Amedisys, Inc. www.amedisys.com NASDAQ: AMED May 2007 EXHIBIT 99.1 |
1 Statements contained in this presentation which are not historical facts are forward-looking statements. These forward-looking statements and all other statements that may be contained in this presentation that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially from those forecasted. Such forward-looking statements are estimates reflecting the best judgment of Amedisys, Inc. management based upon currently available information. Certain factors which could affect the accuracy of such forward-looking statements are identified in the public filings made by Amedisys, Inc. with the Securities and Exchange Commission, and forward-looking statements contained herein, or other public statements of Amedisys, Inc. or its management should be considered in light of those factors. Forward Looking Statements |
2 Investment Highlights • Large, growing and fragmented industry • Focus on home nursing and related services to Medicare population • Strong internal growth and cash flow with low recurring cap ex • Proven operating model supported by sophisticated technology system • Demonstrated ability to identify and integrate acquisitions • Substantial liquidity and balance sheet capacity to fund external growth • Extensive delivery platform ideally positioned for Medicare disease management initiatives and payor diversification • Experienced management team |
3 Management Team • William F. Borne - Chairman and Chief Executive Officer - CEO since founding the Company in 1982 - Registered nurse, extensive hospital administrative and clinical experience • Larry R. Graham - President and Chief Operating Officer - Joined Amedisys in 1996; COO since 1999; President since 2004 - General Health Systems - Arthur Andersen • Dale E. Redman, CPA – Interim Chief Financial Officer - Joined Amedisys in February 2007 - CFO of United Companies - Ernst & Young |
4 Corporate Overview • Leading provider of home nursing services • 290 1 locations primarily in the Southern and Southeastern United States • Services include skilled nursing and therapy • Medicare accounts for approximately 91% of net service revenue • Hospice care accounts for approximately 6% of net service revenue 1) Both home health and hospice; as of March 31, 2007 |
5 16 16 13 13 12 12 27 27 52 52 40 40 18 18 4 4 42 42 16 16 1 1 7 7 1 1 6 6 7 7 3 3 3 3 Our Locations 1 • Largest home nursing provider in the Southern and Southeastern United States - 273 home nursing locations (shown) - 17 hospice locations 1) As of March 31, 2007 CON State Non-CON State 1 1 4 4 |
6 Our Strategy • Focus on Medicare-eligible patients • Develop and deploy specialized nursing programs • Expand disease management capabilities • Prioritize internal growth • Select, acquire and integrate quality home care agencies • Leverage cost-efficient operating platform |
7 • Home health care is a $62.8 billion industry • Home nursing is the largest segment in the home health industry • Medicare spending for home nursing totaled $13.1 billion in 2005 Home Health Care Spending Home Health Industry Expenditures ($ billions) Medicare Home Nursing $13.1 Home Nursing (Commercial, Medicaid & Other) $23.3 Home Nursing $46.1 Infusion Therapy $5.5 Durable Medical Equipment $2.8 Respiratory Therapy $8.4 Hospice $9.7 Source: Company Reports, CMS and CIBC World Markets Corp. estimates for 2005 |
8 Home Nursing Market • Industry is highly fragmented • 8,500 Medicare-certified nursing agencies • Most are single-site, small local or regional providers: - Independently-owned agencies - Visiting nurse associations - Facility and hospital-based agencies • Publicly-owned providers account for less than 7% of the home nursing market |
9 Industry Growth Drivers • Trend from inpatient to home-based care: - Patient preference - Payor incentives - Technology advancements • Demographics – aging population • Increased prevalence of chronic and co-morbid conditions |
10 Internal Growth - Overall industry growth - Expanded and more effective sales force - Comprehensive range of clinical programs - Enhanced referral source education efforts - Increased focus on start-ups • Strong internal growth in episodic-based admissions - Approximately 15% for Q1 2007 • Internal growth being driven by: |
11 Start-Up Strategy • Start-ups typically generate $1.5 - $2.0 million in run-rate revenue by the end of their second year of operations • ~ 18 months to recoup the $250,000 - $350,000 investment Yearly Start-Ups 8 13 25 40 36 0 10 20 30 40 2003 2004 2005 2006 2007 * As of March 31, 2007 Completed Projected |
12 Acquisition Strategy Disciplined approach • Acquisition criteria: - Defined pricing objectives - Targeted geographic profile - Compatible payor mix - Consistent clinical metrics - Expandable referral base - Opportunities for internal growth • Target hospital-based and multi-site agencies • Nine acquisitions over the last twelve months ended 5/1/2007; 23 agencies representing $39 million in revenues |
13 Investments in Technology • Strategic advantages from technology • Standardized processes: - Automated review of assessment forms - Automatic scheduling - Web-based HR and payroll system • Centralized management of clinical oversight/utilization: - Real-time episode analysis - Daily/weekly review of quality indicators - Executive information system • Point of care roll-out currently underway: - Rolled out over 200 sites as of the end of Q1 2007 - Expect $1.0 - $1.5 million in quarterly savings by Q4 2007 - One-time cap ex investment of $9 - $10 million |
