; Client Profile Example
Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out
Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

Client Profile Example

VIEWS: 33 PAGES: 14

  • pg 1
									                                         EHOB

Completed by: Joel Ericson
Date Completed: 5/18/09

250 N. Belmont Ave.                                     Phone: (317) 972-4600
Indianapolis, IN 46222                                     Or (800) 899-5553
                                                                      Fax: N/A
                                                               www.ehob.com

Company Overview

   A. General Overview:
EHOB (Elevate Head of Bed)

Company Profile:

WAFFLE® Brand Products have been used effectively for pressure ulcer (bed sores)
prevention and healing therapy for more than a decade. EHOB, Inc. was founded in
1985 with a special interest in soft tissue research, education and product development.
Today, a leading company in pressure ulcer management, EHOB continues to be an
innovator of affordable products effective in the prevention and treatment of pressure
ulcers — simple products that work! The acquisition of the DermaCare® brand foam line
in 1998 extended our continuum of care to include products for simple comfort and
prevention for minimal risk patients. EHOB also distributes a non-adhesive ostomy
product line.

EHOB provides acute care and long term care facilities, as well as home care, the most
clinically based, cost effective positioning and support surface solutions available today.
We offer not only mattress replacements and overlays, but also seating cushions, day
chair pads, lower limb protectors, positioning aids and more... products that are
caregiver friendly, easy to clean, store and transport.

Our product selection philosophy focuses on matching the product to the patient and
educating the caregiver for economical and effective patient care. From early
intervention through treatment of Stage IV pressure ulcers, trust WAFFLE® brand for
safe, easy to use products that save time and money.

EHOB, Inc. manufacturing, research, product development, contract sealing and
corporate operations are located in Indianapolis, Indiana.


   B. Past Butler Relationship: Requested resumes for internship positions between
      1998 and 2002, but Maximizer does not include if they were hired. Contacts
      were Abby Rogers and Ken Turro
4/8/2011                              EHOB                                               2


   C. History: Incorporated in 1986

Source: Company Website

II. Business Description

   A. Ownership Type: Private

   B. Industry: NAICS: 339113 - Surgical Appliance and Supplies Manufacturing
                SIC: 3842 - Surgical Appliances And Supplies

   C. Market: Hospitals

   D. Current Products: Waffle brand products for the prevention and treatment of
   pressure ulcers.

   E. Past Products:

Source: Ehob Inc. – Business & Company Resource Center
http://galenet.galegroup.com/servlet/BCRC?vrsn=unknown&locID=butleru&srchtp=glbc
&cc=1&c=1&mode=c&ste=60&tbst=tsCM&tab=1&ccmp=Ehob+Inc.&mst=EHOB&n=25&
bConts=899&ses=1

III. Financial Information
     (Always provide date & source of info, as well as whether it is “estimated”)

   A. Current

    Sales: 8.4 million (estimated from Hoovers), founder and CEO of company has
stated that sales are now more than 20 million (Indy Star article)

   Employees: 120 (Indy Star)

    B. Historical Financial Snapshot: No financial information available. Sales have
increased significantly in recent years due to Medicare and private insurers cutoff of
reimbursements for treatment of preventable bed sores.

   C. International Experience: Several sources reference global sales and marketing
but did not provide much detail.


Source: “EHOB Inc.” - Hoovers
http://premium.hoovers.com/subscribe/basic/factsheet.xhtml?ID=rhfjfftht

―Hospital demand drives EHOB's Indy expansion‖
http://www.ehob.com/company/news.html?content_id=128
4/8/2011                             EHOB                                       3




IV. Key Employees

   A. Individual Company/Site:
   - Dr. James Spahn – Founder and Chief Executive (from company website)
   - Scott Rogers – President
   - Dave Wietfeldt - Chief Financial Officer
   - Brian Conway - Vice President, Sales
   - Kelly Lavin - Director of Human Resources (company website lists Tina Harpenau
       as the HR ―leader‖)
   - Steve Vollmer – Director
   - Christie Sprinkle – Director
   - Nancy Pugh - Marketing Manager
   - Jerry Mason – Manager
   - NOTE: not sure how up to date this list is

