Presenters. Thomas S. Hall. Timothy L. Fielding. Chairman & Chief Executive Officer. Chief Financial Officer

Transcription

1 June 2, 2015

2 Disclaimer In addition to historical information, this presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act ), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act ), which are subject to the safe harbor created by those sections. All statements, other than statements of historical facts included in this presentation, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position and our business outlook, business trends and other information, may be forward-looking statements. Words such as estimates, expects, contemplates, will, anticipates, projects, plans, intends, believes, forecasts, may, should and variations of such words or similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to various risks and uncertainties, including our ability to implement our growth strategy; our ability to maintain sufficient levels of cash flow to meet growth expectations; our ability to protect our brand; federal and state laws and regulations relating to our facilities, which could lead to the incurrence of significant penalties by us or require us to make significant changes to our operations; our ability to locate available facility sites on terms acceptable to us; competition from hospitals, clinics and other emergency care providers; our dependence on payments from third-party payors; our ability to source and procure new products and equipment to meet patient preferences; our reliance on Medical Properties Trust and the MPT Master Funding and Development Agreements; disruptions in the global financial markets leading to difficulty in borrowing sufficient amounts of capital to finance the carrying costs of inventory to pay for capital expenditures and operating costs; our ability or the ability of our healthcare system partners to negotiate favorable contracts or renew existing contracts with third-party payors on favorable terms; significant changes in our payor mix or case mix resulting from fluctuations in the types of cases treated at our facilities; significant changes in rules, regulations and systems governing Medicare and Medicaid reimbursements; material changes in IRS revenue rulings, case law or the interpretation of such rulings; shortages of, or quality control issues with, emergency care-related products, equipment and medical supplies that could result in a disruption of our operations; the intense competition we face for patients, physician use of our facilities, strategic relationships and commercial payor contracts; the fact that we are subject to significant malpractice and related legal claims; the growth of patient receivables or the deterioration in the ability to collect on those accounts; the impact on us of PPACA, which represents a significant change to the healthcare industry; and ensuring our continued compliance with HIPAA, which could require us to expend significant resources and capital; and the factors discussed in the section entitled Risk Factors in the Company s Annual Report on Form10-K filed with the SEC on February 27, 2015, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC s website at These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. This presentation contains presentations of non-gaap financial measures, including Adjusted EBITDA, which is defined as net income before interest, taxes, depreciation and amortization, further adjusted to eliminate the impact of certain additional items, including advisory services paid to a significant shareholder, facility preopening expenses, management recruiting expenses, stock compensation expense, costs associated with our public offerings and other non-recurring costs. For a reconciliation of Adjusted EBITDA to the most comparable GAAP measure, please refer to the Annex of this presentation and to our most recent report on Form 10-Q filed with the SEC in connection with our results for the period ended March 31, 2015 and report on Form 10-K filed with the SEC in connection with our results for the period ended December 31, See the Investors section at 2

3 Presenters Thomas S. Hall Chairman & Chief Executive Officer Timothy L. Fielding Chief Financial Officer 3

4 Mission We remain focused on our core mission: providing access to the highest quality medical care to the communities we serve. In doing so, we are helping to transform the delivery of emergency care in America and, importantly, we are saving lives every day. Facility Photo from Joel 4

5 Emergency Demand Greater Than Supply Significant Supply and Demand Imbalance Decrease in hospital EDs Increase in ED visits Source: American Hospital Association ACEP National Report Card Access to Emergency Care D- Overall D+ Source: American College of Emergency Physicians 5

6 ER Visits Rising in 2015 May 4, 2015 A survey of 2,098 emergency-room doctors conducted in March showed about three-quarters said visits had risen since January That was a significant uptick from a year earlier, when less than half of doctors surveyed reported an increase. The ACEP survey also found that ERs are seeing sicker patients: About 90% of the doctors polled said the severity of illness has stayed the same or gotten worse. That might be explained in part by an aging population, newly insured people with multiple maladies, and people delaying care because they have highdeductible insurance plans. 6

