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Harry Fleming Chief Financial Officer Kenneth Efird Chief Operations Officer. Forward Looking Statements.
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Harry FlemingChief Financial Officer Kenneth EfirdChief Operations Officer
Forward Looking Statements This presentation contains forward-looking information (within the meaning of applicable securities laws) relating to the business of Northstar Healthcare Inc. (the "Company") and the environment in which it operates. Forward-looking information may include statements regarding the objectives, business strategies to achieve those objectives, expected financial results, economic or market conditions, and the outlook of or involving the Company and its business. Such forward looking information or statements are typically identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. Forward-looking information, including any financial outlooks, is provided for the purpose of providing information about management's expectations and plans about the future and may not be appropriate for other purposes. Forward-looking information herein is based on various assumptions and expectations that the Company believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct and the forward-looking information, including the financial outlooks included in this Presentation, should not be unduly relied upon. Those assumptions and expectations are based on information currently available to the Company, including the historic performance of the Company's business. Such assumptions include anticipated financial performance, current business and economic trends, and business prospects and are subject to the risks and uncertainties which are discussed in the Company's regulatory filings available on the Company's web site at www.Northstar-Healthcare.com or at www.sedar.com. The Company’s management has approved the financial outlooks contained in this presentation.
Agenda • ASC Industry • Northstar • Revenue/Growth _Programs • Financials • M&A • Q&A
Average charges – 33% lower Ambulatory Surgery Centers (ASCs) • Outpatient surgery facilities • No overnight stay required • Lower cost structure to patient and insurance companies • Better patient outcomes and satisfaction • Higher physician satisfaction • Reduced patient risk factors 5
ASC Industry Overview • Combined revenue of about $18 billion • Untouched by Federal Healthcare Reform Act • Fragmented market • 50 largest companies generate 30% of the revenue • U.S. ASC industry includes about 3,500 companies that operate about 5,000 centers • 75 independent ASCs in Houston; 350 in Texas • High growth expected over next two years, driven largely by patients seeking lower-cost alternatives to hospital care, better clinical outcomes and patient satisfaction, and physician steerage of patient care
More procedures suitable for ASCs U.S. Healthcare Trends • Growth in outpatient surgeries due to Technology and Technique • National number of ASC’s has quadrupled in 30 years • Over 60% of all U.S. surgeries are as outpatients 7
Northstar - Overview • Northstar partners strategically with physicians in the development and management of ASCs with the mission of providing superior medical care, increased patient satisfaction, lower costs for healthcare delivery and revenue enhancement through innovative marketing campaigns. • NHC is a publicly listed company on the Toronto Stock Exchange (Ticker: NHC), although all of its operations are located in the U.S. • Outstanding Shares to date are 43 Million • Management Team collectively owns approximately 20 Million shares • Institutional Ownership Approximately 25%
Bari, Spine, DPM Gyn, Pain Gen Surgery, Ortho Outpatient SurgeryProfits Outpatient Surgery Inpatient Surgery X Rays Labs Medical Admissions ASCs better serve surgeons, patients and payors Hospital Profits Focus of Our Business • Most profitable part of the healthcare delivery system • Low costs if well managed • Profit margins can exceed 50% on a center level
Our Locations • Own and Operate 4 ASC’s: • 2 in Houston • 1 in Dallas • 1 in Scottsdale • Manage Clinical Operations: • Spine/pain management • Bariatric • Podiatry • Own and Operate 2 MRI and 1 Urgent Care Centers Focus: Surgical excellence and maximizing efficient use offacilities and resources 11
Our ASCs • 18 operating/procedure rooms • 150+ surgeons on staff • Focus on high allowable and high marginoutpatient surgical procedures • 10,000+ cases per year • Close to major medical centers KIRBY Surgical Center Houston 12
Revenue Growth Programs Physician Contracting • Accretive revenues for ASC • Surgeon does not need to purchase equity • Northstar’s ownership is not diluted Direct to Consumer Marketing • Current Campaigns: • NueStepSM (Podiatric nerve decompression) • CuraSpineSM (Spine) • Bariatrics • Upcoming Campaigns: • Peripheral Bariatric Campaigns 14
Direct to Consumer Marketing • Launched first campaign spring 2013 • Marketing infrastructure • Campaign production • Call center • Media components • Online presence • Analytics for campaign optimization • Clinical Management • Lead Management 15
Marketing Campaigns • Current Campaigns: • NueStepSM (Podiatric nerve decompression) • CuraSpineSM (Spine) • Bariatrics • Upcoming Campaigns: • Peripheral Bariatric Campaigns • General Surgery
Reimbursements • High-Margin Cases: • Minimally invasive spine surgery • $50,000 • Bariatric surgery • $40,000 • Podiatric nerve decompression • $20,000 • Pain management procedures • $5,000 - $10,000 17
Consolidated Revenue & Operating EBITDA* *Operating EBITDA is net of non-controlling interest but not including the corporate expense **2013E EBITDA includes gain on bargain purchase from the Scottsdale acquisition 19
Marketing Metrics * Figures based on matured campaign cycle 20
Accelerated Growth Beyond Organic Acquisition Targets • Acquire ownership of local surgical hospital(s) to complement current marketing programs • A small-size ASC to service current in-network marketing leads • ASC(s) beyond current market area: San Antonio • Ancillary healthcare facilities to diversify revenues and develop referrals 22
Strong position in high growth ASC industry Proven track record of performance Compelling value proposition for surgeons, patients, and payors Acquisition environment – accretive and accelerated market entry Platform for scalable growth into multiple markets Northstar Healthcare = Significant growth opportunity Investment Highlights