Renal Care — Investor Presentation (August 2004)
27 slides from Renal Care's investor presentation, Aug 11, 2004
Slide 1: Renal Care Group
( )Renal Care Group NYSE: RCI
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Some of the information included in this presentation is forward-looking information and is given in reliance on the Safe Harbor provided by the Private Securities Litigation Reform Act. These forward-looking statements involve risks and uncertainties. Our actual results c
Slide 3: Key Investment Points
KEY INVESTMENT POINTS Correlation between quality care and financial results Predictable and recurring revenues Prudent capital structure and strong free cash flow Selective acquisition opportunities
Slide 4: Renal Care Group Profile
RENAL CARE GROUP PROFILE Specialized provider of dialysis services Physician-driven heritage Strong regional market presence Conservative financial management Commitment to quality care drives value creation
Slide 5: Dialysis Industry
DIALYSIS INDUSTRY
Slide 6: U.S. Dialysis Providers
U.S. DIALYSIS PROVIDERS 300,000 patients 9% 18% 13% 3% 27% 15% 15% DaVita Renal Care Group Hospitals Other Independent Providers Independent Chain Providers Fresenius Gambro
Slide 7: Company Information
COMPANY INFORMATION (Renal Care Group
Slide 8: Locations
LOCATIONS 32 states Mid-size markets Outpatient Dialysis Centers University Affiliations Corporate Office Nashville, Tennessee
Slide 9: Growth Strategy
GROWTH STRATEGY Expand within existing footprint - Organic growth - De novo development - Selective acquisitions Affiliate with excellent physicians Adhere to core competencies
Slide 10: Strategies for Delivering Long-Term EPS Growth
STRATEGIES FOR DELIVERING LONG-TERM EPS GROWTH Long-Term EPS Growth Target 15% Acquisitions Pricing Volume Share Repurchases
Slide 11: Operating Strategy
OPERATING STRATEGY (Renal Care Group
Slide 12: Operating Strategy
OPERATING STRATEGY Optimal care drives superior financial results Clinical objectives aligned with financial interests Medical Advisory Board sets best practices Benchmarking across the Company Continuously improving outcomes Above industry average clinical outcomes
Slide 13: Kt/V Levels
KT/V LEVELS % of Patients with Kt/V > 1.4 1996 1997 1998 1999 2000 2001 2002 2003 Q1 04 Q2 04 70.8 64.7 80.9 74.3 81.7 79.8 84.5 83.1 84.9 84.3* *Does not include former NNA operations
Slide 14: Hematocrit
HEMATOCRIT Patients with Hct > 33% Goal of 75% 1996 1997 1998 1999 2000 2001 2002 2003 Q1 04 Q2 04 53.2 56.2 71.8 65.9 75.5 72.7 77.8 76.6 76.2 78.1* *Does not include former NNA operations
Slide 15: Hospitalization
HOSPITALIZATION Hospital Days / Patient / Year *Does not include former NNA operations ** Based on latest annual data - 2001 RCI "Rolling" Twelve Months 12.3* National Average** 14.5
Slide 16: Mortality
MORTALITY RCI "Rolling" Twelve Months 21.7%* National Average** 23.3% *Does not include former NNA operations ** Based on latest annual data - 2001
Slide 17: Clinical Initiatives
CLINICAL INITIATIVES Options Education RightStart Nephrologist Primary Care Physician ESRD CKD Type of Patients Diabetic Hypertensive CKD Program Vascular Access Diet and B/P Control Reduce Mortality Physician Value- Added Services Productivity/Work Redesign Case Management - - Diabetes - - RightSta
Slide 18: Financial Information
FINANCIAL INFORMATION
Slide 19: Revenue Trends
REVENUE TRENDS Revenue Per Treatment Four Quarter Rolling Revenue (Revenue in $ millions) $939 $964 $986 $1,005 $1,041 $787 $826 $864 $903 1Q 2Q 3Q 4Q 2002 303 305 307 294 286 291 299 1Q 2Q 3Q 4Q 2003 309 2Q03 2Q04 38% $247 $341 1Q 2004 313 2Q $1,135 314
Slide 20: Payor Mix
PAYOR MIX Private Medicare 49% 4% 4% 43% Medicaid Acute Revenue
Slide 21: Earnings Per Share
EARNINGS PER SHARE 2Q03* $0.34 $0.42 2Q04 23.5% 1996 $0.28 1997 $0.38 1998 $0.56 1999 $0.75 2000 $0.87 2001 $1.01 2002 $1.21 2004E $1.41* $1.69-1.76 All split-adjusted * Excluding the impact of retirement package of $0.07. 2003
Slide 22: Challenges
CHALLENGES Medicare Managed Care Pricing Competition
Slide 23: Proposed MMA Regulations
PROPOSED MMA REGULATIONS Add-On and Other Factors ($0.08) - - $0.05 Net Effect ($0.03) $0.05 Composite Rate 1.6% $0.05 Originally Anticipated Impact Per Share Potential 2005 Per Share Impact as Proposed
Slide 24: Corporate Objectives
CORPORATE OBJECTIVES 2004 Revenues (in billions) $1.3 - $1.4 Earnings per share $1.69 - $1.76 Same-market treatment growth 4 - 6% Same-market revenue growth 5 - 7% Patients 30,000 - 31,000 Treatments (in millions) 4.1 - 4.3 Capital expenditures (in millions) $85 - $95 Acquisition target (patients) 1
Slide 25: Free Cash Priorities
FREE CASH PRIORITIES Share repurchase program De novo development
Slide 26: Key Investment Points
KEY INVESTMENT POINTS Correlation between quality care and financial results Predictable and recurring revenues Prudent capital structure and strong free cash flow Selective acquisition opportunities
Slide 27: Renal Care Group
( )Renal Care Group NYSE: RCI -END-
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