Astrana Health Inc
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
ASTH$34.50-11.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001628280-24-022272
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000950170-24-094262
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 109 current paragraphs.
52 unchanged; 27 reworded; 23 added; 11 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 9 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Anthem Blue Cross Partnership
Current report
On July 15, 2024, the Company announced a new partnership with Anthem Blue Cross to improve access to high-quality healthcare for their shared members. This partnership underscores both organizations' commitment to increasing access to care by addressing social and health inequities in communities that they serve. In conjunction with the announcement of this partnership, Astrana and Anthem Blue Cross have opened their first collaborative care clinic in Whittier, California to exclusively serve Anthem Blue Cross and Allied Pacific IPA members with an HMO health insurance plan.
Current report
Elation Partnership and Convertible Promissory Note
Current report
On July 17, 2024, the Company announced its strategic partnership with Elation Health ("Elation"), a technology company whose electronic health record platform is used nationwide by more than 32,000 clinicians caring for over 15 million members. Together, the two organizations will aim to empower primary care providers via value-based arrangements, leveraging both Astrana and Elation’s technology platform and solutions. Astrana provided a $5.0 million secured convertible promissory note to a subsidiary of Elation which is intended to be used as an initial investment into the partnership. Interest shall accrue on the outstanding principal at an annual interest rate of 7.5%. The convertible promissory note will mature on July 17, 2029 or earlier in the event of a default as defined in the agreement. The Company has the option to convert the note at anytime on or before December 31, 2024 for 80% of the management service organization's equity interest.
Current report
Collaborative Health Systems, LLC Securities Purchase Agreement
Current report
On July 24, 2024, the Company and its affiliated professional entity entered into a definitive agreement to acquire all of the outstanding membership interest relating to Collaborative Health Systems, LLC (“CHS”), Golden Triangle Physician Alliance, and Heritage Physician Networks, for an aggregate purchase price of $37.5 million, subject to customary adjustments, plus earnout payments in an aggregate amount of up to $21.5 million. CHS is a subsidiary of Centene Corporation that partners with independent providers in caring for over 129,000 Medicare members across 17 states. CHS provides comprehensive support for its physician partners by providing management services, risk contracting, and population health capabilities, including actionable data and other tools, to deliver care coordination and closure of gaps in care. CHS provides additional services to secure and deliver favorable value-based contracts with commercial and other health plans. CHS currently manages four REACH ACOs, six MSSP ACOs, three Independent Physician Associations, and a Care Transformation Organization. CHS additionally contracts with private payers to help its providers expand their participation in value-based care across lines of business such as Medicare Advantage. The Company intends to finance the acquisition with cash on hand. The transaction is expected to close during the fourth quarter of 2024, subject to customary closing conditions.
Current report
Risk Bearing Organizations and Patients
Current report
Our total revenue for the six months ended June 30, 2024, was $890.6 million, as compared to $685.5 million for the six months ended June 30, 2023, an increase of $205.2 million, or 30%. The increase in revenue was primarily attributable to capitation revenue. Capitation revenue increased by $207.7 million primarily as a result of our recent acquisitions within our Care Partners segment, including the acquisition of CFC IPA assets that closed on January 31, 2024 and Restricted Knox-Keene licensed health plan acquired on March 31, 2024, along with enrollees transitioning to full risk through the Company's Restricted Knox-Keene plans.
Current report
Expenses related to cost of services for the six months ended June 30, 2024 were $743.2 million, as compared to $582.3 million for the same period in 2023, an increase of $160.9 million. The increase in cost of service was primarily attributable our recent acquisitions within our Care Partners segment along with enrollees transitioning to full risk through the Company's Restricted Knox-Keene plans.
Current report
General and administrative expenses for the six months ended June 30, 2024 were $74.7 million, as compared to $45.2 million for the same period in 2023, an increase of $29.4 million. The increase was primarily due to increased general and administrative expenses to support operational growth.
