Investor Presentation - NASDAQ: SLHG TSXV: SLHG - Skylight Health
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Investor
Presentation
NASDAQ: SLHG
TSXV: SLHG
Q2 2021
Legal Disclaimer Certain information included in this document contains forward-looking statements concerning Skylight Health Group (“the Company”). These include, among others, statements with respect to the company's goals, objectives and the strategies to achieve these. The words “may”, “will”, “could”, “should”, “suspect”, “outlook” “anticipate”, “forecast”, “objective”, and words similar are intended to identify forward-looking statements. By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that forecasts, projections and other forward-looking statements will not be achieved. Certain assumptions are applied, and actual results may differ materially. The Company cautions readers not to place undue reliance on these statements, as a number of important factor, many of which are beyond the Company’s control, could cause actual results to differ materially. Not-market-specific factors include but are not limited to risks relating to general business, economic, competitive, political, regulatory and social uncertainties. The foregoing list of factors that may affect future results is not exhaustive. When reviewing the Company’s forward-looking statements, readers should carefully consider the foregoing factors and other uncertainties and potential events. This document contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about the Company’s prospective results of operations, sales, revenues, funds flow, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was made as of the date of this document and was provided for the purpose of providing further information about the Company’s future business operations. The Company disclaims any intention or obligation to update or revise any forward-looking statements or FOFI contained in document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the forward-looking statements or FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. All currencies unless otherwise mentioned are in $CAD. M&A Corporate Overview Copyright © Skylight Health Group 2021 2
3
Modernizing a National Primary Key Metrics
Care Physician Platform
We are building a national primary care physician (PCP) platform
70,000 5
Primary Care Lives Key Markets Served
that offers independent PCPs a white knight platform to create
value, shift their risk and participate in value-based care
• Providing primary care and future value-based care to over 70,000
patients across 5 markets through a network of 60 providers
19 180
Medical Centers Full Time
• Completed 7 multi-clinic practice acquisitions since October 2020 Employees
• Added over $30 million in annualized revenues from acquisitions priced
between 3-7x EBITDA
60
• Strong organic growth expected as these practices transition to a value-
based reimbursement models within 12-18 months after acquisition
Medical
Professionals
• Developed impressive portfolio of payor relationships as clients
*Statistics based on Internal Analysis
M&A Corporate Overview Copyright © Skylight Health Group 2021
We are Led by a Team of Experienced Healthcare
Professionals
Pradyum Sekar Kash Qureshi Andrew Elinesky Paul Kulas
CEO & Co-Founder President & Co-Founder Chief Financial Officer Chief Operating Office
Diverse background in large
Over 15 years experience in Over 20 years experience in Over 20 years of experience as CFO integrated healthcare systems and
Canadian Healthcare in Canadian Healthcare in and in senior leadership roles with brings 28 years of experience.
technology, practice technology, wellness public companies in both the US and Served in senior leadership roles
management and large multi- development, practice Canada including as CFO of McEwen within Trinity Health and
disciplinary health centers. management and Mining where he managed over Providence Health overseeing
commercial banking. $250M in financings and large scale medical group operations,
acquisitions. productivity and telehealth..
Dr. Kit Brekhus Stephanie Gluchacki Mohammad Batineh Dan Thompson
Chief Medical Officer SVP, Compliance Chief Corporate Officer Chief Communications Officer
Over 25 years of primary care and Over 10 years experience in the Over 20 years experience in strategic Over 15 years of marketing and
family medical experience as a US healthcare sector with M&A activity and legal oversight for communications experience in
clinician, owner-operator and in a multi-state management of small, mid-sized and large both the public and private
variety of executive roles. Founding medical clinics with a focus on corporations with a focus on markets in industries such as
board member of major integrated governance, regulations and inorganic growth strategies and healthcare, technology, retail and
healthcare system overseeing financial management. large-scale healthcare integrations. payments.
5,000 providers.
M&A Corporate Overview Copyright © Skylight Health Group 2021
4
Our Board is Rich with Leadership and Public
Market Experience
Patrick McNamee Grace Mellis Peter Cummins Norton Singhavon
Chairman of the Board Independent Director Independent Director Independent Director
Deep-rooted healthcare Decade-long career at JP Morgan Former Johnson & Johnson Former founder and partner of
executive including as former Chase as MD and Head of Int’l Executive with leadership roles Doventi Capital with extensive
COO of Express Scripts where he Strategy and deep financial and in research & development, experience in capital markets,
led organic and M&A revenue capital markets experience innovation and regulatory M&A activity and
growth from $3B to $120B and including as CFO of NASDAQ- affairs globally. consolidation.
former CEO at Health Insurance listed Greendot Corp (US$3.1B
Innovations. market capitalization).
Tom Brogan Pradyum Sekar Kash Qureshi
Independent Director CEO & Co-Founder President & Co-Founder
of Skylight of Skylight
Former founder of Brogan
Consulting – now IQVIA Over 15 years experience in Over 20 years experience in
(NYSE:IQV) – now a $11B global Canadian Healthcare in Canadian Healthcare in technology,
healthcare technology and technology, practice wellness development practice
research firm. management and large multi- management and commercial
disciplinary health centers. banking.
