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Prism Medical (TSX-V – PM) May 2013 Stuart Meldrum, CEO George Chiarucci, CFO. Forward-looking statements.
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Prism Medical (TSX-V – PM)May 2013Stuart Meldrum, CEOGeorge Chiarucci, CFO
Forward-looking statements This presentation contains forward-looking statements relating to our operations and to the environment in which we operate and our strategy, action plans and investments, which may involve estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond our control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in this presentation and our other public filings. Consequently, readers should not place any undue reliance on such forward-looking statements. These forward-looking statements are made as of the date of this presentation. Prism Medical is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. All forward-looking statements attributable to Prism Medical are expressly qualified by these cautionary statements.
Prism Medical We provide solutions to the mobility challenged to improve their Quality of Life
Global presence $76M 2012 Revenue 450 employees United Kingdom 2 manufacturing facilities 5 regional service and training centres United States Manufacturing facility 2regional service centres Training centre $6.5M 2012 EBITDA Canada R&D facility Contracted third party service Training centre 6.2% Yield November 30, 2012 17% Operating Cash Flow CAGR last 5 years
Growth business Aging population 65% of healthcare dollars are spent on patients over age 65 25% of those over age 80 are immobile In 2030, 20% of North Americans will be over 65 First baby Boomers turn 65 2011 2030
Healthcare cost pressures intensifying $1Bper year 35%more Cost to the US healthcare system due to workers’ compensation RN injuries due to moving patients Replacement nursing costs avoided if reduce injuries Long-term care costs are 35% higher than home care Global economic situation resulting in budgetary pressures on healthcare spending at same time as increasing demand 38% of RNs suffer back pain that requires leave from work 6
Strong demand for mobility equipment • Safe patient handling • Accepted as the solution to avoid care giver injuries • Strong adoption in US market • UK & Canada already adopted • Legislation driven in UK Acute care Long-term care • Homecare & quality of life • Healthcare system wants to keep patients at home based on costs • Patients want to be at home based on quality of life Homecare
Vertical integration & Local service • Service • Assess • Installation • Maintenance • Training • Vertical integration • means higher margins • Service focus • Recurring revenue • Higher customer satisfaction • One stop shop • Higher customer retention rates • Repeat business / cross sell • Service is the differentiator • Sales • Direct • Dealer channels • Manufacturing • Full range of products • Engineering and design
Growth - Organic Strategies • New products • Distribute a broader range of globally sourced products • Develop more affordable products • Bundled product & service offerings to give customer ‘more for less’ • Homecare • Homecare will be the primary delivery channel • Lead the developing homecare market in North America with affordable products and services • Leverage our extensive distribution and service networks in all geographies • U.S. market • Expand Independent Homecare & Long Term Care Dealers • Adoption in underdeveloped institutional market • Geographic expansion • “Made in the USA” h 9
Growth - M&A Strategy M&A will remain a core component of Prism’s growth strategy. Distributors in new geographies (U.S. a priority) Consolidate manufacturers Acquire adjacent products and services Track record of growing business through accretive acquisitions. 50% of the Company’s growth over the last 5 years. Overall market Size - $3bn
MedCare Consideration • $10.5M in total • $1.3M in holdbacks Purchased • 10+10 year exclusive supply agreement; • Manufacturing assets and inventory; • 49% interest in MedCare Benefits • Incremental cash flow from the supply agreement & 49% interest; • Relationship with Tier 1 hospital groups that can be leveraged; • Strong base of recurring revenues in parts supply and service; • Well accepted floor lift products that complements our offering; • Geographic reach.
Business Update • USA • Capital project delays continued into Q4 • Homecare growth, 127 new dealers in 2012 • Canada • Continued growth in new geographies, Quebec • Institutional spend in H1 levelled out in H2, overall substantial growth for full year • UK • Austerity cuts continue • Good growth from Prism strategies to offer customer better value • Right size cost base • Reduced $1.2m spend in costs of goods • Reduced $2.5m spend in SG&A • Working Capital • Reduced by $2.6m versus prior year • Improved inventory and debtor management Significant restructuring completed allowing for future profitable growth
Track record of top-line growth (C$ millions) CAGR 12% CAGR 12% 2008 2010 2011 2012 2007 2009 Fiscal year end November 30
Revenue – foreign exchange impact (C$ millions) CAGR 17% 2010 2011 2007 2012 2008 2009 Fiscal year end November 30 Data based on constant 2007 exchange rates
Revenues in local currency(millions) CAGR 14% £ 26.2 £ 25.2 £ 24.8 $20.1 £ 19.4 CAGR 43% $16.9 $17.6 $16.0 £ 15.3 $15.7 $14.0 £ 13.6 $13.2 $11.2 $11.5 $10.4 $9.4 $2.9 11 12 07 08 09 10 11 12 11 12 07 08 09 10 07 08 09 10 UK (£) Canada (C$) US (US$) Fiscal year end November 30
EBITDA (C$ millions) 2007 2010 2011 2012 2008 2009 Fiscal year end November 30
Operating cash flow & dividends ($ millions) Average ratio of dividends to operating cash = 35%
Earnings per share (C$ fully diluted) 2012 2011 2010 2007 2008 2009 Fiscal year end November 30
Summary Market data as of market close February 28, 2013 21
Investment considerations • Baby boomers aging and focused on quality of life • Healthcare systems globally under financial pressure • Strategies aligned with market & customer needs • Track record of accretive M&A, most recently MedCare • Growing company in a $3 billion market • Cost base now right sized for future profitable growth • Strong cash flow to support dividend Prism offers improved quality of life at a reduced cost to the healthcare system
Established products and servicein a growing market Prism Medical Ltd. Head Office 480 University Avenue, Ste 100 Toronto, Ontario M5G 1V2 George Chiarucci, CFO Tel: (416) 260-2145 ext. 229Email: gchiarucci@prismmedicalltd.com Babak Pedram, TMX Equicom Tel: (416) 815-0700 ext. 264Email: bpedram@tmxequicom.com