TOI - Earnings call transcript Q2 2022 | The Oncology Institute, Inc.

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Operator

Good afternoon, and welcome to The Oncology Institute's Second Quarter 2022 Earnings Conference Call. Today's call is being recorded and we have allocated one hour for prepare marks and Q&A. At this time, I'd like to turn the conference over to Mark Hueppelsheuser, General Counsel at TOI. Thank you.

You may begin.

Mark Hueppelsheuser

I harbor to language. started, the you get safe company's we would remind like of Before Management and underlying make assumptions. may forward-looking statements including guidance

uncertainties based involve results Forward-looking expectations differ that and to are actual could statements materially. cause on risks that

in to to measures adjusted discussion with earnings our and these EBITDA. the This will Reconciliation related SEC. are financial non-GAAP measures business, also see of For a website. discuss to risks the measures, furnished our GAAP the further on call of available included most filings comparable the such release, non-GAAP as SEC our

Joining is and Hively; the me our on call our CEO, Shah. today CFO, Mihir Brad

remarks, With open the to turn our call for over we'll that prepared I'll your questions. call Following the Brad.

Brad Hively

everyone, call to joining Thanks, the Mark thank today. and you

details, achieve into share the like We growth to notes. expect get your attention that quarterly secured senior investment We to important investors us differentiated completed optimistic markets, aggressive significant to of the Deerfield $XXX to give strategic active we convertible our US TOI need bring growth a market. our and the an the we investment to development you. remain from from we country. is million capital in Management, plans. through important we last a our and with runway and journey to will I'd convertible initial are financial $X.XX, experienced premium X% XX% the highlights approach to some an stock. and notes new X, from over one an Deerfield, This closing on of with August care with TOI's company's of price August expansion convertible per $XXX future and approximate of The bear at are most The trajectory excited mature on on XXXX disrupt about quarter the TOI I'm health common into of growth price excited about provide common our have annum this This our representing shares interest into XXXX. an highly approximately billion-plus conversion in notes the stock the new of Before investment X, to oncology milestone continue the represents value-based oncology.

Las the California acqui-hires, our we've we XX strategy. an acquisitions the of be expand We've completing and and July. Dr. trained network XX completed had before, Orange clinics acquisitions Fresno growth Parikh Dr. and of Dr. Women's in completed Care, specially Sapra, practice component the of acquisition this of advanced practice July TOI's with providers, practice across this and Dr. We recently, of County the physicians to These practice California also good we opportunities May. in Fresno the for acquisition and in Perkins of growth Cancer a important Vegas continue five TOI of Cancer in new three market completed County Care optimistic states. the market. Ge, TOI, transactions. that the strategic for As acquisition about The of practice opened success discussed addition of strategy Women's are We highly

increased signaling care for Our traction solution ours. and need in a like market, model our for oncology cost-effective gaining expansion more unique is desire

patients cancer increase to and to comprehensive offer The one designed in clinics, in services, will clinical exceptional trials to state-of-the-art our new specialty experience recently medical oncology where care clinics June for a continue value-based added agreement Texas, gain opened August. of California. We and Austin, and Florida cutting-edge volume ARIA expansion from new we in We share access contracts which access oncology to our increase live into we opened our market in a in steady with oncologists. leading one programs expand went referral XXth two and

delivered savings Medicare the TOI performance the close Our to most OCM, generate saw savings the of TOI $X.X savings. OCM exceeding In episode. meaningful approximately start program continues or program period, savings, Since has management recent of million, million. CMS' participation $X,XXX in by to in oncology target care patient $X.X XXXX, per

In performance on results I'm of it an score. TOI's for above in aggregate quality addition this lower program, based meaningful a savings, very of our track of proud cost achieving average its directly TOI validation to proposition. at demonstrated value as patients record important better speaks outcomes to our these cost, differentiated

care is a TOI OCM oncology model leading value-based model July care support EOM we enhancing the we're oncology has XX, delivery model announced will This on for new the the While adoption replaces way XXXX. start continues new believe, CMS it to or June of and model oncology nationally. and the and design XXXX, more OCM. of payment called that of ended advancement the models

new evaluating highlights some our the are I'll model our provide and We it. now on participation EOM past in this progress additional quarter.

