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EXHIBIT 99
[MATRIA LOGO]
ANALYSTS' MEETING
DECEMBER 14, 2000
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MATRIA HEALTHCARE(R), INC.
Except for historical information discussed, the statements made today are
forward-looking statements that involve risks and uncertainties, including risks
detailed from time-to-time in the Company's reports filed with the Securities
and Exchange Commission including our report on Form 10-Q for the quarter ended
September 30, 2000 and our Annual Report on Form 10-K for the year ended
December 31, 1999. Investors are cautioned that such statements are only
predictions and that actual events or results may differ materially from those
expressed in or implied by such statements. Forward-looking statements include
statements concerning our plans, objectives, goals, strategies and future
operations and performance and the assumptions underlying such forward-looking
statements, our future capital requirements, and estimates of revenues, expenses
and income. The words "anticipate," "estimates," "expects," "believes,"
"intends," "plans," "may," "will," "should," and similar expressions are
intended to identify such forward-looking statements. These forward-looking
statements speak only as of this date. We undertake no obligation to publicly
release the results of any revisions to the forward-looking statements made
today to reflect events or circumstances after today or to reflect the
occurrence of unanticipated events.
[MATRIA LOGO] 2
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MANAGEMENT PRESENTATIONS...
- PETE PETIT, Chairman, President, CEO
- JEFF KOEPSELL, Executive Vice President, COO
- FRANK POWERS, President, Population Health Management
- GEORGE DUNAWAY, Vice President of Finance, CFO
- CHRIS COLOIAN, Vice President of Business Development
- JOE OREFICE, Vice President of Disease Management Sales
[MATRIA LOGO] 3
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CORPORATE AMERICA...
- SEES HEALTHCARE COSTS INCREASING AGAIN
- REALIZES "MANAGED CARE" CAN NOT REDUCE COSTS FURTHER
- KNOWS THEIR EMPLOYEES ARE NOT SATISFIED WITH HEALTHCARE
- WANTS EMPLOYEES TO ACCEPT RESPONSIBILITY
[MATRIA LOGO] 4
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DISEASE MANAGEMENT CAN...
- REDUCE HEALTHCARE COSTS
- IMPROVE OUTCOMES
- INCREASE EMPLOYEE SATISFACTION
- ENCOURAGE EMPLOYEES TO HELP MANAGE THEIR DISEASE AND WELLNESS
[MATRIA LOGO] 5
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MATRIA ADVANTAGES IN
DISEASE MANAGEMENT...
- FIFTEEN YEARS OF DISEASE MANAGEMENT AND TELEMEDICINE EXPERIENCE
- NEW TECHNOLOGY PLATFORM - TRAX(TM)
- EXPERIENCED SALES TEAM
- OVER 1000 CONTRACTS WITH HEALTH PLANS
- STRATEGY TO REACH FORTUNE 100
[MATRIA LOGO] 6
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THE MOST COSTLY DISEASE STATES
FOR EMPLOYERS ...
- MATERNITY
- DIABETES
- RESPIRATORY
- CARDIOLOGY
- CANCER
MATRIA IS FOCUSED ON FOUR OF THE TOP FIVE
[MATRIA LOGO] 7
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MATRIA REVENUE SOURCES...
- DISEASE MANAGEMENT CONTRACTS
- Payors
- Employers
- TELEMEDICINE SERVICES
- FULFILLMENT SERVICES
- Products
- Supplies
[MATRIA LOGO] 8
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MATRIA'S
DISEASE MANAGEMENT GOALS...
- BECOME ONE STOP SHOP FOR PAYORS AND EMPLOYERS
- OFFER MANAGEMENT OF FOUR PRIMARY DISEASES
- USE TRAX(TM) TECHNOLOGY AS A COMPETITIVE ADVANTAGE
[MATRIA LOGO] 9
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MATRIA'S STRATEGY
- DISEASE MANAGEMENT PROGRAMS ALLOW MATRIA TO WORK WITH HEALTH PLANS AND
EMPLOYERS TO IMPROVE THE QUALITY OF CARE AND DECREASE THEIR OVERALL MEDICAL
COSTS.
- THESE DISEASE MANAGEMENT PROGRAMS GO BEYOND TRADITIONAL HEALTHCARE DELIVERY
STRATEGIES
- THROUGH THESE DISEASE MANAGEMENT PROGRAMS, WE AGGREGATE LARGE POPULATIONS OF
PATIENTS AND INTRODUCE THE MATRIA BRAND
- DISEASE MANAGEMENT PROGRAMS GENERATE REFERRALS FOR OUR EXISTING TELEMEDICINE
AND FULFILLMENT PRODUCT LINES
[MATRIA LOGO] 10
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2001 PERFORMANCE GOALS...
