Editor’s note: This is 15th in a series of profiles of companies that presented at Venture 2003.Talk about being on a fast growth curve.
Business continues to increase for United Emergency Services, a Durham firm founded in 1996.
“Since 1999 the company’s revenue have grown from $6.6 million to $35.4 million in 2002, a compound annual growth rate of almost 70 percent,” says Robb Cadwallader, the firm’s president and chief operating officer.
Despite its name, United Emergency is not about responding to crisis situations. Rather, the missions is to help healthcare providers — primarily in rural and smaller markets — find the people they need to man emergency rooms.
And UES believes a strong commitment to service is not only the reason for new growth but eliminating churn. According to Cadwallader, UES hasn’t lost a contract since 1996.
UES already has attracted venture investments from The Aurora Funds and Cordova Capital. But to growth faster, UES is seeking to raise $10 million — and it will use much of those funds to make acquisitions.
If UES gets the funds, Cadwallader says UES can hit $125 million in revenues in 2 Â½ years.
As it did a year ago, Local Tech Wire is featuring in-depth profiles of presenting firms for Venture 2003 built around a Q&A with a company executive as well as a Fact Box of important information. One profile will appear each day.
LTW put together a Q&A designed to not only produce facts about the presenters but also to give each a chance to state the case for venture capitalists to invest.
Answers for UES were provided by Cadwallader.
Venture 2003 took place lask week in Chapel Hill. (Previous profiles – Engineous, Hemocelluar, Elsinore, Gentris, A4, SmartPath, Dynogen, ViASIC, Norak, Kucera, Micell, MindValve, Regado and Bloodhound Software can be found in LTW archives under Executive Q&A category.)
Times are tough. If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”
We have a proven track record of consistently increasing revenues and
earnings. Since 1999 the company’s revenues have grown from $6.6 million to $35.4 million in 2002, a compound annual growth rate of almost 70 percent. Over the same period, earnings before interest, taxes, depreciation, and amortization (EBITDA) have increased from a negative $275 thousand to a positive $1.9 million. We expect to sustain this growth in the years to come both organically and through the acquisition of other healthcare staffing companies.
What is the “pain point” (or points) you address for your customers?
All hospitals, particularly those in rural and secondary markets, have difficulty identifying, attracting, and retaining qualified healthcare professionals to staff their emergency departments and operating rooms.
United Emergency Services relieves the hospital of that burden by providing qualified professionals matched to the needs of that particular practice setting and community.
What makes your company unique? Do you have a proprietary and/or a patented technology?.
UES’ contract retention makes us unique. Since its founding in 1996, UES has not lost a contract. We are a healthcare services company, and, as such, do not have a proprietary property or a patented technology.
What makes your product(s) and/or services unique vs. your competition? (Who is your competition, and what do they offer?) If you have no competition, why not?
UES’ commitment to service makes us unique. We serve three constituencies: our hospital clients; the physicians and nurses who work for us; and the patients treated by those physicians and nurses. We are responsive to the special needs of each constituency and attempt to visit each of our contracts on a monthly basis to ensure a proactive approach to problem identification and resolution.
Our competition on the ED staffing side of our business includes Team
Health, EmCare, PhyAmerica, and National Emegency Services (NES). Our competition on the nurse staffing side includes American Mobile Nursing (AMN), Cross Country, and Medical Staffing Network (MSN)
Does your company already generate revenue? If so, how much? Are you cash flow positive?
Our consolidated revenue for 2002 was $35.4 million, and our EBITDA for the same period was $1.9 million.
What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?
Our target market is the health care staffing market, which is estimated to be $12.3 billion in 2003. With no additional capital, we believe we can achieve revenues of $125 million, or 1 percent market share, within the next five years through organic growth. With a $10 million investment, we believe we can achieve this same market share in half the time through organic growth and acquisitions. More than $10 million in capital would enable us to
achieve even higher market share as a result of a more aggressive
What will you do with the invested funds? What is the timeline for product delivery? If you have existing products and services, how will additional funding help you expand your company, if that is the intention, or will you develop new products?
Of the $10 million we are raising, $7 million is earmarked for acquisitions and $3 million is earmarked for supplemental working capital to fuel organic growth. The acquisition capital will enable UES to achieve greater market penetration quicker.
What do you want from an investor other than money?
We want a partner who shares our vision for what UES can become, a fully integrated healthcare staffing company, and is able and willing to support us in our efforts to achieve that objective.
Why will investors be impressed with your management team?
UES’ management team has almost 100 years combined experience in healthcare staffing and a proven track record of success.
What is the exit strategy for the investor from your company? Are there potential strategic alliances with larger companies? Do you wish to take the company public? Or do you wish to grow the company and either sell it or acquire other companies?
There are numerous exits available for investors in UES. At a current run rate of almost $50 million in revenue, there are already larger, strategic buyers in the healthcare staffing arena that would be interested in acquiring a company like UES. As we continue to grow, the number of potential suiters will also grow as will the opportunity to explore becoming a public company. Opportunities for strategic alliances exist with other healthcare staffing companies filling niches not addressed by UES and with other non-healthcare staffing companies interested in establishing a presence in the healthcare staffing industry.
Just the facts on UES: www.localtechwire.com/article.cfm?u=3970