amn template - amn healthcareamnhealthcare.investorroom.com/download/amn+investor... ·...
TRANSCRIPT
The Innovator in Healthcare Workforce Solutions and Staffing Services
Investor PresentationMarch 2019
Forward-Looking Statements
This investor presentation contains “forward-looking statements” within the meaning of Section 27A of the SecuritiesAct of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Companybases these forward-looking statements on its current beliefs, expectations, estimates, forecasts and projectionsabout 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 andother similar expressions. In addition, statements that refer to performance; plans, objectives and strategies for futureoperations; 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-lookingstatements. Factors that could cause actual results to differ from those discussed in or implied by the forward-lookingstatements contained in this presentation are set forth in the Company’s Annual Report on Form 10-K for the yearended December 31, 2018 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other filings with the SEC.Developments subsequent to this presentation are likely to cause these statements to become outdated with thepassage of time.
2
Non-GAAP Measures
This presentation contains certain non-GAAP financial information, which the Company provides as additionalinformation, and not as an alternative, to the Company's condensed consolidated financial statements presented inaccordance with GAAP. These non-GAAP financial measures include (1) adjusted EBITDA and (2) adjusted EBITDAmargin on slides 10 and 27, respectively. Management believes that adjusted EBITDA and adjusted EBITDA marginserve as industry-wide financial measures. These non-GAAP measures should not be used in isolation to evaluatethe Company's performance. A reconciliation of the non-GAAP measures identified in this presentation, along withfurther detail about the use and limitations of certain of these non-GAAP measures, may be found on the Company'swebsite at http://amnhealthcare.investorroom.com/financialreports.
Key Investment Highlights
3
Leader in Attractive MarketTrusted partner in healthcare staffing services: nurse, allied, locum tenens, physician and executive search, interim leadership, mid-revenue cycle
Innovator in Workforce Solutions MSP, VMS, RPO, workforce optimization, scheduling and credentialing solutions
Differentiated by Technology Enhances recruiting capabilities and improves efficiency
Scalable Operating ModelAbility to drive attractive cash flow and earnings growth
Strong Cash Flow and Balance SheetDisciplined management and conservative balance sheet
AMN at a Glance
Supply ↔ DemandAge demographic shift creates growth opportunities for AMN
workforce solutions
Diverse Client Base with over 100 MSP clients, which
includes many leading healthcare systems
Recognized as largest U.S. healthcare staffing firm
2013-18Revenue Growth
16% CAGR
61%18%
21%Nurse andAlliedSolutionsLocumTenensSolutionsOtherWorkforceSolutions
$2.1B2018 Revenue
Top performer in revenue, profits, and stock returns
HRO Today’s Recruiting Excellence Award and Diversity & Inclusion
Excellence award
Innovation leaders 2018 Impact Awards -
Named largest healthcare staffing firm in the US
4
Our Mission
5
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
A Recognized Leader
2011-
Peer Review Designation to AMN MSP (Managed
Services Programs) since 2011
2018
Largest Healthcare Staffing Company in
the U.S.
Re-Certified through 2020
First Corporate Certification for Staffing
Services by the Joint Commission
2018
Exemplary Compensation
Discussion & Analysis (CD&A) Award Winner
2016
Healthcare Leader
Based on Customer Satisfaction and
Quality
2018
The Top Size of DealProvider
Based on Customer Satisfaction and Quality
2018
2019
Gender Equality Index
2018
Top performer in revenue, profits, and stock returns.
