GMR Solutions Inc. Morgan Stanley 24th Annual Global Healthcare Conference

Recorded? Or, oops. There you go.

Right, now. All right. All right, great.

Well, good afternoon, everyone. I'm Craig Hettenbach. I cover the providers for Morgan Stanley. Just before we get started, for disclosures, you can go to the Morgan Stanley website, www.morganstanley.com/researchdisclosures. With that, very pleased to have with us Global Medical Response Solutions, so CEO Nick Loporcaro and CFO Brian Tierney, welcome.

Thank you. Thank you. I thought we'd just start with an overview of the business.

Recent IPO, and as people are kind of getting up to speed on the name, just start with key secular growth drivers on the EMS side, and we can build from there, if that works.

Great. Well, let me start at sort of the proverbial 40,000-foot level. We refer to us as an integrated EMS provider, and I'll stick with, if you think about a 911 system, you dial 911 when you have a perceived medical emergency. When you're dialing at that local level, that call gets determined on whether you need police, fire, or EMS. Once it's determined you need EMS, a provider like ourselves, who has the contract for that community, are going to be the responders. That's a traditional 911 model. If you have that contract, you're an exclusive provider for that community. Where we, GMR, have evolved the model, and hope to bring the market there as well, is intercepting that call to determine whether you truly need, one, an ambulance dispatch.

Is that an advanced life support, where you have lights and sirens, and we're showing up in 9 minutes, or is that a basic life support unit, still urgent, still needs clinical care, but we can get there in 30 minutes, we don't need the lights and sirens? Or do you need treatment in place? Is there a treat and no transport? We have highly qualified clinicians that can do that. Should we get you to an urgent care, or should we get you connected to a telemedicine call? The level of acuity and distance is what's going to determine whether or not we're doing that with a ground asset, a rotor asset, or a fixed-wing asset. That's probably the simplest way to think about EMS. When you think about GMR, we're national. We're of scale and size.

We're physically situated in 46 states, service all of the states in the U.S. 34,000 team members, 24,000 of which are clinicians. Over 500 air assets and over 7,500 ground assets. That's a good snapshot of who we are. As to the trends, you look at the demographic trends, but more importantly is, think about the state of healthcare. Where are the real pain points? Access, clogged up emergency rooms, people not getting to the right level of care. We believe when you look at EMS, we're the tip of the spear. There's no one further upstream pre-hospital than we are as a service. We can help, and I intentionally don't use the word steer, we can actually help get people to the right sites of care and the right type or modality of care that they require in the communities we serve.

That's a great level setting in terms of the business, so I appreciate that. You mentioned you're the largest provider. It's a very fragmented business as well. Can you maybe touch on that, like what that means in terms of your size and scope in terms of you and your markets versus maybe some regional competitors and kind of different nuances in the market?

I'll start and invite Brian Tierney to give you a little bit more granularity. If you look at us as an integrated national player, we truly are an N of one, when you look at it from that perspective. There are a couple of mid-size players that are now taking on a little bit more of integrated. These are traditionally medium-sized ground service providers who have either partnered with some air offerings or started investing on their own. So you'll see some of that. If you were to compare us traditional air and ground, which we don't typically like to do, but if you were to do that, we're still the largest on the air. We have a second provider, a close second, with Air Methods, and then you have PHI Air Medical and Metro Aviation that probably occupy the third spot. Then drops precipitously from there on a share perspective.

On the ground side, no one on our scale on the ground side. A couple of good mid-size players, and we have seen some private equity investment in grouping and rolling up a few of the other smaller players. I do not know, Brian, if you want to offer up some of the stats.

Yeah, let me approach it from a slightly different angle. Of the overall private providers, at close to $6 billion of revenue, we are roughly 25%, almost 30% of the overall private space. That covers all of our services. If you include the municipal-run fire systems, again, we are about $5 billion-$6 billion of revenue of $35 billion total addressable market. So, really sizable by just about any measure. If you call 911 in this country, about 9% of the time, we are the group that will respond. At north of 500 aircraft, 7,500 vehicles that Nick mentioned, we are the ninth-largest commercial air fleet in the world. American, United, Delta, so on, we are down at number nine. Size and scale in an industry where size and scale really matter, they give us synergies, they give us ability to grow EBITDA faster than revenue, where we really have the size.

All right. I think that is a good build-up to just how you think about your long-term targets of mid-single-digit revenue growth, high single-digit adjusted EBITDA growth. Maybe talk about just some of the building blocks that underpin that target.

As will usually be the case, let me start at a high level, and Brian can provide a bit more of the details. The reason we are pretty adamant about talking about being an integrated EMS provider and we operate and manage the business geographically, years ago, we introduced a system called Nurse Navigation, two other innovations, Transport.Net, Concierge, and these are not separate businesses. These are all integrated into our offering. Nurse Navigation is going to intercept some of those calls that may not require that ALS call. Why is that important? That is important internally for our own operations. We see a pickup of 1%-2% margin improvement by just adopting those types of innovations.