Team Health — Investor Presentation (January 2010)
26 slides from Team Health's investor presentation, Jan 13, 2010
Slide 1: TeamHealth (NYSE: TMH) Investor Presentation
Exhibit 99.1 TeamHealth (NYSE: TMH) Investor Presentation January 2010
Slide 2: Forward looking statement
Forward looking statement Statements made in this presentation that are not historical facts and that reflect the current view of Team Health Holdings, Inc. (the “Company”) about future events and financial performance are hereby identified as “forward looking statements.” Some of these statements c
Slide 3: Our Company
Our Company • One of the leading providers of outsourced Our Service Offerings emergency department staffing as well as management and other services Emergency – Founded in 1979 Medicine Anesthesia – Serves ~560 hospital clients in 48 states Hospital Medicine – Affiliated with ~6,200 healthcare prof
Slide 4: Investment Highlights
Investment Highlights Leading ED Management Company Scalable Infrastructure • Leading outsourced market position • Regional operating model supported by a • Favorable industry dynamics national infrastructure • Outstanding reputation augmented by an • Significant investment in proprietary attractive
Slide 5: Leading Market Share with Favorable Industry Dynamics
Leading Market Share with Favorable Industry Dynamics ED Market (1) Growth in ED Patient Visits (2) ~4,900 Community Hospitals 125 5,000 ~4,500 Hospitals 121 with EDs 120 118 4,900 115 115 113 ~3,000 Outsourced 110 111 EDs 110 4,800 106 105 103 4,700 67% Outsourced 100 100 95 95 4,600 Local Groups 9
Slide 6: Why Hospitals Outsource the Emergency Department
Why Hospitals Outsource the Emergency Department • Entry point for the majority of • Lack of infrastructure to hospital admissions recruit and retain • Drives market share for the physicians hospital • Need to focus on other • Has significant impact on image challenges facing the hospital of hospita
Slide 7: Our Value Proposition
Our Value Proposition Physicians Hospitals • Stable practice • Long and outstanding opportunities in well reputation: regarded hospitals – High quality physicians • Competitive compensation – Low physician turnover packages – High contract retention • Comprehensive practice management support – High
Slide 8: Our Proven Business Model Delivers Value to Multiple Constituents
Our Proven Business Model Delivers Value to Multiple Constituents Patients Physicians & Other Clinicians •Recruit & retain •Provide comprehensive services Payors Bill (Commercial, Client contract Medicaid, Medicare, Contract, Self-Pay, Receive payments Subsidy) Hospitals 8
Slide 9: Regional Operating Model Supported by a National Infrastructure
Regional Operating Model Supported by a National Infrastructure Investment in Infrastructure Drives Operating Efficiencies • 13 regional operating units with local • Favorable SG&A margin trend since 2006 market knowledge • Centralized infrastructure • Regional operating units are structured to abso
Slide 10: Significant Investment in Proprietary Systems and Processes
Significant Investment in Proprietary Systems and Processes… ED Dashboard Patient Satisfaction Monitoring TeamHealth Client Report Facts Five Stars Essentials Patient Disposition -LPMSE (Left Prior to Medical Screening Exam) is tracked in Medical Records Tracking System (MRTS) For DOS Between 2008/O
Slide 11: Comprehensive and Effective Risk Management
Comprehensive and Effective Risk Management… Right Clients Professional Liability Cost as Percent of Total + Net Revenue (1) 6.6% 6.0% Patient Safety 4.8% 4.5% 4.3% Initiatives 3.8% 3.5% + 2003 2004 2005 2006 2007 2008 YTD 9/30/09 Claims Management …leading to favorable loss trends (1) Professional
Slide 12: Leverage Value Proposition to Drive Growth
Leverage Value Proposition to Drive Growth Increase Revenue from Win New Existing Clients Contracts Pursue Pursue Selective Opportunities in Acquisitions Adjacent Markets 12
Slide 13: Increase Revenue from Existing Clients
Increase Revenue from Existing Clients Patient volumes X Revenue per Visit = Same contract growth Attractive client base Revenue Cycle Performance 1 Same contract revenue growth 9.0% 9.3% 5.7% 5.9% 5.7% 4.3% 4.5% 4.5% 2002 2003 2004 2005 2006 2007 2008 YTD 9/30/09 Attractive clients and revenue cycl
Slide 14: Win New Contracts
Win New Contracts • Large and highly fragmented market – 3,000 EDs outsourced – Regional and local groups – 75% of outsourced EDs • Hospitals continue to face fiscal and operating pressures • Customized solutions through people, technology, and experience • $100 million annually generated from new c
Slide 15: Pursue Selective Acquisitions in Core ED Markets
Pursue Selective Acquisitions in Core ED Markets • Established track record of acquisitions and seamless integration • Solidifies existing market share/new market entry • Adhere to strict set of criteria: – Good cultural fit – Accretive to earnings – Opportunity for immediate financial improvement •
Slide 16: Pursue Opportunities in Adjacent Markets
Pursue Opportunities in Adjacent Markets Hospitalist • 58% of community hospitals have hospital medicine programs Market • 83% of hospitals > 200 beds have hospital medicine programs $8 BN • 2 nd largest hospitalist provider Radiology • Technological advancements Market • Aging population $16 BN • I
