Cross Country Healthcare, Inc. · NASDAQ:CCRN
Cross Country Healthcare — Investor Day (September 2022)
56 slides from Cross Country Healthcare's investor day presentation, Sep 14, 2022
Slide 1: Investor Day 2022
Investor Day 2022 Cross Country Healthcare September 14, 2022
Slide 2: Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act, and are subject to the "safe harbo
Slide 3: Agenda: Leadership, Technology, Culture, Go to Market, Delivery
TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5 LEADERSHIP 1 John A. Martins President and CEO
Slide 4: Our Roadmap and Plan
OUR ROADMAP AND PLAN Long-term, sustainable, profitable growth
Slide 5: Evolve, Elevate, Execute
> = a 4 i—} Ke a uy > =z EVOLVE ELEVATE EXECUTE
Slide 6: $31B Total addressable staffing market
$31B Total addressable staffing market Market Size per Staffing Industry Analysts (SIA), US Staffing Industry Forecast, May 2022 Update., represents 2023 estimate Employment Projections 2021-2031; US Bureau of Labor Statistics (9/8/2022) 2.6M Healthcare Jobs to be Added by 2031
Slide 7: Our Roadmap and Plan
OUR ROADMAP AND PLAN A digitally transformed, innovative enterprise with diverse capabilities to help clients solve their most pressing labor challenges
Slide 8: Continuum of Care
Continuum of Care Home Retail Pharmacy Physician Offices & Clinics Urgent Care Center Diagnostic Imaging Center Ambulatory Procedure Emergency Department Hospital Inpatient Rehabilitation Outpatient Rehabilitation Extended Care Facility Skilled Nursing Facility Home Health & Hospice Home/PACE Progra
Slide 9: Share repurchase program
~3% Outstanding shares repurchased in Q3'22 $100M Share repurchase program New $100M share repurchase plan announced August 16, 2022 Shares Repurchased Through September 12, 2022
Slide 10: Bill Burns, Chief Financial Officer
Bill Burns Executive Vice President, Chief Financial Officer TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5 LEADERSHIP 1
Slide 11: Total Addressable Market
Total Addressable Market Healthcare Staffing Market ~$30B* Education Staffing Market ~$1B* ~$31B ~$2.5B Revenue** ~8% MARKET SHARE*** Cross Country Healthcare * Per SIA, US Staffing Industry Forecast, May 2022 Update., 2023 estimate ** Cross Country Healthcare (CCH) trailing twelve month revenue end
Slide 12: The Healthcare Staffing Market
The Healthcare Staffing Market $21B 13% CAGR $40B $34B $30B Market Size & Mix per Staffing Industry Analysts, US Staffing Industry Forecast, May 2022 Update., 2023 estimate Addressable Today & Vendor Management System (VMS) opportunity based on CCH Estimates CAGR: Compound Annual Growth Rate 2023P A
Slide 13: Travel Nursing Evolution through the Pandemic
Travel Nursing Evolution through the Pandemic $15B $18B $23B $9B $7B Bill Rate $ $$ $$$ $$$ $$ 2019 2020 2021 2022 2023 FTEs (in thousands) 50 85 100 80 90 ‘23 vs. Pre-Pandemic CAGR 60% 13% 8% 35% Our Experience: ~3x Total Travelers ~10x age 25 or younger ~3x between ages of 26 - 41 Market Size Staf
Slide 14: Contingent Usage
Contingent Usage Healthcare Job Openings vs. Hires based on JOLTS report from Bureau of Labor Statistics
Slide 15: Our Success is Built Upon
> = a 4 i—} Ke a uy > =z Our Success is Built Upon EVOLVE ELEVATE EXECUTE Market a Ss Clinical Sustained Excellence Productivity CROSS it COUNTRY v World-class - a Capacity Candidate Experience Investments > we Deep Client Relationships 15
Slide 16: Proven Ability to Execute
Proven Ability to Execute REVENUE: 7 Straight Quarters Double Digit Growth 13 out of 14 Quarters Meeting or Exceeding Guidance & Consensus 6 Straight Quarters Outpaced Revenue growth vs publicly traded peer Adj. EBITDA: 7 Straight Quarters High-Single to low-Double Digit Margin 12 out of 14 Quarters
Slide 17: Raising Q3 Guidance
Raising Q3 Guidance THIRD QUARTER 2022 ORIGINAL GUIDANCE REVISED GUIDANCE Revenue $605 - $615M $615M - $625M Adj. EBITDA $55M - $60M $58M - $63M Adj. EPS $0.85 - $0.95 $0.90 - $1.00
Slide 18: Fourth Quarter Revenue Outlook
Fourth Quarter Revenue Outlook + $50M or 10% Min $550M 2022 exit run rate - Revised 2022 exit run rate -Prior Min $500M
