INVESTOR PRESENTATION. HIMSS15 Annual Conference & Exhibition April 2015

Transcription

1 INVESTOR PRESENTATION HIMSS15 Annual Conference & Exhibition April 2015

2 Forward Looking Statements The matters discussed in this presentation may include forward-looking statements, which could involve a number of risks and uncertainties. When used in this presentation, the words will, believes, intends, anticipates, expects and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or implied by, such forward looking statements. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements. See the Company s most recent earnings press release for explanation of non-gaap financial measures used in this presentation as well as reconciliation from GAAP to non-gaap metrics. Some of the products and/or product features discussed in this presentation may be works in progress and not yet generally available for sale. 2

3 CORE BUSINESS update

4 Quarter Results Grew from Last Year $53.6M GAAP Revenue Minor Increase 23% Adjusted EBITDA 35% Increase $12.6M Cash from Operations 34% Increase 4

5 2014 Performance vs Guidance PRO FORMA REVENUE ($MM) ADJUSTED EBITDA ($MM) 45.0 $0.20 $0.16 $0.21 ADJUSTED EPS 5

6 Merge Innovative Imaging Solutions Merge provides solutions to over 7,500 healthcare facilities in the United States. ACUTE SOLUTIONS Hospitals/IDNs AMBULATORY SOLUTIONS Cardiology Cardiology PACS, Hemodynamics Radiology PACS, VNA, RIS, Financials Interoperability iconnect VNA, Universal Viewer, Image-Sharing Orthopedics OrthoEMR, OrthoPACS, OrthoCase Clinical Trials eclinicalos, Clinical Trials Management System Eye Care Eye Station, Retinal Screening 15% 30% 32% 30% 2% 30% 6

7 AN EVEN BIGGER merge Transaction Review Net Consideration of $70M $50M preferred stock $20M internal funds Preferred Stock Issued at $4.14 per share 8.5% dividend rate Implied Transaction Multiples EV / revenue of < 2X EV / EBITDA of < 7X Expected to be accretive in 2015

8 Merge & DR Systems Together Offer BROAD PORTFOLIO Best in KLAS solutions CUSTOMER FOCUS FULLY SUPPORTED No end of life planned Will benefit our clients Best of both solutions, expanded opportunity LONG TERM STRATEGY INNOVATIVE SOLUTIONS History of industry firsts 8

9 Industry Recognition & Rankings Ranked #1 Best in KLAS: Radiology 2014 Ranked #1 Overall PACS Six Times 2001, 2004, 2007, 2010, 2011, 2012 Ranked #1 Best in KLAS: Cardiology Ranked KLAS Category Leader: Cardiology Hemodynamics Merge Cardio: Best in KLAS, Cardiology Merge Hemo: Category Leader, Cardiology Hemodynamics, Best in KLAS Awards: Software & Services IHS VNA Global Market Leader: iconnect Enterprise Archive Q

10 eclinical OS update

11 Merge eclinical At-A-Glance 11

12 Our Breadth & Scalability $5,000 Single-site, Regional Trial Servicing Trials Of All Sizes $2.6M Multisite, Global Trial AROs CROs SPONSORS 12

13 Platform Service Modules START UP CONDUCT SUBMIT Study Designer Electronic Data Capture (EDC) Mobile Access Safety Reporting Study Management Lab Normals DICOM Imaging Endpoint Adjudication Data Imports API Randomization Language Translation Ad Hoc Reporting Medical Coding Interactive Voice Response (IVR) Dispensing Training & Tracking Inventory Mgmt. and Dispensing Double Key Data Entry Patient Reported Outcomes (epro) Site Documents Source Data Verification Service Selection Right-Size Pricing Single Interface Data Aggregation Adaptive Configuration Quality & Compliance UNIFIED SERVICE SELECTION AND DELIVERY PLATFORM 13

14 DICOM Profile Collect, transport and access DICOM images directly in ecos Save images (MRI, CT, PET, etc.) directly on CRFs Enable advanced workflow involving DICOM images (give your whole team access to collect and transport all DICOM images in a study) 14

15 Vision Unified + Magnified: ecos Enabling the Truly Connected Community What It Is: A collaborative network tailored to a diverse clinical CROs research community that shares ideas and information to strive for common goals Subjects Sponsors AROs What It Will Do: Boost innovation, efficiency, skills development and productivity at individual and organizational levels Sites 15

16 INTRODUCING iconnect Network Services

17 Health Systems are Losing REFERRAL REVENUE through a million systemic and technical holes 17 Copyright 2014 Merge Healthcare

18 How Much Revenue is Being Lost? 5 Weekly patients lost to operational inefficiency + $3,000 = Revenue lost per lost referral $15,000 Weekly lost revenue per employed physician $780K Annual lost revenue per employed physician Opportunity: Manage Total Cost and Quality 18

19 Referring Physician Loyalty is CRUMBLING due to increased technical complexity and unsustainable expense 19 Copyright 2014 Merge Healthcare

20 Benefit of Stopping Operational Losses Annual Revenue Gain from Captured Referrals (base rate of 1000 referrals/month, based on $300 per procedure) Improvement in Success Rate 10% 15% 20% 25% 30% % of Referrals via iconnect Network 20% $72,000 $108,000 $144,000 $180,000 $216,000 40% $144,000 $216,000 $288,000 $360,000 $432,000 60% $216,000 $324,000 $432,000 $540,000 $648,000 80% $288,000 $432,000 $576,000 $720,000 $864, % $360,000 $540,000 $720,000 $900,000 $1,080,000 20

21 Manual Prior-authorization is a VICIOUS CIRCLE of inefficiency, redundancy, expense and risk 21

22 How Much Can Outsourcing Save? Average number of per week clinical staff spend on priorauthorization activities M $83k Annual average perphysician cost of interacting with insurance plans3 Total number of hours physicians spend annually on 2 prior-authorizations $8.48B Total potential healthcare industry savings with prior-authorization automation 1.American Medical Association 2010 Survey 2.Based on a 2013 Kaiser Family Foundation Estimate of About 835,000 Practicing Physicians 3.Health Affairs, 2011 Study 22

23 This is How We Do It Introducing iconnect Network Services icns ORDERS Ordering and Referrals Management icns AUTHORIZE Automated Prior-authorization icns RESULTS Loyalty-driven Report Delivery 23

24 iconnect Network Customer Go-Lives projects are expected to enter testing phase soon. We can see 3 to 4 go-lives in April 2015 if no issues arise during testing phase. 24

25 Merge icns Business Opportunity 3 Transactions with Incremental Value $1.4 Billion/Year for Medical Imaging Alone icns ORDERS $377M icns AUTHORIZE $875M icns RESULTS $168M 25

26 CONTACT US: FOLLOW US: Merge Healthcare Headquarters 350 N. Orleans Street, 1st Floor Chicago, IL phone fax toll-free facebook.com/mergehealthcare linkedin.com/company/mergehealthcare merge.com/blog twitter.com/mergehealthcare youtube.com/mergehealthcare 26 Copyright 2014 Merge Healthcare