About Emergent Group Inc.

Emergent Group Inc., through its PRI Medical Technologies, Inc. subsidiary, is a leading provider of mobile laser and surgical equipment. Based on Emergent Group’s three-month September, 2008 financial results, its annualized revenues (as adjusted for PhotoMedex Surgical Services acquisition on August 8, 2008) for fiscal 2008 are estimated at approximately $28 million. This compares to $17.7 million for fiscal 2007.

Growth Strategies
Positive Healthcare Trends
Medical Technology, Accessories and Services
Positive Treatment Patterns
Strong Industry Growth Projections
A Changing Marketplace
Learn more about Emergent Group

Growth Strategies

Emergent Group has developed – and is executing -- a series of strategies which it believes will contribute to future growth:

Expand its equipment rentals and the accompanying sales of highly profitable disposable medical items
Capitalize on the increasing number and scope of medical procedures and new limits on physician equipment ownership
Offer new, cost-effective medical technologies & technical services to provide hospitals and physicians with the most advanced equipment
Focus on hospitals’ shift to equipment rentals
Pursue acquisitions to expand the company’s sales and geographic footprint

Consistent with this last strategy, Emergent Group in August 2008 purchased the Surgical Services Division of PhotoMedex, Inc., which provided mobile laser services in 11 Northeast, Mid-Atlantic and Southeast states, serving 18 individual local markets. The acquisition expanded geographic coverage for Emergent Group’s PRI subsidiary to its current 16 states. The company has since been integrating the acquisition and is making its complete line of products and services available to its new customers.

Positive Healthcare Trends

Emergent Group operates in a positive healthcare environment marked by an aging population, increasing national health expenditures, a growing need for certain medical procedures requiring its products and services, strong projections for industry growth and a marketplace that is changing in the company’s favor.

The U. S. Centers for Medicare & Medicaid Services (CMS) estimates that the population age 65 and over – a prime target for Emergent Group’s products and services – will grow almost 32%, from 36.4 million people in 2005 to 47.9 million by 2017. During the same period, CMS estimates that national health expenditures will more than double.

Emergent Group’s current array of products and services fit well with these trends. The company, through its PRI subsidiary, offers advanced equipment for prostate photovaporization for treatment of benign prostatic hyperplasia (BPH), cryosurgery for treatment of prostate cancer, TMR heart surgery, lithotripsy, arthroscopy and other procedures.

Medical Technology, Accessories and Services

State of the art medical technology, accessories and services provided by PRI include:

Surgical lasers (Novadaq, GreenLight, Comed, Lumenis, Biolitech, Prostalund, Coherent and SLT brands)
Surgical equipment (cryotherapy/Endocare and ESWL/Storz Medical)
Cosmetic lasers and equipment (Medlite, Palomar, Candela, Coherent, KTP, Sciton)
Disposable fibers & accessories sold per procedure
Technicians serve as Laser Safety Officer
Supply responsibility
PRI clinical educators
Laser safety documentation
Laser safety policies & procedures

PRI’s seasoned sales team partners with manufacturer representatives to broaden the distribution of important medical devices to hospitals, outpatient surgery centers and physicians’ offices. As PRI increases its equipment rental volume, it is also able to join with manufacturers in raising the sales of accompanying disposable products required for various medical procedures.

Positive Treatment Patterns

Emergent Group is also seeing positive trends in the treatment of health conditions and illnesses using equipment rented by the company’s PRI subsidiary. There are currently estimated to be about 1.8 billion worldwide sufferers of BPH, urinary incontinence, pelvic organ prolapse (a weakening of pelvic muscles than can affect the bladder and bowel) and menorrhagia (excessive duration and flow during menstruation). Projections indicate that Americans in 2008 experienced:

More than 186,000 new cases of prostate cancer
An additional 77,000 new cases of urinary bladder cancer
Over 33,000 new cases of cancers affecting the kidney and renal pelvis
Approximately half a million new cases of stable angina

The projections above are drawn from competitive reports and from research conducted by the American Cancer Association and the American Heart Association. These dovetail well with PRI’s current array of services.

Strong Industry Growth Projections

Projections for industry growth are particularly strong. The compounded annual growth rate for the global/regional medical laser market is anticipated to be between 9% and 13% over the next several years. In 2007 alone, U.S. physicians completed over 16 million procedures involving directed energy-based surgical systems. Direct energy-based surgical systems industry sales are expected to increase from $3.1 billion in 2007 to $4.1 billion by 2011.

These industry projections are based on figures in two reports: “Medical Laser Systems: A Global Strategic Business Report,” Global Industry Analysts, Inc., 2008; and “U.S. Markets for Directed Energy-Based Surgical Systems,” Medtech Insight, May 2008.

A Changing Marketplace

Several marketplace developments should give Emergent Group’s PRI subsidiary a distinct competitive advantage and opportunities for future growth.

In October 2009, a change in rules disseminated by the U.S. Centers for Medicare & Medicaid Services may cause many physicians to sell or restructure their owned medical equipment businesses.

At the same time, hospitals have been placing a much greater emphasis on equipment rentals to:

Control their capital expenditures as they face a difficult economic environment
Limit the risk that they will be saddled with outdated technology
More effectively address the equipment preferences of their physicians

Learn more about Emergent Group

To learn more about Emergent Group, please visit the other pages on this site and review our investor presentation.