Traders News Source Editor, Mark Roberts Had An Opportunity to Interview CEO, Pradyum Sekar of Skylight Health Group Inc. (NASDAQ: SLHG)
Full Transcript Below
Mark Roberts, Interviewer
Pradyum Sekar, CEO Skylight Health Group
Thank you for taking the time to answer questions for our readers. Could you give our audience a brief overview of Skylight as it is today?
As it stands today, Skylight Health is an under-valued play on the U.S. healthcare space, focused on collecting higher reimbursement from the government and insurance providers, while improving patient health outcomes. We do this by transitioning the patients from a fee-for-service model to a value-based-care model, allowing us higher revenue per patient, allowing our doctors and clinics to use centralized services and capital, and allowing our patients to receive more effective and encompassing care.
What has been the process for identifying a potential target for acquisition?
A large part of our growth is through acquisition. In the last 12 months we have successfully completed 8 acquisitions, contributing more than $35 million in annualized revenue growth. The fragmented marketplace allows us acquire clinics for attractive multiples of 3x-7x times EBITDA. We choose our targets based on location and patient population, specifically looking for clinics with a strong number of patients who are eligible to transition from a fee-for-service model to a value-based-care model, allowing us the potential for exponential revenue growth post-acquisition.
Do you take measures to retain the professional teams at the medical centers you acquire?
Prior to partnering with us, independent practices typically experience the same roadblocks: increased administration and costs, increased network competition, lack of new physical owners, and the inability to shift their models from shrinking fee-for-service rates to the growing value-based-care model due to the time, costs, and expertise associated with the process. By joining our national platform, we alleviate these major challenges and provide access to capital, technology, improved contracting, and participation in value-based programs. The doctors and nurses in the practices we acquire entered their profession because they have a strong desire and gift to help patients – they don’t want to be stressed with the evolution of the business side. We take care of the business aspects and allow them to do what they love: practice medicine. The medical teams at the centers we’ve acquired have shown increased levels of satisfaction post-acquisition so we haven’t had to deal with staff leaving, but from a level of business security, we do put contracts in place to ensure a transition phase if a doctor does decide they’d like to leave the medical practice to embrace a new chapter in their lives.
You are transitioning the medical centers you’ve acquired from an FFS to a VBC model. How will that transition impact them both operationally and financially?
A fee-for-service model reimburses doctors on every patient visit. It’s a volume game that forces doctors to see highest number of patients possible. Visits are shorter and typically only one issue can be address simply due to lack of time. This type of system often fails to address underlying conditions and problems, and results in health outcomes that could have been prevented. A value-based-care model is reimbursed on quality over quantity, understanding that the primary care physician is the first point of entry the patient has into the medical system, and encouraging them to take the steps now the avoid unnecessary problems in the future. This change in reimbursement is being driven by insurance providers who have access to a plethora of data, and have noted that a lot of expensive surgeries, hospital visits, and prescriptions, could have been avoided by proper examination. Insurance providers are willing to reimburse primary care doctors more money up-front to avoid extremely expensive and unnecessary payouts that should have been prevented. As a result, the reimbursement in a value-based-care model is appox. $10,000 – $12,000 per patient, per month, compared to $200 – $400 per patient, per month in the current fee-for-service model.
No need to be specific, but is Skylight currently evaluating any acquisitions that could come to fruition in 2022?
We currently have a pipeline of over $100 million in revenue that we are evaluating. The timing on these acquisitions is to be determined, but there is no shortage of attractive targets.
Oak Street seems to be a direct competitor of Skylight and has experienced rapid growth, yet they are not profitable. Do you see your growth yielding a different result?
While Oak Street Health is one of the largest players in the value-based-care space, they have a very different business model than we do. Their model is to build value-based-care practices from scratch, or de novo, which can timely and expensive. Our model is to acquire practices and convert them to a value-based-care model, so we have the advantage of time and capital on our side. We are still in growth mode and using capital to advance quickly and strategically, but it is a goal of ours to reach break-even in 2022, and achieve profitability in 2023.
Can you tell us more specifically how your partnership with Collaborative Health Systems functions?
