April 2014 - National Investment Banking Association

Transcription

Investor Presentation
April 2014
© 2014 Dr. Tattoff, Inc. - Confidential
Forward Looking Statements
Certain of the ma-ers discussed in this presenta3on may cons3tute forward looking statements for the purposes of the Federal Securi3es Laws and as such, may involve known and unknown risk. Uncertain3es and other factors may cause actual results, performance or achievements of Dr. Ta-off, Inc. to be materially different from future results of performance or achievements expressed or implied by such forward looking statements. Addi3onal informa3on concerning factors that could cause actual results to be materially different than those in the forward looking statements can be found in Dr. Ta-off Inc.’s filings with the Securi3es and exchange Commission, including Form 10-‐Q and Form 10-‐K. All forward-‐looking statements are expressly qualified in their en3rety by these cau3onary statements. © 2014 Dr. Tattoff, Inc. - Confidential
1
The Dr. TATTOFF ® Advantage
• 
• 
Pure play in $10 Billion+ tattoo removal market*
Specialized, experienced, & physician
supervised operations:
• 
• 
• 
• 
Standardized procedures & guidelines
Creators of Kirby-Desai Scale,
the only medically published predictive
scale estimating # of tattoo removal sessions
Strong, favorable clinic economics
Brand recognition and strategic marketing
roll-out campaign
* Marketdata Enterprises, Inc., 2012, IBISWorld, 2012
2
Market Opportunity
•  35 Million individuals,18-40
years old have tattoos*
•  7.5 Million potential
candidates**
•  20,000 tattoo studios
continually creating new
customers***
•  Tattoo removal represents a
market opportunity exceeding
$10 Billion in US only
* Pew Research | ** Harris Poll | *** US News & World Report
3
Target Customer
• 
Female ≈ 70%
• 
Age 18 - 40 years
• 
50% have income over
$50K
• 
Willing to spend to
improve “Body Image”
• 
Financial ability &
personal dedication for
treatments
• 
10 sessions = $1,000+
(approx.)
• 
Not bikers or sailors
4
Who Else Needs It?
…Seeking gainful
employment…
Those outgrowing their
youth-culture trends…
…Needing to erase
past mistakes!!!
5
Strategic Marketing
• 
Digital-age demographic (18 - 40 yrs),
mostly females
• 
Search engine optimization, pay-perclick Internet advertising, social
media and additional digital media
marketing
• 
Traditional media (radio, billboards)
to drive web traffic and name
awareness
• 
Leverage national media and
celebrities
• 
Cluster clinic locations to maximize
advertising expenditures
(approx. 3-4 sites/region)
THE STORY
OF YOUR LIFE
DOES NOT
HAVE TO BE
WRITTEN IN INK.
People change.
The tattoo that defined you
at 18, may not feel right at age
30. Perhaps you have a new job...
a new partner... a new baby...
a different life.
If you’re ready to remove your
tattoo, there is a safe, proven,
effective way to remove your
tattoo and renew your life.
Dr. Tattoff. Click to learn more...
Dr.TATTOFF
The Tattoo Removal Specialists
Now 2 Houston Area Locations
Westheimer/Galleria & Sugar Land
LASER TATTOO REMOVAL
T
he story ofnot
your life does
en
ha ve to be writt
in INK!
People change. The tattoo that defined
you at 18, may not feel right at age 30.
Perhaps you have a new job... a new
partner... a new baby... a different life.
If you’re ready to remove your tattoo,
Dr. Tattoff is the safe, proven, effective
way to remove your tattoo and renew
you life. Click to learn more...
Dr.TATTOFF
The LaserTattoo Removal Specialists
Over 170,000 Treatments Performed
FREE CONSULTATION
High-Traffic
Billboard
THE STORY
OF YOUR LIFE
DOES NOT
HAVE TO BE
WRITTEN IN INK.
People change.
The tattoo that defined you
at 18, may not feel right at age
30. Perhaps you have a new job...
a new partner... a new baby...
a different life.
If you’re ready to remove your
tattoo, there is a safe, proven,
effective way to remove your
tattoo and renew your life.
Dr. Tattoff. Click to learn more...
Dr.TATTOFF
The Tattoo Removal Specialists
Now 2 Houston Area Locations
Westheimer/Galleria & Sugar Land
Unpaid Exposure
Leading Publications
Strategic Ads
LASER TATTOO REMOVAL
Threlisfteodroy eosfnot
you
ritten
ha ve to be w
in INK!