- REVENUE GROWTH 10 PERCENT
- OPERATING PROFIT 15 PERCENT
- EPS GROWTH 25 PERCENT
10 / 15 / 25
[MATRIA LOGO] 11
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FRANK POWERS
PRESIDENT, POPULATION HEALTH MANAGEMENT
[MATRIA LOGO] 12
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ORGANIZATIONAL FOCUS
- ESTABLISHED A BUSINESS UNIT SPECIFICALLY FOCUSED ON DISEASE MANAGEMENT AND
FULFILLMENT
- STAFFED WITH EXPERIENCED EXECUTIVES
- PRESIDENT (18 years Healthcare)
- VP BUSINESS DEVELOPMENT (11 years Healthcare)
- Heavily involved in initial planning and development
- VP DISEASE MANAGEMENT SALES (30 years Healthcare)
- Extensive Managed Care
- VP OPERATIONS (9 years Call Center)
- Call Center Technology and Expertise
- DIRECTOR OF FINANCE AND OPERATIONS (7 years Healthcare)
- Claims Analysis and Modeling
[MATRIA LOGO] 13
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INVESTMENTS FOR GROWTH
- DEVELOPED INFRASTRUCTURE TO SUPPORT DISEASE MANAGEMENT PROGRAMS
- New technology platform, TRAX(TM)
- Over 2 years in development
- In excess of $3 million for development
- Expanded Fulfillment Capability
- Added software and hardware capacity
- Facility expansion
- New telephony platform
[MATRIA LOGO] 14
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FULFILLMENT INITIATIVES FOR GROWTH
- IMPLEMENT DIRECT MARKETING PROGRAM FOR DIABETES SUPPLIES TO MEDICARE
CONSUMERS
- TV and mail
- EXPAND DIRECT SALES FORCE TO HEALTHCARE PROFESSIONALS
- INCLUDE DIABETES SUPPLY FULFILLMENT IN DISEASE MANAGEMENT CONTRACTS WITH
MANAGED CARE AND EMPLOYERS
[MATRIA LOGO] 15
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JOE OREFICE
VICE PRESIDENT OF DISEASE MANAGEMENT SALES
[MATRIA LOGO] 16
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MANAGED CARE ENVIRONMENT
- DEMOGRAPHICS
- Aging of baby boomer population will be a drain on current resources
- Increasing prevalence of chronic disease
- 20% of health plan members are responsible for 80% of medical claims
expenses
- CONTRACTING
- Additional discounts from hospitals and physicians through more
aggressive contracting are not forthcoming
- Global capitation has not proven to be the answer
[MATRIA LOGO] 17
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MANAGED CARE ENVIRONMENT
- MARKETING
- Employers want new strategies to improve healthcare quality and to hedge
against increasing costs, both short-term and long-term
- Medical inflation looms again on the horizon (estimated at 12.5% in
2001)
- Managed Care companies have experienced their share of negative
publicity
- OPERATIONS
- Traditional Medical Management model has had little to no impact on
chronic disease
[MATRIA LOGO] 18
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HOW DOES DISEASE MANAGEMENT
SOLVE THESE PROBLEMS FOR MANAGED CARE
ORGANIZATIONS AND EMPLOYERS?
- TARGETS THE COST DRIVERS
- PROVIDES TRUE MEDICAL MANAGEMENT FOR THESE CHRONIC DISEASES
- HELPS FULFILL THE PROMISE OF MANAGED CARE
- ENGAGES PHYSICIANS IN A POSITIVE WAY
- ANSWERS THE EMPLOYERS QUALITY CONCERNS
- LOWERS THE COST OF CARE
- IS THE RIGHT THING TO DO
[MATRIA LOGO] 19
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DISEASE MANAGEMENT
STAKEHOLDERS
- MEMBER WITH CHRONIC DISEASE
- EMPLOYER
- MANAGED CARE PLAN
- PHYSICIAN RESPONSIBLE FOR MEMBER
[MATRIA LOGO] 20
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BENEFITS TO THE MEMBER
- PROVIDES SUPPORT AND ADVOCACY FOR THEIR CONDITION - EMPOWERMENT
- INCREASES MEMBER KNOWLEDGE OF THE DISEASE
- ALLOWS MORE PRODUCTIVE ENCOUNTERS WITH THE HEALTH CARE SYSTEM
- IMPROVES QUALITY OF LIFE
- INCREASES SATISFACTION WITH THE PROVIDER AND HEALTHCARE PLAN
[MATRIA LOGO] 21
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BENEFITS TO EMPLOYERS
- ENGENDERS HIGHER EMPLOYEE SATISFACTION WITH THE BENEFIT PROGRAM
- REDUCES ABSENTEEISM FOR THIS CHRONIC POPULATION
- LOWERS SHORT-TERM AND LONG-TERM HEALTH CARE COSTS
- IMPROVES PROGRAM QUALITY
[MATRIA LOGO] 22
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BENEFITS TO THE MANAGED CARE ORGANIZATION
- LOWERS COSTS FOR THIS CHRONIC POPULATION
- IMPROVES QUALITY AS MEASURED BY COMPLIANCE WITH THE STANDARDS OF CARE (NCQA)
- INCREASES SATISFACTION LEVELS FROM MEMBERS
