The Oncology Institute, Inc. (TOI) 8 Nov 232023 Q3 Earnings call transcript

Good afternoon, and welcome to The Oncology Institute Third Quarter 2023 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mark Hueppelsheuser, General Counsel at TOI. Thank you.

You may begin.

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

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

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

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

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

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

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

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

made quarter to to every our by clinical revenue another Thank excited driving staff oncology growth collective by you, and am for compared to growth. Starting XX% our contributions thanking model. for demand you in Mark. and progress our for has care joining of resulted to our community-based quarter day performance thank strong clinical Good teammates report everyone, their supported I'm call. again and by in this for remarkable pleased and very efficiency innovation furthering the top third and afternoon, the patients quarter, begin want the impressive achieved we our financial of services. I quarter Their with line. that XXXX, in QX

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

IV Gross execute improving margins quarter as in XXXX. demonstrates strategy the significantly has headwinds we sequentially QX Our performance since profitability. improved top around we the our announced line the ability drug grew our to while profit in

the improvement QX cash EBITDA have to we effort expect a XXXX. QX in position seen improve our improvement compared in $X.X million concentrated Through Adjusted collection and improved XXXX. to to timeliness, continue

and As track fulfill adequate achieve of adjusted to XXXX positive funds on remain such, in end objective expect to to year. by we have next our expansion EBITDA

would Now achievements operational to since highlight our call. few I last like a

hit we QX Florida, new touch use and Dade in a additional Broward on South anticipate I'll opening X our a our First, milestone Counties in to XXth in expanded We which we'll locations value-based clinic. footprint by shortly. and contract, serve

X XXX. Second, in to the Florida, primarily our we physicians quarter, in bringing total provider added count

experience. successfully Ambience, enhancing a AI-powered Third, and significant have of documentation, platform workflows providers the our patient an integrated ambient for clinical portion designed

track efficiency, growing Castle of years Jeremy Fourth, strategy we adds of strength and to As this oncology tool, XX to of addition overall executive driving capacity to Chief as has skills. procurement optimize and radiation in over drug to with groups. growth Jeremy for profitability other a more record us team key Officer. we new our experience operational continue industry optimization to Jeremy number improve accommodate excellence, multistate joins aim on Operating oncology patient to we our physician recently implement encounters. our thus increase charge satisfaction, capture, creating welcomed

procurement enhancing of on commence to strong her strategies. from [ as our a pharmacy experience specialty valuable the and previous XXXX AmerisourceBergen now with Jessica with brings through appointment McKesson. ] leader, margins fully our improved we Lastly, and Jessica new recent focus at are prepared our business drug oral tenure operations national Janus expanding drug

contract update to to plan medical national for payer. provide significant displaces health patients direct This to network TOI the this more capitation a we an and in elevate treat and as Before Florida catalyst into model first you on financials, ability as partnership. TOI. growth, The contract common services in payers I demonstrate will X, will January for walk of us we through for been the turn I continued it entered over to our Effective years, milestone want for Mihir level the prevalent services the act it a XXXX, contract through oncology oncology solution, superior community-based help South a milestone which both and deliver our capitated a full for we patients. radiation we a covers to as to anticipate for many Florida outcomes risk has with is TOI's and and

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

and Thank good you, Dan, everyone. afternoon,

X.X to risk results. at on of Dan As clinics, Lives out quarter existing radiation million. XXX,XXX expanded like shared, X the our third contract would now oncology that oncology our acquisition with of we under point lives. we are radiation I have pleased are QX

of Consolidated quarter increase for QX to million, $XX to a QX was Third results. XXXX. XXXX XX% XXXX to revenue Gross million, QX XXXX. XX% in compared an compared increase X% of and compared increase XXXX $XX QX was an QX profit

in call, we seeing results our SG&A, efforts which XXXX. decrease reduce amortization million QX and our in are A XXXX. of X.X% mentioned of As QX the QX to depreciation $XX to produced overheads, of including compared

of SG&A quarter, XX.X% was percentage in XXXX. revenue, QX down the from points a X,XXX As basis

XXXX earn-out million QX QX to compared loss profit. of increase and operations Net QX decrease offset $XX from to $XX derivative gross XXXX for in to conversion fair an the an million, liabilities $X.X due by increase QX Loss for preliminarily was was value options, a of change million, million the compared XXXX, in $XX.X of XXXX.

negative for EBITDA million. XXXX Adjusted QX $X.X was

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

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

turning guidance. Now to

full We year reaffirming our are XXXX guidance.

