Investor Presentation September 2019 Forward-Looking Statements - - PowerPoint PPT Presentation

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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


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SLIDE 1

The Innovator in Healthcare Workforce Solutions and Staffing Services

Investor Presentation

September 2019

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SLIDE 2

Forward-Looking Statements

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

  • ther similar expressions. In addition, statements that refer to performance; plans, objectives and strategies for future
  • perations; 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-looking

  • statements. Factors that could cause actual results to differ from those discussed in or implied by the 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 Developments subsequent to this presentation are likely to cause these statements to become outdated with the passage of time.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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SLIDE 3

Key Investment Highlights

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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

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SLIDE 4

AMN at a Glance Supply ↔ Demand

Age 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

2013-18 Revenue Growth

16% CAGR

62% 17% 21%

Nurse and Allied Solutions Locum Tenens Solutions Other Workforce Solutions

$2.1B

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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SLIDE 5

Our Mission

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Every day, we . . .

Deliver the best talent and insights to

help healthcare organizations optimize their workforce

Give healthcare professionals

  • pportunities to do their best work

towards quality patient care

Create a values-based culture of

innovation where our team members can achieve their goals

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SLIDE 6

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 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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SLIDE 7

History of AMN Healthcare

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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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SLIDE 8

Evolution of AMN: Driving Towards Workforce Solutions

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AMN has evolved from traditional healthcare staffing to providing comprehensive workforce solutions

4%

2008

Workforce Solutions Staffing

63%

  • Staffing and Recruitment
  • Workforce Solutions
  • Leadership
  • Workforce Technologies

2018

Workforce Solutions Now Majority of Revenue Mix

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SLIDE 9

Revenue Growth with Operating Leverage

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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

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SLIDE 10

2019 – A Year of Focus and Investment

Tailwinds

  • Recent MSP wins and

strong MSP pipeline

  • Healthy demand across

staffing service lines

  • Bolstered our Allied and

Nurse capabilities

  • Added to high-growth

School staffing offering

  • Added new SaaS

credentialing and Teletherapy platforms

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Headwinds

  • Locum Tenens

turnaround

  • Lower staffing volume

with large client

  • Tough Q2 comp due to

$25M strike revenue

  • Margin impact from

Silversheet acquisition and investments

Investments

  • Locum Tenens

enhancements and headcount

  • Candidate and client

engagement

  • Digital and mobile
  • Data management,

analytics, and reporting

  • Team member retention

and development

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SLIDE 11

Industry Overview

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SLIDE 12

Healthcare Staffing: Large, Fragmented Market

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

  • Healthcare open jobs are 2x monthly hiring
  • Hiring is largely offset by voluntary attrition
  • Stepped-up hiring efforts have made a minor

difference

Source: Job Openings and Labor Turnover Survey, US Bureau of Labor Statistics

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SLIDE 13

+4 Million More Healthcare Jobs

Healthcare will add more jobs than any other industry

Fast-Growing Healthcare Jobs 2016: 19 million 2026: 23 million

Healthcare Job Growth Demands New Solutions

Source: Bureau of Labor Statistics – Employment Projections, 2016 - 2026

Physical Therapists Registered Nurses Physician Assistants Nurse Practitioners Physicians

37% 36% 25% 15% 15%

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SLIDE 14

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

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 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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SLIDE 15

Business Overview

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SLIDE 16

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
  • utsourcing (RPO)
  • Mid-revenue cycle workforce

solutions

  • Scheduling and labor

management

  • Credentialing solutions

AMN Portfolio of Solutions

Executive Leadership

  • Interim leadership
  • Executive search
  • Physician leadership search
  • Nurse leadership search
  • Leadership training and

development

  • Workforce analysis and
  • ptimization
  • Predictive modeling and analytics
  • Education services

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Value through leadership, innovation and strategic insight

Staffing and Recruitment Workforce Solutions Leadership and Consulting

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SLIDE 17

Leader in Managed Services Programs (MSP)

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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

  • 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
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SLIDE 18

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

MSP: Growth Engine

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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 Gross Billings Under Management ($M)

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SLIDE 19

Nurse and Allied Solutions

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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

62%

  • f 2018

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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SLIDE 20

Locum Tenens Solutions

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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%

  • Hospitalists
  • Anesthesia/CRNA
  • Emergency Medicine
  • Internal Medicine
  • Psychiatry
  • Surgery
  • Advanced Practices
  • Radiology
  • Primary Care
  • Dentistry
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SLIDE 21

Other Workforce Solutions

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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SLIDE 22

Terms/Impact of Acquisition Solution Set

Advanced Medical Acquisition

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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SLIDE 23

Diverse Client Base

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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

“ ”

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SLIDE 24

Financial Overview

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SLIDE 25

Financial Summary

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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SLIDE 26

Historical Credit Statistics

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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 $

  • Secured Term Loan

3.900% Jun 2024 150.0 $

  • Revolving Credit Facility

3.900% Jun 2024 $ 196.0 $ 188.7 16% 14% 16% 14% 10% 0% 5% 10% 15% 2015 2016 2017 2018 LTM 2Q19

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SLIDE 27

Allocation of Strong Free Cash Flows

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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SLIDE 28

Key Investment Highlights

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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