- INCREASES SATISFACTION LEVELS FROM PHYSICIANS
- PROVIDES BETTER POSITIONING WITH EMPLOYERS
[MATRIA LOGO] 23
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BENEFITS TO THE PHYSICIAN
- BUILDS ADVOCACY AND SUPPORT FOR THEIR PLAN OF CARE
- IMPROVES COMPLIANCE WITH THE STANDARDS OF CARE
- IMPROVES SELF-CARE SKILLS FOR THEIR PATIENTS
- IMPROVES OUTCOMES FOR PATIENTS WITH CHRONIC DISEASE
[MATRIA LOGO] 24
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DIABETES FACTS
- 16 MILLION PEOPLE IN THE UNITED STATES HAVE DIABETES (6% OF ADULTS OVER
20 YEARS OF AGE)
- 5 MILLION OF THESE PEOPLE ARE NOT AWARE THAT THEY HAVE THE DISEASE
- PREVALENCE INCREASES WITH AGE (18.4% OF PEOPLE OVER AGE 65)
- DIABETES ACCOUNTS FOR 15% OF NATIONAL HEALTHCARE EXPENDITURES
- INDIVIDUALS WITH DIABETES ARE ABSENT FROM WORK FOUR TIMES AS OFTEN AS
PEOPLE WITHOUT THE DISEASE (88 MILLION DISABILITY DAYS PER YEAR)
- MEDICARE HAS EXPANDED COVERAGE FROM TYPE 1 TO TYPE 2 DIABETES
[MATRIA LOGO] 25
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DIABETES TRENDS
- THE PREVALENCE OF DIABETES ROSE FROM 4.9% IN 1990 TO 6.5% IN 1998 - AN
INCREASE OF 33%
- INCREASES WERE OBSERVED IN BOTH SEXES, ALL AGES, ALL ETHNIC GROUPS, ALL
EDUCATION LEVELS, AND NEARLY ALL STATES
DIABETES CARE 2000
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MANAGED CARE ORGANIZATION
DIABETES MANAGEMENT CONTRACT
(Engagement Model)
<TABLE>
<CAPTION>
3 YEAR CONTRACT
---------------
(Cumulative)
<S> <C>
Base Contract Period Diabetes Cost $207.0 million
--------------
Direct Healthcare Cost Savings $ 14.0 million
Matria Diabetes Management Fees $ 8.9 million
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Net Savings $ 5.1 million
</TABLE>
BASED ON TOTAL MEMBERSHIP OF 500,000 COMMERCIAL MEMBERS
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MANAGED CARE ORGANIZATION
DIABETES MANAGEMENT CONTRACT
(Engagement Model)
<TABLE>
<CAPTION>
REVENUE TO MATRIA 3 YEAR CONTRACT
----------------------- ---------------
(Cumulative)
<S> <C>
Disease Management Fees $ 8.9 million
Fulfillment Revenue $ 2.3 million
-------------
Total Revenue $11.2 million
</TABLE>
BASED ON TOTAL MEMBERSHIP OF 500,000 COMMERCIAL MEMBERS
[MATRIA LOGO] 28
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EMPLOYER
DIABETES MANAGEMENT CONTRACT
(Engagement Model)
<TABLE>
<CAPTION>
3 YEAR CONTRACT
---------------
(Cumulative)
<S> <C>
Base Contract Period Diabetes Cost $81.2 million
-------------
Direct Healthcare Cost Savings $ 5.1 million
Employer Productivity Savings $ 2.5 million
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Total Gross Savings $ 7.6 million
Matria Diabetes Management Fees $ 3.6 million
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Net Savings $ 4.0 million
</TABLE>
BASED ON 77,000 EMPLOYEES
(194,650 EMPLOYEES AND DEPENDENTS)
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EMPLOYER
DIABETES MANAGEMENT CONTRACT
(Engagement Model)
<TABLE>
<CAPTION>
REVENUE TO MATRIA 3 YEAR CONTRACT
----------------------- ---------------
(Cumulative)
<S> <C>
Disease Management Fees $ 3.6 million
Fulfillment Revenue $ 1.1 million
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Total Revenue $ 4.7 million
</TABLE>
BASED ON 77,000 EMPLOYEES
(194,650 EMPLOYEES AND DEPENDENTS)
[MATRIA LOGO] 30
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DISEASE MANAGEMENT
MARKETPLACE
- COMPOSED OF SMALL ENTREPRENEURIAL COMPANIES AND LARGE PHARMACEUTICAL
COMPANIES OFFERING VARYING LEVELS OF SERVICES
- INITIALLY COMPANIES FOCUSED ON A SINGLE DISEASE
- MANY MANAGED CARE ORGANIZATIONS HAVE UNSUCCESSFULLY ATTEMPTED TO BUILD
THIS CAPABILITY INTERNALLY
- MARKET IS SEEKING A SINGLE VENDOR SOLUTION
- $390,000,000 MARKET GROWING AT 30% A YEAR
[MATRIA LOGO] 31
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DISEASE MANAGEMENT LANDSCAPE
[Graphic Intentionally Omitted]
32
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"WE ARE COMMITTED TO IMPROVING THE HEALTH OF OUR MEMBERS THROUGH PROACTIVE
MANAGEMENT OF HEALTH CONDITIONS. WE HAVE EXPERIENCED EXCELLENT RESULTS FROM ALL
OF THE DISEASE MANAGEMENT PROGRAMS PROVIDED IN COLLABORATION WITH MATRIA. WE ARE
CONFIDENT THIS DIABETES DISEASE MANAGEMENT PROGRAM WILL PROVIDE THE SAME
POSITIVE RESULTS."