   B. Parent Group: None found

Source: Source: “EHOB Inc.” - Hoovers
http://premium.hoovers.com/subscribe/basic/factsheet.xhtml?ID=rhfjfftht


V. Top Competitors (Reference USA –IMCPL or Irwin company lib guide-create a list
of competitors)

   A. Direct Competition (from Indy Star article)
      1. Kinetic Concepts (Texas)
      2. Hill-Rom (Batesville)

    B. Broader Scale Competitors (From Reference USA)
          1. Ace Mobility
          2. Associates in Digestive
          3. Boston Scientific Corp
          4. Caradyne
          5. Circle Medical Products
          6. Clarian Health
          7. Flotec
          8. Integrated Instruments Svc
          9. Medical Systems Corp-Indiana
          10. Powerway Inc
Source: ―Hospital demand drives EHOB's Indy expansion‖
http://www.ehob.com/company/news.html?content_id=128

―Ehob Inc.‖ ReferenceUSA (through IMCPL website)
4/8/2011                             EHOB                                             4




VI. Parent Company: None found



VII. Press Coverage

        A. May 26, 2009
           ―TechPoint Announces Mira Award Winners‖
           InsideIndianaBusiness.com
           EHOB won in the Health & Life Sciences Company Category

        B. April 12, 2009
           ―Invention born of necessity precipitated career change‖
           Indianapolis Star
           Written by Dr. James Spahn, details how he transitioned from medicine to
           business. Provides background information.

        C. February 26, 2009
           ―Hospital demand drives EHOB's Indy expansion‖
           Indianapolis Star
            This article details the recent attention given to the prevention of bed sores
           in hospitals because Medicare and private insurers have restricted
           reimbursements for costs related to hospital-acquired conditions. This has
           increased Ehob’s sales significantly, requiring the addition of a third
           production shift.

        D. June 27, 2005
           ―Largest Indianapolis-Area Medical Device and Product Developers.‖
           Indianapolis Business Journal
           Presents a ranking of companies in the medical instruments and supplies
           industry in Indianapolis, Indiana according to number of employees. Roche
           Diagnostics; King Systems Corp.; Guidant Corp.; Disetronic Medical
           Systems Inc.; Helmer Inc.; EHOB Inc.; Suros Surgical Systems Inc.; Piezo
           Technologies; Polymer Technology Systems Inc.

VIII. Industry Analysis

Current Industry Status:

The medical supplies and devices manufacturing industry includes about 12,000
companies with combined annual revenue of $78 billion. Large manufacturers include
Johnson & Johnson, Baxter, Medtronic, and Boston Scientific. The industry is slightly
concentrated: the 50 largest companies hold close to 60 percent of the market.
Medical supply and device manufacturers produce instruments, apparatus, and supplies
4/8/2011                              EHOB                                            5


used in the medical field. The industry doesn't include the manufacture of x-ray or
electromedical equipment and devices, such as ultrasound equipment, pacemakers,
and electrocardiographs.

COMPETITIVE LANDSCAPE
Demand is driven by population demographics and advances in medical knowledge
and technology. The profitability of individual companies depends on the ability to
develop superior products. Large companies have economies of scale in manufacturing
and R&D. Small companies can compete successfully by specializing in a particular
market segment, or through technical innovation. Annual revenue per employee is
about $250,000.

PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include surgical and medical instruments such as syringes,
hypodermic needles, and catheters (nearly 40 percent of industry revenue), and
surgical appliances and supplies such as sutures, surgical dressings, and orthopedic
devices (also about 40 percent). Other sources of revenue include lab equipment and
furniture (centrifuges, scales, operating tables, hospital beds); ophthalmic goods
(prescription glasses, contact lenses); and dental equipment and supplies.
For many technically advanced products, manufacturing is labor-intensive. Many small
manufacturers outsource manufacturing to facilities operated by contract manufacturers.
Manufacturers of low-tech product like latex gloves, tape, syringes, and gauze are most
concerned with maintaining a highly efficient, low-cost manufacturing environment.
Companies that specialize in diagnostic and therapeutic devices generally emphasize
technological innovation and precision.

Major inputs include stainless steel, silicone or latex rubber, plastic, aluminum,
polymers, and natural fabrics. Electricity and natural gas typically provide the power for
manufacturing.

