HealthWarehouse.com Investor Presentation
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HealthWarehouse.com presented preliminary financial results through December 2011 and discussed opportunities for future growth. Key highlights included over 100% year-over-year growth in revenue and gross profit in 2011. The presentation discussed the company's competitive advantages in price, convenience, and customer service compared to traditional retail pharmacies. It also outlined trends favoring generic drug growth and the company's strategy to acquire more customers and enhance its online portal. HealthWarehouse concluded by emphasizing its barriers to entry and potential for continued strong revenue growth.
HealthWarehouse.com Investor Presentation
- 1. Investor Presentation Preliminary financial results through December 2011
- 2. Safe Harbor Statement This presentation may contain forward-looking statements regarding future events or the future financial and operational performance of HealthWarehouse.com. Words such as “targets,” “expects,” “believes,” “anticipates,” “intends,” “may,” “will,” “plan,” “continue,” “forecast,” “remains,” “would,” “should,” “projected,” “focus” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on current expectations, are not guarantees of future performance and involve assumptions, risks, and uncertainties. Actual performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such differences could include, among other things: effects of changes in the economy; changes in consumer spending; fluctuations in the stock market; changes affecting the Internet, online retailing and advertising; difficulties establishing our brand and building a critical mass of customers; the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results; risks related to business combinations and strategic alliances; possible tax liabilities relating to the collection of sales tax; consumer trends; the level of competition; seasonality; the timing and success of expansion efforts; changes in senior management; risks related to systems interruptions; possible governmental regulation; and the ability to management a growing business. Additional information regarding factors that potentially could affect our business, financial condition and operating results is included in our periodic filings with the SEC on our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward- looking statements represent our views as of today and we expressly disclaim any intent or obligation to update any forward-looking statement.
- 3. Introduction | Company Details Founded: August 2007 Headquarters: Florence, KY Stock Symbol: HEWA Employees: 65 Licenses: 50 States + DC Certifications: DEA Awards:
- 4. Introduction | Our Mission Build the most efficient delivery system for cash paying prescription consumers Other Cash Generic Rx Pet Rx Platforms
- 5. Industry Trends | Why HealthWarehouse.com? The traditional retail pharmacy model doesn’t fulfill customer requirements Costly Inconvenient Unpleasant
- 6. Industry Trends | Current Landscape Retail Prescriptions OTC Business to Business Only Mail-Order
- 7. Industry Trends | Current Landscape (continued) Sales breakdown of select major US pharmacies – CY2011 Pharmacy ℞ Sales1 Internet ℞ Cash ℞ 3rd Party Generic ℞ Walgreens $46,700 1% 3% 96% 74% CVS Caremark 40,700 1% 1% 98% 76% Rite Aid 17,800 0% 2% 97% 76% Walmart 15,900 2% 20% 70% 65% Kroger 7,200 1% 25% 65% 50% Safeway 3,900 1% 10% 80% 50% Target 3,400 2% 25% 70% 50% Kmart 2,300 1% 30% 60% 50% Supervalu 2,200 1% 10% 80% 50% Costco 1,540 1% 25% 45% 70% HealthWarehouse 10.4 100% 83% 17% 95% Source: Company info, DrugStoreNews.com Note: 1. In USD millions
- 8. Industry Trends | Current Landscape (continued) Several brands have become obsolete by not changing their business models
- 9. Industry Trends | Name-Brand Medications Moving to Generics Approximately $212 billion in name-brand medications will have become generic by 2015 28.3 Plavix® Seroquel® Singulair® Actos® Lexapro® Diovan® 13.8 13.5 Diovan HCT® 13.8 12.6 Tricor® Prevacid® Lipitor®(1) Lidodem® Nexium® 9.8 Effexor XR® Topamax® Zyprexa® Viagra® Celebrex® Flomax® 6.9 Valtrex® Levaquin® Proair HFA® Abilify® Aricept® Adderall XR® Cozaar® Cymbalta® Hyzaar® Aciphex® Lovenox® 2009 2010 2011 2012 2013E 2014E 2015E Source: Company info Note: 1. Lipitor was initially released November 2011, with a broader release in May 2012
- 10. Industry Trends | Lipitor Case Study Lipitor once sold for $150… Rent No significant increase in Inventory overhead to sell Employees nationwide $7 million to open 10 mile radius Retail pharmacy needs 10x generic Lipitor prescriptions in a 10 mile radius of store to cover current costs …its generic version now sells for $15 at HealthWarehouse
- 11. Industry Trends | Change in Retail Pharmacy Pharmacies have shifted a significant portion of their revenue stream away from prescription medications Beer & Wine Cafés Groceries
