Renal Care — Investor Presentation (June 2004)
26 slides from Renal Care's investor presentation, Jun 9, 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 Strong U.S. market growth of 4-6% annually Predictable and recurring revenues Prudent capital structure and strong free cash flow De novo development 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 Improved medical outcomes Enhanced financial performance
Slide 5: Dialysis Industry
DIALYSIS INDUSTRY (Renal Care Group:
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 31 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: Operating Strategy
OPERATING STRATEGY (Renal Care Group:
Slide 11: 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 12: Kt/V Levels
KT/V LEVELS % of Patients with Kt/V > 1.4 1996 1997 1998 1999 2000 2001 2002 2003 Q104 70.8 64.7 80.9 74.3 81.7 79.8 84.5 83.1 84.9
Slide 13: Hematocrit
HEMATOCRIT Patients with Hct > 33% Goal of 75% 1996 1997 1998 1999 2000 2001 2002 2003 Q104 53.2 56.2 71.8 65.9 75.5 72.7 77.8 76.6 76.2
Slide 14: Hospitalization
HOSPITALIZATION Hospital Days / Patient / Year * Based on latest annual data - 2001 National Average* 14.5
Slide 15: Mortality
MORTALITY * Based on latest annual data - 2001 National Average* 23.3%
Slide 16: Clinical Initiatives
CLINICAL INITIATIVES Options Education RightStart Nephrologist Physician PCP ESRD CKD Type of Patients Diabetic Hypertensive CKD Program Vascular Access Reduce Mortality Physician Value- Added Services Productivity/Work Redesign Case Management - - Diabetes - - RightStart Transplant RCG Approach Wit
Slide 17: Financial Information
FINANCIAL INFORMATION (Renal Care Group:
Slide 18: Revenue Trends
REVENUE TRENDS Revenue Per Treatment Four Quarter Rolling Revenue (Revenue in $ millions) $939 $964 $986 $787 1Q $826 2Q $864 3Q $903 4Q 2002 303 305 307 294 286 291 299 $1,005 1Q 2Q 3Q 4Q 2003 309 1Q03 1Q04 14.9% $242 $278 1Q 2004 313 $1,041
Slide 19: Payor Mix
PAYOR MIX Private Medicare 49% 6% 5% 40% Medicaid Acute Revenue
Slide 20: Earnings Per Share
EARNINGS PER SHARE 1Q03* $0.34 $0.42 1Q04 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 21: Challenges
CHALLENGES Medicare Managed Care Pricing Competition
Slide 22: Medicare Bill
MEDICARE BILL MSP No Change No Change AWP "Acquisition Cost" Carve Out 1.6% Composite Rate 0% EPO Carve Out "Acquisition Cost" 2004 2005
Slide 23: Corporate Objectives 2004
CORPORATE OBJECTIVES 2004 Revenues (in billions) $1.3 - $1.4 Earnings per share $2.54 - $2.64 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 24: Free Cash Priorities
FREE CASH PRIORITIES Share repurchase program De novo development
Slide 25: Key Investment Points
KEY INVESTMENT POINTS Strong U.S. market growth of 4-6% annually Predictable and recurring revenues Prudent capital structure and strong free cash flow De novo development Selective acquisition opportunities
Slide 26: Renal Care Group
()Renal Care Group NYSE: RCI -END-