Concentra Group Holdings Parent, Inc. · NYSE:CON
Concentra Group Holdings Parent — Concentra — Deutsche Bank Securities High Yield Conference 2003
34 slides from Concentra Group Holdings Parent's conference presentation, Oct 7, 2003
Slide 1: Deutsche Bank Securities High Yield Conference
Deutsche Bank Securities High Yield Conference October 7 - 9, 2003
Slide 2: Forward-Looking Information
Forward-Looking Information This This presentation presentation contains contains certain certain forward-looking forward-looking statements, statements, which which the the Company Company is is making making in in reliance reliance on on the the safe safe harbor harbor provisions provisions of of
Slide 3: Agenda
Agenda Introduction Introduction of of Concentra Concentra Daniel Daniel J. J. Thomas Thomas Business Business Segments Segments Chief Chief Executive Executive Officer Officer Financial Financial Overview Overview Thomas Thomas E. E. Kiraly Kiraly EVP EVP and and CFO CFO 3
Slide 4: Introduction of Concentra
Introduction of Concentra Daniel J. Thomas Chief Executive Officer
Slide 5: Company Highlights
Company Highlights n The n The leading leading healthcare healthcare outcomes outcomes and and cost cost improvement improvement company company in in the the United United States States n Concentra n Concentra is is the the answer answer to to the the nation’s nation’s problem problem in in dealing
Slide 6: Company Highlights
Company Highlights n Concentra n Concentra is is the the market market leader leader in: in: –– Workers’ Workers’ compensation compensation costcost management management –– Controlling Controlling the the cost cost of of auto auto injury injury claims claims –– Reducing Reducing the the cost cost o
Slide 7: Traditional Healthcare Environment
Traditional Healthcare Environment Workers’ Compensation, Group Health, Auto & Occupational Health Markets Employee Injuries Benefits & & Illness Lost--time Wages Lost Payor/ Provider Medical Costs Employer 7
Slide 8: Concentra is at the Center of Improving Outcomes and Reducing Costs
Concentra is at the Center of Improving Outcomes and Reducing Costs Workers’ Compensation, Group Health, Auto & Occupational Health Markets Employee Quicker Return Injuries To Work Improved & Illness Outcomes Benefits & Concentra Lost--time Wages Lost Payor/ Provider Medical Costs Employer Reduced C
Slide 9: Concentra's Business Segments
Concentra’s Business Segments ($ in millions) Concentra LTM 6/30/03 Revenue $1,017 LTM 6/30/03 EBITDA $134 Margin 13% Health Services Network Services Care Management LTM Revenue $490 LTM Revenue $240 LTM Revenue $287 LTM Gross Profit $80 LTM Gross Profit $100 LTM Gross Profit $27 Margin 16% Margin
Slide 10: Primary Service Offerings
Primary Service Offerings Health Health Services Services Care Care Management Management Network Network Services Services nn 247 247 health health centers centers nationwide nationwide nn Professional Professional services services aimed aimed at at nn Review Review and and reduction reduction of
Slide 11: Markets and Customers Served
Markets and Customers Served MARKETS MARKETSSERVED SERVED CUSTOMERS CUSTOMERSSERVED SERVED Auto Insurance and Other 3,500 Insurance 7% Companies, TPAs Group Health and Other Payors 11% 52% Occupational Health 17% Workers' Compensation 65% 114,000 Employers 48% Note: Percentages based on 2002 revenue
Slide 12: Workers' Compensation Market Today
Workers’ Compensation Market Today n Substantial n Substantial nationwide nationwide premium premium increases increases of of 20% 20% to to 70% 70% and and $132 Billion medical medical cost cost inflation inflation of of 12% 12% to to Workers’ Compensation Market 15% 15% Administrative Costs n 7 n
Slide 13: Other Markets of Increasing Importance
Other Markets of Increasing Importance n Group n Group Health Health –– Market Market consists consists ofof more more than than $50 $50 billion billion out-of-network out-of-network and and $350 $350 billion billion in- in- network network claimsclaims per per year year –– Concentra Concentra is is
Slide 14: Stable and Growing Base of Blue Chip Customers
Stable and Growing Base of “Blue Chip” Customers Major Insurance Carriers and Health Plans Major Employers n Aetna n Albertsons n AIG n ARAMARK n Allstate n GE n Blue Cross Plans n General Motors n CIGNA n Home Depot n CNA n UPS n Fireman’s Fund n US Postal Service n Hartford n Wal-Mart n Health Net
Slide 15: Business Segments
Business Segments LN CONCENTRA
Slide 16: Health Services
Health Services n Provides n Provides injury injury care care services services for for work-related work-related injuries injuries and and other other occupational occupational health health services services through through 247 247 centers centers across across 34 34 states states n LTM n LTM 6/30
Slide 17: Largest National Health Centers Network
Largest National Health Centers Network 247 centers 79 markets in 34 States CONCENTRA Medical Centers (247) Corporate Headquarters Concentra’s extensive national service network provides key competitive advantages versus local and regional competitors. 17