7 Leader in the FSED Market 24 / 7 access to emergency care Board-certified physicians Convenient and attractive locations Joint Commission accredited as a Healthcare System CLIA and COLA certified on-site laboratories Full radiology suite Short wait times Coordinated care 7

8 Innovative Facility Model Open 24 / 7 Typically 6 to 9 exam rooms Includes 2 high-acuity and one child friendly pediatric room PATIENT ENTRY staffing model: Doctor, Nurse, Technologist and Front Office staff at all times AMBULANCE EXIT Facility Medical Director for each facility Joint Commission accredited as a Healthcare System CLIA / COLA certified labs: all tests performed in approximately 20 minutes Cardiac enzymes, CBC s, chemistry, urine analysis and testing for flu, strep throat Full radiology suites including CT scanners, digital x-rays and ultrasound 8

9 Unique Real Estate Capability Approximately months 8 person team with over 150 years combined experience in multi-unit retail expansion Site-selection model that leverages proprietary data analytics Highly scalable business model Robust pipeline designed to support similar number of facilities in 2015 Letter of Intent & Purchase and Sale Agreement in Place (1-4 Months) Due Diligence (3 Months) Construction Plans (2 Months) Permits and Approvals (2-4 Months) Build Facility Shell (3-4 Months) Build Interior (2-3 Months) Pre-Open (1 Month); Facility Opens 9

10 Our Growth January 1, 2014: 26 facilities December 31, 2014: 55 facilities Today: 66 facilities 10

11 Highly Rated Top 1% Nationally #7 Best Company in Texas 11

12 Partnerships 12

13 Multiple Growth Drivers 1 Grow our Presence in Existing Markets Build Strategic Alliances with Leading Health Systems 2 Pursue a Disciplined Development Strategy in New States and Markets 3 13

14 Experienced Management Team Thomas S. Hall Chairman and CEO Timothy L. Fielding Chief Financial Officer Graham B. Cherrington President and Chief Operating Officer Andrew M. Jordan Chief Marketing Officer 14

15 Hear From Our Patients In our patients own words 15

16 Hear From Our Patients 16

17 Hear From Our Patients 17

18 Hear From Our Patients 18

19 Financial Overview 19

20 Strong Track Record of Growth Net Patient Service Revenue (in $ millions) Quarterly Net Patient Service Revenue (in $ millions) +105% YOY +109% Q1 14 Q1 15 YOY +42% YOY $210.7 $ 70.1 $ 80.9 $ 57.6 $72.6 $102.9 $ 38.8 $ A 2013A 2014A Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 # of Facilities # of Facilities (1) 65 free standing facilities and 1 hospital as of 01-May

21 Strong Track Record of Growth (continued) (in $ millions) Annual Adjusted EBITDA Quarterly Adjusted EBITDA (in $ millions) +76% YOY +160% Q1 14 Q1 15 YOY $28.2 $ 13.3 $16.0 $ 10.2 $ 5.1 $ 5.9 $ A A Q1-14 Q2-14 Q3-14 Q4-14 Q

22 Attractive Payor Mix and In-Network Rates Payor Mix (FY 2014) Patient Service Revenue Breakdown Other 13% Self-pay 2% BCBS 28% (in $ millions) Q % of revenue Cigna 14% Patient service revenue $96 - Provision for bad debts (15) 15.6% Aetna 19% United Healthcare 24% Net patient service revenue $ % 98% of 2014 net patient service revenue was derived from third-party payors (including patient portion) Contracts in place with commercial insurance providers with in-network rates Charity care includes Medicare / Medicaid 100% of charity care charges written off Bad debt write-offs represent 15.6% of patient services revenue 22

