Exhibit 99.1
Exhibit 99.1
Presentation of HealthTronics
January 2006
John Q. Barnidge
CFO
Statements in this presentation that are not strictly historical, including statements regarding plans, objective and future financial performance, are “forward-looking” statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although HealthTronics believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that the expectations will prove to be correct. Factors that could cause actual results to differ materially from HealthTronics’ expectations include, among others, the existence of demand for and acceptance of HealthTronics’ services, the integration of Prime’s and HealthTronics’ businesses, regulatory approvals, economic conditions, the impact of competition and pricing, financing efforts and other factors described from time to time in HealthTronics’ periodic filings with the Securities and Exchange Commission.
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Business Segments/Sub-Segments
Urology Services
Lithotripsy
Prostate Therapies
Anatomical Pathology
Medical Devices
Sales
Service
Specialty Vehicles
Medical
Broadcast
Homeland Security
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Urology Services
Lithotripsy
Prostate Therapies
Uropathology
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Leading Competitive Position
Partnering with 1/3 of Nation’s Urologists
Veteran Management Team
Bringing Cutting-edge Therapies to Market
Successful Partnership Model
Proven Execution
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Core Objectives
~ Leverage Urology Channel
Trusted Advisor to our Partners
Value-added Products and Services
Facilitate Marketplace Consolidation
Growing Revenue & Taking Share
Expanding Platform
Expand Margins
Pricing Stability
Wholesale Pricing Power
Operating Efficiencies
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Lithotripsy
Cost Effective, Non-invasive, Efficacious
Fractional Cost of Surgical Alternatives
Market Scope
250,000 Cases per Year
$2,000 per Case Revenue
$500M Revenue Market
Physician-driven Therapy
No Alternative Therapy
~ 93 Partnerships in 47 states
~ 183 installed litho base
~ Over 750 care venues
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Lithotripsy Partnership Ecponomics
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Prostate Therapy - BPH
Benign Prostatic Hyperplasia
Non-cancerous Enlargement of the Prostate
Market Scope
Affects 50% of Men Over Age 60
13 Million American Men in 2004
Growth Rate
From 40,000 to 360,000 Minimally Invasive Treatments
$650 Million - $700 Million Market
Multiple Treatment Methodologies
TUMT - Transurethral Microwave Therapy
PVP GreenLight
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Prostate Therapy - Prostate Cancer
Market Scope
Second Most Common Cancer in American Males
230,000 New Cases per Year in the U.S.
Baby Boomer Impact (approximately 40 million males)
$5B market
Dramatic Increase in Public Awareness
Demanding Focal Therapy vs. Total Ablation
Participating in the Diagnosis
PSA Testing
Anatomical Path
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Prostate Therapy - Prostate Cancer
Treatment Alternatives
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Uropathology Market
Market is Approximately $500 Million
8,400 Private Practice Urologists
Approximately 10 Prostate Biopsies / Month
Each Patient = Approximately $600 Revenue
60% of Patients are Medicare
Medicare Reimbursement is Excellent
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HealthTronics Uropath Advantage - Big Lab Technology, Small Lab Service
Focal Diagnosis to compliment Focal Therapies
Timeliness & Accuracy – Turnaround Within 48 Hours
Technology - Electronic Reporting
Customer Service - Physician Oriented Pathologists
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Development Strategy
Beta Users
HTRN Physician Partners
Beta Sites
Georgia, Louisiana & Mississippi
Investment
2005 CapEx $2 Million
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Medical Device Sales & Service
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Devices
Lithotripters
Market Scope:
Total US Installed Base of 650 Units
Average Selling Price of $390,000
35% of US Market is Spark Gap Technology
US HTRN Manufactured Installed Base of 220 Units
Opportunities:
Dual Branding Strategy to Expand Spark Gap Market
New Model with Multi-Functional Capability Enjoys Premium Price
R&D for More Efficient Shock Source
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HTRN New Urology Imaging System
UroVantage Image
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Devices
Urology Imaging System
Market Scope:
Total US Installed Base of 4,500 Units
200 - 250 Units Purchased in US Annually at $300,000 ASP
Urologist Influential in Equipment Decision
Market Moving Toward Multi-Specialty Surgical Units
Opportunities:
UroVantage launched in 2Q 2005
MultiVantage launched in 4Q 2005
Design has Unparalleled Flexibility & Image Quality
Superior Cost Position and Optimal Pricing Upside
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Devices
Other Products
Patient Management Tables:
US Installed Base of 4000 Units, HTRN 450 Units Installed
Comprehensive Dealer Network, OEM Supplier
PSA Testing:
6 Million PSA Tests Performed Annually, $200 Million Market
In-Office Testing Approved and now Reimbursed by All Payors
Signed Marketing Agreement with Qualigen, Inc.
