Lumexa Imaging Holdings, Inc. Common Stock Wells Fargo 21st Annual Healthcare Conference

Sure. Very happy to be here. Thank you for having us, Stephen.

Sure. Lumexa Imaging, we are the second-largest scaled provider of outpatient imaging services. We provide our services in centers called IDTFs, independent diagnostic testing facilities. We have 190 centers located in strong MSAs that have above-average population growth. Think great markets like Dallas, Denver, Atlanta, and Charlotte. We have grown by both acquisitions and de novos over time. We've had a recent focus on our de novo strategy. Last year, we opened up nine de novos, a record in company history, on track to do another eight to 10 this year, and see that as a meaningful source of growth as we look to the future. As you referenced, we have a joint venture focus. About 50% of our sites are in joint ventures with leading health systems, think Baylor Scott & White, Integris. We just announced Hospital for Special Surgery on our Q2 call, UPMC.

Why we love working with health systems is that in any market, we're always looking for what is our enduring value proposition. Working with a health system allows us to think through our rate strategy as well as utilization of our centers within their network. In terms of referenced public company comps, we are honored to have RadNet as a public company comp. Very much focused in the same space. They are admittedly a little further down the path than we are. We're early innings of our public company journey. We went public in December. Most meaningful differentiator is just how we approach technology, which I'm sure we'll talk about in a little bit. We have more of a partnership approach, using best-of-breed partners, while they have a build-or-buy strategy.

Yes. Imaging is an exciting industry to be in. Radiology writ large is a $120 billion TAM growing at a 4% CAGR. As you said, Stephen, outpatient imaging is a $33 billion TAM growing at a 7% CAGR. What is driving that? First, you have the overall drivers of healthcare utilization writ large. You have an aging population, and you have a migration to lower-cost sites of care. I referenced we provide our services in IDTFs, independent diagnostic testing facilities. They are outpatient entities that are reimbursed on the Physician Fee Schedule, so we are not on the HOPD rates and about 60% lower cost. So that site of service trend you have to high-quality, lower-cost sites of service modalities, that is benefiting outpatient imaging. When you think about imaging itself, imaging contains both advanced imaging and routine. We focus on both. Advanced would be your MRI, your CT, your PET scan.

Your routine would be more of your diagnostic and screening mammogram, ultrasound, X-ray. Advanced imaging is growing as a percentage of our total scans. On our Q2 call, we mentioned that now we're up to 37.4% of our overall imaging volume through advanced. It's 111 basis point improvement year over year. What's driving that is increased screening mandates, you have more chronic complex conditions, and you have novel treatment paradigms. Things like your PET diagnostics, your new radiopharmaceutical tracers, and even future things like theranostics all driving and accelerating the growth of advanced. When we think about why we focus on advanced have about a 3 times revenue premium compared to routine. Certainly it's a significant driver of our overall revenue and margin growth.

Sure. Yeah. On an outpatient basis, which is 85%+ of what we do, we have been growing revenues same site at about 6%.

So 6%-7% is a place we feel comfortable in as a baseline for what this company can do. That has largely been achieved without much in the way of de novos the last few years, and that has really changed a lot as we started re-emphasizing that in late 2024 and into 2025. That baseline of 6%-7% revenue is about two-thirds from volume and about one-third price. When I say price, I mean a couple of things. About half of it is just an escalator in our commercial book, maybe 1% or 2%. The other half is an increase in revenue per unit that we see based on the advanced imaging growing faster than the rest of our business, as Caitlin described.

It reached a record high in Q2, and it continues to be a bigger piece of the pie. So that pulls up our revenue per unit. So that revenue growth drives about a 7% EBITDA margin plus in our current state. There are opportunities to overdrive that with the de novos that we talked about, opening four in late 2024, and then nine in 2025, on track for 8 to 10 this year. As those mature, those will, we believe, drive higher growth rates while they are ramping, because that is a two or three-year time span where they ramp toward maturity. With all that as our organic, there is also a great M&A opportunity in this space, because it is very fragmented. Reminds me a lot of the ASC space 10 or 15 years ago.

The main reason we went public was to strengthen our balance sheet, improve our cash flows, so that we could put some of that money to work selectively and strategically adding sites through M&A. So you will feel really good about that overall long-term algorithm.