Current report
Unrealized (Loss) Gain on Investments
Current report
Unrealized gain for the six months ended June 30, 2024 was $1.0 million, as compared to unrealized loss of $5.5 million for the same period in 2023, an increase in unrealized gain of $6.5 million. The increase in unrealized gain on investments was primarily driven by changes in the fair value of equity securities.
Current report
Other Income
Current report
Other income for the three months ended June 30, 2024 was $6.1 million, as compared to other income of $1.2 million for the same period in 2023, an increase of $4.9 million. The increase in other income was primarily driven by the receipt of $5.3 million from Allied Pacific Holdings Investment Management, LLC reimbursing the Company for taxes associated with the Excluded Assets spin-off completed during December 2023.
Current report
Provision for income taxes was $17.2 million for the six months ended June 30, 2024, as compared to a provision for income taxes of $20.9 million for the same period in 2023, a decrease of $3.8 million. The decrease in provision for income taxes was due to tax restructuring that resulted in a lower tax rate.
Current report
Net income attributable to non-controlling interests for the three months ended June 30, 2024 was $2.7 million, as compared to net income attributable to non-controlling interests for the three months ended June 30, 2023 of $4.3 million, a decrease in net income attributable to non-controlling interest of $1.6 million. The decrease was primarily driven by a decrease in rental income for the Excluded Assets as a result of the spin-off.
Current report
Our net income attributable to Astrana Health, Inc. for the six months ended June 30, 2024 was $34.0 million, as compared to $26.3 million for the same period in 2023, an increase of $7.7 million.
Current report
Revenue for the three months ended June 30, 2024 was $463.3 million, as compared to $321.8 million for the three months ended June 30, 2023, an increase of $141.5 million, or 44%. Operating income for the three months ended June 30, 2024 was $40.3 million, as compared to $27.8 million for the three months ended June 30, 2023, an increase in operating income of $12.5 million, or 45%. The increase in revenue and operating income was primarily as a result of our recent acquisitions within our Care Partners segment, including the acquisition of CFC IPA assets that closed on January 31, 2024 and Restricted Knox-Keene licensed health plan acquired on March 31, 2024 and May 1, 2023, along with enrollees transitioning to full risk through the Company's Restricted Knox-Keene plans.
Current report
Revenue for the six months ended June 30, 2024 was $845.6 million, as compared to $636.4 million for the six months ended June 30, 2023, an increase of $209.2 million, or 33%. Operating income for the six months ended June 30, 2024 was $83.5 million, as compared to $50.2 million for the six months ended June 30, 2023, an increase in operating income of $33.4 million, or 67%. The increase in revenue and operating income was primarily as a result of our recent acquisitions within our Care Partners segment, including the acquisition of CFC IPA assets that closed on January 31, 2024 and Restricted Knox-Keene licensed health plan acquired on March 31, 2024 and May 1, 2023, along with enrollees transitioning to full risk through the Company's Restricted Knox-Keene plans.
Current report
Revenue for the six months ended June 30, 2024 was $65.6 million, as compared to $50.9 million for the six months ended June 30, 2023, an increase of $14.7 million. Operating income for the six months ended June 30, 2024 was $1.6 million, as compared to a loss of $0.4 million for the six months ended June 30, 2023, an increase in operating income of $2.0 million. The increase in revenue and operating income was primarily driven by increased volume in patient visits at our primary, multi-specialty, and ancillary care delivery entities.
Current report
Taking all of Astrana's recent growth initiatives and capital allocation strategy into account, the Company is updating its revenue, net income attributable to Astrana, and EPS – diluted guidance for 2024 while reiterating guidance for Adjusted EBITDA for the year ending December 31, 2024.
Current report
Other, net for the three months ended June 30, 2024 relates to non-cash changes related to change in the fair value of the Company’s Collar Agreement, transaction costs incurred for our investments and tax restructuring fees, and reimbursement from a related party of the Company for taxes associated with the Excluded Assets spin-off.
