INVESTOR PRESENTATION LD Micro 500 – Summer 2020
FORWARD LOOKING STATEMENTS This presentation contains forward‐looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this presentation are forward‐looking statements. Forward‐looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward‐looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect” and similar expressions are intended to identify forward‐looking statements. This presentation contains certain forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our outlook for revenues, net income (loss), and adjusted EBITDA in 2020 and beyond. These forward‐looking statements are based on current expectations, estimates, assumptions and projections that are subject to change and actual results may differ materially from the forward‐looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the material adverse impact of the COVID‐19 pandemic on our business, results of operations and financial condition as well as on the business operations and financial performance of many of our customers, that the Company may not have sufficient cash flows from operations to fund ongoing operations and other liquidity needs, that the Company’s indebtedness could adversely affect its business and financial condition and could reduce the funds available for other purposes and the failure to comply with covenants contained in its credit agreement could result in an event of default that could adversely affect its results of operations, that the Company faces a long period to implement a new contract which may result in the incurrence of expenses before the receipt of revenues from new client relationships, the high level of revenue concentration among the Company's largest customers and any termination in the Company’s relationship with any of our significant clients would result in a material decline in our revenues, that many of the Company's customer contracts are subject to periodic renewal, are not exclusive, do not provide for committed business volumes and may be changed or terminated unilaterally and on short notice, that the Company may not be able to manage its potential growth effectively, that the Company faces significant competition in all of its markets, that continuing limitations on the scope of our audit activity under our RAC contracts have significantly reduced our revenue opportunities with this client, that the U.S. federal government accounts for a significant portion of the Company's revenues, that future legislative and regulatory changes may have significant effects on the Company's business, that failure of the Company's or third parties' operating systems and technology infrastructure could disrupt the operation of the Company's business and the threat of breach of the Company's security measures or failure or unauthorized access to confidential data that the Company possesses. More information on potential factors that could affect the Company's financial condition and operating results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's annual report on Form 10‐K for the year ended December 31, 2019 and subsequently filed reports on Forms 10‐Q and 8‐K. The forward‐looking statements are made as of the date of this presentation and the Company does not undertake to update any forward‐looking statements to conform these statements to actual results or revised expectations. 2
PERFORMANT AT A GLANCE Key Markets 1976 Healthcare, financial services, government, founded higher education, and commercial Headquartered in Bay Area Publicly Traded (Livermore, CA) under PFMT (NASDAQ) Long‐term Client Integrity‐focused Partnerships offering enterprise driven by a customer solutions that enhance service culture revenue and contain costs 140M+ Technology driven audit, recovery, and commercial health plan outsourced services lives served 3
WHY PERFORMANT? Proven, scalable business model that is difficult to replicate providing highly flexible solutions across multiple end markets and processes 4
INNOVATIVE TECHNOLOGY PLATFORM Data, Analytics Culture of and Workflow Innovation Performant’s scalable technology Culture of innovation and a client platform allows subject matter experts service philosophy enable continuous to efficiently validate outputs from the improvement and expanded value Compliance and Security company’s payment integrity creation algorithms Information Security and compliance are a pre‐requisite for winning and Combination of publicly‐available, Concerted focus on developing new retaining clients; Performant proprietary and client data create a robust payment integrity concepts to increase maintains rigorous standards to input for claims selection and review client savings protect Company and client data analytics Collaborative approach to identify and Customized algorithms review claims and resolve client pain points; growing pipeline other data to identify potential payment within (and beyond) mid‐sized plans who inaccuracies and isolate for expert review Client-Oriented have historically been underserved by Subject-Matter larger platforms Go-to-Market Expertise Strategy Purpose‐built workflow tools allow subject The Company typically sells into a cross matter experts to quickly review analytical functional matrix of client decision makers outputs and accelerate the reclamation across payment integrity, finance, provider process network management and clinical policy Combination of best‐in‐class technology and deep domain expertise delivers tangible results while fostering a client‐focused culture rooted in innovation 5
OPERATING IN A POST COVID‐19 ENVIRONMENT • Successfully adapted and responded to a multitude of changes from clients and various governing bodies at every level from local cities and counties, all the way to the federal government • Mobilized over 1,200 employees to continue our ongoing business operations in a secure remote environment. Health care operations were not significantly impacted as only two of our health care customers • were directly impacted by congressional regulations related to COVID‐19 Coordination of benefits contracts have not experienced contractions o Continued growth and expansion in our other health care offerings o Do not anticipate COVID‐19 to have permanent negative effects on our relationships or overall o contract expectations • As a leader in payment integrity, serving multiple CMS regions and numerous national and regional Medicare and Medicaid managed care plans, our customers have come to depend on our resiliency and forward thinking to combat the highly disruptive nature of COVID‐19 • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) directly impacted our Recovery operations Suspended payments, ceased accruing interest and stopped involuntary collection of payments or o wage garnishment for student loans originated by the Department of Education. Pause in outbound activity related to student loans expected through December 31, 2020 o 6
HEALTHCARE OPERATIONS
OVERVIEW OF HEALTHCARE SOLUTIONS Eligibility‐Based Reviews Claims‐Based Reviews Identifies other insurance and Corrects claims that were billed coordinates coverage responsibility inaccurately ~$27.7MM ~61% ~$15.6MM ~77% 2019 2019 1‐Year Growth 1‐Year Growth Revenue Revenue Providing payment integrity and other technology driven solutions for health plans and governmental agencies Note: Claims-based reviews YOY percentage change does not include the 2018 CMS Region A 8 contract termination impact of $28.4 million
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