![]() Concentra Inc. Concentra Inc. Credit Suisse 2006 Global Leverage Finance Credit Suisse 2006 Global Leverage Finance Conference Conference March 29, 2006 March 29, 2006 Exhibit 99.1 |
![]() 2 Forward-Looking Information Forward-Looking Information This presentation contains certain forward-looking statements, which the Company is making in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that the Company’s actual results may differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the potential adverse impact of governmental regulation on the Company’s operations; changes in nationwide employment and workplace injury trends; interruption in its data processing capabilities; operational, financing, completion and strategic risks related to the Company’s capital structure and growth strategy; possible fluctuations in quarterly and annual operations; possible legal liability for adverse medical consequences; competitive pressures; adverse changes in market conditions for the Company’s services; inability to complete planned acquisitions; and dependence on key management personnel. Additional factors include those described in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward- looking statements or to make any other forward-looking statements, whether as a result of new information, future events, or otherwise. |
![]() 3 Agenda Agenda Overview of Concentra Overview of Concentra Financial Performance Trends Financial Performance Trends Key Considerations Key Considerations Questions & Answers Questions & Answers |
![]() Overview of Concentra Overview of Concentra Overview of Concentra |
![]() 5 Concentra’s Mission Concentra’s Mission “Improving quality of life by making “Improving quality of life by making healthcare accessible and affordable” healthcare accessible and affordable” |
![]() 6 Company Highlights Company Highlights Concentra has established a consistent record of earnings and cash flow Concentra has established a consistent record of earnings and cash flow growth since going private in 1999, resulting from growth since going private in 1999, resulting from – – Diversification of business segments with multiple avenues for growth Diversification of business segments with multiple avenues for growth – – Broad base of customers Broad base of customers – – Continual reduction in days sales outstanding Continual reduction in days sales outstanding – – Demonstrated management of capital expenditures Demonstrated management of capital expenditures – – Ability to successfully withstand economic cycles Ability to successfully withstand economic cycles – – Growing levels of retained cash Growing levels of retained cash In 2005, Concentra completed the acquisitions of Beech Street Corporation In 2005, Concentra completed the acquisitions of Beech Street Corporation and Occupational Health + Rehabilitation and Occupational Health + Rehabilitation Pro forma for these acquisitions, the Company generated revenue and Pro forma for these acquisitions, the Company generated revenue and EBITDA of $1.3 billion and $178 million, respectively in 2005 EBITDA of $1.3 billion and $178 million, respectively in 2005 |
![]() 7 Business Overview Business Overview Concentra is increasingly being recognized as the nation’s leading Concentra is increasingly being recognized as the nation’s leading healthcare outcomes and cost improvement company healthcare outcomes and cost improvement company Concentra is the market leader in the United States in: Concentra is the market leader in the United States in: – – Reducing the cost of out-of-network medical expenses Reducing the cost of out-of-network medical expenses – – Disease management of injured workers and workers’ Disease management of injured workers and workers’ compensation compensation cost management cost management – – Controlling the cost of auto injury claims Controlling the cost of auto injury claims Concentra has strong long-term relationships with employers, insurers and Concentra has strong long-term relationships with employers, insurers and TPAs TPAs – – Proven ability to produce superior patient outcomes and deliver cost Proven ability to produce superior patient outcomes and deliver cost savings to its customers through extensive clinical experience savings to its customers through extensive clinical experience – – Leveraging of market knowledge, advanced IT systems and customer Leveraging of market knowledge, advanced IT systems and customer relationships to deliver broad cost containment services relationships to deliver broad cost containment services |
![]() 8 Payor/ Payor/ Employer Employer Employee/ Employee/ Patient Patient Provider Provider Medical Costs Group Health, Workers’ Group Health, Workers’ Compensation, Employer Health & Auto Markets Compensation, Employer Health & Auto Markets Injuries & Illness Benefits & Lost-time Wages Traditional Healthcare Environment Traditional Healthcare Environment |
