AMN Healthcare Investor Presentation

Size: px

Start display at page:

Download "AMN Healthcare Investor Presentation"

Steven Gregory
5 years ago
Views:

1 AMN Healthcare Investor Presentation November 2016 The Innovator in Healthcare Workforce Solutions and Staffing Services

2 Forward-Looking Statements This investor presentation contains forwardlooking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company bases these forward-looking statements on its current beliefs, expectations, estimates, forecasts and projections about future events and the industry in which it operates. Forward-looking statements are identified by words such as believe, anticipate, expect, intend, plan, will, should, would, project, may, variations of such words and other similar expressions. In addition, statements that refer to performance; plans, objectives and strategies for future operations; and other characterizations of future events or circumstances, are forward-looking statements. The Company s actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ from those discussed in or implied by the forward-looking statements contained in this presentation are set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and its other periodic reports, its current reports and its other filings with the SEC. Developments subsequent to this presentation are likely to cause these statements to become outdated with the passage of time. 2

AMN At-a-Glance ($ in millions) Healthcare s leader and innovator in workforce solutions and

full-service comprehensive workforce solutions company, with services delivered through four

Executive Leadership Advisory Services MSP and Workforce Solutions Revenue Growth 2008 2016

3 AMN At-a-Glance ($ in millions) Healthcare s leader and innovator in workforce solutions and staffing services AMN has evolved from a traditional healthcare staffing provider to a full-service comprehensive workforce solutions company, with services delivered through four main service offerings: Staffing and Recruitment Revenue Adjusted EBITDA Workforce Solutions Executive Leadership Advisory Services MSP and Workforce Solutions Revenue Growth Staffing 96% MSP 33% Staffing 50% Nurse & Allied Solutions, 63% Workforce Solutions 3% MSP 1% Workforce Solutions 17% 3

4 Our Mission Every day, we... Deliver the best talent and insights to help healthcare organizations optimize their workforce Give healthcare professionals opportunities to do their best work towards quality patient care Create a values-based culture of innovation where our team members can achieve their goals 4

A Trusted Partner 2014 2015 Most Trustworthy Selected from 8,000 publicly

Governance Team of the Year 2016 Best Governance, Risk & Compliance

5 A Trusted Partner Most Trustworthy Selected from 8,000 publicly traded companies 2015 Best Compliance & Ethics Program 2015 Corporate Governance Team of the Year 2016 Best Governance, Risk & Compliance Program Award Winner 5 Exemplary Compensation Discussion & Analysis (CD&A) Award Winner

AMN Strategic Growth 2000-2008 2009-2013 2014-2015 2016 Interim Leadership and Ex

Smith, Healthsource Global, Peak Health Solutions Nurse, Physician, VMS, Leadership, Predictive Modeling Onward Healthcare, Locum Leaders, Medefis, The First

6 AMN Strategic Growth Interim Leadership and Executive Search, Rapid/Project Staffing, Medical Coding B.E. Smith, Healthsource Global, Peak Health Solutions Nurse, Physician, VMS, Leadership, Predictive Modeling Onward Healthcare, Locum Leaders, Medefis, The First String, MillicanSolutions, Avantas Workforce Solutions: MSP, RPO and VMS MedFinders, ShiftWise Physician, Allied, Nurse and Search Expansion Merritt Hawkins, StaffCare, MedTravelers, O Grady Peyton 1990s Nurse and Allied Expansion American Mobile Healthcare, MedicalExpress 1980s 6 Travel Nurse American Mobile Nurses: A founding company

7 Business Overview

AMN Service Offerings Staffing and Recruitment Workforce Solutions Executive

staffing Physician placement Rapid response Mid- to senior level leadership

Recruitment process outsourcing (RPO) Vendor management systems (VMS) Remote

management Interim leadership Executive search Physician leadership search Nurse

development Workforce analysis and optimization Predictive modeling and analytics

8 AMN Service Offerings Staffing and Recruitment Workforce Solutions Executive Leadership Advisory Services Travel nursing Local staffing Locum tenens Allied staffing Physician placement Rapid response Mid- to senior level leadership placement EMR implementation Labor disruption Managed services programs (MSP) Recruitment process outsourcing (RPO) Vendor management systems (VMS) Remote medical coding Scheduling and labor management Education services Float pool management Interim leadership Executive search Physician leadership search Nurse leadership search Leadership training and development Workforce analysis and optimization Predictive modeling and analytics Financial & operational performance improvement HIM consulting 8 Value through leadership, innovation and strategic insight