indexes joined XXXX June for company. Russell TOI First, Russell and the us important public on XXXX XX, as a an milestone

with agreement strategy. pharmaceutical agreement multiyear is operational TOI's expansion and Corporation. intended logistics provide McKesson streamline to Second, to and financial and alignment upon distribution we our company's the This partnership continue expanded execute

the good finally, in new through TOI; to including leaders will of welcomed SOX lead strategy, quarter pleased and past with issues Melissa this Campenni, our we they progress VP, of the care. Talent respectively. continue Acquisition. made our as be and making Both our remediation play contracting growth and of critical to over partnerships we Goodman, Strategic Overall, model expansion several teammate about oncology Third, progress are Dave VP, optimistic related working unique we roles we've compliance. we are Partnerships; strategy growth to And

our additional to over results. turn Mihir first I'll provide Now the on to detail financial quarter call

Mihir Shah

revenue with the QX Starting XX.X% to increase top-line. year-over-year in $XX quarter, the a increase compared total We a and generated XX.X% of million second XXXX. Brad. you, Thank

the have results made second in a growth large year-over-year we XXXX XX.X%. As in Absent late our growth quarter. termination, our the this of conference and payer quarter strategic XXXX would impacted discussed year end to on decision terminate contract a we this second revenue in call, our been

gross million for was our the a increase and profit net XX.X%, On the X.X% our $X was a quarter, our margin million basis, year $XX quarter. over prior GAAP loss second period. was the For gross

our adjusted EBITDA For million. $X.X the negative quarter was

EBITDA Our provider as EBITDA our XX-Q. adjusted Further includes be end, balance define acquisition $XX on million. in costs. At well can we quarter was how calculation cash our start-up as found costs adjusted details

With the convertible debt will on we have that deal pro million Brad basis. $XXX approximately forma discussed, a

the this capital We for sufficient XX and operations months. enhance growth expect to to support be our next

second the to of guidance. XXXX expected for our as unchanged. XXXX turning outlook remains Now Results and in came for quarter

growth XX% the to For full year XXXX revenue expect range $XXX $XXX to million over to revenue. XX% we in XXXX, to be of million continue representing

in to million range and $XX million remains EBITDA guidance profit range million the adjusted of gross $XX $XX of million. negative Our negative to $XX the in

XXXX, a policy services. Medical of January a As reminder regarding pharmacy implemented reimbursement in

claims be these The medical be Healthcare of was in Although, benefit all of intended of part the available Medical guidance early pharmacy as Department Services change Medical continue are that plans outpatient the year drugs policy the transition managed the clarifying to to benefit. way California through not benefit. under medically office to to issued care nevertheless reimbursed administered certain payable administered built prescription some physician in necessary drugs the chemotherapy began

medical half drug the we to With We our first dispensed and of IV our scripts million insurance, which this reimbursements. into translate dispensary, have to the revenue Rx Medical we respect less to fill. are otherwise patients under XXXX, currently chemotherapy that historically some covered saw not being estimate now in we to oral benefited from. are XXXX able would $X During impact of minimal certain have we in oncolytics

launching We acquiring actively forward or on continue to assess a impact going for pharmacy. to us including mitigate opportunities the our business

you available. to We with far we With update will are more XXXX. have track once information on SG&A, in so spend our respect we

back targeted back we DNO in related related particular investments cost costs some start-up we company supporting to infrastructure costs adjusted providers. turn corporate in reemphasize make new are want our now not EBITDA those growth to Brad remarks. it to are to our that adding to continue over sites summary public strategy. We for or and adding new I nor back will to any We

Brad Hively

adding important in of the to value-based communities. more more to and acquisitions, summary, we our continue to TOI By model several are In effort provider care our new and Thanks, oncology make country. patients two bringing Mihir. leading in unique the strides be markets

with gain that continued expanded strategy. We show Deerfield, look is earnings investment million resources $XXX up have QX open forward demand it for to recent back turn an share operator the providing growth with I'll in and our there value-based update from making that, our execute more agreements to And progress on in over amongst the Our on And to to our we call. it partners. questions. tools additional next and

Operator

from is question-and-answer we will time, Thank [Operator first you. Jefferies. be At Tanquilut Instructions] session. a question Our conducting with this Brian

Taji Phillips

for This everyone. Thank for Hi, on question. Brian. Taji you my is taking

on question you mix revenue first if contracts? versus capitated between inorganic the segment. Services And it just some on attributed is my out growth? break color you So the between Patient too then Can also could that's revenue to provide organic fee-for-service there and

Brad Hively

you. Nice Taji. from to hear Sure,

Taji Phillips

Thanks, me too.

