9663 Santa Monica Blvd. #959
• Beverly Hills
• CA
• 90210
• USA
• www.tig3.com
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall · Hawk Associates Inc. · (305) 451-1888 · www.hawkassociates.com
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall · Hawk Associates Inc. · (305) 451-1888 · www.hawkassociates.com
TIGroup Announces Name Change to First Physicians Capital Group, Inc. Elects Five Directors
Currently, FPCG is focused on two specific healthcare segments, rural hospitals and ASCs. In November 2006, FPCG acquired majority interests in the Del Mar and Point Loma Surgical Centers in Southern California and subsequently consolidated both centers into a single operation. In November 2007, FPCG acquired 51% of Rural Healthcare Acquisition LLC (RHA) in Oklahoma, which owned and operated three critical access hospitals and provided ancillary healthcare services. In May 2008, FPCG acquired Southern Plains Medical Group, adding two additional facilities in Oklahoma. Southern Plains is one of the nation's longest established medical groups and most respected provider in the region, having provided care since 1915.
In December 2008, FPCG purchased the remaining 49% of RHA consolidating all operations under the Southern Plains Medical Group brand. In September FPCG signed a Letter of Intent (LOI) to jointly acquire the fixed assets of the Liberty-Dayton Community Hospital in Southeastern Texas and to develop a new medical facility to serve the region.
Critical Access/Rural Hospitals
Rural hospitals provide essential care services to nearly 54 million people, including 9 million Medicare beneficiaries. These facilities suffer from the same workforce shortages and rising liability premiums as their urban counterparts, but with a distinct difference.
Rural hospitals have historically had restricted access to capital. In addition to declining reimbursement payments, many of these facilities are approaching 50 years of age, further compounding the seriousness of this problem.
Approximately 1,300 rural hospitals in the U.S., including the facilities in the Southern Plains Group (SPMG), are designated as “critical access hospitals.” These facilities are typically located more than 35 miles from other hospitals, offer 24-hour emergency care, maintain fewer than 15 inpatient beds and do not keep inpatients longer than 96 hours. That these critical care facilities exist underscores their importance in delivering healthcare to many communities. That they have been chronically under-funded provides a significant opportunity for FPCG.
Ambulatory Surgical Centers (ASCs)
ASCs are independent, stand-alone centers where surgeries are performed on an out-patient basis. Procedures performed at ASCs typically include orthopedic surgeries, non-invasive laser surgeries, podiatry, and obstetrics-gynecology surgeries.
The Southern California ASC market, where FPCG operates, is believed to be the largest in the country, with approximately 700 ASCs in operation. The ASC industry remains highly fragmented and dominated by practicing physician-owners, with an estimated 75% of centers unaffiliated with corporate buyers or hospitals.
Differentiators
Medicare Advantage Program (MA)
In reviewing its prospects for introducing the Medicare Advantage program, FPCG has taken a wait and see position in terms of the viability of the program with the new administration in Washington.Economics and Strategy
Due to the relatively high fixed cost structure of healthcare facilities, the economics of FPCG's business are primarily determined by capacity and volume.
The company believes its strategy of interdependent relationships tied to operating profit sharing partnerships will produce solid risk-adjusted returns. FPCG also desires to continue to build its real estate portfolio of healthcare facilities. First Physician's Capital Group believes its funding strategy provides above-average returns to its preferred shareholders. Physician-owners receive an attractive proposition as equity interests are acquired at multiples traditionally paid for a controlling stake.
Through its First Physicians Business Solutions' strategy is to provide flexible financial solutions to businesses delivering quality healthcare services outside of traditional hospital settings where FPCG’s interests are aligned with those of physician-partners. Its goals are to capture and offer attractive solutions for its physician partners including insurance, IT and billing systems. For the centers that FPCG operates, the company plans to upgrade technology and improve operational efficiencies to increase their value.
Recent News
TIGroup Elects Five Directors, Changes Name to First Physicians Capital Group, Inc.
TIGroup Announces Third Quarter Results, New Growth Initiatives And Medical Advisory Board
TIGroup Announces LOI to Jointly Acquire Rural Hospital and Develop New Regional Medical Center in Eastern Texas
TIGroup Second Quarter Revenue Up 57% To $10.2M; Company Announces New Agreements and Financings
TIGroup Approved for Quotation on OTC Bulletin Board
- Dependence on relationships with physicians
- Dependence on payments from third parties
- Illiquidity of its common stock
The Outlook For the third fiscal quarter ended June 30, 2009, The company reported revenue from medical services of $9.2 million. This represented a 9.5% YOY increase from $8.4 million in FQ3 '08. Revenue from medical services totaled $30.2 million for the first nine months of the fiscal year, an increase of 53.3% from $19.7 million for the comparable period ended June 30, 2008.
The company reported a ($2.7 million) operating loss before non-cash charges for FQ3. Adjusted company-wide EBITDA was a negative ($1.8 million) reflecting the add-back of non-cash stock-based compensation, depreciation/amortization and interest to the overall net loss of ($3.7 million).
As of June 30, 2009, FPCG retained a strong cash position with $4.1 million in available and restricted cash.
FPCG also signed a LOI with the current owner of the FPCG also signed a LOI with the current owner of the Liberty-Dayton hospital to take a majority controlling ownership position. This will be managed through the company's Oklahoma based subsidiary, Southern Plains Medical Group.
Management believes Liberty and its surrounding communities represent a population demographic equivalent to 80% of the combined communities currently being served in Oklahoma. Liberty could become the company's largest operation.
The company reelected four of its current directors, Chairman and CEO David Hirschhorn; Todd Parker, managing director at Hidden River, LLC; Dr. Robert N. Schwartz, adjunct professor at the University of California, and Richardson E. Sells, owner and manager of Transition Management. The newly elected director is William A. Houlihan, a former investment banker who has served as chief financial officer for a number of companies.
The company added new physician partners at the Del Mar surgery center. The new partners made a fresh investment of $600,000. The company said it expects a positive contribution to revenue and EBITDA in Q4'09 and FY 2010.
The company said SPMG expects to benefit from its new relationship with Chandler Medical Group, which provides an excellent source and destination for quality care in the company's rural Oklahoma network. Chandler is expected to add a positive contribution to revenue and EBITDA in its first full year as part of FPCG with initial impact during Q4' 09.
Management
CEO and Chairman, TIGroup, Inc.-
David
Hirschhorn
Managing Director, Corporate Development, TIGroup, Inc.-
Dan
Chen
CEO, Southern Plains Medical Group, a division of TIG Healthcare Services-
Thomas
Rice
CFO, Southern Plains Medical Group, a division of TIG Healthcare Services-
Donald
C.
Parkerson
Vice President, Finance and Controller, Southern Plains Medical Group, a division of TIG Healthcare Services-
Richard
E.
Rentsch
Senior Marketing Consultant, TIGroup, Inc.-
Elizabeth
Winterhalter