Current report
On April 1, 2024, the Company received $8.3 million as a promissory note with a maturity date of March 31, 2027. I Health may accelerate the maturity date if the Company does not exercise the I Health Call Options. Refer to Note 9 — “Credit Facility, Bank Loans, and Lines of Credit” to our condensed consolidated financial statements under Item 1 in this quarterly report on Form 10-Q for additional information.
Removed paragraphs (11)
Previous report
Second Closing of Community Family Care (“CFC”) Acquisition
Previous report
On March 31, 2024, the Company successfully closed the second and final part of the CFC acquisition. This acquisition marks the largest in Astrana’s history and allows the Company to take on greater responsibility for the outcomes of the patients we serve with CFC’s full-risk Medicaid Restricted Knox-Keene license.
Previous report
Closing of Prime Community Care of Central Valley (“PCCCV”) Acquisition
Previous report
On March 29, 2024, the Company completed the acquisition of PCCCV, a risk-bearing provider organization with over 150 primary care and multi-specialty care providers which serves around 26,000 primarily Medicaid members in the Central Valley of California.
Previous report
Physician Groups and Patients
Previous report
Our total revenue for the three months ended March 31, 2024, was $404.4 million, as compared to $337.2 million for the three months ended March 31, 2023, an increase of $67.1 million, or 20%. The increase in revenue was primarily attributable to the following:
Previous report
Unrealized Gain (Loss) on Investments
Previous report
Other Income (Loss)
Previous report
Net Income (Loss) Attributable to Non-controlling Interests
Previous report
Revenue for the three months ended March 31, 2024 was $397.1 million, as compared to $314.7 million for the three months ended March 31, 2023, an increase of $82.4 million, or 26%. Operating income for the three months ended March 31, 2024 was $43.2 million, as compared to $22.3 million for the three months ended March 31, 2023, an increase in operating income of $20.9 million, or 94%. The increase in revenue and operating income was primarily due to recent acquisitions within our Care Partners segment.
Previous report
Astrana is reiterating the following guidance for total revenue, net income attributable to Astrana, Adjusted EBITDA, and EPS - diluted, based on the Company’s existing business, current view of existing market conditions and assumptions for the year ending December 31, 2024.
Reworded paragraphs (27)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q. In addition, reference is made to our audited condensed consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Condensed Consolidated Financial Statements” of this Quarterly Report on Form 10-Q. In addition, reference is made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024.
Previous wording
Through our accountable care organization and a network of IPAs with more than 10,000 contracted physicians, we are responsible for coordinating care in value-based care arrangements for approximately 1.0 million patients primarily in California as of March 31, 2024. These covered patients are comprised of managed care members whose health coverage is provided either through their employers, acquired directly from a health plan, or as a result of their eligibility for Medicaid or Medicare benefits. Our managed patients benefit from an integrated approach that places physicians at the center of patient care and utilizes sophisticated risk management techniques and clinical protocols to provide high-quality, cost-effective care.
Current wording
Through our risk bearing organizations with more than 10,000 contracted physicians, we are responsible for coordinating care in value-based care arrangements for approximately 1.0 million patients primarily in California as of June 30, 2024. These covered patients are comprised of managed care members whose health coverage is provided either through their employers, acquired directly from a health plan, or as a result of their eligibility for Medicaid or Medicare benefits. Our managed patients benefit from an integrated approach that places physicians at the center of patient care and utilizes sophisticated risk management techniques and clinical protocols to provide high-quality, cost-effective care.
Previous wording
Our Adjusted EBITDA and Adjusted EBITDA margin are supplemental performance measures of our operations for financial and operational decision-making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, stock-based compensation, and APC excluded assets costs. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.
Current wording
Adjusted EBITDA and Adjusted EBITDA margin are supplemental performance measures of our operations for financial and operational decision-making, and are used as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, stock-based compensation, and APC excluded assets costs. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.
Previous wording
As of March 31, 2024 and 2023, we managed a total of 18 and 15 independent physician groups that are affiliated and non-affiliated, respectively. The total number of patients for whom we managed the delivery of healthcare services was approximately 1.0 million and 1.3 million as of March 31, 2024 and 2023, respectively.