14 Comprehensive Compliance Program Local Level • Clinical nurse review of assessments • Standardized care plans • Physician review/approval • Weekly case conferences • Monthly audits • End of episode case review • Point-of-care system enhances clinical documentation accuracy with real-time assessment input Regional Level Corporate Level • Unannounced compliance & billing audits • Regional directors monitor compliance status and resolve errors • Real-time monitoring capability of local level activity via point-of- care system • Semi-annual clinical/compliance reviews • Compliance review of metric variances • Compliance manager site visits • Compliance training for all employees • Compliance concerns hotline • Annual Sarbanes-Oxley audit |
15 Medicare Prospective Payment System • Implemented in October 2000 • Base payment for 60-day episode of care - Adjusted for patient acuity and market factors - Reviewed and updated annually • Encourages efficient delivery of care • Benefits high-quality/low-cost providers |
16 Medicare Reimbursement • Outlook for 2007 and 2008 - Market basket - Case mix weighting - Rural add-on - Therapy threshold |
17 Financial Highlights • Increasing revenue • Expanding margins • Cash flow/low cap ex requirements • Consistent EPS growth • Strong balance sheet to fund future growth |
18 EBITDA is net income before provision for income taxes, net interest expense, and depreciation and amortization. EBITDA should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure that we believe provides relevant and useful information. Our calculation of EBITDA may not be comparable to a similarly titled measure reported by other companies, since all companies do not calculate this non-GAAP measure in the same manner. 1) Per share information for the year ended December 31, 2005 has been adjusted to reflect the four-for-three stock split effected in the form of a 33 1/3% stock dividend for holders of record as of November 27, 2006. 2) Adjusted to exclude $0.03 charge for write-off of deferred financing fees. Summary Financial Results 1 CY2005 CY2006 Net revenue $381.6 $541.1 Period-over-period growth 68.0% 41.8% Gross margin 218.5 305.7 Margin 57.3% 56.5% Operating income 50.1 65.7 Margin 13.1% 12.1% EBITDA 57.2 75.7 Margin 15.0% 14.0% Fully-diluted EPS $1.41 $1.75² Period-over-period growth 23.7% 24.1% ($ millions, except per share data) |
19 EBITDA is net income before provision for income taxes, net interest expense, and depreciation and amortization. EBITDA should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure that we believe provides relevant and useful information. Our calculation of EBITDA may not be comparable to a similarly titled measure reported by other companies, since all companies do not calculate this non-GAAP measure in the same manner. ($ millions, except per share data) Summary Quarter Financial Results Q2 2006 Q3 2006 Q4 2006 Net revenue $132.9 $137.0 $144.0 Period-over-period growth 66.0% 22.2% 21.1% Gross margin 76.2 77.2 80.9 Margin 57.4% 56.3% 56.2% Operating income 15.7 18.2 19.1 Margin 11.8% 13.3% 13.3% EBITDA 18.2 20.4 21.9 Margin 13.7% 14.9% 15.2% Fully-diluted EPS $0.42 $0.48 $0.51 1 Period-over-period growth 10.5% 33.3% 50.0% Trailing Four Quarters Q1 2007 $153.6 20.8% 86.5 56.4% 20.7 13.5% 15.4% $0.51 50.0% 1) Adjusted to exclude $0.03 charge for write-off of deferred financing fees. 23.6 |
20 Net Revenue Annual Revenue ($ millions) 0 100 200 300 400 500 600 2003 2004 2005 2006 Quarterly Revenue ($ millions) 0 25 50 75 100 125 150 Q1 Q2 Q3 Q4 2005 2006 2007 • Revenue of $541.1 million in 2006; 41.8% year-over- year growth • Revenue of $153.6 million for Q1 2007; 20.8% quarter-over-quarter growth • Strong internal growth |
21 EBITDA 1 • EBITDA of $75.7 million in 2006; 32.4% year-over-year increase • EBITDA of $23.6 million for Q1 2007; 55.3% quarter- over-quarter increase 1) EBITDA is net income before provision for income taxes, net interest expense, and depreciation and amortization. EBITDA should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. Rather, EBITDA is presented because it is a widely accepted supplemental financial measure that we believe provides relevant and useful information. Our calculation of EBITDA may not be comparable to a similarly titled measure reported by other companies, since all companies do not calculate this non-GAAP measure in the same manner. Annual EBITDA ($ millions) 0 10 20 30 40 50 60 70 80 2003 2004 2005 2006 Quarterly EBITDA ($ millions) 0 5 10 15 20 25 Q1 Q2 Q3 Q4 2005 2006 2007 |
22 Earnings Per Share • Fully-diluted EPS of $1.75 1 for 2006; 24.1% year-over- year increase • Fully-diluted EPS of $0.51 for Q1 2007; 50.0% quarter-over-quarter increase 1) Adjusted to exclude $0.03 charge for write-off of deferred financing fees. Quarterly EPS 1 0.00 0.10 0.20 0.30 0.40 0.50 Q1 Q2 Q3 Q4 2005 2006 2007 Annual EPS 1 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2003 2004 2005 2006 |
23 Capitalization Summary ($ in thousands) March 31, 2007 Cash and cash equivalents $107,483 Total debt and capital lease obligations 6,334 Stockholders' equity 379,983 Total capitalization $386,317 Net debt / LTM EBITDA --- |
24 Guidance 1) Assumes no utilization of proceeds from equity offering. CY2007 1 Net revenue: $625 - $650 million EPS: $2.05 - $2.15 Diluted shares: 26.5 million |
25 Investment Highlights • Large, growing and fragmented industry • Focus on home nursing and related services to Medicare population • Strong internal growth and cash flow with low recurring cap ex • Proven operating model supported by sophisticated technology system • Demonstrated ability to identify and integrate acquisitions • Substantial liquidity and balance sheet capacity to fund external growth • Extensive delivery platform ideally positioned for Medicare disease management initiatives and payor diversification • Experienced management team |
26 Contact Information • Thomas J. Dolan • SVP of Finance • Amedisys, Inc. • 5959 S. Sherwood Forest Boulevard • Baton Rouge, LA 70816 • Office – 225.292.2031 • Fax – 225.295.9624 • tdolan@amedisys.com • Dale Redman • CFO • Amedisys, Inc. • 5959 S. Sherwood Forest Boulevard • Baton Rouge, LA 70816 • Office – 225.292.2031 • Fax – 225.295.9624 • dredman@amedisys.com |