The Innovator in Healthcare Workforce Solutions and Staffing Services
Investor Presentation
March 2019
Investor Presentation March 2019 Forward-Looking Statements This - - PowerPoint PPT Presentation
The Innovator in Healthcare Workforce Solutions and Staffing Services Investor Presentation March 2019 Forward-Looking Statements This investor presentation contains forward-looking statements within the meaning of Section 27A of the
The Innovator in Healthcare Workforce Solutions and Staffing Services
March 2019
This investor presentation contains “forward-looking 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
The Company’s actual results could differ materially from those discussed in, or implied by, these 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, 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 Developments subsequent to this presentation are likely to cause these statements to become outdated with the passage of time.
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Non-GAAP Measures
This presentation contains certain non-GAAP financial information, which the Company provides as additional information, and not as an alternative, to the Company's condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures include (1) adjusted EBITDA and (2) adjusted EBITDA margin on slides 10 and 27, respectively. Management believes that adjusted EBITDA and adjusted EBITDA margin serve as industry-wide financial measures. These non-GAAP measures should not be used in isolation to evaluate the Company's performance. A reconciliation of the non-GAAP measures identified in this presentation, along with further detail about the use and limitations of certain of these non-GAAP measures, may be found on the Company's website at http://amnhealthcare.investorroom.com/financialreports.
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Leader in Attractive Market Trusted 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 Model Ability to drive attractive cash flow and earnings growth Strong Cash Flow and Balance Sheet Disciplined management and conservative balance sheet
Age demographic shift creates growth opportunities for AMN workforce solutions
with over 100 MSP clients, which includes many leading healthcare systems
Recognized as largest U.S. healthcare staffing firm
2013-18 Revenue Growth
16% CAGR
61% 18% 21%
Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions
2018 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
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Deliver the best talent and insights to
help healthcare organizations optimize their workforce
Give healthcare professionals
towards quality patient care
Create a values-based culture of
innovation where our team members can achieve their goals
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 Deal Provider 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
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Strategic Transformation in Workforce Solutions
1980s 2000–08 2014-15 2018-19 1990s 2010-13 2016
Travel Nurse American Mobile Nurses: A founding company Nurse and Allied Expansion Preferred Healthcare, Medical Express, NursesRx Workforce Solutions: MSP, RPO and VMS MedFinders, ShiftWise Nurse, Physician, VMS, Interim Leadership, Workforce Scheduling Onward Healthcare, Locum Leaders, Medefis, The First String, MillicanSolutions, Avantas Physician, Allied, Nurse and Search Expansion Merritt Hawkins, Staff Care, MedTravelers, O’Grady Peyton Interim Leadership and Executive Search, Labor Disruption, Medical Coding BE Smith, Peak Health, HealthSource Global Mid-Revenue Cycle, C-Suite and Interim Leadership, and Credentialing Solutions MedPartners, Phillips DiPisa, Leaders For Today, Silversheet
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4%
Workforce Solutions Staffing
63%
Workforce Solutions Now Dominate Revenue Mix
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($ 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
Tailwinds
implementations
staffing service lines
credentialing solution
repurchases
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Headwinds
turnaround
with large client
$25M strike revenue
Silversheet and investments
Investments
enhancements and headcount
engagement
management and reporting
Sources: US Healthcare Staffing Forecast, Staffing Industry Analysts, September 2018; AMN internal estimates of other markets
U.S. Temporary Healthcare Staffing
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Demand Drivers
($ 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)
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Job Openings Hires Quits 1% 2% 3% 4% 5% 6% 7% 2013 2014 2015 2016 2017 2018 % of Employment
3% 14% 5%
Hires Openings Quits
Five-Year CAGRs
JOLTS = Job Openings and Labor Turnover Survey
Healthcare Hires, Openings and Quits
Data source: Job Openings and Labor Turnover Surveys, US Bureau of Labor Statistics
Projected Healthcare Labor Shortage in 2030 Aging Healthcare Professionals
~ 50% of RNs and physicians are age 50+
Annual Growth in Healthcare Spend Aging Population and Healthcare Utilization
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.
hospital days
healthcare days
2010 2015 2020 2025 2030
Source: 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 shortage Regional & specialty nurse shortages
2018–27 2017 2018
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Staffing and Recruitment
Workforce Solutions
(MSP)
(VMS)
solutions
management
Executive Leadership
development
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Value through leadership, innovation and strategic insight
Staffing and Recruitment Workforce Solutions Leadership and Consulting
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Outsourced partner to manage all supplemental workforce needs AMN manages staffing vendors, credentialing, clinical support, reporting, consolidated invoicing
500+ affiliates
Client Benefits AMN Benefits
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 $346
MSP Direct Fill Revenue Filled by Affiliate Network
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(1) Staffing revenue consists of Nurse, Allied, and Locum Tenens revenue; on a consolidated basis, MSP was 42% of 2018 revenue
MSP direct fill revenue grew from 1% of AMN staffing revenue in 2008 to 51% today (1)
MSP Gross Billings Under Management ($M)
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Short- and Long-term Travel and Local Staffing
and allied staffing company
typically 13 weeks
revenue comes through exclusive MSP relationships
61%
AMN Revenue Robust Demand: Key Drivers Shortage of nurses Shift to MSP relationships Shift 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
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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%
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Before: Multiple, unintegrated, inflexible, aging technologies Today: Integrated, scalable, agile technology platform Our focus for growth:
Inconsistent operating model across brands Single, cohesive operating model
Workforce and leadership shortages Rising healthcare costs Increased administrative complexity Revenue 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%
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Terms of Acquisition Solution Set
Subscription-based credentialing and privileging software platform Credential Verification Organization services $30 million cash Up to $25 million earn-out, based on revenue and earnings targets for 2019-20
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Credentialing Solutions
Provides sophisticated, cloud-based software solutions to reduce the complexities and challenges of the credentialing process for clinicians and healthcare organizations
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As the market leader, AMN delivers a broad suite of workforce solutions to many leading health systems
AMN knows the national landscape. They know what’s out there and what the trends are. They bring that valuable information to us so that we can better plan as partners.
Chief Nursing Officer,
Large Integrated Health System & AMN MSP Client
27 ($ 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 $250 2014 2015 2016 2017 2018 9% 16% 14% 16% 14% 0% 5% 10% 15% 2014 2015 2016 2017 2018
Gross Profit Total Revenue Adjusted EBITDA Return on Invested Capital
28 ($ Millions)
$476
$- $100 $200 $300 $400 $500
2014 2015 2016 2017 2018
$ Millions
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
$ Millions
Selected Other Uses and Sources of Cash Fiscal Years 2014-18
$651 Million Spent on Acquisitions, Stock Buybacks Strong Balance Sheet, 1.7x Leverage Ratio
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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