Investor Presentation
October 2015
Forward Looking Statements & Statutory Rights
of Action
FORWARD-LOOKING STATEMENTS
Certain statements in this presentation (the "Presentation") may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Patient Home Monitoring Corporation and its predecessor companies ("PHM"), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this Presentation, such statements use such words as "may", "will", “estimate(d)”, "expect", "believe", "plan", "intend", "should", "anticipate" and other similar terminology. These statements reflect current assumptions and expectations regarding future events and operating performance and speak only as of the date of this Presentation. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the results discussed in the looking statements, including, but not limited to, the risk factors typical of businesses operating in PHM's industry. Although the forward-looking statements contained in this Presentation are based upon what management believes are reasonable assumptions, PHM cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this Presentation, and PHM assumes no obligation to update or revise them to reflect new events or circumstances.
STATUTORY RIGHTS OF ACTION
If this Presentation is delivered to you for the purpose of assisting you in making a decision about investing in securities of PHM and you decide to purchase such securities, this document may be considered an offering memorandum pursuant to securities laws applicable in the Province of Ontario. This means that if
this Presentation contains a misrepresentation and it was a misrepresentation at the time of purchase of securities by you, you will be deemed to have relied upon the misrepresentation and will, as provided below, have a right of action against PHM for damages or, while still the owner of such securities, for rescission, provided: (a) an action is commenced to enforce such right: (i) in the case of an action for rescission, not more than 180 days after the date of purchase; or (ii) in the case of an action for damages, not more than the earlier of (i) 180 days following the date you first had knowledge of the misrepresentation and (ii) three years after the date of purchase; (b) PHM will not be liable if it proves that you purchased the securities with knowledge of the misrepresentation; (c) in the case of an action for damages, PHM will not be liable for all or any portion of the damages that it proves does not represent the depreciation in value of the securities as a result of the
misrepresentation relied upon; and (d) in no case will the amount recoverable in any action exceed the price at which you purchased the securities. If you elect to exercise the right of rescission, then you will have no right of action for damages against PHM. The foregoing summary is subject to the express provisions of the Securities Act (Ontario) and the regulations, rules and policy statements thereunder and reference is made thereto for the complete text of such provisions. The rights of action described herein are in addition to and without derogation from any other right or remedy that you may have at law.
Who We Are
Why Invest
Improving our patients lives & reducing
healthcare costs
450+ employees across 27 states delivering world class
healthcare to patients across the spectrum of both acute
and chronic illnesses.
Our clinicians drive results through technology and
collaborative care models that ultimately brings results
such as:
•
93% of our patient report they breathe better
•
70+% improvement over average 30 day readmit rate
The Target Market
•
Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every
day for the next 19 years
•
26% of the total U.S. population are Baby Boomers
1
•
Readmissions cost the Medicare program $17.5 billion just in inpatient spending, or a 19.2%
readmission rate on all Medicare patients
2
•
15-25% of people who have Chronic Obstructive Pulmonary Disease (COPD) are discharged from the
hospital will be readmitted to the hospital within 30 days or less, and that many of these readmissions
are preventable.
3
•
Health care spending in the U.S. is projected to have hit $3.1 trillion, or $9,695 per person, last year
(2014)
4
5
1 -http://www.pewresearch.org/daily-number/baby-boomers-retire/
2 -http://www.academyhealth.org/files/2012/sunday/brennan.pdf
3 -http://www.chqpr.org/readmissions.html
Virtual Hospital in the Home
Leading the Shift in Healthcare Delivery
•
Healthcare delivered within
the institution
•
Physician centered decisions
centered around the
hospital
•
Pt. lack of healthcare
knowledge
•
Lack of home
services/technology
availability
•
Fee for service
•
Patients demand healthcare
in their homes
•
A mix of patient, physician
and payer driven decisions.
•
Online and in-person
education
•
High availability of technology
and services
•
Outcomes based
reimbursement
6
Who We Are
Why Invest
Why invest
Strong Portfolio
•
Broad range of clinical services
and healthcare offerings
•
In home Sleep and
Coumadin testing
•
End to End respiratory
solutions
•
Patient monitoring for
varying degree of needs
•
Twenty-seven states and
growing in coverage
Strong Performance
•
Consistent solid revenue
growth record
•
Operational excellence
is part of our DNA
•
Strong cash flow
Growth Drivers
•
Rapid growth in an industry
experiencing consolidation
•
Addressing the fastest growing
segment of healthcare
•
Utilizing technology that scales
the business with little
investment
A Company with a Mission & Vision
Mission Statement:
To educate, nurture, and inspire our patients to live better
lives.
Vision Statement:
We want to be THE
healthcare company admired for its’
people, performance, and partnership!
Targeted diversified revenue sources
Respiratory
Complex Rehab Sleep
Testing
Retail
DIVERSIFICATION
•
Current state of offerings
Not reflective of potential
of adjacent space
acquisitions
Strong financial performance
$ Millions
$ Millions
Who We Are
Why Invest
Operational Leadership Initiatives
•
Business Integration
•
Growth
•
Talent Acquisition
•
Financial Results
Business Integration
•
Organizational changes to reflect a “ONE” PHM to our patients, our
clinician base and the investor market
•
Bringing Billing and Finance into the Lafayette, LA headquarters
•
Consolidating, Purchasing, Operations, HR, Sales and Marketing
groups into a hierarchal alignment
GROWTH – Five Strategic Models
Acquisition
More strategic approach
New or complimentary
services
Adding more active patients
PHM Investor Presentation - January 2015
15
Existing Business
(organic)
Add new service offerings
100k+ current active patients
Leverage current assets
Geographic Expansion
New territories
New States
Population Health
Channel Expansion
Retail
E-commerce
Partnerships
Emerging Care
Models
Accountable Care Org
(ACO)
Hospital based
PPO/HMO
Talent acquisition
•
Recruited and hired:
•
Chief Medical Officer –
First ever established in this space
•
Chief Information Officer –
Information systems and integration support
•
Corporate Billing Manager –
Elevating the role of this position
D
Current Status of PHM
240%
17
Financial Metrics (rounded)
o
Annualized June 2015 Run Rate Revenues: $116 million
o
Approximately $56 million in cash as of August 2015
Q4 Spending:
o
Centralization costs in Q4 include investments in common systems, consulting expenses and duplicated staffing
o
In addition, investing heavily in Q4 to support 2016 growth initiatives (hiring & training, marketing spending,
start-up facility costs)
o
Total Q4 investment to achieve the above expected to be $3 to $4 million with resulting benefits beginning in Q1,
2016
Pending Acquisition:
o
Announced acquisition of Patient Aids expected to close October 7, 2015
o
Revenue of $20M and EBITDA margin of 35%
Target 2015 PHM Exit Revenue Run Rate
* In calculating Adjusted EBITDA certain items are excluded from net loss including interest, taxes, amortization, non-cash stock-based compensation.
18
PHM Today:
$125 million Revenue
Add:
$20 million Acquisition of Patient Aids
Add:
$10 million
Organic growth of PHM in Oct – Dec ‘15
(20% annual growth)
2015 PHM Exit Revenue Run Rate: $155 million (not including future
acquisitions)
Adjusted EBITDA margin:
23% - 28%
D
