Investor Presentation November 2017 NYSE AMERICAN: CTEK Safe - - PowerPoint PPT Presentation
Investor Presentation November 2017 NYSE AMERICAN: CTEK Safe - - PowerPoint PPT Presentation
Investor Presentation November 2017 NYSE AMERICAN: CTEK Safe Harbor Statements This presentation contains, and our officers and representatives may from time to time make, forward-looking statements within the meaning of the safe harbor
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Safe Harbor Statements
This presentation contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of
- 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,”
“believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make (herein or
- therwise) regarding the size of the potential market for our services; the number of potential customers/clients for
- ur services; plans and strategies of CynergisTek and its subsidiaries for future growth and performance; market
acceptance of our business model; our ability to integrate acquisitions and merged companies; and timelines relating to growth, milestones, and strategic focus. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among
- thers, the risk factors discussed throughout Part II, Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations, and in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2016; and throughout Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Quarterly Reports on Form 10-Q for the quarters ending March 31, June 30 and September 30, 2017, Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. We expressly disclaim any
- bligation to publicly update any forward-looking statement, whether written or oral, that may be made from time
to time, whether as a result of new information, future developments, or otherwise.
Introduction
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CynergisTek
Cybersecurity & Information Management for Healthcare
Nationwide Presence Consultants average 15 years of experience in their domain expertise Revenue $60M in 2016 Covered Entities 1,000 healthcare provider locations and business associates Contracts 3-5 year service contracts Auxilio acquires CynergisTek in 2017
Market Opportunity
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Print Has Increased 11%
Significant risk to PHI and cost savings opportunity for hospital.
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Cost of a Breach
Breaches cost the healthcare industry $6.2B/yr1, 90% of all hospitals had a breach in the past two years.2
Healthcare IT Dynamics
3.5 Million Covered Entities and 35 Million Business Associates
IT Spend on Security3
Healthcare 4-6% Financial 10-12% Government 7-9%
Internet of Things (IoT)
Estimated 30 billion devices by 2020. Biomedical device risk.
Increased Regulation
OCR enforcement of HIPAA among Covered Entities and Business Associates.
Lack of Resources
Shortage of estimated 1.5M cybersecurity resources. Leading to managed services and program delivery.
References on slide 25
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$12B+ Domestic Market Opportunity
EHR produces 60%
- f print volume1
- Paper represents
30% of all breaches
Healthcare $12B Market
Market Cap combined Healthcare Cybersecurity and MDS business
40% of 2016 breaches were unauthorized disclosure2 64% increase in breaches related to hacking in 2016 vs. 20153 41% of data breaches in 2017 were tied to insider error or wrongdoing, which compromised nearly 1.2 million patient records.
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In the News
Enterprise Attacks are Growing and Impacting Consumers
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Ransomware 64% of victims in the U.S. pay ransom Threats 1 in 131 emails are malicious Weaponized IoT devices Take down critical cloud services
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Disruptive Attacks Shutting down hospitals Identity Theft Every two seconds someone is a victim of identity theft
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Global 689 million people globally were victims of cybercrime in 2016
Cybersecurity labor crunch to hit 3.5 million unfilled jobs by 2021
Solutions
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The Services We Provide
Consulting Services
- Risk Assessment
- Technical Security
Assessment
- Print Security Assessment
- Architecture Assessment
- Social Engineering and
Phishing
- Privacy Program
Assessment
- Policy and Procedure
Development
- Compliance Program
Effectiveness Assessment
- HIPAA Research Program
Assessment
- Meaningful Use Audits
Managed Services
- Compliance Assist Partner
Program
- Vendor Security
Management
- Privacy Monitoring
- Vulnerability
Management
- Managed Print Service
- Incident Response
Management Professional Services
- Remediation
- Program Development
- Strategic Staffing
- Virtual CISO
Security/Privacy/Compliance/Cost
Thought Leader Unique lead generation efforts of educational events and PR to gain share of voice in the market.
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Our depth and breadth in the industry make us a trusted partner to healthcare leadership, providing the services they need. Account Managers embedded into client to upsell services across the organization. Building long-term partnerships and becoming the trusted advisor with our clients.