Slide 19: 2023 Minimum Guidance
2023 Minimum Guidance 2023 Full Year $2.2B $200M +9% Revenue Adj. EBITDA AEBITDA %
Slide 20: Susan Ball, Chief Administrative Officer and General Counsel
Susan Ball Executive Vice President, Chief Administrative Officer and General Counsel LEADERSHIP 1 TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5
Slide 21: Northwell Health testimonial
“A relationship of this length can only succeed if trust is established between the parties and that is certainly the case for Northwell’s partnership with Cross Country Healthcare.” - EVP and Chief Nurse Executive of Northwell Health
Slide 22: Clinical cancellation and on-time start rates
<0.5% Clinical cancellation rate 95% Onboarding On-time start rate Internal Metrics – YTD 2022
Slide 23: Phillip Noe, Chief Information Officer
Phillip Noe Chief Information Officer LEADERSHIP 1 TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5
Slide 24: Our Industry Today
Our Industry Today Growing by Acquisitions Lack an Integrated Tech Stack STAFFING Tech-focusedSolutions Lack Staffing Industry Experience TECHNOLOGY Strong Weak Strong Weak TRADITIONAL HEALTHCARE STAFFING TECH DISRUPTORS PROBLEM PROBLEM
Slide 25: The Benefit
THE BENEFIT Speed and accuracy across the entire professional and client experience.
Slide 26: A Frictionless, Simple Candidate Experience
A Frictionless, Simple Candidate Experience OUR GATEWAY PORTAL EVOLVE ELEVATE EXECUTE
Slide 27: Gateway Candidate Portal
Digital Credentialing Wallet Candidate Loyalty Machine Learning/Artificial Intelligence Real Time Notifications Instant Interviews Quick Extensions Job Offers Pay Package Quotes GATEWAY CANDIDATE PORTAL
Slide 28: A Frictionless, Simple Client Experience
A Frictionless, Simple Client Experience OUR INTELLIFY VMS
Slide 29: Intellify Client Portal
Integration and Partnership Machine Learning/Artificial Intelligence Customer Data Smart Schedule Vendor Neutral Talent Forecasting OUR INTELLIFY CLIENT PORTAL Client Needs Time to Market
Slide 30: Automation, efficiency and data analytics
Implementing self service automation Improving producer efficiency and capacity Leveraging data and analytics to improve decision making
Slide 31: Colin McDonald, Chief Human Resources Officer
Colin McDonald Chief Human Resources Officer LEADERSHIP 1 TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5
Slide 32: Engage
> = a 4 i—} Ke a uy > =z EVOLVE ELEVATE EXECUTE Engage 32
Slide 33: We are: Connected, Accountable, Compassionate
We are: Connected Accountable Compassionate Driven Entrepreneurial
Slide 34: Hiring and attrition metrics
1,100+ Most employees hired in a single year ~20% Average attrition rate $350M Revenue from first-year travel recruiters over the last 12 months Metrics for CCH corporate employees only (2021-2022)
Slide 35: New hires and retention metrics
42% New hires from healthcare and staffing industry 81% Number of employees retained 100% Employees work where they are most productive Metrics for CCH corporate employees only (2021-2022)
Slide 36: Promotions and flight risk
36% Increase in promotions YTD compared to 2021 87% Employees predicted as a low flight risk using our internal Business Intelligence (BI) system Metrics for CCH corporate employees only (2021-2022)
Slide 37: Diversity metrics
42% Employees identifying as minorities 87% Employees who believe CCH is committed to diversity 88% Employees whobelieve the company respects individuals and values their differences 78% Female employees Metrics for CCH corporate employees only (2021-2022)
Slide 38: Dan White, Chief Commercial Officer
Dan White Chief Commercial Officer LEADERSHIP 1 TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5
Slide 39: New MSP contracts signed
$84M New MSP contracts signed in 2022 $70M MSP verbal awards in contracting for Q3'22
Slide 40: A Tech-Enabled Workforce Platform
A Tech-Enabled Workforce Platform IntellifyTM is our proprietary Vendor Management System (VMS) that automates the process of finding, scheduling and managing staff via one centralized platform
Slide 41: Our Workforce Platform
