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8-K - 8-K - HOOPER HOLMES INC | hhform8-kreldmicropresenta.htm |
Corporate
Overview
December, 2016
Presented By: Henry Dubois, CEO
(NYSE Mkt: HH)
Safe Harbor Statement
2
This presentation contains forward-looking statements, as such term is defined in the Private Securities Litigation Reform Act of 1995,
concerning the Company’s plans, objectives, goals, strategies, future events or performances, which are not statements of historical fact
and can be identified by words such as: “expect,” “continue,” “should,” “may,” “will,” “project,” “anticipate,” “believe,” “plan,” “goal,”
and similar references to future periods. The forward-looking statements contained in this presentation reflect our current beliefs and
expectations. Actual results or performance may differ materially from what is expressed in the forward looking statements. Among
the important factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking
statements contained in this presentation are our ability to realize the expected benefits from the acquisition of Accountable Health
Solutions and our strategic alliance with Clinical Reference Laboratory; our ability to successfully implement our business strategy and
integrate Accountable Health Solutions’ business with ours; our ability to retain and grow our customer base; our ability to recognize
operational efficiencies and reduce costs; uncertainty as to our working capital requirements over the next 12 to 24 months; our ability
to maintain compliance with the financial covenants contained in our credit facilities; the rate of growth in the Health and Wellness
market and such other factors as discussed in Part I, Item 1A, Risk Factors, and Part II, Item 7, Management’s Discussion and Analysis of
Financial Conditions and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2015. The
Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or
circumstances, or to reflect the occurrence of unanticipated events, after the date of this presentation, except as required by law. This
presentation contains information from third-party sources, including data from studies conducted by others and market data and
industry forecasts obtained from industry publications. Although the Company believes that such information is reliable, the Company
has not independently verified any of this information and the Company does not guarantee the accuracy or completeness of this
information. Any references to documents not included in the presentation itself are qualified by the full text and content of those
documents. During our prepared comments or responses to your questions, we may offer incremental metrics to provide greater
insight into the dynamics of our business or our quarterly results, such as references to EBITDA and other measures of financial
performance. Please be advised that this additional detail may be one-time in nature and we may or may not provide an update in the
future. These and other financial measures may also have been prepared on a non-GAAP basis. For some of these measures, a
reconciliation schedule showing GAAP versus non-GAAP results has been provided in our press release that was issued after the market
closed today.
Hooper Holmes, Inc.
3
Improving Population Health
Health Screenings &
Sample Collections
Education Engagement
Identify Health Risks
4
Hooper’s programs generate changes in behavior that impact 15 chronic conditions,
which account for 80% of Total Costs for all chronic illnesses worldwide
Diabetes
Coronary Artery Disease
Hypertension
Back Pain
Cause 15 Chronic Conditions
8 Risk and
Behaviors
Poor Diet
Physical
Inactivity
Smoking Lack of Health
Screening
Poor Stress
Mgmt.
Poor Standard
of Care
Insufficient
Sleep
Excessive Alcohol
Consumption
Obesity
Cancer
Asthma
Arthritis
Lung Disease (COPD)
Kidney Disease
High Cholesterol
Allergies
Sinusitis
Depression
Congestive Heart Failure
Health & Wellness Programs Benefits1
5
28% reduction in sick days
26% reduction in health costs
30% reduction in workers’ compensation
and disability management claims
$5.93 to $1.00 savings-to-cost ratio ($3.27 in
hard cost savings and $2.66 in soft costs) Prog
ram
b
e
nef
its
base
d
on
42
pub
li
shed
stud
ie
s
(1)Aflac Workforces Report, 2013
92% of companies with a
wellness program in place
agreed that these
programs are effective,
while 44% of employers
said they are able to offer
lower health insurance
premiums as a result of
their wellness program.
6
Hooper Wellness Programs Get Results
HH Case Study: Manufacturing company with 7,500 employees in an HH Wellness program
7% net change in health risk status
improvement
Annual healthcare cost reduction of
nearly $1.5 million
Overall, 1,100 employees improved
their health (15% of the employee
population)
Participants that started as a low health
risk remained at a low health risk 91%
$1.5
Mil.
Additional cost savings from higher
productivity, reduced absenteeism,
increased talent, and fewer safety
incidents are not included
Leader in Health & Wellness
#1
Largest Health &
Wellness Examiner
Network in the U.S.
Screened over 500,000
individuals in 2015;
Additional ~ 250,000
individuals on portal
Only End-to-End
Health & Wellness
Provider
99+% participation
satisfaction
Serving over 3,000
employers; 200 direct
clients and 95+ channel
partners
18% Five-Year CAGR of
Health & Wellness
Revenues
7
Hooper Holmes’ Evolution
8
Today:
Drive Profitable Revenue
Growth
Transform
Business Model
116 Year Old
Start Up
• Differentiated delivery model focused
on compelling market opportunities
• Leverage our national health
professional network as a
competitive advantage
• Major restructuring activities completed
• Acquired Accountable Health Solutions
• Ended 2015 with record Health & Wellness
revenues and significant reduction in net
adjusted EBITDA loss
• Historically, Hooper Holmes serviced life insurance
industry
• Health & Wellness segment started in 2007
Platform Created to Drive Long-Term
Profitable Growth
9
Built new management team and Board of
Directors with operational and Health &
Wellness experience.
Sold non-core businesses tied to declining life
insurance market to focus on growing Health
& Wellness industry.
