The Oncology Institute, Inc. (TOI) 8 Aug 232023 Q2 Earnings call transcript

Good afternoon ladies and gentlemen and welcome to The Oncology Institute's Second 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. Please go ahead sir.

The press release announcing the Oncology Institute's results for the second quarter of 2023 are available at the Investors section of the company's website theoncologyinstitute.com. call the be conclusion this company's at of after website of replay will available also the A this call.

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

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

For with the filings business, see a our further discussion of risks related to our SEC.

to of the non-GAAP financial comparable measures as these This non-GAAP included will Reconciliation measures SEC and are release also discuss measures website. available call earnings on furnished most the adjusted GAAP such the our EBITDA. in to

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

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

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

thank and you to CEO everyone afternoon for I'm our of quarter as Good Mark. the The you, have the second honored to call. opportunity serve next Institute. joining Oncology Thank

took and the role CEO Chairman and noted announcement, as on our for provide on in continues the to over transitioned Board to Xst; I strategic July of he Hively remains support June our organization. where As Vice Brad

on gratitude Their clinical this we that achieved our we impact physicians has first earnings call It my care Institute, I group as made the of a QX exceptional their Since commitment outstanding XXXX. the dedication teams. patients is of of want lives to profound serve in because to is and by expressing each of care The of day. results start CEO my Oncology to

growth I we second versus topline. of to the XXXX. quarter with that XX% am share thrilled the revenue in QX achieved Starting

was for patients strong growth growth care among our rate demonstrates payer growth the our and XX% organic sales This demand our revenue our both was innovative model partners. continued and XX%. our same-store Importantly,

Now, gross profit. moving to

happy saw points QX return drug call, focus levels we to efforts, we we in QX, through report drug our on of IV gross quarter were a margin margins. procurement first heightened over on basis XXXX. pressures the our XX experiencing bolstering to our mentioned I'm that the On a expected by

results paved half of to our path as into strong These for we the the head way second XXXX. profitability

we reaching anticipate XXXX. As we profitability mentioned, previously in

Now, would the quarter. achievements second few a from highlight operational like I to

the multisite delighted critical oncology announce practice. Southland to Radiation our Oncology, enhance expands we market. offering, strengthens our First, margins acquisition allows in care strategic us move even are provide of Southern to radiation to our a in our This position product this better and patients operating will California

our strategic successfully Second, at we bolstering a dispensing in aimed California, have drug capability. acquired Southern move a pharmacy

in approval will Board, currently are the obtaining days. process We of from XX anticipate approximately Pharmacy which the take we

alone us development we will revenue representing service on Once patients this This treat enable have since Medi-Cal for substantial January to is growth our million us. provide we additional for upwards generate to that of a expected opportunity pharmacy approved, of $X XXXX. patients been all prescriptions already license to unable in a fulfill annual

Florida. to to this South are in Fresno, I'm two and dispensaries Additionally California open one year underway three that happy announce plans in additional

to drive proud a will been and and partnerships finalized our few that unveil help efforts are we expansion important Finally, forward. margin moving growth have

randomizations. leverage enable Massive artificial power and to will Our the clinical optimizing partnership Bio with intelligence of trial us

as commitment provider. have and growth strategy. We also agreement developments evolve operations our These signed improve to a and to an continuously care pharmacy health House our Rx with optimize reflect

in as a have management value leader and key of team value-based that enhance terms enable number goals In focus, one, to eliminate Goal burn. continue oncology. four cash us will shareholder we

XXXX our and a ensuring our sustainable the We burn are committed for stable future to by eliminate of cash organization. financially end

expect $X XXXX from the first in-year reductions. SG&A to track $XX year, $X in to to on are deliver Our $X million million million we million in half restructuring efforts XXXX reductions. realized of Full

Goal priority healthcare markets a to number remains we of legacy Nevada California regions. these enhance under strive and in provider a in Arizona expanding as two, our as leading position patient care profitability our lives and solidify

In growing Goal of expansion that we Texas, improving is Florida markets. base number markets financially excellent model are improving patient and committed our our both value-based clinically and viable. new three, our and to

care Goal and in oncology to new clinical set market. we as in oncology standards for its number outstanding the four, excellence pride steadfast by this position in industry. value-based leading commitment take innovation guided the We value-based market, our to leaders patient aim

even partners sustainable By relentlessly value achieve pursuing stakeholders. these patients, and to our deliver greater to ability growth and we goals, our in are confident

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

good Dan, and afternoon. Thanks

excited are as upper our we EBITDA we track the to are revenue results and quarter on said, Dan adjusted As about of end second guidance. deliver

X.XX the want purchase announcement, Before share open million its in stock Pursuant of of on the program XX. we remind get market you into repurchased to the financials, I shares purchases. to common June TOI announced

QX $XX of compared our Radiation After Oncology and X% increase a XXXX. Consolidated compared with $XX clinic XXXX at Gross QX to is to the QX our QX revenue of count was XX. in million, XX million, XXXX QX for counts XXXX. increase an clinics, provider an Southland acquisition compared XXXX profit XX% increase of was to XX%

QX year. of to XXX basis was million, second burden revenue strategic and XXXX in of steps reduce compared be in X% an overhead from was to QX took a several XXXX points of We the basis XXXX. full to expect QX impact this On the QX percentage XX%, half $XX QX our XXXX. in increase SG&A down realized

Loss $X.X a million Net due a $XX decrease a operating XXXX. revenue increase liabilities QX by for of million, in million was loss from goodwill compared impairment decrease of charge. value million, XXXX offset of and QX QX to XXXX, QX fair $XX.X was change $XX primarily operations in earn-out compared to XXXX in to

for Adjusted $X million. EBITDA QX was negative XXXX

fees start-up and the the legal nor cost add Our back costs. adjusted wider EBITDA the calculation does acquisition with not consulting associated