The industry is technologically advanced, and new product development is a major
activity for most manufacturers. Patents are valuable and patent disputes frequent.
Large companies often buy small companies that have developed promising new
technologies.

SALES & MARKETING
Typical customers are national medical supply distributors like Cardinal Health, Owens
& Minor, and Henry Schein. Large companies may distribute products directly to
hospital chains or other major customers.

Major types of marketing include advertising on TV, and in magazines and
newspapers. Manufacturers market products through a combination of direct sales and
sales representatives that target hospitals, insurers, and individual doctors. Companies
with products tied directly to a particular medical condition often sponsor medical
conferences. The general adoption of a specialized technique - for example, the use of
metal stents to open clogged arteries - can dramatically increase sales. The actual cost
4/8/2011                              EHOB                                           6


of manufacturing a medical device is often small relative to the marketing costs.
Because of the large expense involved in such testing and documentation, small
manufacturers often form marketing alliances with larger companies.

Manufacturer sales tend to be through traditional channels, though some medical
supply resellers specialize exclusively in online sales. The Internet plays an important
role in marketing product uses, features, and benefits to distributors, hospitals, and
physicians. The FDA regulates online sales and marketing of medical devices by third
parties. Companies may try to sell devices like contact lenses without a prescription, or
may sell items like magnets and patches that purport to cure diseases, aches, and
pains.

Prices vary depending on the type of product. A box of 1,000 syringes may cost around
$8 to a wholesaler, while an artificial hip may cost $10,000 or more.

FINANCE & REGULATION
Receivables can be high - typically between 30 and 60 days sales - because of
manufacturer dependence on large buyers. Small manufacturers funded by venture
capital may have large cash balances from periodic rounds of fundraising. The costs
and availability of liability insurance are a major concern for companies, especially
because manufacturers and distributors are routinely named in lawsuits even when their
liability is questionable. Product defects can have serious consequences. Litigation
over patents, licenses, and intellectual property rights are also common in an industry
with rapidly evolving technology.

Gross margins are high, typically ranging from 40 and 60 percent. For specialized
companies, R&D spending is often as much as 20 to 30 percent of revenue.

The industry is heavily regulated by the FDA. The complexity and cost of following
regulations depend on the category a medical device falls into: I, II, or III. Class III
devices often require expensive clinical trials and Pre-Market Approval (PMA) before
they can be marketed for use. Class I and II devices may need only a 510(k) pre-market
notification. In Europe and other countries, agencies comparable to the FDA enforce
similar regulations. Products marketed in Europe now need a CE mark of approval
under the European Union Medical Device Directive; products sold internationally often
need an ISO 9000 certification of quality.

REGIONAL & INTERNATIONAL ISSUES
Leading states for manufacturing medical devices include California, Indiana, and
Florida, which account for more than 30 percent of total US industry revenue. The US
imports about the same amount of medical devices as it exports. Imports of medical
devices account for 23 percent of the total US industry, while US exports represent 21
percent of total US production. Over 40 percent of imports are shipped from Mexico,
Ireland, and China. The largest export markets for medical supplies and devices are
Japan, the Netherlands, and Canada.
4/8/2011                             EHOB                                           7


HUMAN RESOURCES
Wages for workers in medical products manufacturing are 10 percent lower than the
national average. Pay for surgical and medical instruments manufacture is even lower
at more than 15 percent below the national average. Because of relatively small
production runs, much of the work is labor-intensive, prompting manufacturers to move
production to lower-cost countries like Ireland, Mexico, and China. Most workers in
medical products manufacture require only average skills.

The industry has a good safety record: injury rates are more than 40 lower than the
national average. Common injuries include strains, sprains, cuts, and wrist pain from
working with machinery, moving containers, and overexertion.