![]() 9 Payor/ Payor/ Employer Employer Employee/ Employee/ Patient Patient Provider Provider Medical Costs Injuries & Illness Benefits & Lost-time Wages Concentra Concentra Quicker Recovery Improved Outcomes Reduced Cost Concentra is at the Center of Improving Concentra is at the Center of Improving Outcomes and Reducing Costs Outcomes and Reducing Costs Group Health, Workers’ Group Health, Workers’ Compensation, Employer Health & Auto Markets Compensation, Employer Health & Auto Markets |
![]() 10 ($ in millions) ($ in millions) (1) Excludes corporate expenses of approximately $33 million. (1) Excludes corporate expenses of approximately $33 million. Segment Financial Profile Segment Financial Profile Concentra TTM 12/31/05 Revenue $1,155 TTM 12/31/05 EBITDA $165 Margin 14% Health Services TTM Revenue $667 TTM EBITDA (1) $96 Margin 14% Network Services TTM Revenue $286 TTM EBITDA (1) $87 Margin 30% Care Management TTM Revenue $202 TTM EBITDA (1) $16 Margin 8% |
![]() 11 Primary Service Offerings Primary Service Offerings Over 300 health centers nationwide providing: – Treatment of work-related injuries and illnesses – Physical therapy – Pre-placement physicals – Drug and alcohol testing Rapidly growing Diversified Services – Pharmacy management services – Over 200 employer on-site locations Workers’ Compensation Auto Insurance & Other Group Health Employer Health Employers & Payors Employers & Payors National PPO networks for Group Health and Workers’ Compensation with primary and “wrap” products Review, repricing and reduction of medical bills received by insurance companies and other payors Savings to clients achieved through fee negotiation, bill repricing and access to PPO networks Health Services Care Management Network Services Professional services aimed at reviewing and resolving cases that have been outstanding for extended periods of time, including: – Case management – Independent medical exams |
![]() 12 Integrated Delivery Model Integrated Delivery Model Health Centers Highly-Steered Networks Primary PPO, Wrap Networks, Out of Network Care Management |
![]() 13 Markets and Customers Served Markets and Customers Served Group Health 15% Workers' Compensation 64% Employer Health 17% Auto Insurance and Other 4% Markets Served 190,000 Employer Locations 57% 3,700 Insurance Companies, TPAs and Other Payors 43% Customers Served Note: Percentages based on 2005 pro forma data. Note: Percentages based on 2005 pro forma data. |
![]() 14 Medical cost inflation of 8% to 10% 6.5 million injuries occur each year Tremendous inefficiencies Workers’ compensation benefits include: – Indemnity: portion of lost wages – Medical: lifetime medical costs resulting from work-related injuries Guaranteed reimbursement to healthcare providers in all states Regulations vary by state Administrative Costs 16% Medical Costs 19% Wages & Lost Productivity 65% $142.2 Billion Source: National Safety Council Injury Facts - 2004 Edition Source: National Safety Council Injury Facts - 2005 Edition Workers’ Workers’ Compensation Market Today Compensation Market Today |
![]() 15 Commercial market consists of more than $700 billion in-network and $65 Commercial market consists of more than $700 billion in-network and $65 billion out-of-network claims per year billion out-of-network claims per year Group health payors are increasingly looking for solutions that help them Group health payors are increasingly looking for solutions that help them more efficiently and effectively manage claims that fall outside more efficiently and effectively manage claims that fall outside their their proprietary networks proprietary networks Small group payors looking for attractively priced provider networks and an Small group payors looking for attractively priced provider networks and an efficient bill repricing engine to compete with Blue Cross plans efficient bill repricing engine to compete with Blue Cross plans Recent sales and growth have accelerated in part due to Beech Street Recent sales and growth have accelerated in part due to Beech Street acquisition acquisition Group Health Group Health |
![]() 16 Developing market with nearly $2 billion in claims currently available for bill Developing market with nearly $2 billion in claims currently available for bill review, network and case management services review, network and case management services Concentra provides a full complement of integrated services and employs Concentra provides a full complement of integrated services and employs experienced personnel dedicated to auto injury services experienced personnel dedicated to auto injury services Programs are outcomes-oriented Programs are outcomes-oriented and demonstrate control over claims and demonstrate control over claims severity severity Auto Injury Services Auto Injury Services |