M&A Corporate Overview Copyright © Skylight Health Group 2021
5
6
Focused on High Growth PCP
Market PCP by Site of Employment
Opportunity: Help independent and smaller practices
adopt a value-based capability mindset where care is Owner, insurance
company or health
Contractor,
1%
measured against Quality and Outcomes, and results in plan, HMO, other, 2%
significantly improved patient economics
Employee,
physician owned
practice, 15%
• Primary Care market represents over $290B with annual
growth rate of 4.7%
Owner,
• Increasing costs in healthcare will drive further capital to Employee, not physician
physician
Primary Care owned practice, 26%
practice,
56%
• Primary Care functions as the gatekeeper of all healthcare
services and costs
• Primary Care practices will need to change as the market
transitions from fee-for-service to value-based care
• Most independent practices lack the infrastructure,
technology and capabilities to provide care while
measuring value-based capabilities
M&A Corporate Overview Copyright © Skylight Health Group 2021
7
Focused on Solving Major
PCP Challenges PCP by Specialty
• Major PCP shortage identified across the U.S. (32% ~940K Physicians in the US
of market)
• PCPs on low end of compensation scale relative Internal
Medicine
to other physician specialties 13%
• Low interest by physicians in training to enter Family Medicine
13%
primary care
Other Specialties
Pediatrics
• Regulations have increased administrative 68%
6%
burden
• Shift to value-based payments have increased
reporting requirements
M&A Corporate Overview Copyright © Skylight Health Group 2021
8
The U.S. Faces a Dramatic Shortage of Primary Care
Physicians Number of PCPs Needed to Fill Shortage of PCPs by State
WA
ME
Projected Gap Between MT ND
OR MN VT
Primary Care Physician SD
NH
MA
ID WI NY
Supply and Demand(1) WY MI RI
IA CT
CAGR: 7.4% NE PA NJ
NV OH
UT IL IN DE
CO WV VA MD
55 KS
CA MO KY
NC
TN
AZ OK
NM AR SC
MS AL GA
TX
LA
22
FL
AK
HI
344-
2020 2033 2-134 147-322 837-1,609
724
(1) Association of American Medical Colleges projects a shortage of 21k (25 th percentile scenario) to 52k (75th percentile scenario) in 2033; population in thousands.
Source: Association of American Medical Colleges; Kaiser Family Foundation.
M&A Corporate Overview Copyright © Skylight Health Group 2021Payors Are Driving Change in the U.S. Healthcare
Landscape Progression to alternative payment methodologies
“Aetna is
committed to 75% ` Traditional Fee- Pay-for- Shared Savings Value-Based Care
of claims being
for-Service Performance and Bundles
value-based by
the year 2020. And
care management Medicare
39.5% 6.9% 36.4% 17.2%
is widely known as Advantage
a good strategy to
improve health Original
and reduce costs.” 10.2% 48.9% 36.5% 4.4%
Medicare
– Mohamed Diab, VP
Provider Medicaid 66.1% 10.6% 17.4% 5.9%
Transformation at
Aetna
Commercial 55.7% 14.2% 27.6% 2.5%
All-Payor
39.1% 25.1% 30.7% 5.1%
Average
Source: Health Care Payment Learning and Action Network (LAN).
M&A Corporate Overview Copyright © Skylight Health Group 2021
9Managed/Value-Based Care is a Fast-Growing Market
Per Patient
MCO States U.S. Medicare and Medicaid Eligibles Enrollment, By Product Type
Per Month Rate
(Population shown in millions)
Medicare Advantage Medicare FFS
CAGR
55 57 58 60 61 63
38 38 37 (0.2%)
37 39 38
Medicare 17 18 20 22 23 26 8.2% $968
Advantage
2015 2016 2017 2018 2019 2020
Penetration of Medicare Eligibles:
Original 69% 68% 65% 64% 62% 59% Category 1
MA 31% 32% 35% 36% 38% 41%
Medicaid MCO FFS Medicaid
79 CAGR
73 75 73 72 71
16 (7.4%)
23 22 19 18 17
63 5.0%
Managed 49 53 54 54 54
$410
Medicaid
2015 2016 2017 2018 2019 2020
Penetration of Medicaid Eligibles:
Original 32% 30% 26% 25% 24% 20% Category 1
MCO 68% 70% 74% 75% 76% 80%
Sources: KFF; Mark Farrah Associates; CMS; Health Management Associates.