Current wording
As of June 30, 2024 and 2023, we managed a total of 18 and 15 independent risk bearing organizations including both affiliated and non-affiliated, respectively. The total number of patients for whom we managed the delivery of healthcare services was approximately 1.0 million and 1.3 million as of June 30, 2024 and 2023, respectively.
Previous wording
(i) Capitation revenue increased by $65.7 million primarily as a result of our recent acquisitions within our Care Partners segment, including the acquisition of CFC IPA assets that closed on January 31, 2024.
Current wording
Our total revenue for the three months ended June 30, 2024, was $486.3 million, as compared to $348.2 million for the three months ended June 30, 2023, an increase of $138.1 million, or 40%. The increase in revenue was primarily attributable to capitation revenue. Capitation revenue increased by $142.0 million primarily as a result of our recent acquisitions within our Care Partners segment, including the acquisition of CFC IPA assets that closed on January 31, 2024 and Restricted Knox-Keene licensed health plan acquired on March 31, 2024 and May 1, 2023, along with enrollees transitioning to full risk through the Company's Restricted Knox-Keene plans.
Previous wording
Expenses related to cost of services for the three months ended March 31, 2024 were $330.4 million, as compared to $289.4 million for the same period in 2023, an increase of $41.0 million. The increase was primarily due to our recent acquisitions within our Care Partners segment.
Current wording
Expenses related to cost of services for the three months ended June 30, 2024 were $412.8 million, as compared to $292.9 million for the same period in 2023, an increase of $119.9 million. The increase in cost of service was primarily attributable our recent acquisitions within our Care Partners segment along with enrollees transitioning to full risk through the Company's Restricted Knox-Keene plans.
Previous wording
General and administrative expenses for the three months ended March 31, 2024 were $38.7 million, as compared to $21.2 million for the same period in 2023, an increase of $17.5 million, or 83%. The increase was primarily due to general and administrative expenses to support operational growth.
Current wording
General and administrative expenses for the three months ended June 30, 2024 were $36.0 million, as compared to $24.1 million for the same period in 2023, an increase of $11.9 million. The increase was primarily due to increased general and administrative expenses to support operational growth.
Previous wording
Depreciation and amortization expenses for the three months ended March 31, 2024 were $5.1 million, as compared to $4.3 million for the same period in 2023. This amount includes depreciation of property and equipment and the amortization of intangible assets.
Current wording
Depreciation and amortization expenses for the three months ended June 30, 2024 were $7.4 million, as compared to $4.2 million for the same period in 2023. This amount includes depreciation of property and equipment and the amortization of intangible assets.
Previous wording
Income from equity method investments for the three months ended March 31, 2024 was $0.6 million, as compared to income from equity method investments of $2.5 million for the same period in 2023, a decrease of $1.9 million. The decrease was primarily due to APC’s equity method investment in LMA. For the three months ended March 31, 2024 and 2023, APC recognized income from this investment of $0.4 million and $2.2 million, respectively.
Current wording
Income from equity method investments for the three months ended June 30, 2024 was $0.9 million, as compared to income from equity method investments of $2.7 million for the same period in 2023, a decrease of $1.8 million. The decrease was primarily due to APC’s equity method investment in LMA. For the three months ended June 30, 2024 and 2023, APC recognized income from this investment of $0.8 million and $2.7 million, respectively.
Previous wording
Interest expense for the three months ended March 31, 2024 was $7.6 million, as compared to $3.3 million for the same period in 2023, an increase of $4.3 million. The increase in interest expense was due to greater amounts borrowed on the Amended Credit Facility. As of March 31, 2024, the Company borrowed $391.3 million on the Amended Credit Facility compared to $180.0 million as of March 31, 2023.
Current wording
Interest expense for the three months ended June 30, 2024 was $8.6 million, as compared to $3.6 million for the same period in 2023, an increase of $5.0 million. The increase in interest expense was due to greater amounts borrowed on the Amended Credit Facility. As of June 30, 2024, the Company borrowed $435.7 million on the Amended Credit Facility compared to $210.0 million as of June 30, 2023.