Management focused on optimizing cost
structure to produce significant leverage
within financial model
Expanding delivery model to serve growing
markets
Compelling Market Trends
10
Reduce Health
Care Costs
Identify Common
Medical Conditions
Empower
Employees
Hooper Holmes competes in a $7.0 billion market
11
Strong and Growing Employer Demand
Source: NBGH Fidelity 2016
67%
17%
2%
14%
Expand at a greater level
Continue at the same level
No longer invest in this tactic
Do not know
Employers Continue to Encourage Program
Engagement
87
81
78
65
64
58
41
8
6
10
5
13
22
35
36
31
59
0% 20% 40% 60% 80% 100%
Biometric Screening
HRA
Physical Challenges
Lifestyle Coaching
Weight Mgmt.
Tobacco Cessation
Disease Mgmt.
Incentives Disincentives No Incentives
Employers Planning to Expand Their Investment in
Wellbeing Over the Next Three to Five Years
Our Addressable Market
Full Service
Wellness
Channel
Market
Clinical
Research
Organization
Market Size
$6.0B
(includes screening only market)
$2.3B
(screening only market)
$1.0B
Market Growth Est.+8% per annum Est. +8-10% per annum Est. +6-8% per annum
Competitive
Landscape
High and growing with limited
barriers to entry
Moderate with large
barriers to entry
Limited for mobile
collections; high for site
collections
Large opportunity given
increasing focus on health
Utilization of biometric
screenings growing
among small to mid-size
companies; higher
penetration among larger
companies
Substantial opportunity
in the research market as
mobile data collection is
a compelling value
proposition and a shift
from current methods
Customer Examples
12
Non-Financial Health & Wellness Benefits
13
Improved
productivity
Stronger culture,
morale and loyalty
Improved health
and wellbeing
Reduced
Health Risks and costs
Attractive HR
Benefit
14
Impact of Wellness Benefits on Employee Satisfaction(1)
1 Aflac Workforces Report, 2013
Based on these
factors,
employees at
companies with
Wellness
Programs are
35% more
satisfied with
their job and
their employer.
0% 25% 50% 75%
Extremely or very satisfied with their job
Completely or strongly agree their company
has a reputation as a great place to work
Extremely or very likely to recommend their
workplace to others
Extremely or very satisfied with their
benefits program
Wellness Program Offered No Wellness Program Offered
Hooper Holmes’ Solutions
15
Hooper solutions
focus on educating
employees to drive
behavior change to
help PREVENT these
high-cost conditions
that drive employer
medical costs today
Screening &
Collections
Education Engagement
Industry Leading Services
16
During 2015…
17
Expanding Delivery Model To Serve Growing
Markets
Tobacco DetectSM
The nation’s first fingerstick cotinine test
Onsite service; results available within 5 minutes of test
Indicates all tobacco use; equivalent to clinical lab results
Onsite Flu Vaccines
Conveniently add Trivalent flu shot vaccine to onsite events
Registration via Hooper’s online screening scheduler
Hooper coordinates all aspects of the screening and flu shot events
Compelling long-term potential
Roughly 44% of American adults are vaccinated each year
MinuteClinic®
Expands participant access
MinuteClinic has more than 1,100 locations nationwide
Improves convenience of screenings for mobile workforces and
remote employees
Hooper Holmes has the logistical experience and
resources to deliver results on a national scale
18
Right
People
Right
Place
Right
Time
Right
Equipment
Right
Information
Improving Financial Results
Revenues have increased at a CAGR of 18% from ’10-’15
19
$14,957
$19,220
$22,136
$24,171
$28,524
$32,115
-
100,000
200,000
300,000
400,000
500,000
600,000
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2010 2011 2012 2013 2014 2015 Screenings
Revenue
$’s in thousands
20
Many Health & Wellness Programs Launch in Q3 & Q4
Hooper’s Service Mix Enables Ongoing Revenue Recognition
Screening and Coaching Revenue driven by the percentage of employees participating in
the Wellness program; Portal is a recurring per employee per month fee
Hooper works with clients to drive program participation
Coaching typically follows Screenings; both typically recur annually for new program year
%
o
f
A
n
n
u
a
l
R
e
v
e
n
u
e
Portal
Coaching
Biometric
Screenings
Typical Screening Months
Dec
Jan
21
Q3 2016 HIGHLIGHTS
$9.75mm Health & Wellness revenue. YTD Revenue increased 9% compared to 2015
̶ Adjusted EBITDA near break-even
Higher percentage of Q3 revenues from top Channel Partner and Clinical customers
Longer lead time from agreement in principle to contracting for new large customers delays
revenue timing
Expecting full year revenue growth of ~12% growth over 2015
Building Long Term Growth
Gross Margin (%) Revenue($000’s) Adjusted EBITDA ($000’s)
22 22
Growth in core business Key Takeaways
Core Customer Growth in Q3 2016
R
ev
en
u
e
C
la
ss
if
ic
atio
n
b
y
sal
e
s
segme
n
ts
Core business solid and
growing
Growth in Channel Partners
revenue reflects strength of
our screening services
Direct sales channel reflects
customers who contract
directly with us for one or
more services. These
contracts are typically multi-
year commitments
Clinical research organizations
contracts are typically long
term in nature
Biometric screenings sold
through all sales channels
Flu shots sold through both
Direct and Channel Partner
sales channels
Revenue Distribution
+25.2%
+16.7%
23
2017 Outlook Levers for Growth
Improved Operating Performance
Compared to Q3 2015:
Building Long-Term Growth
Creating Value for Shareholders
• Gross margin improved 16%
• SG&A decreased 4%
• Adjusted EBITDA improved 80%
• Higher percentage of Q3 revenues from top
Channel Partner and Clinical customers
• New customers revenue taking longer to
ramp up, will add to base
• Robust demand for integrated vaccinations
• Wellness platform enhancements
• Expanding Health Professional network
utilization
• Scalable delivery model, national network
• Proven portal, incentive, engagement and
rewards programs
• Right coaching resources to improve health
outcomes
• Targeting 10-15% revenue growth for
the full year
• Improved financial performance