Paula Sauer
Vice President of Care Management
Medical Mutual of Ohio
[MATRIA LOGO] 33
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"OUR DISEASE MANAGEMENT PARTNER RECEIVED A VENDOR OF THE YEAR AWARD. AGAIN."
"THE ONE-SIZE-FITS-ALL APPROACH TO DIABETES DISEASE MANAGEMENT WAS NO LONGER
WORKING FOR US. COSTS WERE SOARING, AND PARTICIPANT FRUSTRATION WAS AT AN
ALL-TIME HIGH. MATRIA HEALTHCARE, THROUGH ITS DISEASE MANAGEMENT SOLUTIONS (DMS)
DIVISION, DEVELOPED A CUSTOMIZED, COMPREHENSIVE DISEASE MANAGEMENT PROGRAM THAT
HELPED US STABILIZE COSTS AND ACHIEVE A HIGH LEVEL OF EMPLOYEE SATISFACTION."
Ray Brusca
Vice President of Benefits
Black & Decker Corporation
[MATRIA LOGO] 34
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CHRIS COLOIAN
VICE PRESIDENT OF BUSINESS DEVELOPMENT
[MATRIA LOGO] 35
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MATRIA'S PRODUCTS AND SERVICES
OBJECTIVES
OFFER CONDITION-SPECIFIC INTERVENTIONS TO A
DESIGNATED POPULATION THAT FOCUS ON
ACHIEVING THE GREATEST POSITIVE IMPACT
TO HEALTH OUTCOMES, INCLUDING:
- INCREASING FUNCTIONAL HEALTH STATUS AND QUALITY OF LIFE
- INCREASING COMPLIANCE WITH PHYSICIAN'S PLAN OF CARE
- INCREASING COMPLIANCE WITH STANDARDS OF CARE
- REDUCING THE COST OF CARE
- Cost avoidance
- Alternative site care
[MATRIA LOGO] 36
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HOW DOES DISEASE
MANAGEMENT WORK?
- IDENTIFY PARTICIPANT-SPECIFIC RISKS
- INCREASE PATIENT KNOWLEDGE OF THE DISEASE AND BETTER SELF-CARE CAPABILITY
- IMPROVE COMMUNICATION AND COORDINATION OF CARE WITH PROVIDERS, HEALTH
PLAN RESOURCES, AND THE PATIENT
- PROVIDE CASE MANAGEMENT
[MATRIA LOGO] 37
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DISEASE MANAGEMENT RISK
STRATIFICATION AND INTERVENTIONS
CARE LEVELS
BASIC CARE COORDINATION OR MILD PROGRAM
- Compliant with standards of care and no complications
CASE MANAGEMENT
- Newly diagnosed or presence of co-morbid condition(s)
INTENSIVE CASE MANAGEMENT
- Hospitalization or ER utilization
[MATRIA LOGO] 38
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DISEASE MANAGEMENT
CARE GUIDELINES AND PATHWAYS
[CHART]
- BASED ON CLINICAL CARE GUIDELINES AND NATIONAL STANDARDS OF CARE
- INTEGRATION WITH MEMBER ENROLLMENT QUESTIONNAIRE
- INTEGRATION WITH PROVIDER PLAN OF CARE
- INTEGRATION WITH STRATIFICATION MATRIX AND CLINICAL PROTOCOLS
- COUNSELING PROMPTS
- RECOMMENDED INTERVENTIONS AND EDUCATIONAL MATERIALS
[MATRIA LOGO] 39
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TRAX(TM) SYSTEM
- WEB-BASED OPEN ARCHITECTURE
- Secure Intranet
- Can be run via internet for Client, provider or patient interface
(security encryption, HIPAA compliance)
- ORACLE DATABASE
- Powerful database solution used by leading companies, including all of
the top 50 internet companies
- Storage of clinical and administrative data, including diagnostic,
video, and sound
- RULES-BASED ARCHITECTURE
- Triggers interventions and clinical contact based on data inputs
- Allows for customized patient carepaths based on client specifications
and patient profiles
[MATRIA LOGO] 40
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PROGRAMS AT WORK
[CHART]
[MATRIA LOGO]
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TRAX(TM) SUPPORTS DM AND ENTIRE CLINICAL SERVICE OFFERINGS
- CURRENT FUNCTIONALITY
- Claims Analysis
- Past Medical History
- Health Risk Assessments
- Lab, Diagnostic and Monitoring Data
- Initial and Ongoing Risk Stratification
- Case Management
- Intervention and Compliance Tracking