Reportable Segments Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions Travel nurse

All physician specialties All nursing specialties Physical therapists, respiratory, imaging, lab technologists

search Physician search Recruitment process outsourcing Vendor Management Systems Medical Coding Consulting &

9 Reportable Segments Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions Travel nurse Temporary physician Allied staffing staffing Local staffing MSP MSP Locums Billing EMR staffing Labor disruption All physician specialties All nursing specialties Physical therapists, respiratory, imaging, lab technologists Pharmacists and techs Advanced practice specialties Dentistry staffing Psychiatry Interim leadership Executive search Physician search Recruitment process outsourcing Vendor Management Systems Medical Coding Consulting & predictive analytics Scheduling Education 62% 23% 15% of revenues of revenues of revenues 9 Source: Revenue mix is YTD 9/30/16 actual

Nurse and Allied Solutions Local staffing, short- and long-term travel healthcare staffing All nursing

therapists 62% of Revenues Travel nurse assignments across the U.S.

travel nursing and allied staffing company with ~30% market share Robust Demand: Key Drivers Brands

10 Nurse and Allied Solutions Local staffing, short- and long-term travel healthcare staffing All nursing specialties, rehab therapists, radiology technologists, lab technicians, pharmacists and respiratory therapists 62% of Revenues Travel nurse assignments across the U.S. for a typical placement of 13 weeks 50% of revenue through exclusive MSP relationships AMN is the largest travel nursing and allied staffing company with ~30% market share Robust Demand: Key Drivers Brands Shortage of nurses Shift to MSP relationships Shift to flexible staffing models Aging U.S. and clinical population Favorable economy and low unemployment 10

11 Locum Tenens Solutions Physician and mid-level specialties: Primary Care & Internal Medicine Psychiatry Hospitalists Emergency Medicine Surgery Radiology Dentistry & many more 23% of Revenues Typical assignments range from a few days to multiple months AMN is the second largest locum tenens staffing company with 10-12% market share Robust Demand: Key Drivers Brands Shortage of physicians Growing demand for healthcare services Specialty specific demand Aging physician population 11

Other Workforce Solutions Reduce Complexity Increase Efficiency Improve Patient Outcomes

healthcare settings Vendor Management Systems are proprietary SaaS-based solutions for

expertise and support systems to replace or complement a client s internal recruiting

modeling and SaaS-based scheduling technology Key Drivers Brands Workforce shortages

12 Other Workforce Solutions Reduce Complexity Increase Efficiency Improve Patient Outcomes Interim and permanent executive leadership and permanent physician placement across all healthcare settings Vendor Management Systems are proprietary SaaS-based solutions for contingent clinical labor 15% of Revenues Recruitment Process Outsourcing leverages AMN s expertise and support systems to replace or complement a client s internal recruiting function Workforce Optimization Solutions include consulting, data analytics, predictive modeling and SaaS-based scheduling technology Key Drivers Brands Workforce shortages Rising healthcare costs Increased administrative complexity Increased healthcare utilization/spend 12

fulfillment time Staffing optimization Controlled spend Accountability Regulatory compliance AMN Perspective Cross-selling

13 Leader in Managed Services Programs (MSP) Outsourced partner to manage all supplemental workforce needs under one client contract Recruitment, credentialing, clinical support, reporting, consolidated invoicing Client Perspective Higher fill rates Improved fulfillment time Staffing optimization Controlled spend Accountability Regulatory compliance AMN Perspective Cross-selling opportunities Recruitment advantages Less cyclicality Improved demand visibility Strong client relationships High client retention 500+ affiliates 13

14 MSP Growth ($ in millions) MSP Direct Fill Revenue as a % of total staffing revenue has grown from 1% in 2008 to $954 ~40% in 2016 (1) MSP Direct Fill Revenue Third-party Revenue (AMN earns ~5% fee) $772 $504 $380 $406 $291 $604 $219 $464 $350 $296 $265 $185 $41 $134 $13 $8 $ LTM 6/30/16 Healthcare adoption of MSP is gaining substantial momentum in recent years 14 (1) Staffing revenue consists of Nurse, Allied, and Locum Tenens revenue; on a consolidated basis, MSP is approximately 33% of revenue

pool staffing through online order and fulfillment, scheduling, credential

15 Leader in Vendor Management Systems (VMS) Fill rates Clinician quality Efficiency Staffing optimization Controlled spend Automates temporary and float pool staffing through online order and fulfillment, scheduling, credential tracking, time keeping, reporting, invoicing ~ $1 Billion Annualized VMS Spend Under Management 15