Industry Employment Growth
Bureau of Labor Statistics




Average Hourly Earnings & Annual Wage Increase
Bureau of Labor Statistics




INDUSTRY INDICATORS
US consumer prices for medical care commodities, which may impact supply and
device makers' profitability, rose 2.4 percent in April 2009 compared to the same period
in 2008. Total US retail sales, a potential measure of consumer spending on medical
supplies and devices, decreased 10 percent in the first four months of 2009 compared
to the same period in 2008.
4/8/2011                              EHOB                                             8


QUARTERLY INDUSTRY UPDATE
Medical Device Industry Outlook: Mixed - Though the healthcare sector overall tends
to outperform many other sectors during economic recessions, the makers of medical
supplies and devices still face some challenges in 2009. As unemployment rises, so
does the number of uninsured, which can reduce demand for medical services. The
credit crisis also affects hospitals' ability to upgrade equipment. On the other hand,
aging of the US population is expected to buoy demand for medical supplies for the next
20 years.

Device Lawsuit Protections May End - A 2008 US Supreme Court ruling prevented
patients from suing makers of medical devices, if those devices were approved by the
FDA. Some members of Congress are considering legislation that would negate the
Supreme Court ruling. Patient advocates and some lawmakers claim the ruling leaves
patients vulnerable as the FDA is not adequately staffed to ensure device safety. The
medical device trade group, Advanced Medical Technology Association, claims that a
reversal of the Supreme Court decision could inhibit future device innovation.

Nanotechnology Fights Device-Related Infections - Medical device maker AcryMed,
a subsidiary of I-Flow Corp., has developed a method for coating medical devices with
nanoparticles of silver that makes them less likely to cause infection. The infection-
fighting properties of silver have been known since ancient times. Silver-coated
catheters tended to reduce bacterial counts by 99.9 percent, according to AcryMed. The
silver coating technology can be applied to many materials including glass, stainless
steel, plastics, and cotton. AcryMed claims several other device makers have expressed
interest in the technology.




Business Challenges
CRITICAL ISSUES
Dependence on Regulators - All new medical devices require approval from the FDA
to be marketed, and from Medicare and other insurers that ultimately pay for use.
Although FDA and Medicare have streamlined procedures, review for new devices can
be lengthy and approval uncertain. Devices that get FDA approval may be unsuccessful
if insurers judge them to be too expensive. The costs associated with such regulation
can be high, particularly with higher-risk, Class III devices.

Healthcare Cost-Containment - Because of rapidly increasing healthcare costs,
private insurers and government programs like Medicare have moved to limit payments
for many medical treatments that require medical supplies or devices. Doctors and
hospitals, in turn, have a greater incentive to resist price increases. Wholesale prices for
surgical instruments, for example, increased only 5 percent in the last 10 years.

OTHER BUSINESS CHALLENGES
Product Obsolescence Risks - Medical device manufacturing is highly specialized,
and rapid industry innovation greatly increases the risk of technological obsolescence.
4/8/2011                               EHOB                                             9


Most medical device companies are small and specialize in just one type of device,
targeted toward one particular market, so they can't spread the risk of obsolescence
across multiple products and markets.

Product Liability - Because their products are devices that interact with humans,
companies in the industry have increased risk of being held liable for injury. The cost
and availability of liability insurance are a major concern for most companies. The
greater use of healthcare devices and equipment also has resulted in more device-
related malpractice cases.

Dependence on Large Customers - Buying groups act as distributors for about half
the nation's nonprofit hospitals. Often, smaller medical device and supply companies
can be shut out of sales to hospitals when a larger competitor has secured exclusive
contracts with the purchasing group. Most large medical manufacturers sell heavily to
purchasing groups.

Product Cost Justification - Third-party payers, such as Medicare, Medicaid, MCOs,
and commercial insurers, are becoming more involved in determining the types of
diagnostics and treatments eligible for cost reimbursement to doctors, hospitals, etc. In
many cases, these third-party payers pay a flat fee, which encourages the provider to
use the lowest cost generic treatment. Device manufacturers that can document a
favorable cost-performance ratio for their products can benefit, but clinical trials to prove
cost-effectiveness are expensive and time-consuming.

Competition from Alternative Products - Device manufacturers are concerned that
advances in biotechnology may make certain devices obsolete. Biotech treatments like
bone, organ, and tissue replacements may ultimately be more restorative than devices
implanted into patients. Even preventative and pay-for-performance healthcare, with its
proactive focus to reduce the risk of disease and debilitating conditions, may also be
considered a competitive force.