- Education Fulfillment
- Utilization and Outcomes Reporting
[MATRIA LOGO]
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REFERRALS THROUGH CLAIMS DATA ANALYSIS
[PICTURE]
[MATRIA LOGO]
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PAST MEDICAL HISTORY
[PICTURE]
[MATRIA LOGO]
44
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HEALTH RISK ASSESSMENTS
[PICTURE]
[MATRIA LOGO]
45
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LABORATORY DATA COLLECTION
[PICTURE]
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46
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MEDICATION IDENTIFICATION AND TRACKING
[PICTURE]
[MATRIA LOGO]
47
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INTERVENTION AND COMPLIANCE TRACKING
[PICTURE]
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CASE MANAGEMENT CLINICAL SUMMARY
[PICTURE]
[MATRIA LOGO]
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TRAX(TM) FUTURE FUNCTIONALITY
- INCREASED CAREPATH AUTOMATION FOR CASE MANAGEMENT
- BI-DIRECTIONAL COMMUNICATION VIA INTERNET, FAX OR TELEPHONE MESSAGING
- ON-LINE ACCESS TO CLINICAL IMAGING, PRETERM LABOR MONITORING, EKG, ETC.
- SECURE ACCESS FOR HEALTH PLAN CASE MANAGERS AND PROVIDERS
[MATRIA LOGO]
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TRAX(TM) ADVANTAGE IS IN OPERATIONS/ADMINISTRATIVE FUNCTIONS
- CURRENT
- Workflow engine to support scheduling of call center tasks and
project staffing requirements
- Advanced scheduling and contact management for patient
appointments
- Ability to redirect call center activity to other locations to
balance workload
[MATRIA LOGO]
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STAFFING WORKLOAD
[PICTURE]
[MATRIA LOGO]
52
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NOTIFICATIONS AND ALERTS
[PICTURE]
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TRAX(TM) ADVANTAGE IS IN OPERATIONS/ADMINISTRATIVE FUNCTIONS
- FUTURE
- On-line enrollment
- Automated and On-line education
[MATRIA LOGO]
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MATRIA'S TRAX(TM) SYSTEM UNIQUELY POSITIONED TO DELIVER TO HEALTH PLANS
- POPULATION-BASED PROGRAMS
- Flexibility to be either Enrollment or Engagement Model
- RULES-BASED NOTIFICATIONS AND ALERTS
- Conditions
- Risk Stratification Level
- CALL CENTER AND SYSTEMS INVESTMENTS
- Prohibitive for all but the largest health plans
- COMPREHENSIVE ADMINISTRATIVE AND WORK FLOW PROCESSES
- OUTCOMES REPORTING
- Financial and Quality Results
- Compliance with Regulatory Organizations
[MATRIA LOGO]
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DIABETES DISEASE MANAGEMENT PROGRAM RESULTS
- BASED ON INDEPENDENT AUDITS BY MEDSTAT AND BY MERCER OF 1,449
INDIVIDUALS ENROLLED IN THE BASIC PROGRAM
- REDUCTIONS IN HEALTH RELATED INCIDENTS:
- 19% reduction in ER visits
- 16% reduction in hospital visits
- 15% fewer missed days of work
- PARTICIPANT IMPROVEMENTS:
- 85% reported improvement in their overall health
- 53% reported an ability to control their blood glucose levels
100% of the time versus only 10% at the start of the program
- PARTICIPANT SATISFACTION:
- 97% indicated that the program is helpful in controlling their
diabetes
- 97% felt that the educational materials are effective
- 99% are satisfied with the services they receive
[MATRIA LOGO]
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ASTHMA PROGRAM RESULTS
[CHART]
[MATRIA LOGO]
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MATERNALINK(R) RESULTS FOR NATIONAL PLANS