2019
Corporate Equality Index
2018
Best Proxy Statement
6
History of AMN Healthcare
7
Strategic Transformation in Workforce Solutions
1980s 2000–08 2014-15 2018-19
1990s 2010-13 2016
Travel NurseAmerican Mobile Nurses: A founding company
Nurse and Allied ExpansionPreferred Healthcare, Medical Express, NursesRx
Workforce Solutions: MSP, RPO and VMSMedFinders,ShiftWise
Nurse, Physician, VMS, Interim Leadership, Workforce SchedulingOnward Healthcare, Locum Leaders, Medefis, The First String,MillicanSolutions, Avantas
Physician, Allied, Nurse and Search ExpansionMerritt Hawkins,Staff Care,MedTravelers, O’Grady Peyton
Interim Leadership and Executive Search, Labor Disruption, Medical CodingBE Smith, Peak Health,HealthSource Global
Mid-Revenue Cycle, C-Suite and Interim Leadership, andCredentialing SolutionsMedPartners, Phillips DiPisa, Leaders For Today,Silversheet
Evolution of AMN: Driving Towards Workforce Solutions
8
AMN has evolved from traditional healthcare staffing to providing comprehensive workforce solutions
4%
2008
WorkforceSolutionsStaffing 63%
Staffing and Recruitment
Workforce Solutions
Leadership
Workforce Technologies
2018
Workforce Solutions Now Dominate Revenue Mix
Revenue Growth with Operating Leverage
9
($ Millions)
$1,012 $1,036
$1,463
$1,902 $1,988
$2,136
2013 2014 2015 2016 2017 2018
$85 $91
$165
$237 $256
$270
2013 2014 2015 2016 2017 2018
Revenue Adjusted EBITDA
2019 – A Year of Focus and Investment
Tailwinds• Recent MSP wins and
implementations
• Strong MSP pipeline
• Healthy demand across staffing service lines
• Added Silversheet credentialing solution
• Deleveraging and share repurchases
10
Headwinds• Locum Tenens
turnaround
• Lower staffing volume with large client
• Tough Q2 comp due to $25M strike revenue
• Margin impact from Silversheet and investments
Investments• Locum Tenens
enhancements and headcount
• Candidate and client engagement
• Digital and mobile
• Analytics, data management and reporting
Industry Overview
Healthcare Staffing: Large, Fragmented Market
Sources: US Healthcare Staffing Forecast, Staffing Industry Analysts, September 2018; AMN internal estimates of other markets
U.S. Temporary Healthcare Staffing
12
• Growing economy
• Shortage of clinicians & physicians
• Aging population & medical advances
• Adoption of outsourced solutions
• New emerging clinical roles
Demand Drivers($ Billions)
$13.2$15.2
$16.2 $16.7 $17.4
$0
$5
$10
$15
$20
Other Addressable Markets: Greater Than $5 Billion(Interim Leadership, Perm/Search, RPO, Mid-Revenue
Cycle, Workforce Consulting, VMS, Credentialing)
Why JOLTS Matters
13
Job Openings
Hires
Quits
1%
2%
3%
4%
5%
6%
7%
2013 2014 2015 2016 2017 2018
% o
f Em
ploy
men
t
3%
14%
5%
Hires Openings Quits
Five-Year CAGRs
JOLTS = Job Openings and Labor Turnover Survey
• Healthcare sector has record-high % of open jobs
• Voluntary quits = 66% of hires in Q4 2018
• Hires reached 3% of jobs for first time since 2008
Healthcare Hires, Openings and Quits
Data source: Job Openings and Labor Turnover Surveys, US Bureau of Labor Statistics
Projected Healthcare Labor Shortage in 2030Aging Healthcare Professionals
~ 50% of RNs and physicians are age 50+
Annual Growth in Healthcare Spend Aging Population and Healthcare Utilization
Drivers of Healthcare Employment Growth
Sources: 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, 2016; AMN Healthcare survey, November 2017; AMA Physician Master File and 2012 Physicians Foundation Survey conducted by Merritt Hawkins – 2012 data; National Health Expenditure Projections – CMS, February 2019; AMN Healthcare 2013 Clinical Workforce Survey of Hospital Leaders; “The Complexities of Physician Supply and Demand,” Association of American Medical Colleges, March 2018; Future of the Nursing Workforce, Health Resources and Services Administration, December 2014.
• Over 65 - 3x more hospital days
• Over 75 - 4x more healthcare days
2010 2015 2020 2025 2030Source: U.S. Department of Health and Human Services
5.5%
4.4%3.9% 40
72
U.S. population aged 65+in millions
55% of RNs who plan to retire will do so by 2020~38% of active physicians are age 56 & older Up to 104,900
physician shortageRegional & specialty
nurse shortages
2018–272017 2018
15
Business Overview
Staffing and Recruitment
• Travel nursing• Allied staffing• Locum tenens• Local staffing• Physician placement• Rapid response• EMR implementation• Labor disruption
Workforce Solutions
• Managed services programs (MSP)
• Vendor management systems (VMS)
• Recruitment process outsourcing (RPO)
• Mid-revenue cycle workforce solutions
• Scheduling and labor management
• Credentialing solutions
AMN Portfolio of Solutions
ExecutiveLeadership
• Interim leadership• Executive search• Physician leadership search• Nurse leadership search• Leadership training and
development• Workforce analysis and
optimization• Predictive modeling and analytics• Education services
17
Value through leadership, innovation and strategic insight
Staffing and Recruitment Workforce Solutions Leadership and
Consulting
Leader in Managed Services Programs (MSP)
18
Outsourced partner to manage all supplemental workforce needs
AMN manages staffing vendors, credentialing, clinical support, reporting, consolidated invoicing