People change. The tattoo that defined
6
Brand Awareness
• 
• 
• 
• 
Cover page - NY Times and LA Times – Countless other domestic
& foreign popular press publications
Television, print, internet, radio – Featured articles, management
interviews, expert quotes, celebrity endorsements
Top unsponsored Google search result
400,000+ website views annually
Millions of dollars of free publicity through corporate,
medical & celebrity relationships
Dr. Will Kirby – Dr. Tattoff’s
Medical Advisor – Highly
publicized as leading
authority on tattoo removal.
7
Corporate Timeline
Founded &
Beverly Hills
Clinic Opens
Sunbelt
Phoenix, AZ
Clinic Opens
Enhanced Medical &
Advisory Board
Corporate Recapitalization
Market Demand Grows
Orange County
Clinic Opens
South California Region
Inland Empire, CA
Clinic Opens
Southwest Region
Sugar Land, TX
Clinic Opens
Southeast Region
Atlanta, GA
Clinic Opens
Southwest Region
Dallas, TX
Clinic Opens
Continued Demand
Encino, CA
Clinic Opens
Southwest Region
Frisco, TX
Clinic Opens
Southwest Region
Houston, TX
Clinic Opens
Public Merger
Into Shell Corp.
Coming Soon! Q2 - 2014
Fort Worth, TX
2004
2006
2008
2010
2011
2012
2013
2014
Milestones to Date
Current Activities – 1H - 2014
•  240,000+ treatments completed
•  9 Clinics fully operational
•  $$M in free media coverage &
celebrity endorsements
•  National Rollout Plan in Place:
•  “Best Practices Guidebook”
•  Standardized Training Program
•  National Branding
•  Investor Relations
8
Dr. Tattoff Locations
4 California Clinics • 
• 
• 
• 
Beverly Hills Montclair Sherman Oaks Santa Ana 4 Texas Clinics Dallas Houston Frisco Ft. Worth* • 
• 
• 
• 
(*Q2-‐2014) 1 Arizona Clinic •  Phoenix 1 Georgia Clinic •  Atlanta © 2013 Dr. Tattoff, Inc. - Confidential
9
Our Clinics
Offering Best-in-Class Experience
•  Licensed healthcare professionals on site
•  Highest level of safety & treatment practice
•  Clean, relaxing environment
•  Open 5 - 6 days/week (extended hours)
•  Convenient locations
10
How It Works
Before After
• 
Treatment by licensed
medical professional
• 
Consultation process –
Kirby-Desai scale
• 
10 treatments typically
spaced 6-8 weeks apart
• 
Most treatments last
under 10 minutes
• 
Fee based on size and
number of treatments,
average total cost
approx. $1,000
• 
More than 240,000
treatments total to date
11
Clinic Growth Capability
Reproducible Business Model
•  Standardized interior design
•  Equipment and vendors
•  Training protocols
•  Marketing materials prepared
•  Optimum locations pre identified
•  New cities under review
Grand Opening
Celebration
State-of-the-Art
Equipment
Nationwide
Growth
Corporate
Training Manuals
Ensure
Consistent, HighLevel Care
12
Clinic Model Start-Up
Leasehold Improvements (net of LL
share - $40,000) includes signage and
architecture
$100,000
Laser Equipment (net of financed
portion – $75,000)
90,000
Furniture and Office Equipment –
phone, computers (net of financed
portion – $10,000)
20,000
Pre-Opening Marketing
60,000
Training
15,000
Deposits and Initial Month’s Rent
15,000
Total
$300,000
Property
• 
$300K (approx.) per location to open, including start
up costs and advertising. Opening takes about
120-150 days from site selection.
• 
Visible retail location of approximately 2,000 sq. ft.
• 
About $90-100K per location net in tenant
improvements
• 
Typical 5 year lease
Equipment
• 
Tattoo and hair device – typically $75-125K each,
current pricing on lower end of range. About $30K
for computers, office furnishings, etc.
• 
Devices typically financed 75%, (~$90K cash
expended)
Operations
• 
$75K for operations – training, pre-opening
marketing
13
Clinic Financial Model
Revenue
•  $1,000 per tattoo (avg. total cost)
•  $100/treatment ($49/sq. inch)
•  Avg. 10 treatments, 6-8 weeks apart
•  75% of patients buy package
•  Most pay cash or credit card
•  Less than 20% use patient financing
• 
• 
• 
• 
~15% of business is hair removal
$1,200 avg. cost
Avg. 7–9 treatments
More than 75% of clients buy package (avg.)
•  GAAP revenue steps up with 80% of revenue
related to previously sold treatments
•  GAAP accounting vs. cash collection
dynamics
Expenses
•  Small clinic staff – manager, patient
coordinator and clinician. Second
clinician after volume builds.
•  $16K/month 1st clinician
•  $23K/month w/ 2nd clinician
•  Clinician license requirements varies
by state
• 
Other Monthly Overhead
•  $9K - Rent and utilities
•  $5K - Medical director
•  $2K - Supplies
•  $2K - Insurance and other misc.