MATERNALINK PROGRAM ACHIEVEMENTS
MATERNALINK NATIONAL
<TABLE>
<CAPTION>
1997 1998 1999 % CHANGE FROM 1997 TO 1999
------- ------- ------- --------------------------
<S> <C> <C> <C> <C>
Deliveries 24291 28944 27000 11.2% increase
Singletons 23792 28352 26454
Multiples
Livebirths 24820 29571 27568
Preterm Birth Rate (<37 wks) 8.30% 8.90% 8.10% 2.4% decline
Preterms >=35 Weeks 66.50% 65.90% 68.60% 3.2% increase
Low Birth Weight Rate 6.60% 6.90% 6.40% 3.0% decline
Very Low Birth Weight Rate 1.10% 1.10% 0.80% 27.3% decline
NICU Admission Rate 8.50% 7.70% 7.40% 12.9% decline
NICU Average LOS 14.8 14.8 13 12.2% decline
NICU DAYS/1000 1249 1144 959 23.2% DECLINE
<CAPTION>
NICU SAVINGS 1998 NICU SAVINGS 1999
<S> <C> <C> <C> <C>
Expected costs $74,400,636 Expected costs $62,832,986
PROJECTED COST/SAVINGS Actual costs $67,398,223 Actual costs $53,040,832
PROJECTED SAVINGS: $ 7,002,413 PROJECTED SAVINGS: $ 9,792,154
</TABLE>
NICU: neonatal intensive care unit
LOS: length of stay
Cost savings assumes $2000 per day charge for hospital and physician charges
related to NICU
[MATRIA LOGO]
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JEFF KOEPSELL
EXECUTIVE VICE PRESIDENT, COO
[MATRIA LOGO]
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FOUNDATION FOR GROWTH
- SALES AND MARKETING EMPHASIS
- Developed consumer marketing strategy for diabetic supplies
- Built marketing teams within business units
- Increased sales training, education, and accountability
- SUCCESSFULLY LAUNCHED TRAX(TM) PLATFORM FOR DISEASE MANAGEMENT
- ENHANCED FOCUS ON PEOPLE ASSETS
- Management Leadership Training (150 Managers)
- BEGAN INFRASTRUCTURE INVESTMENT TO PREPARE HIGH GROWTH AREAS
[MATRIA LOGO]
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MATRIA POSITIONED UNDER A DISEASE MANAGEMENT UMBRELLA
<TABLE>
<CAPTION>
PRODUCT/DISEASE STATE DIABETES WOMEN'S HEALTH RESPIRATORY CARDIOLOGY
--------------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
POPULATION-BASED - Diabetes - MaternaLink(R) - Asthma - CHF and CAD
DISEASE MGMT. Management - COPD (in development
PROGRAMS Solutions for 2nd half 2001)
TELEMEDICINE - Acute Patient - Preterm Management Labor - Cardiac Event
Management - Hypertension Detection
(CDE) - Gestational - Pacemaker
Diabetes follow-up
- Nausea - Telemetery @
Home
FULFILLMENT - Diagnostic - Nutriceuticals - Supplies
Supplies (in develop-
- Pharmaceuticals ment for 2nd
- Lancets half 2001)
</TABLE>
[Matria Logo] 61
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MATRIA'S MULTIPLE SALES OPPORTUNITIES
WITH CUSTOMERS
[ GRAPHIC INTENTIONALLY OMITTED ]
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SALES AND MARKETING CHANNELS
- DISEASE MANAGEMENT
- Direct sales to targeted managed care organizations
and employers
- TELEMEDICINE
- Direct sales to health care professionals
- Direct contracting with health plans and other payors
- FULFILLMENT
- Direct sales to healthcare professionals
- Direct advertising to consumers (mail, TV)
[MATRIA LOGO]
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THE 2001 DIFFERENCE
FOR DIABETES
- IMPLEMENT DIABETES MEDICARE CONSUMER DIRECT MARKETING PROGRAM WITH
TELEVISION AND DIRECT MAIL ADVERTISING
- INCREASE DIABETES PHYSICIAN SALES FORCE BY 80% (FROM 15 TO 27)
- INCLUDE DIABETES SUPPLY FULFILLMENT IN DISEASE MANAGEMENT CONTRACTS
WITH MANAGED CARE AND EMPLOYERS
- CONTINUED IMPROVEMENT OF FACILITIES, SYSTEMS AND OPERATIONS IN
FULFILLMENT CENTERS TO SUPPORT GROWTH
[MATRIA LOGO]
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THE 2001 DIFFERENCE
