INVESTOR PRESENTATION December 2015 SAFE HARBOR / DISCLAIMER This - - PowerPoint PPT Presentation

December 2015

INVESTOR PRESENTATION

SAFE HARBOR / DISCLAIMER

This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events and are subject to risks and uncertainties. The forward-looking statements, which address the Company's expected business and financial performance and financial condition, among other matters, contain words such as: “believe,” “could,” “opportunities,” “continue,” “expect,” “may,” “will,” or “would” and other words and terms of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected income; earnings; revenues; and growth. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Readers are cautioned not to place undue reliance on these forward- looking statements, which speak only as of the date on which they are made. Factors that could cause actual results to differ materially from these forward-looking statements can be found in the Company's Registration Statement on Form S-1 and the accompanying prospectus filed with the Securities and Exchange Commission on May 22, 2015. These or other uncertainties may cause the Company’s actual future results to be materially different than those expressed in any forward- looking statements. The Company undertakes no obligation to update or revise any forward-looking statements. This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. This presentation also contains non-GAAP financial measures. You can find a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures in the appendix to this presentation.

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INVESTMENT HIGHLIGHTS

Recognized Position of Leadership in a Large and Growing Market Investing in Disruptive Solutions Strong Financial Performance A Leading Industry Platform Poised for Growth Favorable Industry Dynamics Proven Management Team

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EXPERIENCED MANAGEMENT TEAM

Patrick T. Ryan, Chief Executive Officer

 30+ years of experience working with healthcare leaders

and providers

 Previously served as CEO of The Broadlane Group,

PolyMedica Corporation (PLMD) and Physicians Dialysis Patricia Riskind, Chief Client Experience Officer

 25+ years of healthcare experience  Previously founded PatientImpact, acquired by Press

Ganey in 2009, and co-founded 3d Health Joe Greskoviak, President, Chief Operating Officer

 30+ years of healthcare experience  Previously served as President of MedAssets’ spend and

clinical resource management business (MDAS) and as EVP and Chief Development Officer for The Broadlane Group

• Dr. James Merlino, President & Chief Medical Officer,

Consulting

 17 years of experience  Practicing surgeon  Previously Chief Patient Experience Officer for The

Cleveland Clinic Health System

• Dr. Thomas Lee, Chief Medical Officer

 35 years of healthcare experience; practicing physician  Previously served as Network President for Partners

Healthcare System and CEO for Partners Community Healthcare, Inc.

 Board member of Geisinger Health System and NYP /

Weill Cornell Medical Center Christina Dempsey, Chief Nursing Officer

 30+ years of healthcare experience  Faculty for the Missouri State University Dept of Nursing  Previously VP at Patient Flow Technology and VP for

surgical and emergency services at Mercy St. John’s Deirdre Mylod, Executive Director, The Institute for Innovation and SVP, Research and Analytics, Press Ganey

 19 years of healthcare experience  Launched the Institute for Innovation to reduce patient

suffering and improve patient engagement Breht Feigh, Chief Financial Officer

 25+ years of financial experience  Previously served as CFO of American Dental Partners

(ADPI)

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INHERENT SUFFERING Experienced even if care is delivered perfectly GOAL Alleviate this suffering AVOIDABLE SUFFERING Caused by defects in the approach to deliver care GOAL Prevent this suffering

Design the Patient Experience to Reduce Suffering

PRESS GANEY OVERVIEW Mission

 To help healthcare organizations reduce suffering and improve clinical quality, safety and the overall patient experience

History

 A pioneer and thought leader in the patient experience industry with 30 years of experience  Built Company on the simple premise that “the patient voice matters”

Strengths

 An industry leader in the approximately $3.7B patient experience measurement and performance improvement solutions market  Viewed as a strategic partner to our clients  Represent healthcare providers across the continuum of care

Scale and Growth

 Multiple drivers of sustainable organic growth  Natural operating leverage  High revenue visibility

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PRESS GANEY PIONEERED THE INDUSTRY AND CONTINUES TO DRIVE INNOVATION TODAY

