The Oncology Institute, Inc. (TOI) 10 May 232023 Q1 Earnings call transcript

Good afternoon. Welcome to The Oncology Institute First Quarter 2023 Earnings Conference Call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A.

At this time, I'd like to turn the conference over to Mark Hueppelsheuser General Counsel at TOI. Thank you.

begin. may You

call announcing call. quarter release section Institute's for the of results the the available The website company's XXXX The are first after this replay A of website of Investors also available the be company's at this press conclusion theoncologyinstitute.com. Oncology will at of the

including company's language. Management may Before we like would Harbor I underlying to remind forward-looking Safe statements guidance get started, you and assumptions. of the make

and based uncertainties to are Forward-looking on actual involve risks could expectations results that statements differ that cause materially.

filings are to to non-GAAP For these the a included in SEC risks also as of call the further measures, release available on discuss and measures, of Reconciliation measures This the discussion earnings to our our adjusted related business, non-GAAP website. EBITDA. financial the see our most furnished SEC. will GAAP with comparable

on Joining our Mihir Shah. the is Hively; Brad today and me our CFO, call CEO,

prepared remarks, open our for call the Following questions. we'll your

to turn the With Brad. call that, I'll over

in expansion towards our optimizing Mark, year strong Florida. to Thanks refining revenue, dispensed growth the fourth effectiveness positive made revenue, The from we progress existing momentum meaningful organic record-setting in for started our our quarter. markets, fee-for-service and everyone today. model dispensaries scale growth in the dispensary We optimizing and driven business drugs, quarter operational was by and and our as specifically and growth Florida. dispensary joining was continuing off in a us oral you in particular It organic thank

line from generated through growth XX%. As our Mihir, you'll financial top goes he we hear of when results,

rate growth was growth and XX% our sales our was XX%. Importantly, same-store organic

patients for from growth proud demonstrates as very extremely both strong of our demand payers. it We this model and are

the to continue to of signed that we since one happy and another Texas new share grow. cornerstone market. in Our our I'm in the California value-based value-based And beginning contracts year: Southern our two the model, of as lives

notable our also quality of particularly contract well contract care as total as D first A and Texas as it value-based it primary marks in both, in with where accountability contract marks is cost the first cost. B for outcomes And recent The partner market. take our we Part care that

pipeline as remains to year I progresses. Our and look business forward and updating strong deep, the development you

On strong capture of from savings. of savings. to a our are first related note, excited This greater and proof that Florida. our point report TOI showed and significant differentiated received we for XX% in than The partners for greater period a cost milestone XX% model's we've is and data referral one meaningful value-based than data performance cost the a approach

drugs margins the Concurrently, generic pressure on the established significant certain drug IV and against as downward Inflation costs upcoming reimbursement market. realigned we manufacturers in with Reduction Act, quarter our hedged as and experienced first in the becoming

Our into oncology-specific respond team which to been GPO, swift has identifying an began to opportunities save, including QX. membership in

to result, our I'm additional in thank to to beyond adapt effectiveness. want them And innovate. team's a drugs on infusion and membership. ability key their several As this and from expect and savings proud we I for dedication QX of generate

XXXX As from to us policy I've mentioned Medi-Cal's our Medi-Cal previously, oral is members. dispensing drugs preventing

patients credentialed a into oral now will in acquire which entered have to acquired again. once us once retail those to pharmacy LOI drugs California, We an dispense and to enable

new a for pharmacy acquisition the both important medications. oral of It of in objective. innovation oral resulted is TOI important therapeutics to As our are you all in and Therefore, to retail this dispense have access therapies. be achieve oncology an milestone will IV has aware, to much

patient partnership to the with the This local our to alternative cancer visits XXXX; of is bringing promising XXXX; treatments another compared TOI was a to first example yet with drug treated Tempus total increased oral compared QX for TOI into dispensed Additional the and be patient to worldwide Laboratories. highlights community. from the through XX% quarter ovarian increased include XX% chemotherapy cutting-edge QX metastatic

our Now, Mihir the first financial quarter on I'll provide call to results. turn additional details over to

line. in loss was to XXXX of for a to by due compared XX.X% Thanks, XX% QX million offset revenue increase to compared QX of million, XXXX. XXXX, $XX with to XXXX liabilities top $XX $XX operating QX an compared revenue, Brad. and earn-out for goodwill decrease for Gross increase an and to charge. profit increase compared Consolidated QX increase million, change XXXX X.X% QX $XX XXXX. fair was QX preliminarily the million, Starting of a value XXXX was QX of in Net impairment

EBITDA EBITDA Adjusted associated the provider Adjusted EBITDA Further now our modified Directors. note, adjusted cash found fees XX-K. can have costs. start-up adjusted consulting define calculation with to include how XXXX acquisition starting be paid and the add EBITDA we Of back in our to our not of QX, Board compensation does nor on legal was calculation negative $X.X details we million. costs

of cash million our end, As balance total $XX equivalents $XXX of investments a and million had cash cash, investments. million quarter and we and was of equivalent $XX for cash in

We support expect operations through this capital to our growth XXXX. and be enhance sufficient to

guidance. talking about Now,

Our full X.X year we guidance XXXX to continue lives end the to with and capitation. million year remains X.XX expect to unchanged, million under

growth This over $XXX $XXX is XX% million. revenue. to million XXXX range revenue XX% Our represents to

to million ranges adjusted Our guidance $XX And $XX EBITDA negative from negative profit from guidance $XX our million. $XX ranges million million. gross to

for I summary to turn Brad back over will remarks. now some it

Mihir. Thanks,

QX, drug manufacturer am year EBITDA pressured progresses. ramp, how lower-than-expected resetting, and quarter to expect adjusted with our trend lower new price payroll responded first year as we were this favorably beginning to team of proud by margins EBITDA taxes our While I margins, IV to initiatives do increases. We adjusted Overall, the drug current seasonally challenge. results in expect

in As our the high-quality patient to number US outcomes partnerships care, value-based oncology of and market expand grow cancer we to leader base, continue the value-based deliver patients.

