Annual Shareholder Meeting

Transcription

1 Annual Shareholder Meeting Agenda Corporate Business Items Curt Sampson Richard Primuth Chairman Company Secretary Business Update Roger Lacey Scott Fluegge Bruce Blackwood Scott Otis CEO CSI President JDL President Suttle President Transition

2 Business items Appointment of five Directors identified in the 2016 Proxy Statement, each for a term of one year Appointment of Baker Tilley LLP as CSI s independent registered accounting firm for 2017

3 Business Update May 24 th 2017

4 Safe Harbor Actual results, performance, or developments could differ materially from those expressed or implied by the forward looking statements contained in this presentation as a result of known and unknown risks, uncertainties, and other factors including those identified in the Company s Form 10 K and other periodic filings with the Securities and Exchange Commission.

5 2016 Results ($000s) Net Sales % Growth Gross Margin Cash New Product Revenue $99, % 26.8% $16,249 $28,620 Cash returned to shareholders via dividends totaling $4.6 million

6 Q Results ($000s) Net Sales % Growth Gross Margin Cash New Product Revenue $20, % 28.7% $17,540 $6,007 Good growth of new products. Margin improving but still weak.

7 CSI Business Portfolio 2015/ % 15% 2% 15% 38% 46% Suttle Transition Net2Edge JDL 41% 42% Suttle Transition Net2Edge JDL $107.7 $99.4 Business portfolio beginning to stabilize, more to do with Suttle

8 Our Vision To make Communications Infrastructure and Services Better, Easier and More Complete

9 The Timing is Right All Networks Are In Transition and NEED CSI can help solve these issues BUT customers want better More Bandwidth VALUE Better Security SIMPLICITY Greater Distance DELIVERY Improved Management CHOICE Lower Cost TECHNOLOGY Hybrid Solutions

10 Our Key Strategies Relentless focus on Productivity Build out new product success Align sales programs with emerging Customer segments Great people development

11 Productivity Actions to Date Suttle Costa Rica, SGA reduction TN SGA reduction JDL Service Tech reduction N2E Location Corporate Admin Adjustments driven by OneCSI projects

12 ONE CSI Improvement Goal Tree 138 Total Projects $11.7M Project Pool Improve Product Management $5 M 35 Total Projects SKU Management and Reduction Strategic Pricing Project ONE CSI Goal Tree Total Project Poor $11.7 M Target $6 M Increase Sales and Market Share $3.7 M 24 Total Projects Reduce Product Costs $2 M 38 Total Projects Implement Market Share Expansion Improve Sales Productivity Improve On Time Delivery Improve Sourcing Process Reduce Product Cost Redesign Products for Cost Reduction Improve MFG Processes Maximize Resource Utilization $1 M 41 Total Projects Increase Labor Productivity Lean Factory Layout for Low Cost

13 New Product Success Gaining Momentum 2016 ($000s) N2E TN $797 42% Suttle Suttle CSI $28, % $10,063 24% JDL $14,659 35% $3,101 20%

14 Focus on Sales Productivity N2E TN Asia Agent expansion Build Europe resource Suttle CSI Sales Success Broaden Fed sales responsibilities New Japan agents JDL Redesign Tier 1 Sales group Build new Commercial Territory Sales Expand Commercial Territory sales

15 Great People Development Health of Organization ONE CSI Checking the Pulse All Employees High Potential Misplaced Development Plans Talent Planning Six Sigma Toolset Lean Thinking Green/Black Belts Training Kaizen experience Improvement mindset All Employee Survey Company wide feedback Workshops on key issues

16 Highest Scoring Questions

17 Focus on productivity Zero based budgeting continuing in all businesses Cororate costs focus OneCSI Lean initiative key to business recovery

18 Our Key Strategies Relentless focus on Productivity Build out new product success Create credible sales programs Great people development

19 JDL Technologies Scott Fluegge

20

21 Delivering IT from the Cloud JDL s Product JDL FastTrack Solutions Complete Office in the Cloud Boutique Blend of Cloud Solutions Work SECURLY from anywhere, any time, on any device Winner of 2016 Information Security Award Winner of 2017 Managed Security 100 Drivers for Change Predictable, simple cost based on headcount (MRC Model) Safer & more secure Removes client IT management, maintenance and cost (refresh) Increases companies IT adaptability and ability to change Supports Core Business Applications Health Care: EMRs (Allscripts, Care360, Cerner, emds, Epic, NextGen) Commercial: Quickbooks, ShareFile, Skype, Office Legal: Needles, PC Law

22 Key Vertical Markets Health Care Market JDL HIPAA FastTrack Compliance in the Cloud First Health Care FastTrack client in January of 2016 Currently more than 15 Health Care Clients on boarded Commercial Market (Financial & Legal focus) JDL Security FastTrack Your Office in the Cloud First commercial FastTrack client in March of 2016 Six new logos have moved into this environment since Education Market Broward County Public Schools Year 3 of five year wireless services contract Continuing to explore opportunities in other School Districts