Unrivaled

patient experience database constitutes barrier to entry

Investment

in innovation to address dynamic industry demands

30 years

• f improving the patient

experience

1985: Established by Co-Founders

• Dr. Irwin Press & Dr. Rod Ganey

Establish Market Industry Growth Thought Leadership & Innovation Evolve the Model

1992: Government begins tying patient experience metrics to reimbursement 2002: Develops online client forum 2012: New Management Team 2012: Morehead Acquisition 2013: Introduction

• f Suffering

Framework 2009 - 2010: Four Strategic Acquisitions:  Patient Flow Technologies  PatientImpact  Data Advantage  Quality Indicator Project 1997: Press Ganey releases One Million Patients Have Spoken 2012: Institute for Innovation 2013: Census Based Surveying 2014: NDNQI Acquisition 2014: DCS Acquisition 2014: Compassionate Connected Care

Over 300 C-Suite Visits (2012-2014)

2006: CMS introduced HCAHPS Program 2014: ACA Implemented 2015: Transparency Summit – 140 clients 2013: OTS Acquisition 2014: NCC - 2500 clients 2015: Peds Summit – 50+ clients 2015: HPI Acquisition: 2015: NCC - 2900 clients

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Competitive Forces

30 Years Technology & Innovation Investment Advanced Analytics & Insights Thought Leadership Advisory Strength Client Relationships

PRESS GANEY’S ECONOMIC MOAT

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DRIVING CULTURAL AND OPERATIONAL PERFORMANCE

Scientific Measurement

• Scientifically rigorous
• Industry-leading

benchmarking database

• Robust data sets (CPT,

DRG, ICD-9)

• 105 million+ surveys

distributed in 2014

Advanced Analytics

• Integrated data insights
• High reliability analytics
• Sentiment analysis
• VBP modeling
• Quality measures

Intuitive Reporting

• Enterprise view
• Drill down to service,

unit, physician levels

• Targeted improvement
• pportunities

Expert Advisors

• Nationwide advisory

support

• Access to subject matter

experts, PhDs

• Discrete consulting

engagements

Patient-Centered Solutions

 Patient experience improvement  Physician, nurse and employee engagement  Nursing quality indicators  Patient reported outcome measures  Core measures  Culture and engagement  Safety and high reliability  Compassionate Connected Care Patient Experience / Engagement Solutions Clinical & Quality Outcomes Consulting Services 8

300+

Client Facing Associates

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Quota-Driven Sales Professionals ($18.5mm) (1)

120

Advisory Professionals ($12.4mm) (1)

144

Account Management Supporting Clients ($9.2mm) (1)

1000+

Press Ganey Total

Geographically-based model for majority of client base

INDUSTRY LEADING SALES AND CLIENT MANAGEMENT TEAMS

1. Includes salary, incentives, commissions, taxes and benefits.

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DISTINGUISHED CLIENT BASE

Deep Customer Relationships with High Level of C-Suite Connectivity

~3% largest client revenue contribution(1) ~94% average annual revenue retention(2) ~8 years average duration of hospital client relationship 99% operational effectiveness(3)

1. Represents year 2015. 2. Represents 2012 - 2014. 3. Operational effectiveness error rate calculated by dividing total errors in the collection, compilation and / or presentation of data by total requests for data.

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CASE STUDIES

4.3 3.7 3.6 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Lowest Middle Best

Average Length of Stay (Days) Reliability Score Quintile Rank

Average Length of Stay by Patient Experience Reliability Score Ranking (1)

1. Reliability and length of stay data derived from our 2013 HCAHPS all-facilities database and CMS Hospital Compare database. Source: Based on MSPB (Medicare Spending per Beneficiary) 2012, HCAHPS. Note: Hospital Compare 2012 and Billian’s 2012 data, N=2,655.