Previous wording
Interest income for the three months ended March 31, 2024 was $4.0 million compared to $3.0 million for the three months ended March 31, 2023. Interest income reflects interest earned on cash held in bank accounts, money market and certificate of deposit accounts and the interest from notes receivable. The increase in interest income was primarily from the IntraCare convertible promissory note and BASS secured promissory note.
Current wording
Interest income for the three months ended June 30, 2024 was $3.5 million compared to $3.3 million for the three months ended June 30, 2023. Interest income reflects interest earned on cash held in bank accounts, money market and certificate of deposit accounts, and the interest from notes receivable.
Previous wording
Unrealized gain for the three months ended March 31, 2024 was $1.1 million, as compared to a $6.4 million loss for the same period in 2023, a decrease in unrealized loss of $7.5 million. The decrease in unrealized loss on investments was primarily driven by changes in the fair value of equity securities.
Current wording
Unrealized loss for the three months ended June 30, 2024 was $0.1 million, as compared to unrealized gain of $0.9 million for the same period in 2023, a decrease in unrealized gain of $1.0 million. The decrease in unrealized gain on investments was primarily driven by changes in the fair value of equity securities.
Previous wording
Other loss for the three months ended March 31, 2024 was $4.3 million, as compared to other income of $1.2 million for the same period in 2023, a decrease of $5.5 million. The decrease in other income was primarily due to an expense related to a financial guarantee via a letter of credit that we provided almost three years ago in support of two local provider-led ACOs.
Current wording
Other income for the six months ended June 30, 2024 was $1.9 million, as compared to other income of $2.4 million for the same period in 2023, a decrease of $0.5 million. The decrease in other income was primarily due to a decrease in rental income as a result of the Excluded Assets spin-off.
Previous wording
Provision for income taxes was $7.1 million for the three months ended March 31, 2024, as compared to a provision for income taxes of $6.9 million for the same period in 2023, an increase of $0.2 million. The increase in provision for income taxes was due to an increase in pretax income.
Current wording
Provision for income taxes was $10.0 million for the three months ended June 30, 2024, as compared to a provision for income taxes of $14.0 million for the same period in 2023, a decrease of $4.0 million. The decrease in provision for income taxes was due to tax restructuring that resulted in a lower tax rate.
Previous wording
Net income attributable to non-controlling interests for the three months ended March 31, 2024 was $2.0 million, as compared to net loss attributable to non-controlling interests for the three months ended March 31, 2023 of $0.6 million, an increase in net income attributable to non-controlling interest of $2.7 million. The increase was primarily driven by a decrease in unrealized loss resulting from the change in the fair value of equity securities held by APC.
Current wording
Net income attributable to non-controlling interests for the six months ended June 30, 2024 was $4.7 million, as compared to net income attributable to non-controlling interests for the six months ended June 30, 2023 of $3.7 million, an increase in net income attributable to non-controlling interest of $1.1 million. The increase was primarily driven by a decrease in unrealized loss resulting from the change in the fair value of equity securities held by APC.
Previous wording
Our net income attributable to Astrana Health, Inc. for the three months ended March 31, 2024 was $14.8 million, as compared to $13.1 million for the same period in 2023, an increase of $1.7 million.
Current wording
Our net income attributable to Astrana Health, Inc. for the three months ended June 30, 2024 was $19.2 million, as compared to $13.2 million for the same period in 2023, an increase of $6.0 million.
Previous wording
The Company currently has three reportable segments consisting of Care Partners, Care Delivery and Care Enablement. The Company evaluates the performance of its operating segments based on segment revenue growth as well as operating income. Management uses revenue growth and total segment operating income as a measure of the performance of operating businesses separate from non-operating factors. For more information about our segments, refer to Note 1 — “Description of Business” and Note 18 - “Segments” to our condensed consolidated financial statements under Item 1 in this Quarterly Report on Form 10-Q for additional information.