gainshare and to optimizing are, risk population in model our expansion capture optimizing by growing second, our markets refining agreements; quarter's in expanding by markets, mentioned first, our and three last in top I service cash offerings priorities efficiency sustainable items progress technology and including to As existing to call, look our and counties; burn these legacy across I contracts transitioning XXXX clinics forward referral our optimizing future third, three calls. updating and approach more new expanding entry. margins improving to a on you new drug taking on market new reducing with and solutions,

take With that, your to ready we're now questions.

you. Thank

you. We Instructions] question-and-answer will now [Operator be session. conducting a Thank

your is from question. Please with first proceed Our question with Tanquilut Brian Jefferies.

Hey guys. good afternoon

Brian. Hey

guess terms share interest of you level market from with as or total the what think cost I us, first contracts, care of Brad, folks my appetite for similar other So types if can you're I maybe the in question, maybe in in about of arrangements. seeing

sure. Yes,

the -- company, it this asked a you is I'm enables milestone portion exciting patients. So and larger an to of It's manage oncology total it. because glad the spend to about us related for

expands or cost we we And our hospitalization with related great our think the but oncology, TAM costs and associated cost can a with physician patients. to wallet and So, job customers. share improving outcomes costs drug also just it do beyond oncology

from not risk cost and services. have putting physician We drugs our an the interest care just seen us increase at primary nursing oncology care oncology of for total in partners in

try all manage and part in some we representative that holistically total costs. I put let's where arrangements for also doing cost our arrangements working patients nephrology The just for total partners because other they're our of example, it are are so in nice who think care care is It's because a other alignment risk -- cost to primary these us think want care the specialties I specialties other groups oncology. common. of it's hey specialties for at and more of are with saying, out

we that year. have lot interest of So this a seen in

it. Got

for discussion And oncology and Okay. savings to you maybe that the maybe you're time what on realize any is them? the then quantify cost way in there initiative? that can Brad the GPO And frame the is guidance expecting

Yes, sure.

But not see want release to put our months stake We full our participation given guidance. enough don't publicly a what just think -- play for -- before we it. to year. us we cost it's savings to the out the this change guidance change we ready to have last we to the expected was not started are. it -- say we that month wanted cause us in haven't we're quantifying It year But suffice enough few a to ground cause on to we to not

you. Got

And awesome. that's for No maybe last then me. Okay. question

your As business potentially one more here. that I to the ABC closer the oncology look at deal obviously with and specifically? what Any on or industry to do getting thoughts could

scenes oncology mean spend interest first broad off an oncologists deal. of in for and behind it sure. interest and how -- a and number believe practices we're because we were we a and I who sort of much of are looking that I oncology demand aware of demonstrates control. substantial managing of a by Yes, represents -- the participants the Represents at owning -- practices think

So I it broadly like for think strong demonstrates companies ours. demand speaking

I trying still made think in oncologists. fee-for-service can is interest And that's oncology. by that oncology. it and there of drug be think to controlling some I And create costs. also And when savings value-based for us outcomes that our we're customers value-based we're we to profitable. lower to on the ways money a We distributors' lot in reward does both demonstrate demonstrate focus in the be to improve oncology trying we try demonstrated to convince

you. Got

Awesome. guys. Okay. you, Thank

welcome. You’re

from Sandy question. Guggenheim you. Draper Thank your next with Instructions] is Partners. with [Operator question proceed Our Please

Hi. This Mitchell is on Sandy. for

Hey, Mitchell.

is how Hey, going? it

Good.

question One guidance. on

revenue over right seen around print if get guide. we of year. that we several And the full the look the grown years sequentially midpoint at past you've annualize XQ here we've the to year and it we the So throughout

and would embedded just what's in understand there to So be any color helpful.? guide that trying

were in organic top-line start really growth with like. is quarter. anywhere XX% Yes very you'd Mihir sure. and spectacular. We I'll pleased growth this jump

the started add from anything strong to year to want revenue Mihir that? we so you And perspective. a very

does And covered the group the you our not for any think I include No, acquisitions that year. it guidance also right. reminding

QX where from able to run we we to we guidance believe our with QX comfortable rate So are. should are we be

broader multiples? in helpful. the to on the anything And any And there then just, their just would terms more helpful. more Awesome. broadly just color kind of less of, pipeline the acqua-hire practices? or people one just And Thank are environment. sell kind Has of you. in willing environment That’s be on changed

and acqua-hire that small of draw at sure. macro Yes any time. pursuing I'm to I a are cautious one we acquisitions from insights number always

happy So while I'm do it. be would I to cautious

sellers' contracted little down bit seen think market is have market -- just overall come balance as a to current But have little We a there on some bit. the has they with lag expectations realigning I multiples.

the that existed So realistic to of more valuation I think understand exist in and starting today. that don't are sellers multiples some XXXX

bit a down. have those lag of with little slowly we seen come so And expectations

all Got That’s I it. Thanks. it. appreciate had

Great.

You’re welcome.

this at Hively turn I questions you. further back for over comments. would closing like floor time. to to Thank There Brad Instructions] [Operator are no the

Great. for you Well you thank updating call. path up TOI's and you progress day. we in to next you excited forward very coming all have good call Thank our We're today the with look about joining to on our and weeks. a look we earnings and on ahead following forward our

This concludes teleconference. today's

this You your lines may Thank at time. your disconnect for participation. you