Go-to-Market Strategy
Market Approach
Upsell
Longevity
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Competitive Advantage
Unmatched Healthcare Cybersecurity Experts
CynergisTek won the 2017 Best in KLAS Award for Cyber Security Advisory Services
Effective Leadership Customer Driven Strong Relationships and Track Record Well Known Industry Player Actionable Insight Tailored Solutions
Financial Performance
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Snapshot
NYSE AMERICAN 11/28/2017 Share price $4.06 Market cap $41M FD Shares Outstanding 10M Shares Owned by Mgmt. and Board 25% Income Statement 2016 YTD Q3 2017 Revenue1 $60M $53M Adjusted EBITDA1 $3.4M $5.3M Adjusted Earnings $3.3M $3.9M Cash $6.1M $2.7M2 Debt $1.3M $21.4M
1 Please see our annual and quarterly financial results for complete details. 2 Company maintains a $5M receivable based line of credit with $0 balance outstanding.
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Revenue
Financial Highlights
$44 $61 $60 $53 19% 17% 20% 29% $44 Q3 YTD 2014 2015 2016 YTD 3Q17 Revenue Gross Margin YTD $ IN MILLIONS
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Adjusted EBITDA
Financial Highlights
1 Adjusted Earnings: adjusting for estimated cash tax adjustment, interest expense, amortization of intangibles, stock based compensation and depreciation
$2.1 $1.8 $3.4 $5.3 $1.8 $1.7 $3.3 $3.9 2014 2015 2016 YTD 3Q17 Adjusted EBITDA Adjusted Earnings $ IN MILLIONS
About Us
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Snapshot of Clients
Sample representation more than 1,000 healthcare provider locations and business associates.
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Create $150M Recurring Revenue Healthcare IT Services Business
5 year goal with >15% adjusted EBITDA.
Employee Investment
Continue to strengthen and build on the teams depth of knowledge in cybersecurity.
Increase Shareholder Value Cybersecurity Focus
Continue growing service offerings to meet market demand. Be the #1 trusted source in the market.
Growth Initiatives
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Management Team
Mac McMillan
Chief Executive Officer
Paul Anthony
Chief Financial Officer
Mac has nearly 40 years of both government and private sector experience. He served as Director of Security for two Defense Agencies and as an Intelligence Officer in the U.S. Marines. He has worked in the healthcare industry since his retirement from the federal government and contributes regularly to industry thought leadership. Paul is a Certified Public Accountant and an expert in financial management, investor relations, tax, treasury and risk management with over 20 years of professional services experience with worldwide enterprises, publicly traded companies and start-ups. His career has included time with KPMG, Peat Marwick LLP and IBM.
Angela Rivera
EVP Operations
David Finn
EVP Strategy
Angela Rivera is a passionate executive with 24 years of years experience in the healthcare industry with significant focus serving the healthcare provider industry. Ms. Rivera served the last 17 years in various roles at Computer Task
- Group. In her most recent role as Vice President,
Health Solutions for Computer Task Group, she held executive responsibility for solutions and growth strategy, quality service delivery, and management of the professional consulting base that delivered information technology services and solutions to CTG’s healthcare provider, payer, and life sciences clients in North America. David, comes from Symantec and has been involved in leading the planning, management, and control of enterprise-wide, mission-critical information technology and business processes for more than 30 years. His unique experience in risk management and control objectives of technology (including audit, security, and privacy) allows him a distinctive perspective in the design and implementation of business applications and the processes that the technology must support.
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Board of Directors
J.D. Abouchar
Chairman of the Board
Drex DeFord
Director Principal at Drexio Digital Health, former Healthcare CIO
Mac McMillan
Director CEO OF CynergisTek
Judy Krandel
Director Snap Interactive CFO
Mark Roberson
Chairman of the Audit Committee COO of Chanticleer Holding, Inc.
Theresa Meadows
Director SVP/CIO Cooks Children’s Health Care System
- Dr. Michael
Mathews
Director COO of CynergisTek
Transition of Board in 2016 and 2017 bringing in healthcare IT and capital markets expertise
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Investment Thesis for the New CTEK
FY17: Transformation FY18: Execution FY19 & FY20: Opportunity
Grow and deploy professional and privacy services offerings that help healthcare
- rganizations remediate, develop and implement programs and technology to fulfill short
and long-term security and privacy roles Well positioned for sustainable mid to high organic revenue growth Fundamental operational improvements expected to result in industry-leading operating margin Experienced management team with proven operational success and deep healthcare cybersecurity knowledge
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Questions
Mac McMillan mac.mcmillan@cynergistek.com Questions?
?
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References
Slide 6:
1 Beckers Healthcare IT and CIO Review, 2017 2 HIMSS Analytics Healthcare IT Security and Risk Management Study, 2016 3 SANS IT Security Spending Report, 2016 4 BI Intelligent Estimates – Global Data, 2015
Slide 7:
1 Nuance 2 Bitglass Breach Report 3 Modern Healthcare December 2016