Current wording
The Company currently has three reportable segments consisting of Care Partners, Care Delivery and Care Enablement. The Company evaluates the performance of its operating segments based on segment revenue growth as well as operating income. Management uses revenue growth and total segment operating income as a measure of the performance of operating businesses separate from non-operating factors. For more information about our segments, see Note 18 — “Segments” to our condensed consolidated financial statements under Item 1 in this Quarterly Report on Form 10-Q for additional information.
Previous wording
The following table sets forth our revenue and operating income by segment for the three months ended March 31, 2024 and 2023 (in thousands):
Current wording
The following table sets forth our revenue and operating income by segment for the three and six months ended June 30, 2024 and 2023 (in thousands):
Previous wording
Revenue for the three months ended March 31, 2024 was $30.7 million, as compared to $25.4 million for the three months ended March 31, 2023, an increase of $5.3 million, or 21%. Operating loss for the three months ended March 31, 2024 was $0.2 million, as compared to a loss of $1.0 million for the three months ended March 31, 2023, an increase in operating income of $0.7 million, or 75%. The increase in revenue and operating income was primarily driven by increased volume in patient visits at our primary, multi-specialty, and ancillary care delivery entities.
Current wording
Revenue for the three months ended June 30, 2024 was $34.9 million, as compared to $26.4 million for the three months ended June 30, 2023, an increase of $8.5 million. Operating income for the three months ended June 30, 2024 was $1.8 million, as compared to a $0.6 million for the three months ended June 30, 2023, an increase in operating income of $1.3 million. The increase in revenue and operating income was primarily driven by increased volume in patient visits at our primary, multi-specialty, and ancillary care delivery entities.
Previous wording
Revenue for the three months ended March 31, 2024 was $33.3 million, as compared to $30.6 million for the three months ended March 31, 2023. Operating income for the three months ended March 31, 2024 was $3.5 million, as compared to operating income of $5.7 million for the three months ended March 31, 2023, a decrease in operating income of $2.2 million, or 39%. The increase in revenue was primarily due to managing more IPAs and the decrease in operating income was due to more expenses incurred to support the growth in Care Enablement operations.
Current wording
Revenue for the three months ended June 30, 2024 was $36.2 million, as compared to $35.0 million for the three months ended June 30, 2023, an increase of $1.2 million. Operating income for the three months ended June 30, 2024 was $6.9 million, as compared to operating income of $7.6 million for the three months ended June 30, 2023, a decrease in operating income of $0.7 million. The increase in revenue was primarily due to managing more IPAs and the decrease in operating income was due to more expenses incurred to support the growth in Care Enablement operations.
Previous wording
Set forth below are reconciliations of Net Income to EBITDA and Adjusted EBITDA as well as the reconciliation to Adjusted EBITDA margin for the three months ended March 31, 2024 and 2023. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.
Current wording
Set forth below are reconciliations of Net Income to EBITDA and Adjusted EBITDA as well as the reconciliation to Adjusted EBITDA margin for the three and six months ended June 30, 2024 and 2023. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.
Previous wording
(2) Other, net for the three months ended March 31, 2023 relates to changes in the fair value of our financing obligation to purchase the remaining equity interest in one of our investments.
Current wording
Other, net for the three and six months ended June 30, 2023 relates to non-cash changes in the fair value of our financing obligation to purchase the remaining equity interests in one of our investments, changes in the fair value of our contingent liabilities, and changes in the fair value of the Company's Collar Agreement.
Previous wording
(1) Other, net for the three months ended March 31, 2024 relates to financial guarantee via a letter of credit that we provided almost three years ago in support of two local provider-led ACOs, non-cash changes related to change in the fair value of our financing obligation to purchase the remaining equity interests in one of our investments, non-cash changes related to change in the fair value of the Company’s Collar Agreement, and transaction costs incurred for our investments and tax restructuring fees.
