Second Quarter 2015
Second Quarter 2015 Financial Results Conference Call August 5, 2015, 8:30 A.M. (ET)
Forward Looking Statements Certain of the statements contained in this presentation are "forward-looking information“ within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. You are cautioned not to place undue reliance on such forward-looking information. Forward-looking information is based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking information contained in this presentation. No assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur or, if any of them do so, what benefits Centric Health will derive therefrom and neither Centric Health nor any other person assumes responsibility for the accuracy and completeness of any forward-looking information. Other than as specifically required by applicable laws, Centric Health assumes no obligation and expressly disclaims any obligation to update or alter the forward-looking information whether as a result of new information, future events or otherwise. All dollar figures are in Canadian dollars unless otherwise stated.
2
David Cutler
President & Chief Executive Officer
Agenda 1. Highlights and Key Developments 2. Financial Review 3. Strategic Review 4. Questions
4
5th Consecutive Quarter of Year-over-Year Growth
Q2 2015 Revenue Adj. EBITDA Adj. EBITDA margin
Q2 2014
91.0M
Revenue
78.7M
↑ 15.6%
9.6M
Adj. EBITDA
7.8M
↑ 24.0%
10.6%
Adj. EBITDA margin
9.9%
13th consecutive quarter of positive cash flow from operations Concluded on our commitment to repay $25M in debt from divestiture proceeds 5
Highlights – Physiotherapy, Rehabilitation & Assessments
Continued momentum with several notable contract wins Success in renewing / extending contracts Momentum in Employer Healthcare Management
Organic growth for Q2 2015 dampened by transient factors, including therapist vacancies, which are being filled Reintegration of Active and CAR proceeding seamlessly
6
Highlights – Specialty Pharmacy
Strong growth, primarily due to acquisition of Pharmacare Organic growth driven by maximizing infrastructure to win new contracts Integration of Pharmacare and Care Plus proceeding well
Proposed Ontario Drug Benefit Act amendments – positioned to neutralize impact Significant opportunities with new cohesive team’s ability to serve clients nationally
7
Highlights – Surgical and Medical Centres
Capacity Utilization1 40% 32%
Continued year-over-year revenue growth Adjusted EBITDA and margin dampened by investments in additional space at Don Mills & False Creek High demand for gastric band procedure helped drive 150% year to date revenue growth at Don Mills
False Creek’s contract with Vancouver Coastal Health ahead of budget and to include additional procedures
Q2/14 1
8
Excludes Windsor
Q2/15
Maples team well ahead of target to deliver 10,000 echocardiograms
Daniel Gagnon
Chief Financial Officer
Q2/15 Revenue (in Millions, C$)
91.0
↑ 15.6%
Driven primarily by acquisition of Pharmacare and reacquisition of Active and CAR
78.7
Q2/14
Q2/15
Achieved revenue growth across all segments 10
Q2/15 Adjusted EBITDA (in Millions, C$)
9.6
7.8
Driven primarily by acquisition of Pharmacare and reacquisition of Active and CAR
↑ 24.0%
9.9%
10.6%
Q2/14
Q2/15
Adjusted EBITDA margin up from both Q2/14 and Q1/15 11
Segment Results - Physiotherapy, Rehabilitation & Assessments Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
12
Adjusted EBITDA $M
Q2 2014
Segment Results - Specialty Pharmacy Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
13
Adjusted EBITDA $M
Q2 2014
Segment Results - Surgical and Medical Centres Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
14
Adjusted EBITDA $M
Q2 2014
Segment Results - Corporate Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
15
Adjusted EBITDA $M
Q2 2014
Cash Flow from Operations (in Millions, C$)
12.7 Continued focus on operational and working capital initiatives
8.6
Q2/15 includes transaction and restructuring costs of $2.5M
Q2/14
Q2/15
13th consecutive quarter of positive cash flows from operations 16
Progress on Balance Sheet Concluded permanent debt reduction of
Closed on refinancing of Revolving Facility to
$25M
$35M
$15M
Revolving facility
$10M
Second lien senior secured notes
17
for an additional year with consistent terms and conditions
David Cutler
President and Chief Executive Officer
Strategic Review Process
Debt reduction remains top priority
Strategic Review process launched in response to unsolicited interest in certain businesses
Value proposition and opportunities unchanged
Fundamental strength and significant opportunities in each of our businesses
19
Continued Momentum: Trailing 12 Months Revenue
Adj. EBITDA
(in Millions, C$)
(in Millions, C$)
327.4
31.5
315.1 301.4
26.9
306.7
9.1%
27.9
29.1
29.6
9.5%
9.4%
9.6%
9.3%
295.1
Jun'14
20
Sep'14
Dec'14 Mar'15
Jun'15
Jun'14
Sep'14
Dec'14 Mar'15
Jun'15
Questions
Second Quarter 2015 Financial Results Conference Call August 5, 2015, 8:30 A.M. (ET)
Forward Looking Statements Certain of the statements contained in this presentation are "forward-looking information“ within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. You are cautioned not to place undue reliance on such forward-looking information. Forward-looking information is based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking information contained in this presentation. No assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur or, if any of them do so, what benefits Centric Health will derive therefrom and neither Centric Health nor any other person assumes responsibility for the accuracy and completeness of any forward-looking information. Other than as specifically required by applicable laws, Centric Health assumes no obligation and expressly disclaims any obligation to update or alter the forward-looking information whether as a result of new information, future events or otherwise. All dollar figures are in Canadian dollars unless otherwise stated.