FOR DIABETES
- INCREASE MANAGED CARE SALES FORCE BY 27% WITH EMPLOYER AND PLAN
SPECIALISTS (15 TO 19)
- EXPAND SCOPE OF MANAGED CARE SALES FORCE TO CONTRACT FOR ALL SERVICES
(WOMEN'S HEALTH, CARDIOLOGY, DIABETES SUPPLIES, AND DISEASE MANAGEMENT)
[MATRIA LOGO]
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THE 2001 DIFFERENCE
FOR DIABETES PRODUCT DEVELOPMENT
- EXPAND FACET TECHNOLOGIES R&D TO SUPPORT NEW DEVELOPMENT CONTRACTS
- EXPAND FACET TECHNOLOGIES MANUFACTURING AND DISTRIBUTION FACILITY TO
SUPPORT INCREASED VOLUMES
- STRONG OPERATING PROFIT AND CASH FLOW
- INDUSTRY LEADER FOR OEM DIABETES LANCETS
- INVESTMENTS BEING MADE IN BROADENING PRODUCT OFFERINGS
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THE 2001 DIFFERENCE
FOR FOREIGN DIABETES
- STRONG GROWTH IN REVENUE OFFSET BY CURRENCY EXCHANGE RATES
- EXPERIENCED MANAGEMENT GROUP IN GERMANY
- OEM OUTLET FOR FACET TECHNOLOGIES PRODUCTS
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THE 2001 DIFFERENCE
FOR WOMEN'S HEALTH
- CONTINUED STRONG OPERATING PROFIT AND CASH FLOW
- EXCELLENT REPUTATION AND FRANCHISE WITH OBSTETRICIANS AND HEALTH PLANS
- EXPERIENCED MANAGEMENT TEAM
- EXCESS OF 95% MARKET SHARE
- CONTINUED PURSUIT OF NEW PRODUCT AND SERVICE OFFERINGS
- Gestational Diabetes
- Nausea and Vomiting in Pregnancy
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THE 2001 DIFFERENCE
FOR WOMEN'S HEALTH
- INCREASE RESOURCES FOR MATERNALINK(R)
- EXPAND GESTATIONAL DIABETES BUSINESS WITH AN ENTRY LEVEL PROGRAM
- REPOSITION "HUAM" PROGRAM FOR MULTIPLE GESTATION AND CURRENT PRETERM
LABOR
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THE 2001 DIFFERENCE
FOR CARDIOLOGY
- STRONG NATIONAL PRESENCE
- EXPERIENCED MANAGEMENT GROUP
- INSTALL ENHANCED SOFTWARE PLATFORM IN SECOND QUARTER OF 2001
- INCREASE FOCUS ON PAYOR CONTRACTS TO IMPROVE REIMBURSEMENT LEVELS
- TELEMETRY@HOME FOR MANAGING THE EARLY DISCHARGE OF CABG PATIENTS AND
DIFFICULT TO DIAGNOSE ARRHYTHMIAS
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THE 2001 DIFFERENCE
FOR RESPIRATORY
- IMPROVED PROFITABILITY WITH NEW NATIONAL JEWISH CONTRACT
- TEN RESPIRATORY DISEASE MANAGEMENT CONTRACTS IN PIPELINE
- EXPANDS OUR DISEASE MANAGEMENT OPPORTUNITIES (ONE-STOP SHOP)
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SUMMARY 2001
- INCREASED FOCUS AND INVESTMENT IN SALES AND MARKETING
- CONSUMER MARKETING
- CONTINUED INVESTMENT IN INFRASTRUCTURE
- IMPROVED INCENTIVE PROGRAM GEARED TOWARD GROWTH IN REVENUE AND PROFIT
- ADD CONGESTIVE HEART FAILURE (CHF) AND CORONARY ARTERY DISEASE (CAD)
PROGRAMS TO DISEASE MANAGEMENT OFFERING
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SUMMARY 2001
- FOCUS ON ONE-STOP SHOP DISEASE MANAGEMENT
- LEVERAGE PREVIOUS SUCCESSES WITH LARGE HEALTH PLANS
- FOCUS ON CORPORATE AMERICA
- CAPITALIZE ON EXPERIENCED SALES AND MANAGEMENT STAFF
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GEORGE DUNAWAY
VICE PRESIDENT OF FINANCE, CFO
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PRO FORMA OPERATING RESULTS
($ millions)
<TABLE>
<CAPTION>
9 MOS. 9 MOS.
1999 2000 %CHANGE
------ ------ -------
<S> <C> <C> <C>
REVENUE $176.4 $182.0 3.2%
COGS 89.0 92.1 3.5%
GROSS PROFIT 87.5 89.9 2.8%
Gross Margin 49.6% 49.4%
OPERATING EXPENSES 63.0 61.7 -2.1%
OPERATING EARNINGS 24.5 28.3 15.4%
Operating Margin 13.9% 15.5%
</TABLE>
NOTE: Pro Forma Results exclude
NRMC and one time items
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PRO FORMA FINANCIAL RESULTS
($ millions)
