AMN Healthcare Acquisition of Stratus Video January 30, 2020 The Innovator in Healthcare Workforce Solutions and Staffing Services
Forward-Looking Statements This investor presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning the impact the acquisition is expected to have on our adjusted earnings per share, revenue and adjusted EBITDA. The Company bases these forward-looking statements on its current expectations, estimates and projections about future events and the industry in which it operates using information currently available to it. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “estimates,” variations of such words and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. The Company’s actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ from those discussed in or implied by the forward-looking statements contained in this presentation are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and its other periodic reports, its current reports and its other filings with the SEC. Developments subsequent to this presentation are likely to cause these statements to become outdated with the passage of time. Non-GAAP Measures This presentation contains certain non-GAAP financial information, which the Company provides as additional information. These non-GAAP financial measures include (1) adjusted EBITDA and (2) adjusted EBITDA margin. Management believes that adjusted EBITDA and adjusted EBITDA margin serve as industry-wide financial measures. A reconciliation of the non-GAAP measures identified in this presentation are included in the Appendix to this presentation. 2
What is Stratus Video? Market leader in video Market leader in video remote interpretation remote interpretation for the healthcare for the healthcare industry industry Connecting healthcare Connecting healthcare patients and providers patients and providers with on-demand with on-demand interpreters in over 200 interpreters in over 200 languages languages 3
Stratus Video Strategic and Financial Rationale Compelling Market, Business Model and Financial Profile • Stratus is the clear market leader in high growth Video Remote Interpretation • Enables providers to improve care and reduce costs for a growing population of patients and meet federal and state mandated requirements • Highly scalable platform with proprietary technology designed for healthcare • High-margin outsourcing model with attractive growth profile and recurring revenue • Outstanding customer and employee retention Strategic Benefit to AMN • Highly aligned with AMN’s total talent solutions strategy • Common markets with ability to leverage MSP/Enterprise relationships • Expected to be immediately accretive to AMN’s margins and earnings • Unique opportunity to participate in the fast-growing markets for virtual care/digital health 4
Stratus Video at a Glance $108M Delivered in Three Across 1,600+ Healthcare Clients Key Modalities 3,000+ Interpreters Revenue in 2019A Medically qualified with $30M Hospitals Video ongoing continuing education requirements Adjusted EBITDA in 2019A Community Health Over the Centers Phone $119M $1.2 Billion Market Clinics Annualized revenue Video remote interpreting run rate in 4Q19 is fastest-growth segment In Person Ambulatory $34M Stratus has leading share Surgery in video segment Centers Adjusted EBITDA run rate in 4Q19 Serving a Growing Population Note: Stratus financials are 26M+ Limited English Proficiency | 11M+ Deaf/Hard of Hearing unaudited and subject to change 5
Stratus Video Core Services Overview Video Remote Interpretation • 35 languages today • Improves patient experience • Available on any device, anytime • Applicable for nearly all in-person interactions Stratus Revenue Mix Over-the-Phone Interpretation In-Person Interpretation Video Hospital Request 66% Provider Requests Provider Hires Interpreter Interpreter Interpreter Arrives Interpreter Response Interpreter Receives Interpreter Accepts Interpreter Sees Requests & Confirms Earnings & Ratings In- • Tech-enabled, efficient deployment • 200+ languages available Person • Enables hospitals use of in-house and & • Covers less common languages and Other contract interpreters roll-over support for VRI Phone 11% 23% • Applicable for complicated / sensitive • Applicable for inbound patient calls, appointments scheduled calls Note: Revenue mix is based on 2019A 6
Stratus Key Financial Metrics ($ in Millions) Total Revenue Gross Profit and Margin $120 $60 70% $108 $51 65% $100 $84 $45 $40 60% $80 $68 $33 $30 55% $60 50% $40 $15 49% 45% $20 47% 47% $0 40% $- 2017 2018 2019 2017 2018 2019 Adjusted EBITDA and Margin Key Financial Highlights 60% • Purchase price: $475 million cash $30 55% $30 50% • Proposed financing: $250 million Term Loan, 45% 40% $21 $175 million revolver draw and $50 cash 35% 30% $15 $14 25% • Pro forma leverage: Debt/EBITDA 3.3x 28% 20% 25% 15% 20% • Immediately accretive to gross margin, 10% 5% EBITDA margin and adjusted EPS $0 0% 2017 2018 2019 7 Stratus financial results are pro forma for acquisitions
Closing Remarks Highly strategic acquisition that accelerates AMN’s vision of being the market leader and innovator in total talent solutions complementary market for higher growth UNLOCKS to AMN’s portfolio of solutions and technology ADDITIVE relationships with healthcare providers and patients STRENGTHENS strong common cultures and fortifies AMN team SYNERGISTIC to AMN Healthcare’s financial performance ACCRETIVE Drives significant shareholder value creation 8
Appendix
Non-GAAP Financial Measures Stratus uses EBITDA and Adjusted EBITDA, which are Non-GAAP measures, to analyze its operating performance. Because calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing Stratus’ non-GAAP financial measures to those of other companies. Stratus believes the most directly comparable GAAP measure would be Net Income (loss) from continuing operations, net of disposed business shown in the following reconciliation table. Twelve Months Ended December 31, ($ in thousands) 2017 2018 2019 Net income $(18,743) $(10,778) $(1,997) Add (deduct): $3,313 $ 2,540 $8,015 Interest expense 8,084 8,436 12,734 Depreciation and amortization Income tax 375 307 116 Reported EBITDA $(6,971) $505 $18,868 Non- Recurring Adjustments 4,788 3,262 4,089 Acquisition Synergies 7,193 8,342 4,679 Proforma Adjustments 8,717 8,716 2,677 $13,727 $20,823 $30,312 Pro forma adjusted EBITDA 10
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