Corporate Presentation May 2010 © 2009 PHC, Inc. All Rights Reserved - Confidential NYSE Amex:PHC...
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Transcript of Corporate Presentation May 2010 © 2009 PHC, Inc. All Rights Reserved - Confidential NYSE Amex:PHC...
Corporate PresentationMay 2010
© 2009 PHC, Inc. All Rights Reserved - Confidential
NYSE Amex:PHC
PHC, Inc. dba
RENN GLOBAL ANNUAL MEETING AND INVESTOR CONFERENCE
2AMEX:PHC
In addition to historical facts or statements of current condition, this presentation may contain forward-looking statements. The Company's performance and financial results could differ materially from those reflected in the forward-looking statements due to general financial, economic, regulatory and political conditions or additional factors unknown to the Company at this time, as well as more specific risks and uncertainties such as those set forth in documents filed by the Company with the SEC (including, but not limited to, its most recent reports on Form 8-K, Form 10-Q and Form 10-K, copies of which are available upon request or over the Internet at www.sec.gov). Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. Furthermore, the Company has no intent, and disclaims any obligation, to update any such factors or forward-looking statements to reflect future events or developments.
Safe Harbor Statement
3AMEX:PHC
PHC: What We do...
• PHC (dba Pioneer Behavioral Health), is a leading
provider of behavioral healthcare services
• In-patient & out-patient; acute & long-term
• Four markets: Michigan, Nevada, Utah, and
Virginia
• Strong Growth & Outlook: Record revenues: For FY ‘09 of $46.4 million,
up 2.2% year over year; 9 mos FY’10 $39.0 million, up 12.4%
Operated profitably for last five quarters with recent profitability
increasing
CMS certification anticipated for Seven Hills Behavioral Institute
would allow PHC to gain government reimbursement for many
of the services provided
Opportunities for accelerated revenue growth & acquisitions
Annual RevenuesContinuing Operations
$ Millions
4AMEX:PHC
• Individuals with psychiatric disorders, alcohol & drug dependency
• Corporate employees in the gaming & transportation industry via a
diversified marquee customer base:
Who we do it for....
Covering more than 1 million lives
5AMEX:PHC
Mental Health Care Market Drivers
Catalysts for Mental Health Treatment
• Events of 9-11 were tipping point for Americans to seek help; created an
unprecedented need for emergency workplace mental health services
• 22.5M Americans suffer from drug abuse; less than 4M receive treatment*
• 7.5% of US population (16.5M) had at least one major depressive episode
(MDE) in the previous year (2007)*
• Adults with MDE had more than double the rate of illicit drug use (27.4% vs.
12.8%)*
• 5.4M Americans experience severe and persistent mental illnesses†
• Students grades 9-12 who have seriously considered suicide: 16.9% (2005)
• Behavioral health care sector continues to benefit from lingering effects of
facility closures in the 1990s
• Total inpatient psychiatric hospital beds 44% lower than 1991 peak*Thomson Healthcare report, June 2007. †Center for Mental Health Services, Mental Health, United States, 1996.
6AMEX:PHC
Financial Impact of Mental Health Care
• Large, expanding market: $100 billion
spent annually on mental health treatment
• U.S. substance abuse treatment costs
totaled $20.7 billion in 2003, up 124%
from $9.3 billion in 1986*
• Total economic cost of alcohol & drug
abuse: $246 billion annually
$98 billion related to drug abuse†
$20.7B
*2007 National Survey on Drug Use & Health †The Lewin Group, 1998 (most recent data available)
7AMEX:PHC
New Government Drivers
Supporting Legislation:
•Mental Health Parity Legislation signed into law on
October 3, 2008:
Requires group health insurance plans to provide
equal access and cost sharing for physical and mental
health treatment
Legislation becomes effective October 2009 and
implemented by most plans on January 1, 2010
• In addition, the new economic stimulus plan
includes more than $80 billion to be used for
state-level healthcare needs
• 32 million new insureds through healthcare
reform legislation
8AMEX:PHC
Most Important Driver: Treatment WorksAccording to a major U.S. Dept of Health & Human Services study, negative consequences of drug abuse decrease dramatically following treatment, improving many aspects of a patient’s life:
Source: National Treatment Improvement Evaluation, HHS 1997 (most recent of its kind). See: http://ncadi.samhsa.gov/govstudy/f027/
9AMEX:PHC
PHC’s Operating Structure
Patient Care Patient Care via Hospitalvia Hospital
& Clinical Services& Clinical Services
Patient Care Patient Care via Hospitalvia Hospital
& Clinical Services& Clinical Services
Contract SupportContract Support& Integrated & Integrated
Delivery ServicesDelivery Services
Contract SupportContract Support& Integrated & Integrated
Delivery ServicesDelivery Services
Operating UnitsOperating UnitsOperating UnitsOperating Units
Capstone AcademyCapstone Academy
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Fiscal 2010- 9 months ended 3/31/2010
PHC Revenue Mix
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PHC Hospital & Clinical Services
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PHC Bed Count Growth
CAGR 22% FY03 – FY10 (proj.)