Slide 18: Health Services Value Equation
Health Services Value Equation Concentra Concentra has has aa proven proven ability ability to to produce produce superior superior patient patient outcomes outcomes and and deliver deliver cost cost savings savings to to its its customers customers nn Concentra Concentra more more effectively effec
Slide 19: Network Services
Network Services n Services n Services designed designed to to assist assist payors payors in in the the review review and and reduction reduction of of the the bills bills they they receive receive from from medical medical providers providers n LTM n LTM 6/30/03 6/30/03 sales sales of of $240 $240
Slide 20: Network Services Business Model
Network Services Business Model PROVIDER TREATS PATIENT AND Repriced to GENERATES A BILL Fee Schedule Medical Bill Repriced to Network PPO Services Discount SENT TO REPRICED CONCENTRA BILL FOR REVIEW AND SENT BACK REPRICING TO INSURANCE CARRIER FOR PAYMENT INITIALLY SENT NEGOTIATED TO INSURANCE TO A
Slide 21: Care Management Services
Care Management Services n LTM n LTM 6/30/03 6/30/03 sales sales of of $287 $287 million million n Case n Case Management Management –– one-on-one one-on-one workers’ workers’ compensation compensation claim claim management management to to resolve resolve cases cases of of injured injured employee
Slide 22: Financial Overview
Financial Overview Thomas E. Kiraly Chief Financial Officer
Slide 23: Succeeding in a Difficult Economy
Succeeding in a Difficult Economy n Health n Health Services Services has has achieved achieved solid solid revenue, revenue, EBITDA EBITDA and and cash cash flow flow growth growth despite despite challenging challenging environment environment –– Pricing Pricing increases increases –– Growth Growt
Slide 24: 2002 and 1H 2003 LTM Revenue & EBITDA
2002 and 1H 2003 LTM Revenue & EBITDA ($ in millions) LTM Revenue LTM EBITDA $134.0 $1,030.0 $135.0 $131.7 $1,017.3 $1,020.0 $1,011.2 $129.1 $128.3 $130.0 $1,010.0 $999.1 $1,000.0 $123.4 $990.5 $125.0 $122.3 $986.5 $990.0 $985.3 $980.0 $120.0 $970.0 $115.0 $960.0 $950.0 $110.0 2 3 3 -02 -02 -02 -0 -
Slide 25: Revenue and EBITDA Growth Trends
Revenue and EBITDA Growth Trends Revenue EBITDA 1 $1,100.0 $1,050.0 $145.0 1 $999.1 $150.0 $983.3 $1,000.0 $134.6 $903.9 $129.3 $123.4 $900.0 $119.3 $125.0 $123.6 $803.8 $856.9 $115.5 $800.0 $762.2 $104.7 % $700.0 $100.0 : 8.7 AGR $690.7 1.4 % ‘01C 1 - $600.0 GR: ‘99 1 CA $75.0 $500.0 - ‘0 ‘99 $400.
Slide 26: Declining Days Sales Outstanding
Declining Days Sales Outstanding 86 84 83 82 82 81 80 80 79 78 78 76 74 74 74 74 73 72 70 68 66 66 64 64 64 62 62 62 61 60 99 99 01 01 02 02 00 00 01 01 03 03 00 00 02 02 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 26
Slide 27: Improving Operating Cash Flow
Improving Operating Cash Flow ($ in millions) 1 $80.0 $77.2 $80.0 $54.0 $60.0 $36.0 $40.0 $28.3 $20.0 $0.0 1999 2000 2001 2002 2003E YTD 6/30 Operating Cash Flow: $37 million LTM 6/30 Operating Cash Flow: $83 million 1 Reflects mid-point of Company estimate of $75-85 million, excluding any effects o
Slide 28: Modest Historical Capital Expenditures
Modest Historical Capital Expenditures ($ in millions) $45.6 $50.0 1 $37.5 $36.0 $35.1 $40.0 $32.0 $30.0 $20.0 $10.0 $0.0 1999 2000 2001 2002 2003E % of revenue: 5.2% 4.2% 5.3% 3.5% 3.7% YTD 6/30 Capital Expenditures: $14.4 million 1 Reflects mid-point of Company estimate of $35-40 million previousl
Slide 29: Proven Track Record of Deleveraging
Proven Track Record of Deleveraging ($ in millions) 7.0x 6.5x 6.0x 5.8x 5.8x 5.4x 5.5x 6.0x 5.4x 5.0x 4.9x 4.7x 4.6x 4.0x 3.9x 3.6x 3.0x 2.0x 1.0x 0.0x 1 1999 2000 2001 2002 LTM PFM 6/30/03E 6/30/03E EBITDA: $104.7 $115.5 $123.6 $123.4 $134.0 $134.0 Concentra Operating Corp Concentra Inc. 1 Reflects
Slide 30: Key Financial Highlights
Key Financial Highlights n n Diversified Diversified and and growing growing base base of of operating operating cash cash flows flows n n Proven Proven track track record record of of deleveraging deleveraging and and managing managing indebtedness indebtedness n n Modest Modest capital capital exp
Slide 31: Conclusion
Conclusion LN CONCENTRA
Slide 32: Key Considerations
Key Considerations n n Concentra Concentra isis aa nationwide nationwide leader leader in in providing providing solutions solutions to to improve improve the the quality quality and and effectiveness effectiveness of of healthcare healthcare n n Company Company has has successfully successfully man
Slide 33: EBITDA Reconciliation
EBITDA Reconciliation Per Regulation G, computations of EBITDA have been provided primarily due to the use of this measure by the holders of the Company's 13% senior subordinated notes, and other lenders, for purposes of determining the Company's performance in light of its debt covenant requirement
Slide 34: Concentra
CONCENTRA
Concentra — Deutsche Bank Securities High Yield Conference 2003 on 6ix