10.0% 14.8% 10.5% 2.8% 0% 4% 8% 12% 16% 20% Top Performers Bottom Performers

~5% Over- payment for bottom performers

HIGHLY RELEVANT SOLUTIONS

Patient Experience Is Linked to Clinical & Financial Performance

Average Length of Stay Cost of Care and Operating Margin Patient Experience is a Powerful Tool for Performance Improvement

Hospital Net Margin CMS spending on 30 Days Readmission 12

72 62 61 71 70 70 74 27 20 21 34 28 40 30 20 40 60 80 100

Nurse Responsive Physician Pain Medication Discharge Rate

Average National Percentile Rank in Patient Experience Top 20% of Employee Engagement Bottom 20% of Employee Engagement National Percentile Rank Based on Employee Engagement Scores (1)

Employee Engagement Improves Patient Experience

1. Based on Engagement data from 52 projects, HCAHPS data from Jan-Dec 2013 hospital compare dataset.

HIGHLY RELEVANT SOLUTIONS

Patient Experience Is Linked to Operational & Organizational Performance

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CASE STUDY: EMPLOYEE ENGAGEMENT

 Use of employee engagement surveying since 2004, but scores were declining without actionable improvement plan  Developed comprehensive engagement strategy, implementing more of Press Ganey’s prescribed approaches  By 2011, employee engagement at Carolinas moved to the 93rd percentile from the 76th percentile in 2010, and has since remained in the top decile  Supported by our solutions, CHS observed significant performance benefits including:

• Efficiency (patient discharges per employee)

improved 23% from 2009 through 2013

• Effectiveness (net patient revenue per

employee) improved 17% from 2009 through 2013

Workforce has produced both improved productivity and contribution

23% 17%

Efficiency Effectiveness

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CASE STUDY: CENSUS BASED SURVEYING / TRANSPARENCY

 In 2011, implemented Census Based Surveying, increasing survey returns by 170% from 2010 to 2012  By end of 2012, went to full transparency via University of Utah online physician review site, driving increased accountability and resulting in significant improvement according to the client  Physician ratings rose from 9% of providers in 90th percentile in 2010 to 50%+ in 90th percentile in 2014 based on Press Ganey’s benchmarking database  Additionally, improved from 3% of providers in 99th percentile in 2010 to 26% in 99th percentile in 2014

9% 22% 27% 46% 50%+ 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 2010 2011 2012 2013 2014 % of Total Providers % of Providers at 90th Percentile or above

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INVESTING IN INNOVATION AND THOUGHT LEADERSHIP 29

Executive Council members of Press Ganey nonprofit

245+

Speaking engagements

2,900

Attendees at annual client conference

1,000+

Attendees at five regional symposiums

261,000+

Monthly user logins for improvement solutions

300+

Industry articles in key trade publications

26,000+

Participants in the

• nline community

3,000+

Custom analytic reports generated annually

250

Participants in CNO Quarterly Best Practices Roundtable

Investing in Thought Leadership

Invested $20.4 mm Toward Technology Platform in 2014 ~69% New Product Innovation, Additional Product Functionality and Business Growth

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GROWTH STRATEGY / TOTAL ADDRESSABLE MARKET

VIRTUOUS CIRCLE OF GROWTH

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FAVORABLE INDUSTRY DYNAMICS

Healthcare Dynamics Market Response

 Shift away from fee-for-service to value-based models of care delivery  Narrow networks

Shift to Value-Based Healthcare Rise of Consumerism in Healthcare Expanding Government Regulation Growth in U.S. Healthcare Spending

 Manage population health / care coordination  Patient-centricity movement  Operational integration and advanced analytics  Demand for more comprehensive data  Transparency  Brand awareness / equity  Expanded CAHPS programs  Patient engagement critical for payment  Focus on performance and outcomes

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PQRS CAHPS

PERFORMANCE MANAGEMENT IS ESSENTIAL

Expanding CAHPS Impact on Financial Performance

2%

Medical Practices 2+ EPs Emergency Departments Anticipated ED CAHPS Implementation ED CAHPS Survey Development Hospital Outpatient Departments, Ambulatory Surgery Centers OAS CAHPS Implementation OAS CAHPS Survey Development Pediatric Inpatient Hospitals Child HCAHPS Implementation Inpatient Hospitals HCAHPS Inpatient Psychiatric Facilities Inpatient Psychiatric CAHPS Survey Development Anticipated PY CAHPS Implementation Dialysis Centers ICH CAHPS Hospice Providers Hospice CAHPS Accountable Care Organizations ACO CAHPS for Pioneer & Shared Savings programs Medical Practices 100+ EPs Home Health Agencies HHCAHPS PQRS CAHPS used within VBPM PQRS CAHPS Medical Practices 25+ EPs PQRS CAHPS