Current wording
Other, net for the six months ended June 30, 2024 relates to financial guarantee via a letter of credit that we provided almost three years ago in support of two local provider-led ACOs, non-cash changes related to change in the fair value of our financing obligation to purchase the remaining equity interests in one of our investments, non-cash changes related to change in the fair value of the Company’s Collar Agreement, transaction costs incurred for our investments and tax restructuring fees, and reimbursement from a related party of the Company for taxes associated with the Excluded Assets spin-off.
Previous wording
Cash, cash equivalents, and investment in marketable securities at March 31, 2024 totaled $337.3 million as compared to $296.3 million at December 31, 2023. Working capital totaled $183.5 million at March 31, 2024, as compared to $242.8 million at December 31, 2023, a decrease of $59.3 million.
Current wording
Cash, cash equivalents, and investment in marketable securities at June 30, 2024 totaled $327.7 million as compared to $296.3 million at December 31, 2023. Working capital totaled $260.5 million at June 30, 2024, as compared to $242.8 million at December 31, 2023, an increase of $17.7 million.
Previous wording
Cash provided by operating activities for the three months ended March 31, 2024 was $6.0 million, as compared to cash provided by operating activities of $7.7 million for the three months ended March 31, 2023. The decrease in cash provided by operating activities was primarily driven by changes in net income and working capital. For the three months ended March 31, 2024, net income exclusive of depreciation and amortization, amortization of debt issuance cost, share-based compensation, unrealized gains or losses, income from equity method investments, deferred tax and other was $29.1 million compared to $26.7 million for the three months ended March 31, 2023. Working capital for the three months ended March 31, 2024, decreased operating cash flow by $23.2 million, compared to an $18.9 million decrease in operating cash flow at March 31, 2023. The change in working capital for the three months ended March 31, 2024 was mainly driven by an increase in receivables, net, other receivables and related party receivables primarily due to timing of our receivables including risk pool settlements that occur approximately 18 months after the risk pool performance year is completed, and increase in income tax payable as a result of timing in income tax payments.
Current wording
Cash provided by operating activities for the six months ended June 30, 2024 was $29.2 million, as compared to cash provided by operating activities of $33.5 million for the six months ended June 30, 2023. The decrease in cash provided by operating activities was primarily driven by changes in working capital and partially offset by adjusted net income. Working capital for the six months ended June 30, 2024, decreased operating cash flow by $36.1 million, compared to a $12.9 million decrease in operating cash flow for the six months ended June 30, 2023. The change in working capital for the six months ended June 30, 2024 was mainly driven by an increase in receivables, net, including amounts with related parties, other receivables primarily due to timing of our receivables including risk pool settlements that occur approximately 18 months after the risk pool performance year is completed, a decrease in income taxes payable as a result of timing of income tax payments, and increases in accounts payable and accrued expenses and medical liabilities due to timing of payments. For the six months ended June 30, 2024, net income, exclusive of depreciation and amortization, amortization of debt issuance cost, share-based compensation, non-cash lease expense, unrealized gains or losses, income from equity method investments, deferred tax and other was $65.3 million compared to $46.5 million for the six months ended June 30, 2023.
Previous wording
Cash used in investing activities during the three months ended March 31, 2024, was $71.0 million, primarily due to payments for business and asset acquisitions, net of cash acquired of $50.6 million, issuance of loan receivable of $20.0 million, and purchases of property and equipment of $0.4 million. Cash used in investing activities during the three months ended March 31, 2023 was $14.0 million, primarily due to a deposit for purchase of property of $8.8 million, purchases of property and equipment of $6.0 million, purchase of marketable securities of $1.0 million, and purchase of an equity method investment of $0.3 million, partially offset by proceeds from the repayment of a loan receivable of $2.1 million.
