Foundation Healthcare Holdings Limited · SGX:FHH
Foundation Healthcare — Graymark Healthcare — Investor Presentation (July 2011)
24 slides from Foundation Healthcare's investor presentation, Jul 12, 2011
Slide 1: Sleep better, live longer
Sleep better, live longerSM NASDAQ: GRMH July 2011
Slide 2: Important Cautions Regarding Forward-Looking Statements
Important Cautions Regarding Forward-Looking Statements This presentation contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forwar
Slide 3: Who We Are
Who We Are... Graymark Healthcare is the largest public pure-play sleep management company in U.S. (2nd largest overall) Comprehensive care program covers: Diagnosis Treatment Resupply 99 diagnostic & therapy locations
Slide 4: Graymark Diagnostic & Therapy Locations
99 Graymark Diagnostic & Therapy Locations 2nd Largest Geographic Footprint
Slide 5: What We Do. A Comprehensive Approach.
What We Do. A Comprehensive Approach. Offer highly effective sleep management solutions Diagnose ~80 sleep disorder types; primarily diagnose & treat OSA Provide OSA treatment & resupply (e.g. Continuous Positive Airway Pressure machines "CPAP") Oversee entire patient lifecycle Directed by Board-cer
Slide 6: What is Sleep Apnea?
What is Sleep Apnea? Sleep Apnea is a sleep disorder characterized by abnormal pauses in breathing Each pause or "apnea" can last from a few seconds to minutes, & can occur five to >30 times per hour1 Why does Obstructive Sleep Apnea (OSA) matter? Patients use 2x the healthcare resources2 Patients a
Slide 7: Sleep Management Market Overview
Sleep Management Market Overview 50 million Americans of all ages have a sleep disorder1 80% of population with OSA currently go undiagnosed1 $7.4 billion spent on products & diagnosis by 2013, growing ~13%2 4,000 sleep labs in the U.S. A Large Market 1U.S. Census Bureau, 2008, National Sleep Founda
Slide 8: Million Americans Have a Sleep Disorder
(CHART) (CHART) 50 Million Americans Have a Sleep Disorder Source: U.S. Census Bureau, 2008, National Sleep Foundation, 2009, National Institute of Health, 2003. 14M or 80% of OSA sufferers are undiagnosed 80+ sleep disorders (e.g. narcolepsy, insomnia & restless leg syndrome)
Slide 9: At-Risk Population Growing
At-Risk Population Growing Expected Growth Trends of At-Risk Population for OSA (CHART) 32% 43% Source: Kenneth E. Thorpe, Emory Univ., Nov 2009 and U.S. Census Bureau.
Slide 10: Spending on Sleep Disorder Diagnosis
Spending on Sleep Disorder Diagnosis (CHART) Source: U.S. Sleep-Service Provider Markets, Frost & Sullivan, 2010. CAGR = 14% in U.S.
Slide 11: How Do You Treat Sleep Apnea?
How Do You Treat Sleep Apnea? There is no cure for sleep apnea, but certain treatment options are effective Continuous Positive Airway Pressure (CPAP) device is the most effective tool to treat the disease CPAP device generates the required air pressure to keep the patient's airway open during sleep
Slide 12: CPAP Expected Market Growth
CPAP Expected Market Growth in U.S. Spending on Sleep Apnea Products Source: U.S. Sleep Apnea Diagnostic and Therapeutic Devices Markets, Frost & Sullivan, 2010. 13% CAGR
Slide 13: Premier Sleep Disease Management Platform
Graymark National Sleep Labs Independent Sleep Labs Hospitals National DMEs (Apria/Lincare) Local Durable Med Equip Companies Internet Graymark Differentiator Minimal Full Year of $650 Shipments: $650 Set-up: $1,380 Diagnosis: $800 Titration: $805 Referral Diagnosis CPAP Set-Up Resupply Care Managem
Slide 14: Graymark CPAP Success Program Enhances Compliance
Graymark CPAP Success Program Enhances Compliance...and Drives Revenue Day 1 Day 3 Day 7 Day 30 Day 45 Month 3 Month 6 Equipment set-up in-person, in-clinic Phone follow-up Phone contact In-person meeting with medical staff: Download data from device Determine compliance or reasons for non-complianc
Slide 15: High Compliance Drives Recurring Revenue
High Compliance Drives Recurring Revenue What defines compliance? Greater than or equal to 4 hours/night for 70% of nights during 30 consecutive days Compliance rate is critical for reimbursement Drives patient retention & recurring revenue Medicare reimburses only if mandated compliance rates are d
Slide 16: Recurring Revenue Becomes a Function of CPAP Set-Ups
Recurring Revenue Becomes a Function of CPAP Set-Ups (CHART) Q1-11: GRMH resupply shipments up 120% since Q1-10
Slide 17: Growth Profile: Organic Growth + Acquisitions
Growth Profile: Organic Growth + Acquisitions Organic Growth Acquisitions Drive hospital lab contracts from key industry relationships Marketing to healthcare professionals (focus on Sleep Thought Leaders) Boost conversion rates Increase volume at existing facilities Numerous targets identified High
Slide 18: Highly Fragmented Sleep Lab Market
Highly Fragmented Sleep Lab Market (CHART) ~4,000 Sleep Labs in U.S. Graymark is the second largest behind SleepMed (privately held) with ~3% of the market SleepMed owns <5% of the market Graymark is the largest public, pure-play company All Other includes small regional players & "mom-and-pop" shop
Slide 19: Graymark Key Stats
Graymark Key Stats Trading Data Stock Price (close @ 7/8/11) $1.30 52 Week Low/High $1.17/$6.40 Avg. Daily Vol. (3 mo.) 20,000 Shares Outstanding (pro-forma)1 14.5M Public Float, est. 67% Insider Holdings 27% Valuation Measures Valuation Measures Market Cap $18.9M Enterprise Value $41.9M EV/Revenue
Slide 20: Graymark Revenue by Type
(CHART) Graymark Revenue by Type $9.6M $15.3M $17.6M $22.8M 35% Revenue CAGR, '07-'10
Slide 21: Graymark Key Take-Aways
Graymark Key Take-Aways Graymark is the largest public "pure play" sleep management company U.S. sleep disorder treatment market expected to grow ~13% to >$7 billion by 2013 50M Americans have a sleep disorder; 80% with OSA go undiagnosed Sleep Management Services 2010 revenue up 30% vs. FY 2009 Q1-
Slide 22: For More Information
For More Information Graymark Healthcare, Inc. 210 Park Avenue, Oklahoma City, OK www.graymarkhealthcare.com Company Contact Stanton Nelson, Chief Executive Officer Tel 405.601.5390 Investor Relations Scott Liolios or Cody Slach Liolios Group, Inc. Tel 949.574.3860 • info@liolios.com
Slide 23: Appendix
4 Graymark Healthcare NASDAQ: GRMH APPENDIX
Slide 24: Proven Team with Winning Track Record
Proven Team with Winning Track Record 30+ years of healthcare operations experience Executive consultant for healthcare restructurings ('07-present & '97-'99) Ardent Health Services ('02-'07) COO: >$1B in revenues Managed 8 hospitals & 300+ multispecialty physician groups Integrated complex acquisit
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