- 12. Corporate Overview | Accreditation HealthWarehouse is among the few pharmacies that have VIPPS accreditation
- 13. Corporate Overview | Sources of Customer Acquisition Direct Indirect Search Engines Insurance / Employers Social Media Primary Care Clinic Groups
- 14. Corporate Overview | Sources of Customer Acquisition (continued) Elderly Convenience Medicare “Donut Hole” Chronic Younger Uninsured / Conditions Generation Under-Insured
- 15. Corporate Overview | Simplifying the Channel Current Supply Chain HealthWarehouse Model Manufacturer Manufacturer Wholesaler Distributor Pharmacy Consumer Consumer Cost paid by Consumer, Savings to Consumer, Employer, Insurance Employer, Insurance
- 16. Corporate Overview | Sample Cost Savings – Cash Price HealthWarehouse delivers significant savings across a variety of prescription medications without insurance, discount cards, or coupons Drug QTY HW CVS Walgreens Actos 15mg 30 $178.00 $197.49 $203.49 Amlodipine 2.5mg 30 $3.50 $38.84 $41.49 Atorvastatin 10mg 30 $14.00 $137.49 $113.49 Benicar 5mg 30 $79.00 $85.51 $92.19 Diovan 40mg 30 $85.00 $93.11 $113.49 Simvastatin 40mg 30 $3.50 $52.49 $43.99 Sumatriptan Succinate 100mg 9 $21.00 $157.49 $199.99 Tamsulosin HCL 0.4mg 30 $18.00 $95.49 $108.99 Valacyclovir 1000mg 30 $80.00 $209.20 $209.20 Zolpidem Tartrate 10mg 30 $10.00 $49.16 $51.99 Source: Company info and GoodRx as of June 2012 – San Francisco, CA pricing
- 17. Corporate Overview | Delivery HealthWarehouse offers a quick delivery time from the company’s headquarters Cincinnati, OH 80% of US population reached in 2 days
- 18. Corporate Overview | Strong Customer Service HealthWarehouse consistently ranks highly in third-party customer service ratings Customer Service Ratings 1 5.0 Number of Stars 4.5 4.0 3.5 Source: Google Product Search as of June 2012 Note: 1. Based on reviews on various sources compiled by Google
- 19. Corporate Overview | Leading Technology in Industry – Pharmacy Fax Manager TO COME
- 20. Corporate Overview | Platform’s Ease of Use – Pharmacy Refill Manager TO COME
- 21. Growth Strategy | Current Opportunities HealthWarehouse is a disruptive business model that is poised to benefit from changing market dynamics within the prescription medication industry Disruptive business model Eliminate inefficiencies in drug distribution Provide consumers drug price transparency $212B brands off patent in 5 years By 2015, 94% of drugs sold will be cash generics Bring consumers affordable medications Low overhead Fast shipping Award-winning customer service
- 22. Growth Strategy | Current Opportunities (continued) Further Enhance Portal Increase traffic: Content - Similar to WebMD Community - Web 2.0, Facebook, Twitter Search Engines – Google, Yahoo & Bing - VIPPS Increase stickiness: Monitoring – Online Health Management Mobile – Blackberry, iPhone & Android Pursue Strategic Acquisitions OTC players (revenues/customers) Convert OTC customers to Rx Health 2.0 tools and sites
- 23. Financial Summary | Annual Financial Results USD 2008 2009 2010 2011 Revenue $1,270,527 $3,783,542 $5,691,765 $10,363,293 Gross Profit 299,900 1,148,284 $2,241,744 $4,622,767 Gross Margin (%) 23.6 30.4 39.4 44.6 Net Income ($667,301) ($2,439,502) ($3,691,674 ) ($5,727,073) Revenue Growth 82% Year-Over-Year Gross Profit Growth 106% Year-Over-Year
- 24. Financial Summary | Key Annual Statistics 2008 2009 2010 2011 Orders 22,951 59,614 71,376 143,787 Prescriptions 170 17,853 67,577 157,650 Avg. Order Size $55.36 $46.20 $79.74 $57.20 Refills 17 4,235 23,789 71,930 Page views 1,144,189 4,057,959 5,248,524 11,316,353 Prescription Growth 133% Year-Over-Year Refill Growth 202% Year-Over-Year
- 25. Financial Summary | Revenue and Prescription Growth HealthWarehouse continues to grow both its revenue and customer base… Revenue Gross profit Prescriptions filled 3,000 50 Revenue Growth 82% Year-Over-Year Gross Profit Growth 106% Year-Over-Year 45 2,500 40 35 Prescriptions ('000s) 2,000 30 USD ('000s) 1,500 25 20 1,000 15 10 500 5 - - Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 …and still has significant capacity to meet future growth
- 26. Financial Summary | Prescription Growth – New and Refills Refills continue to comprise a larger share of prescriptions Refills New 23,982 21,365 20,320 20,053 14,893 9,756 12,335 21,996 17,138 20,377 7,077 12,419 5,698 5,883 8,977 3,231 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411
- 27. Financial Summary | Investor Appeal HealthWarehouse is the only nationwide, online, mail-order pharmacy with significant barriers to entry. Key strengths put the Company ahead Barriers to entry: Technology platform that puts us years ahead VIPPS accreditation Licensed in all 50 states and the District of Columbia Strong revenue growth Increasing website effectiveness Excellent track record of high customer satisfaction Market trends & economy favor our business model
- 28. Thank You 7107 Industrial Rd Florence, KY 41042 TEL: 1-866-885-0508 http://www.HealthWarehouse.com