Only In-Office Test System On the Market - Patented
Significant Profit Driver for Physicians
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Service Engineering
Installed Base/Network:
Currently Service 38% of US Lithotripter Installed Base
180 of 250 Total HTRN Service Base is Within Partnerships
36 Field Engineers Trained in Lithotripsy and X-Ray
530 Units Generating Consumable Revenue
Opportunities:
ISO Certification in Atlanta Manufacturing Facility
Deeper Penetration of Urology Market via Litho and Imaging
Leverage Applied Engineering Platform and Hospital Relationships
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Specialty Vehicle Manufacturing
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Specialty Vehicle Manufacturing
Company has engaged JPMorgan Chase to manage a sales process for this division.
Estimated value is $100-$115 million
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Specialty Vehicle Manufacturing
AK Specialty Vehicles is Global Leader in the Design,
Engineering and Construction of Specialty Vehicles.
Medical Imaging
Broadcast & Communications
Command/Homeland Security
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Leadership Position in Mobile Medical Worldwide
Manufacturing Facilities in U.S. and Europe
Strategic Relationships for all Modalities
GE Healthcare Technologies
Philips Medical Systems
Siemens Medical Solutions
Extraordinary Market Breadth
Australia
Korea
Italy
Germany
Finland
Norway
United Kingdom
France
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Leadership Position in Broadcast & Communications Vehicles Worldwide
Strong Customer Base
Major Networks - ABC, CBS, FOX, NBC
Cable Networks - CNN, Time Warner
Satellite Uplink Service Market
Relay House, PSSI, Calhoun, Arctek, Coastal, STS
Export Market
Canada, Morocco, Vietnam, Hong Kong
Barriers to Entry
Existing Customer Relationships
Sophisticated Systems Integration
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Homeland Security
Trailer Image
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Homeland Security
Market Breadth:
Mobile Communications Centers
First Responder Units
Mobile Emergency Ops Units
Military Training Simulators
Tactical transport
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Homeland Security
Federal Funding Programs
$2.6B In Federal Funds are Allocated for 2005:
Urban Area Security Initiative Grant
Earmarked for Top 50 Metropolitan Areas
State Homeland Security Grant
States/Municipalities Response Capabilities
2005 Programs Initiated by DOHS Include:
National Protection Initiatives
Biohazard Detection
Port Security
Container Scanning
Cargo Inspection
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Conclusion
Market Dominator
Hi Barriers to Entry
“Debt-Free” Segment
Focused, Stand Alone Business Unit
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2006 Financial Forecast
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Segment Summary Income Statement 2006 Forecast
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Key Financial Statistics
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2006 Forecast Pro Forma Free-Cash Flow
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Consolidated Summary Income Statement
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Implementation of Strategic Iniatives
1. Proceed with FDA approval for HIFU
2. Introduce Urology Imaging System
3. Establish UroPathology Capability (early 2006)
4.Focus on strategic acquisition targets
5.Divest Specialty Vehicles Division
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Reconcilitation of EBITDA and Adjusted EBITDA
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Reconcilitation of EBITDA and Adjusted EBITDA
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EBITDA and Adjusted EBITDA
HealthTronics has presented EBITDA and Adjusted EBITDA amounts, which are non-GAAP financial measures, in various filings with the SEC. In the SEC filings, HealthTronics has reconciled such amounts to their most directly comparable financial measure calculated in accordance with GAAP, which is HealthTronics’ net income. HealthTronics believes that its presentations of EBITDA and Adjusted EBITDA are important supplemental measures of operating performance to its investors.
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is a commonly used measure of performance which HealthTronics believes, when considered with measures calculated in accordance with GAAP, gives investors a more complete understanding of HealthTronics’ operating results before the impact of investing and financing transactions and income taxes. HealthTronics does not reflect minority interest expense when calculating EBITDA, however, HealthTronics adjusts for minority interest expense and refers to this measure as “Adjusted EBITDA”. HealthTronics has historically reported this measure to its investors and believes that the continued inclusion of Adjusted EBITDA provides consistency in its financial reporting. Adjusted EBITDA is among the more significant factors in management’s internal evaluation of total company performance. Adjusted EBITDA is also widely used by HealthTronics management in the annual budget process. HealthTronics believes these measures continue to be used by investors and creditors in their assessment of HealthTronics’ operating performance and the valuation of the company.
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EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are used in addition to and in conjunction with results presented in accordance with GAAP. EBITDA and Adjusted EBITDA should not be considered as an alternative to net income, operating income, a liquidity measure, or any other operating performance measure prescribed by GAAP, nor should these measures be relied upon to the exclusion of GAAP financial measures. EBITDA and Adjusted EBITDA reflect additional ways of viewing HealthTronics’ operations that HealthTronics believes, when viewed with its GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting HealthTronics’ business than could be obtained absent this disclosure. HealthTronics strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.
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