The Innovator in Healthcare Workforce Solutions and Staffing Services
Investor Presentation
September 2019
Investor Presentation September 2019 Forward-Looking Statements - - PowerPoint PPT Presentation
The Innovator in Healthcare Workforce Solutions and Staffing Services Investor Presentation September 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
September 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 Developments subsequent to this presentation are likely to cause these statements to become outdated with the passage of time.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
62% 17% 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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help healthcare organizations optimize their workforce
towards quality patient care
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, Interim Leadership, Executive Search, Credentialing, Allied and Nurse MedPartners, Leaders For Today Phillips DiPisa, Silversheet, Advanced
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4%
Workforce Solutions Staffing
63%
Workforce Solutions Now Majority of 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
strong MSP pipeline
staffing service lines
Nurse capabilities
School staffing offering
credentialing and Teletherapy platforms
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turnaround
with large client
$25M strike revenue
Silversheet acquisition and investments
enhancements and headcount
engagement
analytics, and reporting
and development
Source: AMN internal estimates of other markets 12
Hires, Openings & Quits Other Addressable Markets: Greater Than $5 Billion
Interim Leadership, Perm/Search, RPO, Mid- Revenue Cycle, Workforce Consulting, VMS, Credentialing
2019E, 17.3 $0 $5 $10 $15
Revenue in $ Billions
Source: Staffing Industry Analysts/Crain Communications
US Healthcare Staffing
Job Openings Hires Quits 1% 2% 3% 4% 5% 6% 7% 2013 2014 2015 2016 2017 2018 2019 % of Employment
Job Openings and Labor Turnover
difference
Source: Job Openings and Labor Turnover Survey, US Bureau of Labor Statistics
+4 Million More Healthcare Jobs
Healthcare will add more jobs than any other industry
Fast-Growing Healthcare Jobs 2016: 19 million 2026: 23 million
Source: Bureau of Labor Statistics – Employment Projections, 2016 - 2026
Physical Therapists Registered Nurses Physician Assistants Nurse Practitioners Physicians
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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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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
62%
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
* Pro forma for full-year contribution from acquisitions of Advanced, MedPartners, Phillips DiPisa and Leaders For Today
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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
17%
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/Impact of Acquisition Solution Set
Travel therapy staffing School therapy staffing Travel nurse staffing Teletherapy offering $200 million cash plus up to $20 million earn-out Run rate $140M revenue and $20M EBITDA Immediately accretive to adjusted EPS
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Allied and Nurse Staffing Solutions
Innovative healthcare staffing company specializing in placing therapists and nurses in contract positions across multiple settings including hospitals, schools, clinics, skilled nursing facilities and home health
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As the market leader, AMN delivers a broad suite of workforce solutions to many leading health systems
AMN knows the national landscape. They know what’s out there and what the trends are. They bring that valuable information to us so that we can better plan as partners.
Chief Nursing Officer,
Large Integrated Health System & AMN MSP Client
25 ($ in Millions) $1,463 $1,902 $1,988 $2,136 $2,123 $- $500 $1,000 $1,500 $2,000 $2,500 2015 2016 2017 2018 LTM 2Q19 $469 $620 $644 $696 $704 32.1% 32.6% 32.4% 32.6% 33.2% 25% 30% 35% 40% $0 $200 $400 $600 2015 2016 2017 2018 LTM 2Q19 $165 $237 $256 $270 $267 11.3% 12.5% 12.9% 12.7% 12.4% 5% 10% 15% $0 $50 $100 $150 $200 $250 2015 2016 2017 2018 LTM 2Q19
Gross Profit Total Revenue Adjusted EBITDA Free Cash Flow
$29 $110 $134 $192 $132 $0 $40 $80 $120 $160 $200 $240 2015 2016 2017 2018 LTM 2Q19
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Capital Expenditures Return on Invested Capital Total Leverage Ratio* Debt and Credit Facilities
($ in millions) $27 $22 $27 $35 $35 $0 $10 $20 $30 $40 2015 2016 2017 2018 LTM 2Q19 1.4x 1.6x 1.3x 1.7x 2.4x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 2015 2016 2017 2018 Q2 19 * As defined by AMN’s credit agreement Balances as of 6/30/19. AMN’s $400M revolving credit facility has $15.3 million pledged as collateral for letters of credit. Interest Rate Maturity Date Debt Outstanding Available Borrowing Senior Unsecured Notes 5.125% Oct 2024 325.0 $
3.900% Jun 2024 150.0 $
3.900% Jun 2024 $ 196.0 $ 188.7 16% 14% 16% 14% 10% 0% 5% 10% 15% 2015 2016 2017 2018 LTM 2Q19
27 ($ Millions)
$525
$- $100 $200 $300 $400 $500 $600
2014 2015 2016 2017 2018 YTD 2019
$ Millions
Cumulative Free Cash Flow
$525 Million Free Cash Flow Generated Since 2014
$(785)
$(119)
$511 $(600) $(400) $(200) $- $200 $400 $600
Acquisitions Stock Repurchases Net Borrowing
$ Millions
Selected Other Uses and Sources of Cash 2014 to Date
$904 Million Spent on Acquisitions, Stock Buybacks Balance Sheet Remains Strong
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