500+ affiliates
Client Benefits AMN Benefits• Higher fill rates
• Improved fulfillment time
• Staffing optimization
• Controlled spend
• Accountability
• Credentialing compliance
• Cross-selling opportunities
• Recruitment advantages
• Less cyclicality
• Improved demand visibility
• Strong client relationships
• High client retention
2010 2011 2012 2013 2014 2015 2016 2017 2018
$134 $185 $265 $296 $350$454
$649$786
$892
$85$106
$115 $110$154
$308
$369
$379$346MSP Direct Fill Revenue
Filled by Affiliate Network
MSP: Growth Engine
19
Adoption of MSP has gained momentum
(1) Staffing revenue consists of Nurse, Allied, and Locum Tenens revenue; on a consolidated basis, MSP was 42% of 2018 revenue
MSP direct fill revenue grew from 1% of AMN staffing revenue in 2008 to 51% today (1)
MSP
Gro
ss B
illin
gs U
nder
Man
agem
ent (
$M)
Nurse and Allied Solutions
20
Short- and Long-term Travel and Local Staffing• AMN is the largest travel nurse
and allied staffing company• Travel nurse assignments are
typically 13 weeks• Over 60% of segment
revenue comes through exclusive MSP relationships
61%of 2018
AMNRevenue
Robust Demand: Key Drivers
Shortage of nurses
Shift to MSP relationshipsShift to flexible staffing models
Aging U.S. and clinical population
Favorable economy
Skill Specialties
All nursing specialties
Physical, occupational, speech therapists
Respiratory, imaging, lab
Pharmacists, technicians
Locum Tenens Solutions
21
Shortage of physicians
Growing demand for healthcare services
Specialty-specific demand
Aging physician population
19%
Robust Demand: Key Drivers
We place physicians, advanced practice clinicians and dentists on temporary assignments throughout the United States
Typical assignments range from days to multiple months
Areas of Practice
18%
• Hospitalists• Anesthesia/CRNA• Emergency Medicine• Internal Medicine• Psychiatry
• Surgery• Advanced Practices• Radiology• Primary Care• Dentistry
Locum Tenens Turnaround in Progress
22
Before: Multiple, unintegrated, inflexible, aging technologies
Today: Integrated, scalable, agile technology platform
Our focus for growth:• Enhance system adoption and usability• Improve data quality and integration• Sales hires and productivity ramp• MSP and new client sales
Inconsistent operating model across brands Single, cohesive operating model
Other Workforce Solutions
Workforce and leadership shortages
Rising healthcare costs
Increased administrative complexityRevenue integrity/capture, quality reporting
Increased need for data-driven insights
Interim and permanent executive leadership and permanent physician placement
Recruitment process outsourcing
Mid-revenue cycle solutions
Vendor management systems
Workforce optimization solutions
Credentialing solutions
Informed decision-making
Reduced complexity
Flexible access to scarce talent
Drive optimal workforce mix
Key Demand Drivers
Business Lines
Key Advantages
21%
23
Terms of AcquisitionSolution Set
Silversheet Acquisition
Subscription-based credentialing and privileging software platform
Credential Verification Organization services
$30 million cashUp to $25 million earn-out,
based on revenue and earnings targets for 2019-20
24
Credentialing Solutions
Provides sophisticated, cloud-based software solutions to reduce the complexities and challenges of the credentialing
process for clinicians and healthcare organizations
Diverse Client Base
25
As the market leader, AMN delivers a broad suite of workforce solutions to many leading health systems
AMN knows the national landscape. They know what’s out there and what the trends are. They bring that valuable information to us so that we can better plan as partners.
Chief Nursing Officer,Large Integrated Health System
& AMN MSP Client
“
”
Financial Overview
Five-Year Financial Summary
27 ($ in Millions)
$1,036
$1,463
$1,902 $1,988 $2,136
$-
$500
$1,000
$1,500
$2,000
$2,500
2014 2015 2016 2017 2018
$316
$469
$620 $644 $696
30.5%32.1% 32.6% 32.4% 32.6%
25%
30%
35%
40%
$0
$200
$400
$600
2014 2015 2016 2017 2018
$91
$165
$237 $256 $270
8.8%
11.3%12.5% 12.9% 12.7%
5%
10%
15%
$0
$50
$100
$150
$200
$250
2014 2015 2016 2017 2018
9%
16%14%
16%14%
0%
5%
10%
15%
2014 2015 2016 2017 2018
Gross ProfitTotal Revenue
Adjusted EBITDA Return on Invested Capital
Allocation of Strong Free Cash Flows
28($ Millions)
$476
$-
$100
$200
$300
$400
$500
2014 2015 2016 2017 2018
$ M
illio
ns
Cumulative Free Cash Flow
$476 Million Free Cash Flow Generated in Last Five Years
$(551)
$(100)
$285
$(600)
$(400)
$(200)
$-
$200
$400
Acquisitions Stock Repurchases Net Borrowing
$ M
illio
ns
Selected Other Uses and Sources of CashFiscal Years 2014-18
$651 Million Spent on Acquisitions, Stock Buybacks
Strong Balance Sheet, 1.7x Leverage Ratio
Key Investment Highlights
29
Market leader and trusted partner 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; expanding solutions to support clients
Positive secular trends supported by aging population and clinical labor shortages
Investment in technology differentiates AMN services, enhances recruiting capabilities, and reduces costs
Scalable operating model with leverage
Strong cash flow and balance sheet