EX-99.1 2 g66406ex99-1.txt SLIDE PRESENTATION 1 Exhibit 99.1 Slide presentation to be used at analyst and shareholder meetings between January 16, 2001 and February 9, 2001 [logo]Renal Care Group Nasdaq Symbol RCGI 2 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 could differ materially from these forward looking statements due to certain factors, including business and economic conditions and the availability of financing. These and other risks and uncertainties are discussed in RCG's reports filed with the SEC, including our annual report on form 10-K and our quarterly reports on form 10-Q. [logo]Renal Care Group 3 KEY INVESTMENT POINTS - Strong U.S. market growth of 5-6% annually - Predictable and recurring revenues - Excellent patient outcomes drives volume growth above market average - Proven cost management - Prudent capital structure and strong free cash flow - Selective acquisition opportunities [logo]Renal Care Group 4 COMPANY INFORMATION [logo]Renal Care Group 5 COMPANY PROFILE - Specialized provider of dialysis services - Physician-driven heritage - Strong regional market presence - Cost-effective, quality care - Commitment to quality care drives value creation - Medical outcomes improved - Financial performance enhanced [logo]Renal Care Group 6 GROWTH IN PATIENTS [Graph showing patient growth from 5,200 in 1996 to 8,240 in 1997 to 11,380 in 1998, to 14,500 in 1999 to 16,000 in 2000] [logo]Renal Care Group 7 CURRENT LOCATIONS 24 States Medium size [Map showing current locations in the states of Alabama, Alaska, Arizona, Arkansas, Florida, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Washington and Wisconsin] [logo] Corporate Office, Nashville Tennessee [character] Regional Offices [character] University Affiliations [character] Outpatient Dialysis Centers [logo]Renal Care Group 8 STRONG REGIONAL MARKET PRESENCE [Chart showing market presence at January 1, 2000]
Market Market Share No. of Patients ------ ------------ --------------- Indiana/Ohio 40% 2,500 South and East Texas 43% 2,230 Mississippi 49% 2,050 Phoenix, AZ 38% 1,950 S. Chicago, IL 30% 1,560 Central Arkansas 39% 660 Portland, OR/Washington 60% 710 Western Kansas 45% 550 Weighted Average Share 30-35%
[logo]Renal Care Group 9 STRONG REGIONAL MARKET PRESENCE [Chart showing market presence at December 31, 2000]
Market Market Share No. of Patients ------ ------------ --------------- Indiana/Ohio 48% 3,000 South and East Texas 43% 2,230 Mississippi 49% 2,050 Phoenix, AZ 38% 1,950 S. Chicago, IL 34% 1,760 Central Arkansas 39% 660 Portland, OR/Washington 60% 710 Western Kansas 45% 550 Weighted Average Share 30-35%
[logo]Renal Care Group 10 NUMBER OF ASSOCIATES (FTEs) [Chart showing number of associates as of 12/31/00]
% ---- Direct Patient Care 3,300 91.7 Billing and Collections 110 3.1 Information Systems 60 1.6 Field Management 80 2.2 Corporate Office 50 1.4 ----- ----- 3,600 100.0 ===== =====
[logo]Renal Care Group 11 NUMBER OF ASSOCIATES (FTEs) Incentive Programs ------------------ - Over 500 individuals have stock options - 20% of associates participate in ESPP - All top management participate in our cash incentive bonus plan [logo]Renal Care Group 12 INDUSTRY OVERVIEW [logo]Renal Care Group 13 ATTRACTIVE INDUSTRY FUNDAMENTALS - Expanding ESRD patient population - High rates of diabetes and hypertension - Aging population - Increasing survival on dialysis - Recurring and predictable revenues with recent increases from Medicare - Patients qualify regardless of age - Positive consolidation momentum [logo]Renal Care Group 14 MEDICARE REIMBURSEMENT ENVIRONMENT - Composite rate increased 2.4% for 2001 - AWP reduction delayed through 2001 [logo]Renal Care Group 15 U.S. DIALYSIS PROVIDERS [Pie chart showing dialysis providers in the United States, reflecting market shares as follows: 24% for Fresenius; 16% for DaVita; 14% for Gambro; 5% for Renal Care Group; 20% for hospitals; 15% for other independent providers; 6% for independent chain providers. All percentages are as a percentage of approximately 260,000 total patients.] [logo]Renal Care Group 16 OPERATING STRATEGY [logo]Renal Care Group 17 OPERATING STRATEGY - Optimal care drives superior financial results - Clinical objectives aligned with financial interests - Medical Board is leveraging best practices across the Company - Benchmarking across the Company - Reviewing data and best practice implementation on quarterly basis - Continuously improving outcomes - Above industry average clinical outcomes [logo]Renal Care Group 18 UREA REDUCTION RATE Percent Patients with URR greater than or equal to 70% Goal = 70.0% [Graph showing percentage of RCG patients with a urea reduction rate greater than or equal to 70% on a quarterly basis from 1997 through third quarter 2000, compared with a national average of 48% based on annual data from 1999. RCG results are as follows: 1997 -- Q1 59.1%, Q2 60.7%, Q3 62.3%, Q4 