Tel-Instrument Electronics Corp · OTC:TIKK
Tel-Instrument Electronics — Investor Presentation (December 2015)
23 slides from Tel-Instrument Electronics's investor presentation, Dec 2, 2015
Slide 1: Investor Presentation
— MC” ‘Telelnstrument ELECTRONICS CORP. = NOVEMBER 24, INVESTOR PRESENTATION
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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 th
Slide 3: Company Overview
AC COMPANY OVERVIEW — —_—~z~EEEEErrreeeeeeeeee o Leading designer and manufacturer of avionics test/measurement solutions for the global airlines, general aviation and government and military aerospace markets © Company focus has been on military markets (90% of business); dominant position in Ident
Slide 4: Attractive Business Model
Attractive Business Model Diverse Product Offering Profitability Growth Competitive Advantages Diverse base of customers with long-term relationships New aviation technology and mandated enhancements will facilitate growth Niche market with traditional 50% gross margins Low capital equipmentrequirem
Slide 5: Sweeping Industry Changes Driving Market Opportunities
SWEEPING INDUSTRY CHANGES =i DRIVING MARKET OPPORTUNITIES o Commercial Market: a 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 techn
Slide 6: Attractive Market Positioning
ATTRACTIVE MARKET A. POSITIONING » Core market for existing TIC avionic testing products estimated at $50 million per year; fairly even split between military and commercial a Other contiguous Radio Frequency (“RF”) testing markets are much larger and can be addressed with our new products under dev
Slide 7: Diverse Product Line
DIVERSE PRODUCT LINE mice ——_h ~~ Currently Supporting Three Major Government Programs a CRAFT (AN/USM-708/719): Portable pre-flight multipurpose testing solution for the U.S. Navy, Coast Guard, Marines and Joint Strike Fighter program a TS-4530A: Portable pre-flight IFF testing solution for U.S. Ar
Slide 8: New Products From The Leader
mic”? New Probucts From THE LEADER Tekineteest IN IFF MODE 5 Fiicutuine Test Sets
Slide 9: Flight-Line Testing
Slide 10: Contract Summary
CONTRACT SUMMARY > At September 30,2015 Cotnemnect TS-4530A ITATS. Miscellaneous TOTAL Portable Pre-flight Mutti Purpose Testing US Navy Portable Pre-fight US Army “FF Testing Maintenance Shop (Bench) TACAN Testing US Navy Orders Received) $39.7M $26.9 $11.6 $76.5M Max Contract| Backlog Size $40.5M
Slide 11: CRAFT (Navy)
CRAFT (NAVY) One CRAFT test set (at $35k) replaces seven obsolete U.S. Navy test sets that collectively cost almost $300,000 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 Shift to higher margin Navy sales starti
Slide 12: CRAFT JSF Program
CRAFT JSF PROGRAM = TIC CRAFT 708 test set selected by the Joint Strike Fighter Program; projected to exceed 2,500 aircraft Joint Strike Fighter program has generated over $3 million in CRAFT revenue as Lockheed ramps up limited rate production o Expect this program to be a source of recurring annua
Slide 13: Additional Growth Opportunities for CRAFT
ADDITIONAL GROWTH A. OPPORTUNITIES FOR CRAFT TIC’s goal is to dominate Mode 5 test set sales in key overseas markets 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 a Expect
Slide 14: TS-4530A (Army and USAF)
AC TS-4530A (ARMY AND USAF) = ee Upgrade of the Mode 4 IFF test set produced by Aeroflex a Contract included upgrade KITS as well as new production SETS Resulted in ongoing Aeroflex litigation which TIC believes has no merit Backlog of $11.1 million as of June 30, 2015 a Army purchased about half of
Slide 15: New Products
LAP. NEW PRODUCTS — NJ engineering team working on new military designs/proposals a Enhancing existing military products to keep in front of competition a New test set introduced for the large Nav/Comm market segment 2 Working on high frequency radar test set; new market for TIC o Branch engineering
Slide 16: Strong Revenue Growth
STRONG REVENUE GROWTH 2016 2016 $20 $18.20 $18 a $15.83 oT . $12 3 Q4 5 $10 =Q3 2 ml ier) a snore sat $4 $2 %0
Slide 17: Selected Financial Results
AC. SELECTED FINANCIAL RESULTS™ Le Selected Consolidated Statements of Operation {In 000s, except per share data) Three Months Ended eros §—sta015 1273172015 Gross Profit Operating Expenses Selling, general and administrative 884 866 785 825 % of sales 13% 15% 122% 16.4% ‘Total Operating expenses 1,
Slide 18: Historical Gross Margins
AC” HISTORICAL GROSS MARGINS “** 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 “™~ Operating Profit 510,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 54,000,000 $3,000,000 $2,000,000 51,000,000 s Gross Margins and Revenue Matrix $8.594,420 S7;700412 $6,804,328 $5,908,202 Py '$5.006,080 5,100, $404; $3706 $3554; $3,006, $3,020. $2484; 51
Slide 20: Selected Financial Results
iC. SELECTED FINANCIAL RESULTS™ = 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 S
Slide 21: Future Prospects
LAP. FUTURE PROSPECTS — o Well situated for high margin follow-on CRAFT and TS-4530A business both domestically and overseas Q 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 f
Slide 22: Operating Objectives
OPERATING OBJECTIVES |- Continue momentum and achieve record revenues and income in the current fiscal year Near Term |+ Commence 450A SET production in January SONNNNNNNNNNN | Further strengthen balance sheet and cash position, + Capture majority of international Mode 5 business + Continue strong p
Slide 23: Contacts
CONTACTS MNO” TeleInstrument ELECTRONICS CORP One Branca Road East Rutherford, NJ 07073 Tel: 201-933-1600 [email protected]
TEL Instrument Electronics — Investor Presentation (December 2015) on 6ix