Odyssey Healthcare — Q1 2008 Earnings Presentation
22 slides from Odyssey Healthcare's earnings presentation, May 15, 2008
Slide 1: To Serve All People During the End of Life's Journey
Slide: 1 “To Serve All People During the End of Life’s Journey”
Slide 2: Forward-Looking Statements
Slide: 2 Title: FORWARD-LOOKING STATEMENTS Body: Certain statements contained in this presentation are forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements are based on management’s current expectations and are subject to known and unknown ris
Slide 3: Investment Highlights
Slide: 3 Body: Well positioned in a sector which provides substantial value to the healthcare system Operating initiatives beginning to improve results VistaCare acquisition adds scale and expands leadership position Experienced management team with strong integration and operating background Title:
Slide 4: Odyssey… A Leader in Hospice Care
Slide: 4 Title: ODYSSEY… A LEADER IN HOSPICE CARE 100 Medicare Certified Programs in 30 states >12,000 current ADC CAGR revenue = 12.3%
Slide 5: Combined Locations
Slide: 5 Title: COMBINED LOCATIONS Odyssey Locations Hospice Office Inpatient Facility Corporate Office – Dallas VistaCare Locations Hospice Office Inpatient Facility
Slide 6: Improves Quality of Life
Slide: 6 Title: IMPROVES QUALITY OF LIFE Body: Prior studies have found that hospice improves quality of care Moor and Kidder 1985 National Hospice Organization 1995 Miller et al. 2002, 2004 Wu et al. 2003
Slide 7: Cost Effective
Slide: 7 Title: COST EFFECTIVE Body: 25% of total US Medicare budget spent on last year of life Mean expenditure in last year of life $24,600 vs $9,400 for same beneficiaries in next to last year of life Duke University study (2007) Hospice use reduced Medicare costs by an average of $2,309 in last
Slide 8: Operating Initiatives
Slide: 8 Title: OPERATING INITIATIVES Body: Management of Medicare cap Strengthen senior management team Focus on existing footprint Rationalize existing portfolio Implement more sophisticated sales and marketing strategy Inpatient program development Investment in information systems
Slide 9: Odyssey's Medicare Cap Expense Trend
Slide: 9 Title: ODYSSEY’S MEDICARE CAP EXPENSE TREND * 2003 - 2006 not adjusted for discontinued operations Q108 Q107 2003 0.5% 2004 0.6% 2005 3.0% 2006 3.8% 2007 1.2% 0.8% 1.2%
Slide 10: Changes in Senior Management Team
Slide: 10 Body: President and Chief Executive Officer, Robert Lefton Senior Vice President and Chief Financial Officer, Dirk Allison Senior Vice President and Chief Operating Officer, Craig Goguen Title: CHANGES IN SENIOR MANAGEMENT TEAM
Slide 11: Rationalize Existing Portfolio
Slide: 11 Title: RATIONALIZE EXISTING PORTFOLIO Exited 18 programs Reasons for closure: Competitive position Market size Medicare cap
Slide 12: Investment in Information Systems
Slide: 12 Title: INVESTMENT IN INFORMATION SYSTEMS Body: Completed implementation at Odyssey sites. Beginning conversion at VistaCare sites In process of implementing new sales and marketing system
Slide 13: VistaCare Transaction
Slide: 13 Title: VISTACARE TRANSACTION Expands leadership position Compatible organizations Strengthens existing markets Management experience with acquisitions and integration Reducing corporate overhead and closing corporate offices drives profitability Operational and Medicare cap improvements no
Slide 14: 1st Quarter Highlights
Slide: 14 1ST QUARTER HIGHLIGHTS
Slide 15: 1st Quarter Highlights
Slide: 15 Title: 1ST QUARTER HIGHLIGHTS Body: Strong admission growth – 11.9% YOY from Odyssey Flat ADC but good growth throughout quarter – 1.3% Continued good cap management Expense initiatives beginning to show results VistaCare Integration on track
Slide 16: Admissions from Continuing Operations
Slide: 16 Title: ADMISSIONS FROM CONTINUING OPERATIONS Q108 Q107 2003 24,900 2004 28,620 2005 30,972 2006 32,001 2007 32,294 10,810 8,489
Slide 17: Net Revenue Growth from Continuing Operations
Slide: 17 Q108 Q107 Title: NET REVENUE GROWTH FROM CONTINUING OPERATIONS CAGR = 12.3% 2003 $251.3 2004 $312.9 2005 $348.6 2006 $379.3 2007 $398.9 $123.3 $96.6 ($ in millions)
Slide 18: Average Daily Census from Continuing Operations
Slide: 18 Title: AVERAGE DAILY CENSUS FROM CONTINUING OPERATIONS Q108 Q107 2003 5,449 2004 6,691 2005 7,145 2006 7,528 2007 7,652 12,170 7,585
Slide 19: Odyssey's Medicare Cap Expense
Slide: 19 Title: ODYSSEY’S MEDICARE CAP EXPENSE ($ in thousands) Q108 Q107 2003 $1,322 2004 $2,089 2005 $11,968 2006 $16,464 2007 $5,039 $1,035 $1,108 * 2003 - 2006 not adjusted for discontinued operations
Slide 20: Income from Continuing Operations
Slide: 20 Title: INCOME FROM CONTINUING OPERATIONS * Excludes charge for settlement with Department of Justice of $9.6 million, net of tax. A reconciliation of GAAP to non-GAAP financial measures are available on the Investor Relations page of Odyssey’s website at www.odsyhealth.com. ($ in millions)
Slide 21: Net Cash from Continuing Operations
Slide: 21 Title: NET CASH FROM CONTINUING OPERATIONS * Exclusive of $13 million for Department of Justice payment ($ in millions) Q108 Q107 2003 $27.6 2004 $47.1 2005 $45.2* 2006 $47.7* 2007 $16.9 $10.4 $1.5
Slide 22: To Serve All People During the End of Life's Journey
Slide: 22 “To Serve All People During the End of Life’s Journey”