63.7%; 1998 -- Q1 63.7%, Q2 63.9%, Q3 63.2%, Q4 66.1%; 1999 -- Q1 66.4%, Q2 66.5%, Q3 70.0%, Q4 73.4%; 2000 -- Q1 70.8%, Q2 71.2%, Q3 73.2%.] [logo]Renal Care Group 19 HEMATOCRIT Hematocrit Levels, HD + PD Pts Percent Patients with Hct greater than or equal to 30% Goal = 90.0% [Graph showing percentage of RCG patients with a hematocrit levels greater than or equal to 30% on a quarterly basis from 1997 through third quarter 2000, compared with a national average of 78% based on annual data from 1999. RCG results are as follows: 1997 -- Q1 81.9%, Q2 82.8%, Q3 79.6%, Q4 79.1%; 1998 -- Q1 79.9%, Q2 82.1%, Q3 83.0%, Q4 84.6%; 1999 -- Q1 84.6%, Q2 86.1%, Q3 86.5%, Q4 87.9%; 2000 -- Q1 88.2%, Q2 88.5%, Q3 88.1%.] [logo]Renal Care Group 20 HOSPITALIZATION Hospital Days/Patient/Year [Bar chart showing national average hospitalization of 14.0 days per patient per year for 1999 compared to RCG "Rolling" Twelve Months ended September 30, 2000 of 12.0 days per patient per year] [logo]Renal Care Group 21 MORTALITY [Bar chart showing national average mortality rate of 23.2% for ESRD patients for 1999 compared to RCG "Rolling" Twelve Months ended September 30, 2000 of 21.8%] [logo]Renal Care Group 22 FINANCIAL INFORMATION [logo]Renal Care Group 23 EARNINGS PER SHARE [Bar chart showing earnings per share for the years ended December 31, 1996 through 1999 with expected year 2000 earnings per share and separate chart showing earnings per share for the third quarters of 1999 and 2000, all earnings are prior to restatements for the Dialysis Centers of America merger and the Renal Disease Management by Physicians merger. Results shown are as follows: 1996 -- $0.42; 1997 -- $0.57; 1998 -- $0.84; 1999 -- $1.12; expected 2000 -- $1.32; Q3 1999 -- $0.29; Q3 2000 -- $0.33. The chart includes an arrow showing growth from 1999 to 2000 expected represents 17.9% (22.3% without giving effect to an increase in the price of Epogen).] [logo]Renal Care Group 24 REVENUE ($ in thousands) [Bar chart showing revenue for the years ended December 31, 1996 through 1999 with expected year 2000 revenue and separate chart showing revenue for the third quarters of 1999 and 2000, all revenue reflected are prior to restatements for the Dialysis Centers of America merger and the Renal Disease Management by Physicians merger. Results shown are as follows: 1996 -- $135.9 million; 1997 -- $214.0 million; 1998 -- $369.4 million; 1999 -- $520.6 million; expected 2000 -- $618.0 million; Q3 1999 -- $133.5 million; Q3 2000 -- $156.5 million. The chart includes an arrow showing growth from 1999 to 2000 expected represents an 18.7% increase.] [logo]Renal Care Group 25 INCREASING EBITDA MARGINS 1Q00 included one month EPO increase 50 basis point decrease in 2Q00 due to EPO [Bar chart showing EBITDA margins for the years ended December 31, 1996 through 1999 and separate chart showing EBITDA margins for the third quarters of 1999 and 2000, all EBITDA margins reflected are prior to restatements for the Dialysis Centers of America merger and the Renal Disease Management by Physicians merger. Results shown are as follows: 1996 -- 18.2%; 1997 -- 19.4%; 1998 -- 22.2%; 1999 -- 23.6%; Q3 1999 -- 23.7%; Q3 2000 -- 23.8%.] [logo]Renal Care Group 26 COMPLETED ACQUISITIONS YTD
Group Patients ----- -------- Northwestern Memorial 220 Renal Disease Management 580 Sacred Heart Medical 425 Providence St. Peters 225 ----- 1,450 =====
[logo]Renal Care Group 27 Acquisition Performance
When Acquired(1) 1999 ----------- ---- Patients (CAGR 12%) 4,365 5,372 Revenues (CAGR 18%) $132.7 million $208.7 million EBITDA 20.0% 25.8% Days Sales Outstanding 81 69 Patients with URR greater than or equal to 70% 48% 71% Patients with Hct greater than or equal to 30% 79% 87%
(1) All 1996 and 1997 acquisitions [logo]Renal Care Group 28 FREE CASH FLOW ($ in thousands)
2000E 2001E ----- ----- EBITDA $149,000 $171,000 CapEx 32,000 45,000 Taxes 40,000 45,000 Interest 6,000 3,000 Working Capital 1,000 13,000 Free Cash Flow 60,000 65,000
[logo]Renal Care Group 29 Capital Structure September 30, 2000 ($ in thousands) Long-Term Debt $ 51,700 12.4% [of total capital] Stockholders' Equity 366,100 -------- Total Capital $417,800 ========
EBITDA = $149 million [logo]Renal Care Group 30 LINE OF CREDIT STATUS September 30, 2000 Total Amount $157,500,000 Amount Outstanding $ 49,500,000 ------------ Amount Available $108,000,000 ============ Borrowing Rate 7.2%
[logo]Renal Care Group 31 Share Repurchase - Up to $50 million - Sound business fundamentals - Accretive to earnings [logo]Renal Care Group 32 KEY INVESTMENT POINTS - Strong U.S. market growth of 5-6% annually - Predictable and recurring revenues - Excellent patient outcomes drives volume growth above market average - Proven cost management - Prudent capital structure and strong free cash flow - Selective acquisition opportunities [logo]Renal Care Group 33 [logo]Renal Care Group Nasdaq Symbol RCGI