2
David Cutler
President & Chief Executive Officer
Agenda 1. Highlights and Key Developments 2. Financial Review 3. Strategic Review 4. Questions
4
5th Consecutive Quarter of Year-over-Year Growth
Q2 2015 Revenue Adj. EBITDA Adj. EBITDA margin
Q2 2014
91.0M
Revenue
78.7M
↑ 15.6%
9.6M
Adj. EBITDA
7.8M
↑ 24.0%
10.6%
Adj. EBITDA margin
9.9%
13th consecutive quarter of positive cash flow from operations Concluded on our commitment to repay $25M in debt from divestiture proceeds 5
Highlights – Physiotherapy, Rehabilitation & Assessments
Continued momentum with several notable contract wins Success in renewing / extending contracts Momentum in Employer Healthcare Management
Organic growth for Q2 2015 dampened by transient factors, including therapist vacancies, which are being filled Reintegration of Active and CAR proceeding seamlessly
6
Highlights – Specialty Pharmacy
Strong growth, primarily due to acquisition of Pharmacare Organic growth driven by maximizing infrastructure to win new contracts Integration of Pharmacare and Care Plus proceeding well
Proposed Ontario Drug Benefit Act amendments – positioned to neutralize impact Significant opportunities with new cohesive team’s ability to serve clients nationally
7
Highlights – Surgical and Medical Centres
Capacity Utilization1 40% 32%
Continued year-over-year revenue growth Adjusted EBITDA and margin dampened by investments in additional space at Don Mills & False Creek High demand for gastric band procedure helped drive 150% year to date revenue growth at Don Mills
False Creek’s contract with Vancouver Coastal Health ahead of budget and to include additional procedures
Q2/14 1
8
Excludes Windsor
Q2/15
Maples team well ahead of target to deliver 10,000 echocardiograms
Daniel Gagnon
Chief Financial Officer
Q2/15 Revenue (in Millions, C$)
91.0
↑ 15.6%
Driven primarily by acquisition of Pharmacare and reacquisition of Active and CAR
78.7
Q2/14
Q2/15
Achieved revenue growth across all segments 10
Q2/15 Adjusted EBITDA (in Millions, C$)
9.6
7.8
Driven primarily by acquisition of Pharmacare and reacquisition of Active and CAR
↑ 24.0%
9.9%
10.6%
Q2/14
Q2/15
Adjusted EBITDA margin up from both Q2/14 and Q1/15 11
Segment Results - Physiotherapy, Rehabilitation & Assessments Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
12
Adjusted EBITDA $M
Q2 2014
Segment Results - Specialty Pharmacy Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
13
Adjusted EBITDA $M
Q2 2014
Segment Results - Surgical and Medical Centres Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
14
Adjusted EBITDA $M
Q2 2014
Segment Results - Corporate Q2 2015 Revenue Division
$M
Margin
Revenue
%
$M
Adjusted EBITDA $M
Margin
%
Physiotherapy, Rehabilitation and Assessments
49.8
6.9
13.9
45.6
7.0
15.4
Specialty Pharmacy
31.2
4.5
14.5
23.8
2.8
11.6
9.9
0.8
7.8
9.3
1.1
11.6
-
(2.6)
-
-
(3.1)
-
91.0
9.6
10.6
78.7
7.8
9.9
Surgical and Medical Centres
Corporate
Total
15
Adjusted EBITDA $M
Q2 2014
Cash Flow from Operations (in Millions, C$)
12.7 Continued focus on operational and working capital initiatives
8.6
Q2/15 includes transaction and restructuring costs of $2.5M
Q2/14
Q2/15
13th consecutive quarter of positive cash flows from operations 16
Progress on Balance Sheet Concluded permanent debt reduction of
Closed on refinancing of Revolving Facility to
$25M
$35M
$15M
Revolving facility
$10M
Second lien senior secured notes
17
for an additional year with consistent terms and conditions
David Cutler
President and Chief Executive Officer
Strategic Review Process
Debt reduction remains top priority
Strategic Review process launched in response to unsolicited interest in certain businesses
Value proposition and opportunities unchanged
Fundamental strength and significant opportunities in each of our businesses
19
Continued Momentum: Trailing 12 Months Revenue
Adj. EBITDA
(in Millions, C$)
(in Millions, C$)
327.4
31.5
315.1 301.4
26.9
306.7
9.1%
27.9
29.1
29.6
9.5%
9.4%
9.6%
9.3%
295.1
Jun'14
20
Sep'14
Dec'14 Mar'15
Jun'15
Jun'14
Sep'14
Dec'14 Mar'15
Jun'15
Questions
Second Quarter 2015 Financial Results Conference Call August 5, 2015, 8:30 A.M. (ET)