•  Marketing – approx. $7.5K, after initial
campaign
•  Total Monthly Cost - $45K to $50K
14
Accounting/Cash Treatment
Owned Clinics
Managed Clinics
100
100
80
80
60
60
40
40
20
20
0
GAAP & Cash
Cash Collections
Expenses
Net Cash Flow
Revenue
Net Income
0
GAAP
CASH
-20
Cash Collections
Revenue
Net Income
Deferred Revenue
Expenses
Net Cash Flow
15
Clinic Model Summary
Start Up
•  Break-even monthly EBITDA
(approx. 6 - 9 mo.)
•  Positive cash flow when
achieve an average of 10
patients per day
•  Year 1 – $314K revenue,
$600K cash collected &
$283K EBITDA loss (approx.)
(000s)
Year 1
Year 2
Year 3
Year 4
Year 5
Revenue
$314
$784
$950
$1,100
$1,300
Clinic Expenses
$662
$696
$742
$804
$815
($283)
$149
$266
$356
$546
$65
$61
$58
$60
$60
($348)
$88
$208
$296
$486
EBITDA Margin
-90%
19%
28%
32%
42%
Cash Collections
$600
$800
$950
$1,100
$1,300
Cash Clinic Expenses
$598
$635
$684
$744
$755
$2
$165
$266
$356
$546
Opertaing Income (EBITDA)
Depreciation/Interest
Clinic Net Income
Established Business
•  Mature at 36 months
•  $1 - $1.3M annual rev. at
maturity
Cash Flow from Operations
•  EBITDA margin ~ 40% at
maturity
16
Clinic Expansion Plans Total Number of Clinics Franchise Plans (company owned only) 100 80 60 40 20 0 2011 2012 2013 2014 2015 2016 •  Domes0c •  Begin in 2014 •  Concentrate on Secondary Markets •  Franchise Fee + Royalty Arrangement 2017 2011
2012
2013
2014
2015
2016
2017
2
2
2
8
12
24
24
Capital/Expenditures
Total/Expenditures
Amount/Financed
Total/Cash/Expended
$487
246
242
$590
166
424
$515 $2,631 $3,983 $7,226 $7,388
240 1,154 1,694 3,120 3,221
275 1,477 2,290 4,106 4,167
Year/one/operations
38
(271)
(544)
$204
$695
$819 $1,874 $2,329 $4,519 $3,968
($000)
Clinics/Opened/During/Year
Total/Cash/Invested/in/New/Clinics
(377)
(39)
(413)
•  Interna0onal •  Begin in 2015 •  Already have inquiries from several countries •  Give country territories 119
17
Management & Board
Management Team
Board of Directors
John Keefe, CEO & Director
Eugene A. Bauer, M.D. – Chairman
•  Seasoned healthcare executive/entrepreneur - raised
$50 million+ for his companies
•  Co-founder and COO of Centerre Healthcare
•  Former CFO of Intensiva Healthcare, Equicare Capital,
NextCare Hospitals, and Safecare Health Services
•  Internationally recognized dermatologist , entrepreneur
•  Former Dean, School of Medicine, Stanford
•  Involved with Conetics (acquired by Stiefel Labs in 2006),
Noesil (acquired by Peplin in 2008), Medgencis
Gene E. Burleson – Director
Harry Zimmerman, COO & EVP
•  General Counsel and Executive Vice President of
Encore Medical Corp. from formation to when sold to
Blackstone in 2006 for $900 million
•  CFO – Pet DRx Corporation during turnaround and sale
to VCA Antech in 2010
•  12+ years of private legal practice, Certified Public
Accountant
•  Degrees from the Wharton School and the University of
Texas School of Law
Mark Edwards, CFO
•  Corp. Controller & SVP of Comprehensive Care Corp.
•  CFO of Advanced Rehabilitation Resources, Inc.
•  CFO of Sterling Healthcare, and VP Finance & CIO of
Centerre Healthcare.
•  Successful healthcare entrepreneur/executive
•  Founder and CEO of GranCare (NYSE)
•  CEO of AMI prior to sale to Tenet Health Systems
Joel Kanter – Director
•  Veteran early-stage healthcare investor
•  Backed over 400 healthcare companies including: Encore
Medical Corporation, Biosystems, Medgencis, I-Flow
William Kirby, D.O. – Director & Chief Medical Officer
•  Board certified dermatologist and is widely considered to be
a leading authority on laser tattoo removal.
•  Developed Kirby-Desai Scale to estimate required tattoo
treatments
•  Extensive professional publications on tattoo removal
18
Medical Advisory Board
Brian Berman, M.D., Ph.D.