23 Team Composition Accomplished Sales Manager JDL Trained Sales Team 3 Hunters 1 Hunter/Farmer Sales Strategy Key Initiatives Growth from cloud All new sales efforts lead with cloud based solutions Offerings range from IT Augmentation to full IT Migrations Client Conversion (Q2 Initiative) Taking cloud services to existing traditional on premise IT clients o Pool Over 100 traditional Clients o Pitch Addressing Refresh and/or New Features and Security Events o Reception 7 have converted, several more testing o Outcome Hoping for 50% conversion by Year End

24 A Look Forward Continue to support our Education Base Commercial Services growth through JDL Cloud Solutions FastTrack / Office in the Cloud o o o o Easy to buy, provision and support Repeatable and scalable No geographic bounds Client growth does not require JDL field engineering Leverage hubs to grow regionally Additional strategic acquisitions 2017 and Beyond

25 Bruce Blackwood

26 The Suttle Challenge Navigate the changing communications marketplace Evolve business practices and systems to drive productivity Pricing practices to profitably engage multiple customer segments New channels to market Streamlined product offering Build to order production with 5 10 day delivery

27 Comprehensive Plan for Recovery and Profitability Suttle Improvement Goal 2017 $ 5 MM Project Pool $9.7 MM Improved Product Management $3.5 MM 29 projects Increase Sales and Market Share $3.7 MM 24 projects Reduce Product Cost $1.7 MM 32 projects Maximize Resource Utilization $0.8 MM 39 projects SKU Management Price products strategically Implement Market Expansion International Builders/Installer CATV Improve Inside Sales team productivity Improve On Time Delivery Improve Sourcing Strategy Reduce Product Cost Redesign Products Improve Manufacturing Processes Increase Labor Productivity Optimize Factory Layout

28 Suttle a leader in the Voice Era ales Today MediaMAX supports the Gig Era and beyond

29 Superior Connectivity Options for the Connected Home & Business

30 ales New Market Opportunity Fiber CAT6 COAX $200M Per Year Opportunity Residential Greenfield and Brownfield Market Bundled Value over $100 2M Homes Per Year Greenfield SFU and MDU Units Brownfield Remodel/Retrofit Fiber CAT6 COAX Brownfield units 35M MDU 90M SFU

31 What s Next? MDU Fiber Solutions

32 Pushing Beyond Telecom Channels New Product Revenue (in thousands) $14,659 $9,

33 Building a New Sales and Marketing Engine Digital Marketing Strategy Distribution Inside Sales Territory Sales 75,000 Installers and Contractors Gigabit Broadband Builds

34 Suttle 2020 Vision Lean, flexible, build to order business operating 24/7 Utilizing modern tools and data analytics Building streamlined and innovative products Servicing a broad range of customer segments 5 day deliveries

35 Transition Networks Scott Otis

36 Restructuring Leading to Much Stronger Business Recovery in second half 2016 Revenue rebound Improved margins SG&A expense reduction and control Growth in North America sales 3X growth with a carrier customer Significant growth from Power over Ethernet products New Product Revenue Strong interest in recent new product offerings OneCSI programs driving productivity and process improvement

37 Portfolio Centered Around Core Strengths Media Converters and Network Adapters ION platform for core and edge deployments Used by Service Providers and Enterprise customers alike Bringing bandwidth and security to the desktop Optical Devices Small form factor pluggable transceivers (SFP) Fiber optic strand utilization Built in monitoring at the transmission source Optical Devices Switching and Ethernet Extension Commercial and industrial grade switching Utilize existing cabling to connect and power IP devices PoE technology to provide data and power to cameras, access points PoE Revenue

38 What is Power over Ethernet (PoE)? Delivers power and data through Ethernet cables Simplifies installation, improves safety, lowers cost, minimizes downtime, eases maintenance, creates network scalability

39 Fuel for Growth More to do with Service Providers New 10gb card and ION continued adoption Migrate customers from old platforms to ION Canada Revenue Securing our position in security and surveillance Channel push with new POE+ products, and Ethernet extenders Named account focus on top key integrators Federal market push M.2 Network Interface Cards for micros/thin clients Canadian Federal & enterprise market Embrace the embedded market Med tech, process control, video management Fed Revenue

40 Beyond 30 Years Celebrating our Past, Excited for the Future Healthier, more nimble organization Exploiting new markets and customers with PoE, M.2, and continued expansion of ION platform Robust new product pipeline and improved launch process Building on already improved web and digital marketing efforts Productivity improvement led by OneCSI initiatives and continued expense management

41