2015 2016 2017

Voluntary Required for Payment Penalty PQRS CAHPS Anticipated MIPS Anticipated MIPS Anticipated MIPS

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TOTAL ADDRESSABLE MARKET

 Total addressable market is large and expanding as patient- centric care becomes mission- critical  Ample opportunity to grow in the white space with new and existing clients and in new markets Patient Experience Measurement and Performance Improvement Solutions

Source: 2014 Stax analysis.

$3.7B $6.0B 2014 2018 21

HISTORY OF SUCCESSFUL ACQUISITIONS

Patient Experience Clinical Consulting Engagement

Disciplined acquisition strategy for acquiring capabilities in core and adjacent markets

2015 2014 2013 2012 2011 2010 2009

• eSurvey technology

platform

• Point of care

technology platform

• Engagement survey

platform, benchmarks

• Core measures

reporting platform and expertise

• Patient reported outcomes survey
• Nurse engagement surveys,

benchmarks, insights

• Throughput analysis and

process improvement

• Safety and reliability consulting

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HPI ACQUISITION EXPANDS PATIENT EXPERIENCE SOLUTIONS SUITE

 Safety Directly Impacts the Patient Experience

• 440,000 Americans die from preventable hospital errors
• 3rd leading cause of death in the US
• 1 in 25 hospitalized patients develop a preventable hospital infection
• Seniors have a 25% chance of injury, harm or death from a preventable

hospital error  Patient injury/error related cost to hospitals ~ $2,013 per discharge  Improvement requires providers to understand the interdependency of safety, quality and patient-centeredness

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HPI offers industry-leading safety and reliability consulting ‒ Founded 2006 ‒ 20+ Consultants ‒ 700+ Hospital clients

FINANCIAL REVIEW

FINANCIAL OVERVIEW

 Retention: 97% client retention / 94% revenue retention 3-year average 2012-2014  Visibility: average contract life for top 100 patient experience clients is 2.5 years  Duration: ~8 years average duration of hospital client relationship  Government: accelerant due to CAHPS mandates and Value Based Reimbursement  Census Based Survey: deeper, actionable insight  Engagement: linkages to patient experience and quality  Consulting: operational improvement  Cost of Revenue: greater percentage of insights from lower cost electronic surveys  Technology Improvements: redesign of platforms for collecting and sharing data  Sales Force: broader product offering  Working Capital: prepayment of services  Unlevered Free Cash Flow: 81% of EBITDA from 2012 to 9/2015  Balance Sheet: deleveraged and lower interest rates

Organic Growth Revenue Predictability Operating Leverage Cash Flow

Long Term Growth Targets Revenue: 7-9% organic / 2-3% acquisition Adjusted EBITDA: 13-15%

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$0 $50 $100 $150 $200 $250 $300 $350

2012 2013 2014 9 Mos '14 9 Mos '15 LTM 9/15

Revenue

GROWTH TRACK RECORD

($ in millions)

$0 $25 $50 $75 $100 $125

2012 2013 2014 9 Mos '14 9 Mos '15 LTM 9/15

Adjusted EBITDA

9 Months +13% 9 Months +16%

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THIRD QUARTER PERFORMANCE

$72 $81 $0 $25 $50 $75 $100 3Q14 3Q15

Revenue Adjusted EBITDA

($ in millions) 12.6% YoY Growth 11.6% Organic 1% Acquisition

$27 $31 $0 $10 $20 $30 $40 3Q14 3Q15

17% YoY Growth Cost of revenue 41.6% → 40.9% General & administrative 21.9% → 20.8%

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5.4x 4.6x 4.0x 3.8x 1.6x 1.5x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 2012 2013 2014 1Q15 2Q15 3Q15

Total Net Debt (2) / Adjusted EBITDA Ratio

CASH FLOW AND LEVERAGE

1. Unlevered free cash flow = adjusted EBITDA – capital expenditures. 2. Net debt = total debt – cash.

($ in millions)