<TABLE>
<CAPTION>
9 MOS. 9 MOS.
1999 2000 % CHANGE
------ ------ --------
<S> <C> <C> <C>
OPERATING EARNINGS $ 24.5 $ 28.3 15.4%
AMORTIZATION OF INTANGIBLES(1) (7.8) (8.1) 3.6%
TAXES(2) (4.4) (5.6) 27.5%
INTEREST EXPENSE, NET (5.7) (6.1) 8.1%
------ ------
NET EARNINGS 6.6 8.4 27.5%
PREFERRED STOCK DIVIDEND (2.5) (2.7) 6.8%
------ ------
NET EARNINGS AVAILABLE TO
COMMON SHAREHOLDERS 4.1 5.7 40.5%
FULLY DILUTED EPS $ 0.43 $ 0.59 38.0%
</TABLE>
1 Non-cash expense
2 Primarily non-cash due to tax loss carry forward
NOTE: Pro Forma Results exclude NRMC
and one time items
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PRO FORMA EBITDA
($ millions)
<TABLE>
<CAPTION>
9 MOS. 9 MOS.
1999 2000 %CHANGE
------ ------ -------
<S> <C> <C> <C>
NET EARNINGS $ 6.6 $ 8.4 27.5%
INTEREST 5.7 6.1 8.1%
TAXES 4.4 5.6 27.5%
DEPRECIATION 4.8 4.7 -2.5%
AMORTIZATION 7.8 8.1 3.6%
EBITDA $ 29.3 $ 33.0 12.5%
EBITDA/REVENUE 16.6% 18.1% 9.0%
EBITDA/SHARE $ 2.90 $ 3.26 12.3%
</TABLE>
NOTE: Pro Forma Results exclude NRMC
and one time items
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DEBT REPAYMENT
($ millions)
[CHART]
<TABLE>
Q199 Q299 Q399 Q499 Q100 Q200 Q300
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
DEBT/LTM EBITDA 5.9 5.2 4.1 3.0 2.1 1.8 1.7
DEBT/COMMON EQUITY 2.0 1.9 1.5 1.0 0.9 0.8 0.8
</TABLE>
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SHARE REPURCHASE UPDATE
AS OF 12/12/2000
<TABLE>
<S> <C>
TOTAL SHARES PURCHASED (POST SPLIT): 460,025
TOTAL PURCHASE PRICE: $ 4,732,000
AVERAGE PRICE: $ 10.29
CURRENT SHARES OUTSTANDING (BASIC): 8,800,000
</TABLE>
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2001 OUTLOOK
- REVENUE GROWTH OF 10%
- First half growth < 10% vs. prior year
- Second half growth > 10% vs. prior year
- SALES COSTS INCREASING BY $4 MILLION
- Advertising (amortized over 2 years)
- Expansion of Sales Force
- G&A EXPENSES INCREASING BY $3 MILLION
- Technology investments
- Facility expansion
- R&D EXPENSES INCREASING BY $1 MILLION
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2001 OUTLOOK
- OPERATING MARGINS MAY DECLINE SLIGHTLY IN FIRST HALF, BUT FINISH 2001
AT CURRENT LEVELS
- EPS GROWTH OF 25% FOR THE YEAR
- EBITDA/SHARE GROWTH OF 10-15%
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VALUATION METRICS
<TABLE>
<CAPTION>
MATR AMHC IMPH
---- ---- ----
<S> <C> <C> <C>
MARKET CAP/LTM REVENUE 0.4 1.4 15.7
MARKET CAP/LTM EARNINGS 10.9 490 74.5
MARKET CAP/LTM EBITDA 2.1 17.1 28.1
ENTERPRISE VALUE/LTM REVENUE 0.9 1.2 15.2
ENTERPRISE VALUE/LTM EARNINGS 25.2 443 72.2
ENTERPRISE VALUE/LTM EBITDA 4.9 15.5 27.2
</TABLE>
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WHY MATRIA?
- DIVERSIFIED MARKET SEGMENTS AND PAYOR MIX
- STRONG PROFITABILITY AND CASH FLOW
- EXPERIENCED MANAGEMENT
- TECHNOLOGY LEADERSHIP
- CLINICAL EXCELLENCE
- FOCUSED ON GROWTH
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CALL CENTER TOURS
- MATERNALINK(R)
- Overview of a typical Call Center Infrastructure
- Fulfillment
- Outcomes Reporting Process
- DIABETES
- Population-based Enrollment
- Clinical Assessment
- Case Management
- CARDIOLOGY
- Telemedicine
- Real-time Diagnostic Services
- Internet Data Transfer
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