Our JV with Collaborative Health Systems (CHS) is a strategic partnership to integrate essential value-based-care services into Skylight’s growing enterprise of primary care practices. CHS is a wholly owned subsidiary of Centene Corporation (NYSE:CYC); a publicly traded company with a $50 billion market cap. CHS is at the forefront of profitably executing on value-based care, having generated over $475 in Medicare savings since 2012. This partnership enables us to leverage the scale, infrastructure, and expertise of CHS, allowing us to fast-track our timeline of value-based contracts by approximately 24 months. We see tremendous value in combining their expertise with Skylight’s aggressive growth plan, with the end result ultimately being improved patient outcomes.
Have any institutional investors approached you about potentially taking a substantial position in Skylight?
We have started to see the transition from retail to intuitional investors. We currently have 6 analysts that cover the stock; 4 in Canada and 2 in the US.
How will your company fund operations through the balance of 2022?
While we do have control over operations, we don’t have control over market conditions or macro impact. We’re fortunate to have access to forms of non-dilutive capital that we can tap into for growth if market conditions are unfavorable for financing.
What is your current (at 12-31-21) debt to equity ratio and what level of debt to equity do you think is acceptable for Skylight?
Skylight does not currently carry any traditional debt. We issued a preferential preferred offering in December, 2021 bringing in $5.75 million in non-dilutive capital.
Can you tells us when we should expect you to release your Q122 earnings report?
Skylight Health will report Q122 in July.
Skylight shares traded as high as $6.95 a year ago. Can you make a case to investors that supports a valuation near the year ago level?
The market conditions were very different a year ago. Unfortunately, that hasn’t improved in 2022, with the S&P erasing 8.8% last month alone, and down over 13% in 2022, its worst start to the year since World War 2. Technology and healthcare stocks have led that decline, with tail-winds from covid fall out, raising interest rates and fall-out from the Russia/Ukraine war. It’s been painful to see our stock price decline, but with so much the downward pressure being macro, my team and I have stayed focused on building a quality business that can sustain an economic downturn. Despite a tough year in the markets, our business has never been stronger. When the market eventually turns around – and it will – I believe we’ll surpass our previous highs and reward investors with tremendous upside.
The Traders News Group
Privacy Policy and Disclaimer
Your Consent
By using our site, you consent to our online privacy policy and disclaimer.
Do we disclose any information to outside parties?
We do not sell your information to anyone.
What information do we collect?
We collect information from you when you subscribe to our newsletter or fill out a form on one of our social platforms. This includes your email address and or mobile phone number.
When registering on our site, as appropriate, you may be asked to enter your: e-mail address and or mobile number.
What do we use your information for?
When we collect your email or mobile number it is used for one purpose to send you the information you requested about small cap stocks. Please read our disclaimer carefully before viewing our emails.
Your information, whether public or private, will not be sold, exchanged, transferred, or given to any other company for any reason whatsoever, other than for the express purpose of delivering the information on small cap stocks that you requested.
We send periodic emails
The email address you provide may be used to send you information, the small cap stock reports you requested, respond to inquiries, and/or other requests or questions.
How do we protect your information?
We implement a variety of security measures to maintain the safety of your personal information when you enter, submit, your email address. We use secure third parties to send email and sms messages to you.
Because we value your privacy we have taken the necessary precautions to be in compliance with the California Online Privacy Protection Act.
Online Privacy Policy Policy
This online privacy policy applies to information collected through our website and social media platforms.
Contacting Us
If there are any questions regarding this privacy policy or disclaimer you may contact us using the information below.
Editor@TradersNewsSource.com
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
Please Note: TNS LLC and its employees are not a registered investment advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operators owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D. TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investors investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a safe harbor in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be forward looking statements. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as projects, foresee, expects, will, anticipates, estimates, believes, understands, or that by statements indicating certain actions & quote; may, could, or might occur. Understand there is no guarantee past performance will be indicative of future results.
In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The owners and operators of this website have been compensated twenty five thousand dollars cash via bank wire by awareness consulting for this weeks distributed opinions on slhg to last for one day 5-3-22. TNS LLC has not been compensated for this ceo interview and the distribution thereof. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.
TNS LLC is not affiliated with any exchange, electronic quotation system, the Securities Exchange Commission or FINRA. TNS LLC is not a Broker/Dealer and does not engage in high frequency trading.