• 
• 
• 
• 
Author of 250+ peer-reviewed scientific and clinical articles, chapters and books
Included among “The Best Doctors in America
M.D. and Ph.D. degrees from New York University
Prof. of Dermatology and Internal Medicine - Univ. of Miami, Miller School of
Medicine.
David E. Cohen, M.D., MPH
• 
• 
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• 
Vice Chair for Clinical Affairs at NYU’s Langone Medical
Director of NYU Dermatologic Associates
Published authority in clinical dermatology and national and international lecturer.
Editorial Board/Advisory of the Journal of Drugs in Dermatology, Dermatitis, and Skin
and Allergy News
Tejas Desai, D.O., FAOCD
• 
• 
Board certified dermatologist, fellowship trained Mohs Micrographic Surgeon
Assoc. Professor of Dermatology at Western University of Health Sciences
Michael H. Gold, M.D., FAAD
• 
• 
Board certified dermatologist/dermasurgeon and the founder of Gold Skin Care,
Center, Advanced Aesthetics Medical Spa, The Laser and Rejuvenation Center and
Tennessee Clinical Research Center in Nashville, TN
Clinical Assistant Professor at Vanderbilt University School of Medicine and School
of Nursing
Neil A. Swanson, M.D., FAAD
• 
• 
• 
Director of Dermatologic Surgery at Oregon Health & Science University
Former Chairman of the Department of Dermatology
Former Board Director for the American Academy of Dermatologists
19
Financials & Forecasts Clinics'('Operating
Clinics'('Pre(Open'&'Open
2011
5
0
Actual
2012
7
8
2013
9
11
2014
17
21
Forecast
2015
2016
29
53
35
59
2017
77
83
Gross-Cash-Collections
$3,817
$4,869
$5,529
$10,065
$19,120
$34,371
$55,346
Less:'Contractual'Allowance
Less:''Deferred'Revenue
Revenue
(986)
(165)
$2,666
(1,351)
(318)
$3,200
(1,263)
(611)
$3,655
(1,418)
(2,019)
$6,628
(1,555)
(3,608)
$13,957
(1,690)
(5,413)
$27,268
(1,795)
(7,193)
$46,358
Clinic'Operating'Expenses
2,112
3,094
3,862
7,353
14,520
26,102
41,256
Clinic'Operating'Income
$554
$106
$(207)
$(726)
$(564)
$1,166
$5,102
G&A'Expenses
2,750
2,567
3,117
3,754
4,373
5,279
6,468
$(2,196)
$(2,461)
$(3,324)
$(4,479)
$(4,937)
$(4,113)
$(1,366)
277
378
977
1,172
1,560
2,667
4,162
Net'Income
$(2,473)
$(2,839)
$(4,301)
$(5,651)
$(6,497)
$(6,780)
$(5,528)
Cash-Provided-by-Operations
$(2,031)
$(2,143)
$(2,713)
$(2,460)
$(1,328)
$1,300
$5,827
$719
$424
$404
$1,294
$3,045
$6,579
$12,295
Operating-Income-(EBITDA)
Depreciation/Interest
Cash-from-Clinic-Operations
20
Financials & Forecasts
Clinics Opened More than 12 Months Number/of/Clinics
Gross/Cash/Collections
Less:1Contractual1Allowance
Less:11Deferred1Revenue
Revenue
2011
3
2012
4
2013
7
2014
9
2015
17
2016
29
2017
53
$2,985
(822)
0
$2,163
$4,126
(1,286)
27
$2,867
$4,695
(1,263)
(214)
$3,218
$6,060
(1,211)
(424)
$4,425
$12,210
(1,555)
(189)
$10,466
$24,091
(1,690)
(194)
$22,207
$40,957
(1,795)
(347)
$38,814
1,482
2,145
2,441
3,362
7,614
15,409
27,065
678
696
546
741
2,178
5,405
9,296
Clinic/Operating/Income/(EBITDA)
$681
$722
$777
$1,063
$2,852
$6,798
$11,749
Cash/from/Clinic/Operations
$681
$695
$991
$1,486
$3,041
$6,992
$12,096
Clinic1Operating1Expenses
Clinic1Operating1Income
21
Summary Highlights
• 
• 
• 
• 
• 
• 
Large and developing market
First-mover advantage
Strong competitive advantage – Pure play clinics
Proven business model and clinical expertise
Experienced and engaged Board and Management
National media exposure and established brand
22
Contact Information
John Keefe
Chief Executive Officer
[email protected]
Harry Zimmerman, Esq.
Chief Operating Officer
[email protected]
Headquarters:
8500 Wilshire Blvd, Suite 105
Beverly Hills, CA 90210
888-828-8633
www.drtattoff.com
23

April 2014 - National Investment Banking Association

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