Tel-Instrument Electronics Corp · OTC:TIKK
Tel-Instrument Electronics — Investor Presentation (November 2015)
23 slides from Tel-Instrument Electronics's investor presentation, Nov 24, 2015
Slide 1: Investor Presentation
NOVEMBER 24, 2015 INVESTOR PRESENTATION
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 2 This presentation includes statements that are not historical in nature and may be characterized as “forward-looking statements,” including those related to future financial and operating results, statements concerning the Company’s outlook, pricing trends, and forces within
Slide 3: Company Overview
COMPANY OVERVIEW 3 o Leading designer and manufacturer of avionics test/measurement solutions for the global airlines, general aviation and government and military aerospace markets o Company focus has been on military markets (90% of business); dominant position in Identification Friend and Foe (“I
Slide 4: Investment Considerations
INVESTMENT CONSIDERATIONS 4 • Diverse base of customers with long-term relationships Attractive Business • New aviation technology and mandated enhancements will facilitate growth Model • Niche market with traditional 50% gross margins • Low capital equipment requirements • Wide product line for mil
Slide 5: Sweeping Industry Changes Driving Market Opportunities
SWEEPING INDUSTRY CHANGES DRIVING MARKET OPPORTUNITIES 5 o Commercial Market: Adaption of new UAT data link for General Aviation aircraft (flights below 18,000 feet) FAA Requirement for all aircraft to have ADS-B implemented by January 1, 2020 New Precision GPS landing systems and data link te
Slide 6: Attractive Market Positioning
ATTRACTIVE MARKET POSITIONING 6 o Core market for existing TIC avionic testing products estimated at $50 million per year; fairly even split between military and commercial Other contiguous Radio Frequency (“RF”) testing markets are much larger and can be addressed with our new products under deve
Slide 7: Diverse Product Line
DIVERSE PRODUCT LINE 7 o Currently Supporting Three Major Government Programs CRAFT (AN/USM-708/719): Portable pre-flight multipurpose testing solution for the U.S. Navy, Coast Guard, Marines and Joint Strike Fighter program TS-4530A: Portable pre-flight IFF testing solution for U.S. Army and U.
Slide 8: Products and Programs
Telinstrument t AN/APM-206 TACAN Automated Test Set Telsinstroument New PRODUCTS FROM THE LEADER IN IFF MODE § FiicutTLine Test SETs AN/USM-719. IFF Transponder / Interrogator Featuring Mode 5 TCAS, EHS TACAN/DME VSWR AN/USM=708 IFF Transponder / Interrogator Featuring Mode 5 TCAS, EHS NAV (VOR, ILS
Slide 9: Flight-Line Testing
FLIGHT-LINE TESTING 9
Slide 10: Contract Summary
CONTRACT SUMMARY At September 30, 2015 10 Max Orders Product Customer Use Contract Backlog Status Received Size 203 units remaining to be Portable Pre-flight CRAFT US Navy $39.7M $40.5M $5.8M shipped. Additional higher priced Multi Purpose Testing Navy and JSF orders expected 520 KITS and 659 SETS
Slide 11: CRAFT (Navy)
CRAFT (NAVY) 11 o One CRAFT test set (at $35k) replaces seven obsolete U.S. Navy test sets that collectively cost almost $300,000 o The Navy has ordered approximately 1,400 CRAFT test sets with the last $9.5 million follow-on sole source IDIQ contract issued in 2013 o Shift to higher margin Navy sal
Slide 12: CRAFT JSF Program
CRAFT JSF PROGRAM 12 o TIC CRAFT 708 test set selected by the Joint Strike Fighter Program; projected to exceed 2,500 aircraft o Joint Strike Fighter program has generated over $3 million in CRAFT revenue as Lockheed ramps up limited rate production Expect this program to be a source of recurring
Slide 13: Additional Growth Opportunities for CRAFT
ADDITIONAL GROWTH OPPORTUNITIES FOR CRAFT 13 o TIC’s goal is to dominate Mode 5 test set sales in key overseas markets o International Mode 5 test set market is substantial with a January 1, 2020 deadline for decertifying Mode 4 IFF Delivered CRAFT test sets to 18 different countries to date Exp
Slide 14: TS-4530A (Army and USAF)
TS-4530A (ARMY AND USAF) 14 o Upgrade of the Mode 4 IFF test set produced by Aeroflex Contract included upgrade KITS as well as new production SETS o Resulted in ongoing Aeroflex litigation which TIC believes has no merit o Backlog of $11.1 million as of June 30, 2015 Army purchased about half o
Slide 15: New Products
NEW PRODUCTS 15 o NJ engineering team working on new military designs/proposals Enhancing existing military products to keep in front of competition New test set introduced for the large Nav/Comm market segment Working on high frequency radar test set; new market for TIC o Branch engineering o
Slide 16: Strong Revenue Growth
STRONG REVENUE GROWTH 16 $20 $18.20 $18 $15.83 $16 $6.50 $14 $4.50 $12 Q4 Millions $10 Q3 $4.09 $5.03 $6.82 Q2 $8 Q1 $6 $4.03 $3.59 $4 $5.80 $2 $3.20 $3.13 $0 2014 2015 2016
Slide 17: Selected Financial Results
SELECTED FINANCIAL RESULTS 17 Selected Consolidated Statements of Operation (In 000s, except per share data) Three Months Ended 9/30/2015 6/30/2015 3/31/2015 12/31/2015 Revenues $6,818 $5,846 $6,449 $5,030 Gross Profit 2,243 1,815 1,905 1,546 Gross Margin 33% 31% 29.5% 30.7% Operating Expenses Selli
Slide 18: Historical Gross Margins
HISTORICAL GROSS MARGINS 18 60% 50.3% 50% 40.2% 40% 32.6% 30% 20% 10% 0% 2000-2010 Average Gross 2014 2015 Margin Focused on Returning to Historical Gross Margin Levels
Slide 19: Operating Profit Matrix
OPERATING PROFIT MATRIX 19 Gross Margins and Revenue Matrix $10,000,000 $9,000,000 $8,594,420 $8,000,000 $7,700,412 $7,000,000 $6,804,326 $5,906,202 $5,794,420 $6,000,000 Operating Profit $5,006,080 $5,100,412 $5,000,000 $4,404,326 $4,000,000 $3,706,202 $3,554,420 $3,006,080 $3,020,412 $3,000,000 $2
Slide 20: Selected Financial Results
SELECTED FINANCIAL RESULTS 20 Selected Consolidated Balance Sheet Data (in 000s) As of As of 9/30/2015 3/31/2015 Cash & Cash Equivalents $795 $186 Total Current Assets 7,789 7,194 Total Assets 10,044 9,883 Total Current Liabilities 4,147 4,595 Long Term Debt, net of debt discount 517 709 Total Stock
Slide 21: Future Prospects
FUTURE PROSPECTS 21 o Well situated for high margin follow-on CRAFT and TS-4530A business both domestically and overseas Follow-on orders expected to achieve our 50% gross margin target o New handheld product has the great potential for the large commercial avionic test market and will allow for e
Slide 22: Operating Objectives
OPERATING OBJECTIVES 22 • Continue momentum and achieve record revenues and income in the current fiscal year Near Term • Commence 4530A SET production in January • Further strengthen balance sheet and cash position • Capture majority of international Mode 5 business • Continue strong profitability
Slide 23: Contacts
CONTACTS 23 One Branca Road East Rutherford, NJ 07073 Tel: 201-933-1600 [email protected]
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