![]() 17 Major Insurance Carriers and Health Plans Aetna AIG Allstate Blue Cross Plans CIGNA CNA Hartford Health Net Humana Liberty Mutual Pacificare Safeco St. Paul Travelers Texas Mutual United Healthcare USAA Major Employers Albertsons Coca-Cola FedEx Hilton Hotels Home Depot Southwest Airlines UPS US Postal Service Wal-Mart Major TPAs Ace – ESIS Broadspire Cambridge Gallagher Bassett Hartford - SRS Sedgwick Concentra has achieved a high rate of customer retention and has low revenue Concentration (no single customer represents more than 5% of revenues). Stable and Growing Base of “Blue Chip” Stable and Growing Base of “Blue Chip” Customers Customers |
![]() Financial Performance Trends Financial Performance Trends Financial Performance Trends |
![]() 19 Revenue and EBITDA Growth Trends Revenue and EBITDA Growth Trends $991.3 $1,041.9 $1,095.9 $1,151.1 $1,350.0 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2002 2003 2004 2005 2006E ($ in millions) ($ in millions) Margin: 12.4% 14.6% 14.0% 14.3% 14.1% (1) (1) Revenue Revenue EBITDA EBITDA (1) Represents the mid-point of the Company’s current forecast for 2006 as of February 14, 2006. $123.4 $153.3 $154.8 $165.0 $190.5 $0 $50 $100 $150 $200 2002 2003 2004 2005 2006E |
![]() 20 Days Sales Outstanding Days Sales Outstanding 51 62 82 79 73 59 62 50 55 60 65 70 75 80 85 1999 2000 2001 2002 2003 2004 2005 |
![]() 21 Operating Cash Flow Operating Cash Flow $28.3 $36.0 $79.4 $56.0 $113.6 $98.9 $141.8 $95.0 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 1999 2000 2001 2002 2003 2004 2005 2006E ($ in millions) ($ in millions) (1) (1) Represents the mid-point of the Company’s current forecast for 2006 as of February 14, 2006. |
![]() 22 Capital Expenditures Capital Expenditures $36.0 $32.0 $45.8 $35.1 $29.6 $27.9 $49.1 $47.5 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 1999 2000 2001 2002 2003 2004 2005 2006E ($ in millions) ($ in millions) % of revenue: 5.2% 4.2% 5.3% 3.5% 2.8% 2.5% 4.3% 3.7% (1) (1) Represents the mid-point of the Company’s current forecast for 2006 as of February 14, 2006. |
![]() 23 5.4x 6.5x 4.9x 6.0x 4.6x 5.8x 3.9x 5.8x 4.3x 4.7x 4.7x 5.1x 4.8x 5.2x 4.6x 5.0x 0.0x 1.5x 3.0x 4.5x 6.0x 7.5x 1999 2000 2001 2002 2003 2004 2005 2005 PFM Proven Track Record of Managing Indebtedness Proven Track Record of Managing Indebtedness TTM EBITDA: $104.7 $115.5 $123.6 $123.4 $153.3 $154.8 $178.4 $178.4 ($ in millions) ($ in millions) Concentra Operating Corp Concentra Inc. Concentra Operating Corp Concentra Inc. (1) Reflects $31.6 million prepayment of Senior debt made up of $14.1 million related to the excess cash flow produced in 2005 as required in the covenants of the Company’s Senior Credit Facility and $17.5 million in voluntary prepayments. (2) Includes results for Beech Street and OH+R for the entire year as if the acquisitions had occurred January 1, 2005. (1) (2) (2) |
![]() 24 Diversified and growing base of operating cash flows Diversified and growing base of operating cash flows Strategic investment in new business initiatives and capital expenditures Strategic investment in new business initiatives and capital expenditures Proven track record of deleveraging and managing indebtedness Proven track record of deleveraging and managing indebtedness Key Financial Highlights Key Financial Highlights |
![]() Conclusions Conclusions Conclusions |
![]() 26 Concentra is a nationwide leader in providing solutions to improve the quality Concentra is a nationwide leader in providing solutions to improve the quality and effectiveness of healthcare and disability costs and effectiveness of healthcare and disability costs Company continues to expand its service offerings and increase its market Company continues to expand its service offerings and increase its market penetration in existing businesses penetration in existing businesses The The strategic strategic acquisitions acquisitions of of Beech Beech Street Street and and OH+R OH+R will will further further expand expand Concentra’s Concentra’s market market presence presence and and increase increase savings savings to to its its customers customers Concentra is well-positioned to benefit from a diversified product line and its Concentra is well-positioned to benefit from a diversified product line and its focus on cost control provides significant operating leverage focus on cost control provides significant operating leverage Key Considerations Key Considerations |
![]() Questions & Answers Questions & Answers Questions & Answers |
![]() |