This $XXX million. XX% over is $XXX revenue revenue. to growth reminder, guidance represents a As XXXX XX% our million to range

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

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

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

revenue our Thanks, our update quarter's our #X, and Priority want cash QX we XXXX. to we seen a progress towards our to ratio which I achieve key after going lowest was public. scale came burn. continued priorities, QX, SG&A through an This have XXXX Mihir. we as as percent call. in completed restructure, last we in providing this benefits key on of I since meeting expect by during close strategic X the call which outlined eliminate of

patient expanding lives #X, value-based care Priority partnerships. through under

partnership. to drive continue legacy key We ongoing efforts: capitated X our markets margin improvement of expansion through in one, value-based

opportunities, near-term fee-for-service and which radiation continuity oncology, our this provides patients drives already for care will requiring expand oncology Three, of oncology to expansion several enhanced have pure-play footprint markets. margin a dominant value-based our as as business. provider in differentiator We a pipeline on program. of of our radiation clinical expansion Two, practices these medical trials

investing patients serve are continue legacy infrastructure we to markets. the randomization opportunities with drive We to our in in technology and

to differentiated in these populations key add patient to partners. our margin We access are are manage to with opportunity a challenged that for truly is and bring our and to it risk potentially trials life-saving opportunities, payer ability

market. our new improving #X, Priority

historic agreement Our a Florida is national TOI. milestone a payer in for with fully capitated

model, growth of cost direct-to-health-plan dramatically which driver our to maintaining care. are follow-on using be We prove means We excited us highest key lower new the payer upcoming capitated new will in while a standards model our markets for of partners, believe opportunities for in growth this years.

we on continue We lead market. provider remain arrangement. oncology #X believe by advance group this by employer value-based and as an cancer live the community-based forward. strongly move our that Priority under forward the value-based patients oncologists, served and to serve largest look the for the continued oncology to of choice country being top in leading we priorities value-based X for revenue and care we We can and innovation payers driving focus

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

question first from The comes of Jefferies. Tanquilut, the Instructions] line [Operator Brian

revenue Florida It's in front. terms add so maybe sort it in that with part there opportunity both contract. size immediate Is perspective? could way Brian. Slevin over continue XXXX, the has you as do all with [ in of ] on for what scale that point can the since towards Florida? profit know the gross I working footprint And public, you a the you cap and big you time from to [ to of a out been any ] to any story thoughts I maybe that to wanted build as congrats contract of on came then Jack start

absolutely. Yes,

the a but great with -- really not capitation. one there are with be number way and this clinics, I'm a both the this been in I think we we we expansion well market, sort a job, medical new to than for It's delegated the that because three, independent follow-on a as do are, question. which make And pipeline which relationship last and really for fantastic and provides TOI capitated very larger it will, of our of just Two, attractive and as a opportunities one, benefits you has pipeline radiation in the for oncologists, patients. should much XXXX, oncology thank it's that years. it's will the employed historic national through confident to a several if TOI be in of payer, sort structured includes that relationship. our for contracting working which partners -- group model medical It's build the XX things important

gross you've maybe Got based date. hit EBITDA. have of full leaning right progressed think to it. progress considering the about both and sort then of performance the you progress Can the moving of the sort the just on the me that guys sort some pathway guidance on way give way the profit on end have the seen we of things That's color. the able looks that might been to that to range the got that sort it? you've you to Is based there me to be to of towards That's front And stepping It great on? helpful. SG&A pieces SG&A lower for on show year

Sure. I can that. take

the be think gross I doing we in range. profit okay should

restructuring we some in through our year. know, of this first in you SG&A half went As the

the yet. is bottom that that think full for So overhang through flowing year I some line not the has

So our we would this the better run than exit see full be year for year. for rate what much

makes And one it. then for sense. me. last That Got

we've cash really year. through got Can sort Just of flow, the progression you it positive of by you at quarter. comments on less gave the end should I next side cash the a sort EBITDA EBITDA be confidence should the think million you cash the think a just you to build items of me on to the that forward, path? free few flow any moving as larger on achieve in than walk looking getting of almost the of there as $XX are that in about million just appreciate down burn sort about, pieces EBITDA? the of progression we step Or

and to million was close million to or $X from third Yes. Yes. our million $X about see to Excellent better So you question as this prior which, can good out ramp spend the -- right? this million it's $XX from prior $XX quarter. quarter, the quarter quarter, second than onset point the quarters,

right. timeliness CapEx significant are seeing We some and of. benefit adjusted of which are the in Taking some see the would potentially from and that most We also our did be we focus acquisitions. accuracy should to year, EBITDA, negative next of collection, you burn put

not other we nonstructure next year. any So see do spend

quarter. helpful. Really Congrats on it. Got the

Thank you.

Thank you.

floor for at would over time. further There I turn questions to Virnich closing this the like now Daniel are no comments. to

to our up I'm wrapping is so forward today. this which drive all in year-over-year, for year. And and of next looking the us this of with profitability towards of additional you the and concludes our my joining as growth quarter Thanks summary, very and all expanded and pleased outlined upcoming thank the much, past with elimination in quarters. you we reduced comments. strong incredible Thank burn third In and of relationship are our pipeline Florida fourth for expect SG&A, delivered towards with opportunities margin the seeing and joining starting year. several we in quarter that our in Again, performance gross earnings really we growth helping call we're quarter, past our to cash end our opportunities, all today, announce new which

This you. Thank teleconference. concludes today's

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