Trends & Opportunities

BUSINESS TRENDS
Specialization - Medical device manufacturers are increasingly specializing in one area
of medicine and sometimes in just one type of treatment. EPMedSystems, for example,
makes only devices that treat atrial fibrillation. The high degree of specialization in a
field of rapid innovation allows small companies to compete successfully, but also
greatly increases the risk of technological obsolescence for any individual company.

Consolidation - Increased consolidation of manufacturers and distributors has been
driven partly by customer consolidation: hospitals, doctors groups, clinics, purchasing
groups, and MCOs. To buy in bulk at lower costs, customers form large buying groups,
and sellers are more likely to get contracts with these groups if they can offer a wide
product assortment. Other factors driving consolidation are shorter product life cycles
and the high cost of new technology development.
4/8/2011                              EHOB                                           10



Outsourcing Distribution - Strong sales and marketing skills are often necessary to
convince healthcare providers to accept new technologies. Many medical product
manufacturers outsource sales and marketing to networks of specialty distributors, who
typically are small and local, selling a dozen manufacturers' lines.

INDUSTRY OPPORTUNITIES
Medical Technology Unaffected by Economic Climate - While many industries are
affected by economic downturns, the growth of medical technology remains largely
undeterred due to its indispensable nature. Implanted defibrillators, female diagnostics,
and cardiac monitoring equipment are rapidly growing market segments.

Advances in Wireless Technology - Manufacturers of implantable medical devices
and diagnostic equipment are rapidly adopting wireless capabilities into their designs.
With wireless technology, doctors and patients have better access to real-time data
from medical devices, such as pacemakers and defibrillators. For example, wireless
technology in hearing aids allows patients and doctors to remotely adjust volume and
balance.

Favorable Demographic Changes - Changing demographics of the US population
favor the medical device industry, quite aside from the pace of technological innovation.
From 2000 to 2020, the number of Americans over 65 will grow more than 50 percent.

Reprocessing Medical Devices - The US healthcare system discards $6 billion worth
of obsolete medical supplies and devices each year. Due to increasing concern over the
volume of medical waste, some medical devices are now recycled or reprocessed for
resale. New FDA rules stipulate that all hospitals and third-party medical device
reprocessing facilities must comply with the same FDA regulations as original
equipment manufacturers of medical devices.

Executive Insight
CHIEF EXECUTIVE OFFICER – CEO
Thriving in Complex Regulatory Environment
Manufacturers of medical supplies and devices face a complex and changing regulatory
environment affecting the development, manufacture, and sale of products. The FDA
continues to evolve regulations governing approval of new products; standards for good
manufacturing practices (GMP); and standards for use of medical supplies and devices.
The Centers for Medicare and Medicaid Services (CMS) has proposed competitive
bidding for medical supplies and devices and changes to hospital reimbursement rates
that may discourage purchases of innovative medical technologies. Executives must
stay abreast of regulatory changes and develop effective responses to maintain growth
and profitability.

Managing Alliances and Acquisitions
The high cost of development and regulatory approval for new medical devices, along
4/8/2011                              EHOB                                            11


with pressure to reduce healthcare costs, is driving consolidation among manufacturers.
Small manufacturers are teaming with larger companies through both marketing and
sales alliances and company mergers. These combinations provide additional
resources and efficiencies in managing the regulatory approval process and justifying
the cost-effectiveness of new products with third-party payers.

CHIEF FINANCIAL OFFICER – CFO
Controlling Insurance Costs
Manufacturers of medical supplies and devices are often named in patient suits against
hospitals and physicians. As a result, the cost and availability of product liability
insurance is a key concern. Rising rates and increased exclusions in coverage by
insurers are causing many manufacturers to adopt a self-insurance strategy for product
liability.

Financing Acquisition Opportunities
As consolidation in the medical supplies and device industry continues, manufacturers
must have access to the financial resources required to take advantage of potential
acquisitions. Companies must choose the proper mix of self-generated cash, new
equity, and debt financing to fulfill capital needs and meet expectations of investors and
lenders. Boston Scientific used a combination of cash and stock in its successful bid to
buy Guidant.