M&A Corporate Overview Copyright © Skylight Health Group 2021
1011
Solving Major Challenges for Markets Served
PCPs
By partnering with Skylight Health, independent PCPs across
the U.S. alleviate major challenges they face by joining a
national platform that can provide them access to capital,
technology and corporate leadership and relationships
• Independent PCPs lack access to capital and don’t have the
capability to convert under value-based payment models
• Skylight solves this challenge by offering proprietary technology
that let’s practices measure, manage and execute on quality
metrics for better patient outcomes Current Markets Future Planned Markets
• Colorado • Pennsylvania
• Providers and patients see an improved delivery of care that is
• Florida • New Jersey
not governed by billing codes and constraint of time and access
• Maine • New York
• Skylight providers participate in the growth of the practices post- • Massachusetts • California
acquisition balancing corporate structure with clinical and • Tennessee
patient independence • Texas
• Washington
M&A Corporate Overview Copyright © Skylight Health Group 2021Why Skylight is the Better Choice for Independent PCP’s
Health Systems & Private Equity & Skylight is a True
Networks Backed Buyers Operating Partner
▪ Focus on higher acuity services ▪ Value tied up in a private model ▪ Competitively priced valuations
▪ Value up-front but limited ▪ Typically, a Non-Operating partner ▪ Operating partner with MSO
growth post ▪ Focus on short term upside through capabilities
▪ Higher burn-out rates acquisition ▪ Focus is long-term conversion to
▪ Not aligned with outcome- ▪ Patient value not the primary goal value
based care ▪ Patient remains the number one
focus
M&A Corporate Overview Copyright © Skylight Health Group 2021
12All Roads Lead to Value-Based Care Payment Models
Stock Ticker NYSE:OSH NASDAQ: SLHG | TSX-V:SLHG NYSE:CANO
Enterprise Value $13.9 billion $0.225 billion $7.3 billion
Value-Based
Payment Model
✓ ✓ ✓
Operating Model Clinic Only Clinic Only Clinic & MSO
Growth Strategy De Novo De Novo, Acquisition Primarily Acquisition
Owned Medical Centers 79 19 71
Patient Count ~96,750 ~70,000 ~122,000
EBITDA Paid for
Acquisitions
N/A 3-6x 10x-15x
Time to Patient Panel
Maturity
1-3 years Immediate Immediate
High as Value Created Post-
Low as Already Managed
Organic Growth High Due to De Novo Only Acquisition
Care
Convert to Managed Care
Green Space Open in Select Markets Fragmented NOT Crowded Deep but Narrow Market
M&A Corporate Overview Copyright © Skylight Health Group 2021
13Our Focus Today is Fee-For-Service
FFS providers face the ultimate roadblocks to Convert to enable risk sharing and capitation-
based payment models
Documentation
Confidence in Can’t Manage what Resource Strength in
Drives
Accountability you can’t Measure Constrained Numbers
Treatment
Challenges faced create the greatest opportunity for Skylight Health
M&A Corporate Overview Copyright © Skylight Health Group 2021
14Removing Roadblocks to Convert to Value-Based-Care
Documentation
Confidence in Can’t Manage what Resource
Drives Strength in Numbers
Accountability you can’t Measure Constrained
Treatment
✓ Providers are now adequately trained and equipped to take an accountability
based approach
✓ Education driven model for all stakeholders to understand what it takes to be
successful
✓ Evidenced based framework to support decision making and patient care planning
✓ Reimbursement models that support payment ahead of care delivery
M&A Corporate Overview Copyright © Skylight Health Group 2021
15Our Value to Patients, Providers and Payors
Patients Providers Payors
• Improved Access • Improved Revenue • Market Access
• Care Teams • Reduced Burnout • Cost Management
• Patient Centric • Team Approach • Risk Sharing
• Equitable Care • Shared Alignment • Increased Access
M&A Corporate Overview Copyright © Skylight Health Group 2021
16Investment Highlights
1
STRATEGIC,
ACCRETIVE ACQUISITIONS 2 STRENGHTEN & ENHANCE
FOUNDATION 3 ENHANCE INSURABLE
REVENUE
▪ Pipeline of deals over ▪ People, process and ▪ Leverage data and
$100mm+ in revenue quality improvements insights to create new
priced between 3-7x lead to immediate growth opportunities
EBITDA revenue growth from accretive
services from new
insurable model
• 2021 revenue guidance of $40 million without including any new acquisitions
• Gross margins of 65-75% and target operational net margin contribution of 20-30% per clinic
• Positive EBITDA and cash flow from operations
• No long-term debt and cash balance of over $15 million
• Stock trades at a significant discount to relevant public companies
M&A Corporate Overview Copyright © Skylight Health Group 2021
17Capital Markets EQUITY RESEARCH
Echelon Capital Markets Price Target $10.50
Market Cap (in MM) $240.5
Raymond James Price Target $9.00
Enterprise Value (in MM) $225.0
52 Week High/Low $9.25 / $0.275 Mackie Research Price Target $9.50
Current Share Price (6/2/2021) $6.31 Beacon Securities Price Target $8.50
Basic Shares Outstanding (in MM) 38.1
Current Cash Position (in MM) $15.5
OWNERSHIP SUMMARY
STOCK CHART
10 900000
9 800000
8 700000 25% Public
7
600000
PRICE IN CAD
6
VOLUME
500000
5
400000 Management & Insiders
4
300000
55%
3
200000
2
20%
1 100000
Institutional
0 0
M&A Corporate Overview Copyright © Skylight Health Group 2021
18Thank You
Email: investors@skylighthealthgroup.com
Website: www.skylighthealthgroup.com
@SkylightGroupIR
@SkylightHealthGroup
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