23 Access to a Variety of Capital Sources to Support Facility Expansion Credit Facility: $250 million $10 million Revolver (Working Capital) $75 million Term Loan (Facility Development) $165 million Delayed Draw Term Loan Total Facility Size: $500 million Lease Terms: Initial term of 15 years with 3 additional periods of 5 years each Treated as operating lease for accounting purposes Maturity: October 2018 Approved Projects: Expect 20 new facilities in 2015 to be funded by agreement 23

24 Balance Sheet (in $ millions) March 31, 2015 December 31, 2014 Cash $13.9 $2.0 Total Assets Total Debt¹ Shareholders /Owners Equity (1) Long-term debt, less current maturities and current maturities of long-term debt. 24

25 Appendix

26 Supplemental non GAAP Disclosures Year Ended December 31, 3 Months Ended March 31, (in thousands) Net income (loss) $(17,272) $(2,984) $ 3,201 $ 1,602 $(2,767) Depreciation and amortization 15,037 7,920 4,640 4,756 3,057 Interest expense / other expenses (a) 11,966 3,155 1,589 3,274 2,206 (Benefit) Provision for income taxes (1,326) Advisory Services Agreement fees and expenses (b) Preopening expenses (c) 10,550 3, ,099 1,408 Management recruiting expenses (d) Stock compensation expenses (e) 1, Initial Public Offering Costs (f) 5, Other (g) 2,404 1,358 1, Total Adjustments $ 45,472 $ 18,994 $ 10,488 $ 11,661 $ 7,859 Adjusted EBITDA $ 28,200 $ 16,010 $ 13,689 $ 13,263 $ 5,092 (a) Consists of interest expense and fees of $11.9 million, $2.8 million, $1.1 million, $3.3 million and $2.2 million for the years ended December 31, 2014, 2013 and 2012 and the three months ended March 31, 2015 and 2014, respectively, a gain in fair market value of derivatives of $0.1 million for the year ended December 31, 2013, a loss in fair market value of derivatives of $0.5 million for the year ended December 31, 2012, and a write-off of deferred loan costs of $0.4 million for the year ended December 31, (b) Consists of management fees and expenses paid to a significant shareholder under our Advisory Services Agreement. The Advisory Services Agreement was terminated in connection with the consummation of our initial public offering in June (c) Includes labor, marketing costs and occupancy costs prior to opening a facility and the equity in loss of our unconsolidated joint venture in (d) Third-party costs and fees involved in recruiting our management team. (e) Stock compensation expense associated with grants of management incentive units. (f) Consists of costs incurred in conjunction with our initial public offering, including $2.4 million in bonuses for certain members of management, $2.3 million in costs related to the termination of our Advisory Services Agreement and $0.5 million of other offering costs. (g) For the year ended December 31, 2014, we incurred costs to develop long-term strategic goals and objectives totaling $1.7 million, real-estate development costs associated with potential real estate projects that were terminated totaling $0.6 million and board fees and travel expenses paid to members of the board of directors totaling $0.1 million. For the year ended December 31, 2013, we incurred costs to develop long-term strategic goals and objectives totaling approximately $0.5 million, real-estate development costs associated with potential real estate projects that were terminated totaling $0.4 million, board fees and travel expenses paid to members of the board of directors totaling $0.2 million and $0.25 million of termination costs paid to the former CEO. For the year ended December 31, 2012, we incurred terminated real-estate development costs totaling. $0.5 million, legal costs primarily associated with real estate development and litigation for violation of our trademark totaling $0.8 million and board fees and travel expenses paid to members of the board of directors totaling approximately $0.2 million. For the three months ended March 31, 2015, we incurred terminated real-estate development costs totaling $32,000 and costs to develop longterm strategic goals and objectives totaling $0.5 million. For the three months ended March 31, 2014, we incurred terminated real-estate development costs totaling $0.2 million, costs to develop long-term strategic goals and objectives totaling approximately $0.3 million and board fees and travel expenses paid to members of the board of directors totaling approximately $60,000.