Brad Hively

was terms under what that, fee-for-service we provided we've we disclosed. Mihir, So I Mihir capitation for future have the think capitated that contracts revenue. keep of last of – updates covered the generate most versus on around we? said don't honest under just provided from time me this what split in specific our I have XX% revenues patients we that any

Mihir Shah

Yes. Right.

Taji for and So out XX-Q, revenue versus of further broken the down this point. not in do three the services Brad trying sorry, do at I'm it's fee into types different get XX-Q but our we XX-Q. our in the the We of that – – available. information breakout patient organic break to – acquisition is in capitation our provide for revenue you

that. We are working towards

Taji Phillips

Q. the I'll make And I just... sure also Okay. then check

Brad Hively

And bill reimbursed just The Q when basis the some that. be important that on thank we But some of look might the – the and we capitated do a for Mihir is of for provide, one were a patient. we capitated services the reminding that note you fee-for-service at have we it – for patients were me thing revenue if because we're fee-for-service. you to the provide of not services billed all capitated

could in contract. bucket is a the actually Hopefully… that there patients covered So under some value-based be fee-for-service revenue to that are attributable

Taji Phillips

higher. is for And one is was labor the Got elevated pressure or the too just why the or is then And G&A it around inflation? that or clarification. just question that SG&A level of Thanks line. any I any it. to for curious attributable on – was detail from more line Thanks

Brad Hively

people just to and done is the all or because Yes additional rather majority in novos good bodies wages SG&A We that increase we've primarily that of de pressure. services wage labor additional healthcare pressures. the it's than question. other rising to company wages attributable and than a attributable are susceptible like But rather every the to it's acquisitions labor

Taji Phillips

Thanks much. so Great

Brad Hively

Sure. for the Thanks question

Operator

next Our is from question Taylor Cowen. Gary Instructions] [Operator with

Christian Borgmeyer

HI. This is Christian Borgmeyer on for Taylor. Gary

having the Just follow-up. oncology proposition macroeconomic attracting or a oncologists platform Maybe Thanks. of sort landscape the has What related is retaining? developed competitive impact current alongside value TOI is on of hiring how the groups? environment how the

Brad Hively

We really Yes that strong feel question. fortunate demand physicians experiencing sure. who actually are want TOI. really work Thanks in from for for the we to

have are are staff So while have interest list always we be there's that practice, more we demand. to more doctors fully places, where actually hard in area always physicians we physician in staffed. going and joining areas wish operate, we vast an soon available. the some of places national of In many a And there majority us expressed waiting as we as to have had position a the we in or a

component, learning more and perspective. to – piece I and at model medicine and and care TOI second about of position from or because it's fortunate we've Was in actually that's your a to practice hiring And to question are we've the that... TOI, as is think that's attractive good a what to a medicine to and about our And feeling means in. practice more we've profile a to and really people are higher was like really – hearing what it gone there our hiring public blessed we about that So had position lot oncologists. feel really at and benefited from addition us demand position be

Christian Borgmeyer

the for that much No was you all. Thank so color.

Brad Hively

Sure.

Operator

Brad and back the reached end gentlemen, the have remarks. turn to question-and-answer closing we for would to I of the Ladies call like Hively session.

Brad Hively

good very our today. Great. joining look following you our day. progress ahead forward Well, days. a for we call to We're the you and thank with TOI's you We forward path up all to in on about updating look our and earnings next Thanks have coming call. excited on

Operator

for This concludes Thank your today's you conference. participation.

time. this at lines your disconnect may You

The Oncology Institute, Inc. (TOI) 12 Aug 222022 Q2 Earnings call transcript