Leader in Recruitment Process Outsourcing (RPO) Outsourced partner to manage all recruitment, hiring, and on-boarding processes for clinician permanent positions

16 Leader in Recruitment Process Outsourcing (RPO) Outsourced partner to manage all recruitment, hiring, and on-boarding processes for clinician permanent positions Recruitment savings & productivity State-of-the-art sourcing Fewer bad hires & lost candidates Variable cost, flexible delivery model Better decision-making through data & insights 16

17 Leader in Workforce Optimization: Predictive Analytics & Forecasting 25% Nurse labor spend % of hospital budget Typical savings: 4% to 7% of nurse labor spend Workforce predictive analytics Scheduling technology & tools Business intelligence Centralized resource management Operational review 17

18 Diverse Client Base AMN has over 100 MSP clients, including many blue chip healthcare systems AMN knows the national landscape. They know what s out there and what the trends are. They bring that valuable information to us so that we can better plan as partners. - Chief Nursing Officer, Large Integrated Health System & AMN MSP Client 18

19 Industry Overview

20 Healthcare Staffing Market Overview $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 U.S. Temporary Healthcare Staffing $15.9 $14.7 $13.0 $10.2 $ P 2017P Demand Drivers Stable or improving economy Low unemployment Shortage of clinician & physicians Increased healthcare utilization Adoption of outsourced solutions Aging population & medical advances New emerging clinical roles Other Addressable Markets: ~$5 billion 20 (Perm, RPO, Coding, Workforce Consulting, VMS) Source: US Healthcare Staffing Forecast, Staffing Industry Analysts, September Internal estimates

Therapists Nurse Practitioners Registered Nurses Physicians Source: Bureau of Labor

21 Growth in Healthcare Employment 5 Million More Healthcare Jobs 2012: 17 million 2022: 22 million Fast Growing Healthcare Jobs 38% 36% 34% 19% 18% Physician Assistants Physical Therapists Nurse Practitioners Registered Nurses Physicians Source: Bureau of Labor Statistics, December 2013; BLS Occupational Outlook Handbook January 2014; Job growth is projected from 2012 to

Drivers of Healthcare Employment Growth Annual Growth in Healthcare Spend Aging Population and Healthcare Utilization U.S. population aged 65+ in millions 3.6% 5.6% 6.

22 Drivers of Healthcare Employment Growth Annual Growth in Healthcare Spend Aging Population and Healthcare Utilization U.S. population aged 65+ in millions 3.6% 5.6% 6.0% Over 65-3x more hospital stays Over 75-4x more hospital stays P P Source: U.S. Department of Health and Human Services Aging Healthcare Professionals Healthcare Reform ~ 50% of RNs and physicians are age 50+ ~ 2/3 of RNs age 54+ plan to retire in next 3 years ~37% of active physicians are age million more insured $7.4 billion less uncompensated care Source: HHS.gov as of April 2016: 17.6 million adults have gained insurance coverage since 2010 due to ACA provisions; HHS.gov as of March 2015: $7.4 billion less uncompensated care in 2014 vs National Council of State Boards of Nursing and The Forum of State Nursing Workforce Centers 2013 data and Association of American Medical Colleges April 5, AMN Healthcare survey, November AMA Physician Master File and 2012 Physicians Foundation Survey conducted by Merritt Hawkins 2012 data. National Health Expenditure Projections CMS, October

Emerging Talent Shortage % reporting somewhat or very difficult to recruit the following healthcare professionals: % reporting moderate or serious shortage of the following healthcare professionals:

23 Emerging Talent Shortage % reporting somewhat or very difficult to recruit the following healthcare professionals: % reporting moderate or serious shortage of the following healthcare professionals: 70% 78% 67% 40% 36% 32% 51% 43% Physicians Nurses NPs/PAs Allied Physicians Nurses NPs/PAs Allied Average vacancy rate at your facility for the following healthcare professionals: Projected healthcare labor shortage in % 17% 15% 13% Physicians Nurses NPs/PAs Allied 94,700 physician shortage Regional & specialty nurse shortages Source: AMN Healthcare 2013 Clinical Workforce Survey of Hospital Leaders; Association of American Medical Colleges, April 5, 2016; Future of the Nursing Workforce, Health Resources and Services Administration, December

