Investor Presentation. December 2013

Transcription

1 Investor Presentation December 2013

2 Forward Looking Statement 2 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 forwardlooking 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 Why Merge Matters images are growing { ARCHIVE ACCESS DIAGNOSE } you need to do more with less { AUTOMATE ADOPT INTEGRATE } regulations are pervasive { EDUCATE EXECUTE ADAPT } consolidation is happening { CONNECT CENTRALIZE EVOLVE } 3

4 Our History of Innovation 2008 Merrick Invests In Merge 2010 Expanded interoperability, AMICAS radiology & cardiology Acquistion offerings 2011 OIS Acquisition 2010 Launched iconnect 100+ Clients Entered eye care market 2012 Launched eclinical OS 2 million+ active patients since launch 2009 Confirma Acquisition Expanded radiology offering 2011 Launched Rad MU Solution 975 doctors utilize Merge MU solutions 2013 Launched iconnect Network Surescripts signs on as partner 2010 Stryker Acquisition Entered specialty orthopedics marketplace 2012 Launched Honeycomb Archive & Image Sharing 4

5 Our Solutions Portfolio Imaging & Interoperability Solutions Radiology Interoperability Cloud Eye Care Orthopedics Cardiology Solutions Cardiology Hemodynamics Clinical Trials Solutions eclinical OS CTMS 5

6 6 We are the Leader in MU for Radiology

7 We are the Leader in Interoperability iconnect Enterprise Clinical Platform iconnect Enterprise Archive 2013 Frost & Sullivan Product Leadership Award, Medical Imaging Interoperability Solutions Market 2013 IHS VNA Global Market Leader 2013 IHS VNA Market Leader, Americas 7

8 We Just Announced Two Big, Strategic Wins Chicago, IL San Diego, CA { ENTERPRISE IMAGING DEAL WITH NET NEW VNA } { E2E OUTPATIENT RADIOLOGY WITH INTEROPERABILITY } 8

9 And, we re the only one with this Every Image, Every EHR, Every Time 9

10 White Space Opportunity Why iconnect Network? 10

11 What Are the Key Drivers? Cost Savings Save time and money by eliminating excess HL7 interfaces Meaningful Use Help community physicians meet the imaging requirement & attest Referral Growth Increase referring physician loyalty and expand business 11

12 The Imaging Marketplace 12% of every visit 800 Million studies 60% EHR Adoption MU2 Mandates 12% of every PCP visit in the USA results in an imaging order (44 Million) Each year in the USA, 800M+ studies are done; 372M are outpatient EHR adoption among referring physicians is nearing 60% Meaningful Use now makes interoperability mandatory 12

13 The Need for an Entire Enterprise Service Low-cost service Compliments your existing community strategy No infrastructure, No replacements, No removals Wraps around existing architecture Hospital System Employed Physicians Community Physicians 13

14 Referral Revenue Referring physician revenue is worth approximately $1.5M to a hospital system and $150K to a imaging center each physician, each year Attracting and maintaining referring physicians is a revenue goal and a strategic asset Accessing images on hospital systems is time consuming and difficult 60% of network physicians now use an EHR Opportunity Image enable your network physician EHRs and provide report delivery directly into the EHR 14

15 The Referral Challenge for Imaging Orders Hospital imaging center More Referrals = More Physician Images Reports Imaging center How Do Providers Prevent Referral Leakage?! 15

16 Clients Work With Many Referring Physicians Cerner Athena Referring Physicians Epic Allscripts eclinical Works NexGen Imaging Center / Hospital System And They Work with Many Different EHRs How will providers connect multiple EHRs to imaging data & studies? 16

17 HL7 Interfaces Are Costly to Build & Maintain Imaging Center For a facility with 20 Community EMR interfaces 20 Related RIS interfaces 80,000 Annual Studies 1. Send Report via HL7 EMR PACS Archive 2. View Images in Browser Report includes link to see image in PACS archive $ Costs to Deploy and Maintain HL7 Interfaces $20K - $30K implementation fees PER bi-directional interface PER referring physician practice 3-6 month wait time PER interface Sample Client 20 Community EMR interfaces 20 Corresponding RIS interfaces 80,000 annual studies TCO over 5 years = $2.7M 17

18 Local Geographic Market Reality Merge Agfa Siemens ç Multiple Imaging Centers Multiple Referring Practices è Epic Epic Cerner Greenway McKesson Philips ç Multiple PACS Systems Greenway Allscripts GE Multiple EMR Vendors è Allscripts 18