OUR WORKFORCE PLATFORM Talent Offerings Managed Service Program (MSP) Recruitment Process Outsourcing Internal Resource Pool Int’lNursing Sabbatical Program Registered Nurse Residency Upskilling Motivate/Engage/Retain Interim Leadership Locums Nurse & Allied Nurse & Allied Non- Clinical Physician Se
Slide 42: Marc Krug, Group President, Delivery
Marc Krug Group President, Delivery LEADERSHIP 1 TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5 Amiee Hawkins SVP Enterprise Operations
Slide 43: Case Study
CASE STUDY 1 700+ professionals mobilized in <2 weeks Onsite regulatory audit: 100% no deficiencies 5% converted to perm staff 209 positions filled 500+ unique candidates sourced Average 1.7 days to submission CASE STUDY 2 CCH Internal Data for specific clients
Slide 44: Our Delivery Model – Six Tenets
1 2 3 4 5 6 Source the right professional for the opportunity Transparency in compensation Customer success with exceptional service to our professionals and clients Continuous engagement throughout the professional and client lifecycle Speed and purpose: speed to partner, speed to support, and spee
Slide 45: Ramp-up Time of New Travel Recruiters
1.5 Weeks 3-4 Months CURRENT PREVIOUS Ramp-up Time of New Travel Recruiters Internal Metrics – 2019 through YTD 2022
Slide 46: Improving Recruiter Productivity
• Recruiter productivity 2X across our travel business lines • Technology automates non-revenue generating tasks• 24/7 recruitment model maximizes potential productivity Improving Recruiter Productivity Internal Metrics – 2019 through YTD 2022
Slide 47: Bill Burns, Chief Financial Officer
Bill Burns Executive Vice President, Chief Financial Officer TECHNOLOGY 2 CULTURE 3 GO TO MARKET 4 DELIVERY 5 LEADERSHIP 1
Slide 48: What We Do: People, Process, Technology
What We Do Prior Today PEOPLE PROCESS TECHNOLOGY = RESULTS +100% +50% 3X Capacity Productivity Revenue x = + + Travel Local Locums Education Home Search MSP / VMS
Slide 49: Strong Client Relationships
Strong Client Relationships Revenue by Client Contract Type MSP / MSO, 53% 3rd Party, 15% Direct, 32% MSP / MSO / VMS, 60% 3rd Party, 10% Direct, 30% TODAY FUTURE GOAL Managed Service Program (MSP), Managed Service Offering (MSO), Vendor Management System (VMS)
Slide 50: Expanding Lines of Business
Expanding Lines of Business TODAY FUTURE GOAL Travel, 79% Other, 2% Local, 10% Home, 4% Education, 2% Locums, 3% Travel, 62% Other, 7% Local, 7% Home, 7% Education, 9% Locums, 8% Improving Diversification Through Growth Across Higher Margin Business
Slide 51: Vendor Neutral Opportunity
Vendor Neutral Opportunity ~$30B* ~$10B - $15B ~8% Potential CCH SHARE $1B+ REVENUE MARGIN 20% Capture $200M 20%-25% 80% Subs $50M ~95%+ Total $250M ~40% Expanding Market Opportunity through Technology Scenario for Illustrative Purposes Only Vendor Neutral Opportunity based on CCH Estimates
Slide 52: Levers for Margin Growth
Levers for Margin Growth High Single to Low-Double Digits Sustained Double Digits Organic Growth in Higher Margin Businesses Improved Bill-Pay Spreads Intellify Operational Efficiencies Automation TODAY FUTURE GOAL
Slide 53: Target Annual Free Cash Flow Generation
Target Annual Free Cash Flow (FCF) Generation >60% of AEBITDA Estimate ~15%-25% of FCF towards Debt Service Estimate ~5-15% of FCF towards Share Repurchases, depending on share price and valuations Sufficient Liquidity to be Opportunistic Potential to accelerate certain investments Capital Allocatio
Slide 54: The Valuation Gap
The Valuation Gap 3-4x $292M 10-12x <$50M FY ’16 Q2 ’22 Adj. AEBITDA based on trailing four quarters ending in each period presented Multiple equals Enterprise Value divided by Adj. EBITDA; Enterprise Value equals Market Cap, plus Debt, less cash Multiple AEBITDA FY ’19
Slide 55: Evolve, Elevate, Execute
> = a 4 i—} Ke a uy > =z EVOLVE ELEVATE EXECUTE 55
Slide 56: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation references non-GAAP (Generally Accepted Accounting Principles) financial measures. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in acco
Cross Country Healthcare — Investor Day (September 2022) on 6ix