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Integrated Delivery Services
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Harmony Healthcare
• 10-Year, $100 million mental health contract with Behavioral Healthcare Options, subsidiary of United Healthcare, (NYSE: UNH)
Largest in company history, started 1/1/07
More than doubled Harmony's annual run-rate: $5M to
~$13M
• Strong presence in Southern Nevada region
Established relationships with 21 casino and resort
properties
Combined, PHC of Nevada will provide mental & behavioral healthcare services to 600,000+ consumers in So. Nevada
Presence strengthened with Seven Hills Behavioral Institute
opened May 2008
15AMEX:PHC
Major New Las Vegas Expansion
Las Vegas, Nevada Expansion announced April
2008
• Secured 93,000 sq ft building site for two new behavioral
treatment facilities ~15 miles SW of downtown
• A 7,000 sq ft behavioral health outpatient facility opened
June 2009
• Planning an additional 45,000 sq ft, three-story
behavior/medical complex on the site
• ~100 beds & capacity to generate >$25M annually
SHBSHenderson, NV
16AMEX:PHC
Wellplace Positioned For Growth
• Renewed a major deal to
service 2.2M citizens of
Wayne County, MI
• Increased marketing effort
underway to achieve better
economies of scale and
expansion into other areas of
the Department of Defense
17AMEX:PHC
Three Months/ Fiscal Year Comparison
Three Months Ended March 31,
FY2010 FY2009
Total Revenue $13.5 M $12.0M
Patient Care Revenues $12.7M $11.1M
Income from Operations
$781,000 $98,000
EBITDA $1,128 $336
Income Before Taxes $758,000 $12,000
*Net Income (loss) $500,000 $(200,000)
Diluted Earnings Per Common Share
$0.02 $(0.01)
18AMEX:PHC
Year/Year Annual Record Growth*
*Continuing Operations in Millions (excluding Pivotal revenue). Fiscal Year Ended June 30
CAGR 12.5% FY03 - FY09
19AMEX:PHC
2010 Fiscal Third Quarter Highlights
Quarter Ended 3/30/2010 :
• Total Net Revenues increased 12.7% to $13.5 million
• Increased census at Seven Hills Hospital in Las Vegas and overall across facilities
• Income from operations improved $683,000 to $781,000 compared to Income from
Operations of $98,000 in year-earlier period
• The 2010 fiscal third quarter represented the company’s fifth consecutive quarter of
profitability.
• Strong sequential revenue and profit growth
20AMEX:PHC
Balance Sheet Summary
03/31/10 06/30/09
Cash & Cash Equivalents
$3.3M $3.2M
Current Assets $14.2M $11.8M
Total Assets $24.9M $22.7M
Total Current Liabilities
$7.1M $5.7M
Long-Term Debt $300K $500K
Total Liabilities $8.0M $6.6M
Shareholders Equity $ 16.9M $16.0M
Liabilities + SE $24.9M $22.7M
21AMEX:PHC
New Expansion in Detroit, Michigan
Expanding youth services in Detroit, Michigan, with enrollment in new Capstone Academy underway January 2009:
• Capstone represents next phase of PHC's efforts to
provide expanded residential treatment services to
adjudicated youth in the Detroit Metro Area
• DBI has been successfully delivering similar programs
since 2004
• Additional expansion opportunities under consideration
22AMEX:PHC
Stock Repurchase Program
Buyback program initiated June 2008 that authorizes repurchase of up to one million common shares on the open market extended through June 2010.
Plan was executed because management believes PHC’s fundamentals and prospects for growth have never been stronger:
•Excluding startup losses from new facilities in Henderson, NV and Detroit, MI, PHC continues long tradition of operating profitably
•Demand for services is strong and industry is prospering
•New Mental Health Parity bill expected to serve as strong market driver
23AMEX:PHC
PHC Management Team
Bruce A. Shear
•CEO and Director since 1980
•VP, Financial Affairs of PHC 1976-1980
•20+ years on Federation of American Health Systems Board of Governors
•Board of trustees for the National Association of Psychiatric Health Systems
Robert H. Boswell
•Senior VP since February 1999
•Exec. VP of PHC 1992 to 1999
•Administrator of PHC’s Highland Ridge Hospital facility 1989 to 1994
Paula C. Wurts•Chief Financial Officer since
1989
•Assistant Clerk since 1996
•Assist. Treasurer 1993-2000; currently Treasurer
•Accounting Manager 1985-1989
Alexander N. Luvall
•Executive Vice President since September 2004
•Experienced attorney
24AMEX:PHC
Investment Considerations
A leading provider of behavioral healthcare
services
Strong market drivers, including new
federal regs
Strong revenue growth and increasing
profitability
Multiple new facilities coming up-to-speed,
driving growth & profitability in FY2010
Stock repurchase program continuing
NYSE Amex:PHC
25AMEX:PHC
For More Information
Company ContactBruce A. Shear
President & CEO
PHC Inc.
200 Lake Street
Suite 102
Peabody, MA 01960
Tel 978-536-2777
Fax 978-536-2677
www.phc-inc.com
Investor Relations
Dan Schustack
CEOcast, Inc.
Tel (212) 732-4300
Fax (212) 732-1132
www.ceocast.com