19 What About MU2 Imaging Requirements? MENU OPTION More than 10% of all tests whose result is one or more images ordered by the EP during the reporting period are available through Certified EHR Technology MU2 is an UNFUNDED mandate MU2 requires that 100% of images need to be available to referring physicians MU is ALL OR NOTHING for referring physicians CORE REQUIREMENT Order entry (30%) of imaging orders by the ordering physician Automatically deliver images into referring physicians existing EMR to collect incentive payments! 19

20 Introducing iconnect Network Share imaging information between referring physicians and imaging centers on EHR networks Provide radiology reports as structured data to be entered into the physicians EHR Beta Customers Tucson, Arizona 600,000 studies annually Currently partnered with Surescripts Clinical Network Services (CNS) Will add more partners over time to expand our reach Greater New York 185,000 studies annually Cautionary Notice Regarding Forward-Looking Statements This slide contains forward-looking statements, which could involve a number of risks and uncertainties. Actual results could differ materially from those expressed in, or implied by, such forward-looking statements. The Company undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements. 20

21 How iconnect Network Works Epic Hospital Imaging Center Cerner Athena Imaging Center Allscripts Cautionary Notice Regarding Forward-Looking Statements This slide contains forward-looking statements, which could involve a number of risks and uncertainties. Actual results could differ materially from those expressed in, or implied by, such forward-looking statements. The Company undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements. 21

22 With Universal Viewer via Web Browser Imaging Report 22

23 Referring Physician Feedback iconnect Network gives us a competitive advantage for both our providers and patients. Since we are a part of an ACO and are patient centered medical home certified, iconnect Network is a true example of a solution that integrates with our EHR, achieves information exchange and helps our health center be more efficient by automating time-consuming processes. This ultimately enables us to improve treatment times, reimbursements and patient care, as well as meet core regulatory requirements. Luis Velasco, CIO, Marana Health Center 23

24 Five Elements of Service E-Ordering/ Referrals Consumer Engagement / Scheduling Pre-Certification: Patient Pay / Clinical Decision Support EHR Integration: Result / Report Delivery Data Mining & Analytics 24

25 The Short-Term Market Opportunity $375M Total Market Consumer Engagement Report & Image Sharing $300M Total Market $450M Total Market RBM / Payer Services E-Ordering $500M Total Market $1B Total Market TeleRad Load Balancing $900M Total Market Revenue Cycle Management Pre-Auth Services $1.0 Total Market Initial Annual Market Opportunity = $4.0 B + 25

26 26

27 27 Why Merge?

28 Where We ve Been PACS for image intensive specialties Clinical data and workflow tools Firsts in enterprise imaging & interoperability 28

29 Our Client Base 1,500 hospitals 6,000 clinics 250 partners 9 of 10 top pharma Including many hospitals on America s Best Hospital Honor Roll 1/3 of all U.S. Imaging Centers 37% of all Ortho Groups 2,000 of all ophthalmology sites 75% of all worldwide modality vendors Top pharmaceutical companies & CRO s have used Merge to run clinical trials 29

30 30 Financial Summary

31 Quarterly Revenue and Adjusted EBITDA Trends Pro Forma Total Revenue $75.0 Revenue $60.0 $45.0 $54.0 $57.0 $60.6 $65.1 $61.6 $63.4 $61.0 $65.1 $64.0 $57.6 $57.7 Fiscal Year End: 2011 $ $251.1 $30.0 Q Q Q Q Q Q Q Q Q Q Q Adjusted EBITDA & EBITDA Margin Adjusted EBITDA $20.0 $15.0 $10.0 $5.0 $ % $ % $14.5 $ % 23.2% $12.5 $13.6 $12.5 $13.9* 20.3% 21.5% 20.5% 21.4% $ % $ % $ % 40.0% 30.0% 20.0% 10.0% % Margin Fiscal Year End: 2011 $ $52.5* $ % Q Q Q Q Q Q Q Q Q Q Q Adjusted EBITDA % Margin * Adjusted EBITDA for 2012 excludes one-time charges recorded in the fourth quarter, which are outlined in the company s earnings release issued in February

32 Pro Forma P&L Trends (as a % of revenue) 64% 62% 60% 58% 56% 54% 52% 50% Gross Margin +0.2% vs % 58.7% 55.1% 55.3% YTD % 15% 10% 5% 0% Sales & Marketing Shift in % vs % 17.5% 16.2% 13.2% YTD 2013 R & D Investment G & A Savings 15% 14% 13% 12% 13.5% +0.4% vs % 11.6% 13.9% 15% 14% 13% 12% 14.7% (0.4%) vs % 13.2% 14.3% 11% 11% 10% YTD % YTD

33 33 Questions?