24 Financial Overview

25 Long-term Adjusted EBITDA Margin Target $ B Revenue $1.5 B Revenue bps bps bps bps 14% AEBITDA Margin $0.9 B Revenue 11.3% AEBITDA Margin 7.2% AEBITDA Margin Gross Margin Improvement WFS Growth Operating Leverage SG&A Efficiency Note: The information set forth herein are based on our current belief of how we may be able to achieve our long term goal. Please refer to page 2 of this presentation titled Forward Looking Statements. By 2020

26 Historical Financial Summary ($ in millions) Total Revenues Gross Profit $2,000 $1,818 $600 $593 40% $1,500 $1,000 $500 $954 $1,012 $1,036 $1,463 $400 $200 $ % $ % $ % $ % 32.6% 35% 30% $0 FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 $0 FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 25% Adjusted EBITDA Capital Expenditures $240 $223 20% $40 $160 $165 15% $27 $25 $80 $74 7.7% $85 8.4% $91 8.8% 11.3% 12.3% 10% $20 $5 $9 $19 $0 FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 5% $0 FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 27

27 Historical Credit Statistics ($ in millions) Total Leverage Ratio Total Net Leverage Ratio 4.0x 4.0x 3.5x 3.5x 3.0x 3.0x 2.5x 2.0x 1.5x 2.1x 1.8x 1.8x 1.3x 1.7x 2.5x 2.0x 1.5x 2.1x 1.7x 1.6x 1.3x 1.6x 1.0x 1.0x 0.5x 0.5x 0.0x FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 0.0x FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 Free Cash Flow (1) Interest Coverage Ratio $200 $ x 21.2x 20.5x $150 $ x $100 $68 $76 $ x 10.0x 8.8x 9.9x $50 5.0x 2.8x $0 FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 0.0x FY 2012 FY 2013 FY 2014 FY 2015 LTM 09/30/16 (1) Defined as EBITDA less Capex 28

Financial Highlights Balance Sheet Items 09/30/2016 Cash and cash equivalents $16 Accounts receivable, net $331 Net working capital $194 Total assets $1,170 Total debt outstanding $386

28 Financial Highlights Balance Sheet Items 09/30/2016 Cash and cash equivalents $16 Accounts receivable, net $331 Net working capital $194 Total assets $1,170 Total debt outstanding $386 Stockholders equity $433 Balance Sheet Metrics 09/30/2016 Day sales outstanding 64 Working capital ratio 1.8x Leverage ratio 1.7x Cash Flow Metrics Q Operating cash flow $30 Capex $5 29 $ in millions

29 Q Outlook Financial Metric Q4 2016* Revenue $473 to $479 million % YOY (+10% organic) Gross margin 32.5% SG&A, percentage of revenue 21.0% % Adjusted EBITDA margin 11.5% % *Percentages are approximate 30 Source: Earnings release and earnings call November 3, Guidance is not being updated or reaffirmed, and AMN does not intend to update guidance prior to its next quarterly earnings release and earnings call. Refer to our earnings release for a reconciliation of non- GAAP measures or

Key Investor Highlights Market leader in healthcare staffing services - nurse, allied, locums, physician and executive search, interim leadership Innovator in healthcare workforce solutions: MSP,

30 Key Investor Highlights Market leader in healthcare staffing services - nurse, allied, locums, physician and executive search, interim leadership Innovator in healthcare workforce solutions: MSP, VMS, RPO, medical coding, workforce optimization Strong demand environment Long-term growth supported by aging population, clinical labor shortages Investment in technology differentiates AMN services, enhances recruiting capabilities, and reduces costs Scalable operating model 31 Stable with strong cash flow & balance sheet

31 AMN Healthcare High Bluff Drive San Diego, CA The Innovator in Healthcare Workforce Solutions and Staffing Services

AMN Healthcare Investor Presentation

AMN Healthcare Investor Presentation September 2017 The Innovator in Healthcare Workforce Solutions and Staffing Services Forward-Looking Statements This investor presentation contains forwardlooking statements