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90

2012 2013 2014 1Q15 2Q15 3Q15

Unlevered Free Cash Flow (1)

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INVESTMENT CONCLUSIONS

Recognized Position of Leadership in a Large and Growing Market Investing in Disruptive Solutions Strong Financial Performance A Leading Industry Platform Poised for Growth Favorable Industry Dynamics Proven Management Team

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APPENDIX

ADJUSTED EBITDA RECONCILIATION

1. Includes costs associated with modification of equity awards in connection with the liquidating distribution and IPO of $70,438 in May of 2015. 2. Write-off of unamortized deferred financing fees, loss on original issue discount and lender fees in connection with debt refinancings. 3. Non-cash property and equipment and intangible impairment charges related to the discontinuation of certain clinical solutions in 2013. 4. Management fees paid to Vestar. 5. Transaction costs incurred in connection with completed and potential acquisitions. 6. Non-recurring expense associated with executive separation agreements and targeted employee headcount reductions. 7. Primarily consists of professional fees incurred in connection with corporate strategic planning and technology consulting projects, as well as expenses and revenue credits related to client retention due to the discontinuation of certain clinical solutions and software applications.

Fiscal Year ended December 31 Nine Months ended September 30 Three Months ended September 30 LTM ended September 30

($ in thousands)

2012A 2013A 2014A 2014A 2015A 2014A 2015A 2014A 2015A Net income (loss) $(7,391) $99 $15,583 $10,509 $(40,427) $4,776 $7,416 $10,516 $(35,353) Interest expense 32,157 24,644 19,832 15,136 9,921 4,706 1,567 20,757 14,617 Income tax expense (benefit) (604) 5,926 13,196 9,185 1,254 4,174 2,614 9,543 5,265 Depreciation & amortization 27,202 32,468 35,102 25,825 30,624 8,779 10,528 34,785 39,901 EBITDA $51,364 $63,137 $83,713 $60,655 $1,372 $22,435 $22,125 $75,601 $24,430 Equity-based compensation(1) 14,256 9,787 8,034 7,565 81,466 2,658 6,469 10,511 81,935 Extinguishment of debt (2) 7,185 7,922 2,894 2,894 1,750 8 1,112 2,894 1,750 Non-cash impairment charges (3)

• 2,579
• 2,579
• Management fee to related

party (4) 968 907 1,047 690 553 230

• 912

910 Acquisition expenses (5) 1,327 902 462 332 319 264 116 450 450 Severance (6) 2,797 625 1,084

• 705
• 705

625 1,789 Loss on disposal of property & equipment

• 274

1,719 1,595 (30) 504 1 1,595 94 Other non-comparable items

(7)

1,465 2,159 3,606 1,830 1,246 360 382 3,071 3,021 Adjusted EBITDA $79,362 $88,292 $102,559 $75,561 $87,381 $26,459 $30,910 $98,238 $114,379

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UNLEVERED FREE CASH FLOW

Fiscal Year ended December 31 Quarter ended

($ in thousands)

2012A 2013A 2014A 3/31/15 6/30/15 9/30/15 Adjusted EBITDA $79,362 $88,292 $102,559 $27,340 $29,131 $30,910 Capital Expenditures (18,191) (17,230) (19,414) (9,185) (5,994) (5,721) Unlevered Free Cash Flow $61,171 $71,062 $83,145 $18,155 $23,137 $25,189 Free Cash Flow Conversion (1) 77% 80% 81% 66% 79% 81%

1. Free Cash Flow Conversion defined as % of Adjusted EBITDA.

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CAPITALIZATION

As Reported

($ in thousands)

12/31/12 12/31/13 12/31/14 3/31/15 6/30/15 9/30/15 Cash $7,845 $32,635 $6,962 $12,162 $19,922 $23,793 Total Debt $438,188 $436,736 $419,296 $416,195 $193,979 $193,228 Net Debt $430,343 $404,101 $412,334 $404,033 $174,057 $169,435 LTM Adjusted EBITDA $79,362 $88,292 $102,559 $106,124 $109,926 $114,379 Total Net Leverage 5.4x 4.6x 4.0x 3.8x 1.6x 1.5x

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