CHIEF INFORMATION OFFICER – CIO
Automating Product Development
The high cost of new product development and shorter product life cycles are causing
manufacturers to seek ways to streamline the development process. Many are investing
in information technology to replace paper-based processes for product design and
testing, continual engineering changes, and documentation for regulatory submissions.
Product life cycle management software enhances collaboration among development
and manufacturing teams and automates generation of compliance documents for
regulatory approval and FDA audits.

Integrating Supply Chain Systems
Manufacturers are lowering costs and reducing lead times by implementing software
systems that integrate the entire supply chain from purchasing to manufacturing to
distribution. Manufacturers of medical supplies are also being required to integrate with
the supply chain management systems of distributors or hospitals to deliver needed
supplies the same-day. Hospitals are seeking to minimize supply inventory levels as
part of cost-containment programs.

HUMAN RESOURCES – HR
Hiring and Retaining Research Specialists
Smaller manufacturers of medical devices and supplies tend to focus on a particular
medical area and must recruit and retain research specialists in that area. Competition
can be intense for researchers in medical areas with strong growth prospects, such as
reproduction diagnostics or cardiac monitoring. Companies often rely on consultants
4/8/2011                                       EHOB                                                        12


who specialize in medical recruiting to source experienced researchers from
competitors and academic environments.

Merging Cultures and Systems
As companies grow through acquisitions, they’re often challenged by merging diverse
corporate cultures and incompatible HR systems. Some choose to retain acquired
companies as separate subsidiaries to minimize integration issues, a strategy that also
limits potential synergies and works only where each company’s medical devices
address separate markets. Successful mergers are usually the result of having detailed
integration plans upfront, assigning dedicated managers to the merger process, and
actively communicating plans and expectations to all employees.

VP SALES/MARKETING – SALES
Building Physician Relationships
Physicians are not only key customers for medical supplies and devices, but also serve
as consultants for the design of new products and development of marketing programs.
Companies rely on them for feedback on how products are used, and they’re important
in clinical trials and regulatory submissions. Manufacturers must build and maintain
strong relationships with physicians who specialize in the medical areas targeted by
their new products.

Negotiating with Buying Groups
To reduce the cost of medical supplies, half the nonprofit hospitals in the US now buy
through buying groups. These buying groups may offer exclusive contracts to suppliers
in exchange for price discounts. Sales teams for manufacturers of medical supplies and
devices must successfully negotiate contract terms with buying groups to retain access
to the hospital market while also meeting profit goals.

Industry Forecast
The output of US medical instruments and supplies is forecast to grow at an annual compounded rate of 4 percent
between 2008 and 2013. Data Sourced: December 2008

Medical Instruments, Supplies Growth Troughs
4/8/2011                                        EHOB                                   13



Source: Medical Supplies and Devices – First Research

IX. Locations

   A. Street Address:                250 N. Belmont Ave.
                                     Indianapolis, IN 46222

   B.    Phone:                      317-972-4600, 800-899-5553
   C.    Fax:                        None given
   D.    Email:                      corporate@ehob.com
   E.    Website:                    www.ehob.com

   F. Plant/Facility Size: 60,000 Square ft.




G. Directions:
Total Time: 18 minutesTotal Distance: 7.73 miles
A: Butler University: 4600 Sunset Ave # 112, Indianapolis, IN 46208, (317) 940-8000
        1: Start out going EAST on W 46TH ST toward ROOKWOOD AVE.                     0.6 mi
              2:        Turn RIGHT onto N MERIDIAN ST.                                2.0 mi

                  3:      Turn RIGHT onto W 30TH ST.                                  0.6 mi

             4:        Merge onto I-65 S via the ramp on the LEFT.                    1.6 mi
             Merge onto N DR MARTIN LUTHER KING JR ST via EXIT 114 toward                0.9
        5:
             WEST STREET.                                                                mi
         6: N DR MARTIN LUTHER KING JR ST becomes N WEST ST.                          0.1 mi

              7:        Turn RIGHT onto W MICHIGAN ST.                                1.6 mi
4/8/2011                                 EHOB                           14


           8:     Turn LEFT onto N BELMONT AVE.                        0.3 mi
         9:     End at 250 N Belmont Ave Indianapolis, IN 46222-4265
B: 250 N Belmont Ave, Indianapolis, IN 46222-4265

Total Time: 18 minutesTotal Distance: 7.73 miles

Source: Company Website

								
To top