Current wording
Cash used in investing activities during the six months ended June 30, 2024, was $151.0 million, due to payments for business and asset acquisitions, net of cash acquired of $114.6 million, issuances of loans of $21.0 million, purchase of an equity method investment of $6.0 million, purchase of a call option issued in conjunction with an equity method investment of $3.9 million, purchases of property and equipment of $3.2 million, purchase of a privately held investment of $2.5 million, and purchases of marketable securities of $0.1 million. The cash used in investing activities was partially offset by proceeds from repayment of loans of $0.3 million. Cash used in investing activities during the six months ended June 30, 2023 was $19.2 million, primarily due to purchases of property and equipment of $17.4 million, purchases of marketable securities of $2.0 million, purchase of a privately held investment of $2.0 million, and purchase of an equity method investment of $0.3 million. The cash used in investing activities was partially offset by proceeds from repayment of a loan receivable of $2.1 million and payments for business and asset acquisitions, net of cash acquired of $0.4 million.
Previous wording
Cash provided by financing activities during the three months ended March 31, 2024, was $106.4 million, primarily due to borrowings on long-term debt totaling $110.0 million, partially offset by repayment of long term-debt of $3.5 million. Cash used in financing activities during the three months ended March 31, 2023, was primarily due to repurchase of treasury stock of $9.5 million, dividend payments of $0.1 million, repayment of debt of $0.2 million, and repayment of finance lease obligations of $0.2 million, partially offset by borrowings from bank loans totaling $1.6 million and proceeds from the exercise of options of $1.3 million.
Current wording
Cash provided by financing activities during the six months ended June 30, 2024, was $153.6 million, primarily due to borrowings on long-term debt totaling $170.3 million and proceeds from sale of non-controlling interest of $0.2 million. This was partially offset by repayments of debt of $11.0 million, tax payments from net share settlement of restricted stock of $3.6 million, dividend payments of $1.9 million, and repayment of finance lease obligations of $0.4 million. Cash used in financing activities during the six months ended June 30, 2023 was $8.1 million, primarily due to repurchase of treasury stock of $9.5 million, dividend payments of $0.8 million, repayment of debt of $0.3 million, a repayment of finance lease obligations of $0.3 million, and purchase of non-controlling interest of $0.1 million. This was partially offset by borrowings from bank loans totaling $1.7 million and proceeds from the exercise of options of $1.3 million.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Depreciation and amortization expenses for the six months ended June 30, 2024 were $12.5 million, as compared to $8.5 million for the same period in 2023. This amount includes depreciation of property and equipment and the amortization of intangible assets.
Current report — wording carried from elsewhere
Income from equity method investments for the six months ended June 30, 2024 was $1.5 million, as compared to income from equity method investments of $5.2 million for the same period in 2023, a decrease of $3.7 million. The decrease was primarily due to APC’s equity method investment in LMA. For the six months ended June 30, 2024 and 2023, APC recognized income from this investment of $1.1 million and $4.9 million, respectively.
Current report — wording carried from elsewhere
Interest expense for the six months ended June 30, 2024 was $16.2 million, as compared to $6.9 million for the same period in 2023, an increase of $9.3 million. The increase in interest expense was due to greater amounts borrowed on the Amended Credit Facility. As of June 30, 2024, the Company borrowed $435.7 million on the Amended Credit Facility compared to $210.0 million as of June 30, 2023.
Current report — wording carried from elsewhere
Interest income for the six months ended June 30, 2024 was $7.5 million compared to $6.3 million for the six months ended June 30, 2023. Interest income reflects interest earned on cash held in bank accounts, money market and certificate of deposit accounts, and the interest from notes receivable.
Current report — wording carried from elsewhere
Net Income Attributable to Non-controlling Interests
Current report — wording carried from elsewhere
Revenue for the six months ended June 30, 2024 was $69.4 million, as compared to $65.5 million for the six months ended June 30, 2023, an increase of $3.9 million. Operating income for the six months ended June 30, 2024 was $10.4 million, as compared to operating income of $13.4 million for the six months ended June 30, 2023, a decrease in operating income of $3.0 million. The increase in revenue was primarily due to managing more IPAs and the decrease in operating income was due to more expenses incurred to support the growth in Care Enablement operations.
Current report — wording carried from elsewhere
Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA