Foundation Healthcare Holdings Limited · SGX:FHH
Foundation Healthcare — Piper Jaffray Annual Healthcare Conference 2015
31 slides from Foundation Healthcare's conference presentation, Dec 1, 2015
Slide 1: Foundation HealthCare, Inc. Presentation
Foundation HealthCare, Inc. Presentation Piper Jaffray Annual Healthcare Conference Stanton Nelson, CEO Hugh King, CFO December 2015 Do the right thing... Do it all the time. www.FDNH.com Exhibit 99.1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may include certain forward looking statements. All statements other than statements of historical fact, included herein, including, without limitation, statements regarding future plans and objectives of Foundation Healthcare or the Corporation, are forw
Slide 3: What We Do
Specialized surgical services – one of the fastest growing segments in healthcare 3 surgical hospitals, 10 ambulatory surgical centers (ASCs) Facilities in 7 states; 800+ employees. 650+ full-time, 150+ part-time. Physician partners : 270+ owners and 165 non-owners Management – proven operators with
Slide 4: Company Snapshot
Foundation Healthcare, Inc. (OTCQB: FDNH) Application Filed With NYSE Business Surgical hospitals and centers Corporate Headquarters Oklahoma City, OK Shares O/S; FDNH share price 1 17.3 million @ [$4.95/share] Market Capitalization 1 $88.2 million Enterprise Value 1, 2 $103.9 million Cash 2 $4.8 mi
Slide 5: Management Team
Management Team Thomas Michaud Chairman of the Board Founded Foundation Surgery Affiliates, LLC (“FSA”) CEO of FSA and Foundation Surgical Hospital Affiliates, LLC Stanton Nelson CEO CEO since January 2010 Vice Chairman of Valliance Bank. Prior CEO of Monroe-Stephens Broadcasting and VP of Oliver In
Slide 6: Current Foundation Footprint
Current Foundation Footprint Surgical Hospital Surgery Center Home Office UGH Opportunity Do the right thing... Do it all the time. www.FDNH.com
Slide 7: Surgery Market Segments
Surgery Market Segments Traditional Acute Care Hospitals (TH) Specialty Surgery Hospitals (SSH) Ambulatory Surgery Centers (ASC) ~5,000 hospitals nationwide Full-service facilities: Diagnostic and surgical Inpatient /outpatient Over half are non-profit High cost provider Very high expense structure
Slide 8: Advantages of Surgical Facilities vs. General Acute Care Hospitals
Advantages of Surgical Facilities vs. General Acute Care Hospitals Private, hotel-like environment Convenient locations Exceptional customer service Predictable scheduling Outstanding nursing staff Negotiated low fee schedules (given our reduced costs) Efficient billing Lower infection and readmissi
Slide 9: Our Approach to Acquisitions
Our Approach to Acquisitions Do the right thing... Do it all the time. www.FDNH.com
Slide 10: Highly-refined Business Plan
Highly-refined Business Plan Goal: strong regional clusters of surgery hospitals and affiliated outpatient surgery centers Intensive, data-driven analysis of states, regions and individual targets: Step 1: identify favorable regional environments (demographics, reimbursement and regulation) Step 2:
Slide 11: Step 2: In Depth Analysis of Regional Target Opportunities
Step 2: In Depth Analysis of Regional Target Opportunities Types of Ancillary Service Facilities Eligible for HOPD Status Total in San Antonio MSA 2 Emergency Medical & Surgical Services 6 Occupational Health & Safety Services 21 X-ray Labs Medical & Dental 46 Clinics 34 Diagnostic Imaging Centers 9
Slide 12: Step 4: Exceptional Management and Data Tracking
Step 4: Exceptional Management and Data Tracking Business Intelligence Features and Functionality Designed for corporate staff, allows Dashboard views covering aggregate performance across all Hospitals, including physician rankings, and facility trends. Administrative Designed for physicians, allow
Slide 13: Case Study: El Paso
Case Study: El Paso Do the right thing... Do it all the time. www.FDNH.com
Slide 14: Case Study 1: El Paso
Case Study 1: El Paso Diagnostic Imaging Centers Physical Therapists Wound Care Oncology Reference Lab Surgical Centers Do the right thing... Do it all the time. www.FDNH.com
Slide 15: El Paso – The Proof is in the Numbers
El Paso – The Proof is in the Numbers… And More Opportunities to Come… Do the right thing... Do it all the time. www.FDNH.com
Slide 16: Tactical Growth: Organic and Acquired
Tactical Growth: Organic and Acquired Improve operating metrics of existing facilities Better surgical throughput with systems infrastructure, software systems and best practices Create a “clustered” facility footprint of hospitals and affiliated outpatient clinics Economies of scale for purchasing;
Slide 17: Financial Discussion
Financial Discussion Do the right thing... Do it all the time. www.FDNH.com
Slide 18: Successful Sale of Minority Interest in Heritage Park Surgical Hospital
Successful Sale of Minority Interest in Heritage Park Surgical Hospital (HPSH) Sold Entire 20% Interest in HPSH Operating Entity (Sherman, Texas) in June 2015 Gain on Sale (Before Taxes) = $6.3 million Cash Proceeds from Sale = $7.8 million Used $7.0 Million of Proceeds to Reduce Debt Sold Entire 20
Slide 19: Income Statement
Income Statement Do the right thing... Do it all the time. www.FDNH.com Dollars In Thousands Nine Months Ended Year Ended September 30, December 31, 2015 2014 2014 2013 Total Revenue and Equity from Affiliates $94,980 $72,888 $,104,225 $92,115 Total Operating Expense 88930 72716 101591 112579 Total
Slide 20: Adjusted EBITDA From Continuing Operations
Adjusted EBITDA From Continuing Operations Do the right thing... Do it all the time. www.FDNH.com Dollars In Thousands Nine Months Ended Year Ended September 30, December 31, 2015 2014 2014 2013 Net Income (Loss) From Continuing Operations $5,402 $-,275 $2,260 $,-15,198 Interest Expense 827 1330 160
Slide 21: Balance Sheet
Balance Sheet Do the right thing... Do it all the time. www.FDNH.com Dollars In Thousands September 30, December 31, 2015 2014 Cash and Cash Equivalents $4,751 $2,860 Working Capital 5823 1527 Total Assets 56654 59527 Short-Term Debt 398 457 Long Term Debt 23148 29761 Total Liabilities From Disconti
Slide 22: UGH Opportunity
UGH Opportunity Do the right thing... Do it all the time. www.FDNH.com
Slide 23: Foundation History in Houston Market
Foundation History in Houston Market Foundation executive have been working with surgeons in the Houston market since 1996 The Foundation Team has developed and managed: Seven ASCs in the Houston market One surgical hospital Currently manage and have a minority interest in one ASC in the Houston mar
Slide 24: University General Hospital - UGH
University General Hospital - UGH Acute care hospital located in Houston, Texas Reported over $70 million in net revenue for 2014 Desirable location Opened in 2006 Grandfathered for physician ownership under Affordable Care Act Licensed for: 69 inpatient beds 6 operating rooms (main campus) HOPD amb
Slide 25: UGH - Bankruptcy
UGH - Bankruptcy Proximate Cause: Parent Company acquired non-performing acute care hospital located in Dallas, Texas UGH forced to subsidize Dallas hospital Contributing Factors: Salary and benefits costs for 2014 in excess of 40% (Foundation hospitals operate at less than 25%) Significant overhead
Slide 26: Foundation Acquisition of UGH
Foundation Acquisition of UGH Bankruptcy Court approved Section 363 sale to Foundation on November 9, 2015 Purchase price = $33.0 million Source of funds Equipment financing = $5.0 million Note to parent corporation = $7.9 million Bank financing = $20.1 million Do the right thing... Do it all the ti
Slide 27: Foundation Plans for UGH
Foundation Plans for UGH On January 1, Foundation will own 100% of UGH but will immediately begin a transition to 49% physician (predominantly surgeon) ownership Physicians ownership at 49% to ensure physician alignment with operating philosophy and quality focus Transition should be completed befor
Slide 28: Summary of UGH Opportunity
Summary of UGH Opportunity Foundation has a proven track record of operational and financial improvement at underperforming surgical hospitals The UGH facility is good fit for the Foundation model Grandfathered for physician ownership Many existing physician (surgeon) relationships in market Good lo
Slide 29: Summary
Summary Foundation has reported five consecutive quarters of double digit year over year growth at currently owned hospitals All Foundation hospitals are profitable with new services and programs in place to support continued revenue growth Trailing twelve months net revenue as of September 30, 2015
Slide 30: Trailing Twelve Months Adjusted EBITDA From Continuing Operations
Trailing Twelve Months Adjusted EBITDA From Continuing Operations Do the right thing... Do it all the time. www.FDNH.com Dollars In Thousands Year-To-Date 2015 Trailing Twelve Months 2014 Q4 Q3 Net Income (Loss) From Continuing Operations $2,859 $5,402 $8,261 Interest Expense 286 827 1113 Provision
Slide 31: Foundation HealthCare
Foundation HealthCare 14000 N. Portland Ave., Suite 200 Oklahoma City, OK 73134 800.783.0404 Do the right thing... Do it all the time. www.FDNH.com
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