Slide 17: Financial Overview
17 Financial Overview TEAMHealth.
Slide 18: Financial Highlights and Overview
Financial Highlights and Overview • Net revenues (1) of $1.4 billion and adjusted EBITDA (excluding favorable actuarial adjustments associated with prior periods) of $142 million as of LTM (2) 9/30/09 Strong Financial • Revenue CAGR: 8.7% (3) Performance • Adjusted EBITDA CAGR: 7.6% (3) • Improving
Slide 19: Historical Financial Performance
Historical Financial Performance Net Revenue Adjusted EBITDA Free Cash Flow CAGR: 8.7% CAGR: 7.6% CAGR: 48.1% $142 $74 $1,406 $1,331 $65 $1,232 $121 $123 $118 $1,075 $114 $1,095 $1,000 $100 $49 $42 $40 $20 2006 2007 2008 9/30/09 9/30/08 9/30/09 2006 2007 2008 9/30/09 9/30/08 9/30/09 2006 2007 2008 9
Slide 20: Long-Term Relationships Generating Recurring Contractual Revenue
Long -Term Relationships Generating Recurring Contractual Revenue ED Contract Longevity 0-2 Years, 18% 10 Years +, 35% 2-4 Years, 19% 7-10 Years, 4-7 Years, 13% 15% 375 contracts as of 9/30/09 13 year average tenure of top 50 customers by net revenue 20
Slide 21: Diversified Payor Mix Provides Stable Revenue Base
Diversified Payor Mix Provides Stable Revenue Base Net Revenue Mix – 09/30/09 YTD (1) Payor Mix by Volume – 09/30/09 YTD Other, 2% Other, 2% Medicare, 22% Commercial, 29% Contract, 31% Fee For Service, Medicaid, 25% 67% Self-pay, 22% (1) Represents net revenues less provision for uncollectibles. Of
Slide 22: Proven Ability to De-lever
Proven Ability to De-lever Net Debt / Adjusted EBITDA (1) Adjusted EBITDA (1) / Interest 6.5x 5.6x 5.0x 4.6x 3.5x 3.6x 2.6x 2.7x 2.0x 2.2x Actual As Adjusted (2) Actual As Adjusted (2) 2006 2007 2008 2006 2007 2008 9/30/09 9/30/09 (1) Adjusted EBITDA excludes favorable actuarial adjustments associat
Slide 23: Capitalization
Capitalization Capitalization Table (1) ($ in millions) Actual As Adjusted Maturity 9/30/2009 9/30/2009 Cash and Cash Equivalents $113.0 $80.3 Revolving Line of Credit ($125) Dec. 2011 0.0 0.0 Term Loan Dec. 2012 409.1 409.1 Total Secured Debt $409.1 $409.1 11.25% Senior Sub Notes Dec. 2013 203.0 45
Slide 24: Investment Highlights
Investment Highlights Leading ED Management Company Scalable Infrastructure • Leading outsourced market position • Regional operating model supported by a • Favorable industry dynamics national infrastructure • Outstanding reputation augmented by an • Significant investment in proprietary attractive
Slide 25: Appendix
25 Appendix TEAMHealth.
Slide 26: Adjusted EBITDA / Net Earnings Reconciliation and Free Cash Flow Calculation
Adjusted EBITDA / Net Earnings Reconciliation and Free Cash Flow Calculation Reported Net Earnings to Adjusted EBITDA Reconciliation ($ in millions) 2006 2007 2008 9/30/2008 YTD 9/30/2009 YTD LTM 09/30/2009 (1) Net earnings $16.5 $43.3 $44.7 $50.1 $55.2 $49.8 Interest expense, net 57.8 55.2 45.8 34.
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