EBITDA to our adjusted QX Board define we starting our include existed XX-Q. how be paid in compensation EBITDA now note, found we to Of of on can Directors. calculation cash XXXX, modified our have details Further

of quarter balance total had cash This the equivalent As and $XX investments. $XX $XX $XX of for cash cash was our equivalents million cash and we million million million in and quarter. represents and of in in cash investment second burn end,

million share $X.X was only related and to of cash in of operations related million burn June. $X.X Importantly, this the burn acquisition while was cash buyback to

was very helped Our cash burn activities. QX a strong collection by in

guidance full unchanged. year Our XXXX remains

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

guidance million to negative our negative million million. $XX from guidance range from gross range million Our profit EBITDA $XX and $XX to $XX adjusted

to end We in capitation. X.XX with million continue the lives expect under to year X million to

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

Thanks Mihir.

some drive to the I'm in from the upcoming the margins that past our IV While am performance. QX pressure accelerating the drug we in momentum our QX, lower expected key quarter financial I challenge in proud to continue gained of than excited encountered responded and to team expected our quarters. how about in initiatives strategic

As a adjusted result, in progresses. we anticipate year a favorable the EBITDA trend as

our margin lead XXXX. any Our the funding efforts to anticipate current us burn execute plans. growth do end We positive to by position additional reducing not in of needs a cash will

ensuring in ahead our about we to the updated I'm Being advancements our dedicated high-quality value-based we'll for the that care oncology lie remain and for the excited during forging patients. keep expanding base on future leading outcomes of possibilities patient partnerships new US, us, provider oncology and you calls. value-based

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

first Instructions] conducting Thank Our question-and-answer now much, will question comes Jefferies. Ladies of ahead. Tanquilut be sir. you session. a Please very and [Operator we from Brian gentlemen, go

evening. good Hi,

Brian. Thank for for got you on question. my You've Taji taking

And $XXX-ish commentary, the from I'm I of approval ahead in in in XXXX if or there's of getting of terms mean of think the and first your your the like expectations your I touch terms -- want revenue half a like efforts of first with revenues. around guidance tracking So just drug in sounds from it it Pharmacy least the revenue, on terms procurement you're like looks momentum pending to at million Board. your positive guidance, I annualize I generally lot business annualized of

it curious, else thinking Anything else for be any of least the remainder guidance that if outlook the or other driving at or Just we your guidance should within as I that same shift I EBITDA, factors year? the right? the there's the anything XX% to the negative to relates are reaffirmation do If then, still as around range. business? And thing, about, I'm tracking

run through first rate of As I of that that from the we kind all guess else anything factors would I guess second kind uplift of half? outlined, to half think you've that

question. Thanks definitely. much so for Yes, the

key XXXX, of back enter the tailwinds levers all we to As half growth we related see our that impact revenue. several of

established both several have pipeline strong partnerships growth, the see in and value-based fee-for-service to to for continuing new So, opportunities our in markets. continuing

as related partnership have opportunities opening our program like of clinical pharmacy House as the well in with our Bio great entities trials and Rx see Massive the with called in dispensary and which We out. several tailwinds to continuing our partnerships business new orals to we locations

to expect accelerate. half year of back would continue the to I So the

of of back out efforts, basis to really That's had And this procurement then, around your results called going you points the think improvement. Virnich. Great. I helpful. XX Dr. kind conversation of drug

inform this of Just improvement think squeeze there's margins gross normalized you effort? how year? curious, I that even year? how this do how I does And think within more think you much out if I runway that more much left, And margin guess, more, is beyond for can gross

well. capabilities Yes. us a different enhancements [indiscernible] orals pricing Two closely on in-house overall process, three, We is, we at scale, distributors. utilization is as more process. margin that that believe procurement continue And going some discipline then some it as with volume procurement things. really on key to of increases. to we One of to there of to allow decisions get business making benefits or factors grab several driving review of really analytics heightened around the are through our and working couple centers as are And utilization our we're our and

on it's half, going an to substantial there's runway the there. but number drive to to continue So hard second put It's exact forward.

around you'd And you that other characterize and strong your in looking the hearing sharing? my seeing like we've the oncology been generally, That's half? I Great. book year? helpful. upon so pipeline the it space been for I for you question, of capitation know looking physician gain utilization can the looking And then what for around, Any the that's Is touched how the maybe really as pretty can of pretty the details more back has remainder provide of opportunity? you strong. you're just into kind partnerships business last lead guess,

Yes.

So of couple it's really different buckets. a in

sort a realize in to continuing funds. expect into of which new traditional the arrangements robust our like of year. we service a pipeline of model, in to markets from markets, model QX which capitation have So In capitation are through more gainshare is to legacy we growth really and pivoted opportunities, show next adjudicated

our and better markets. that's TOI for better ability through even models our some patients partners. many that medical health dynamics program So provide to expanding and frankly Part medical efforts the for groups, effectively our of create helps and we and legacy have high-value are better spend cancer control of group care to A we around in our value and capitation then plan that And for

much. you, Thank so

You’re welcome.

[Operator further and remarks. from to now closing with gentlemen, line, Instructions] would Ladies I back the coming management hand questions for it no

our drive to continue and to Thanks, for growth I so strong of profitability tailwinds thank believe We're a see about the forward. XXXX a today enhance going and you to all the business, the going really to to we quarter. we questions. you. excited call lot half the really Thank whole second which joining had of much. our summary, path want and In second are thoughtful

gentlemen, concludes lines. conference. now you Ladies Thank attending your and you. for this you disconnect and Thank today's may