Sales Overview Q2 2013

Transcription

1 INTERNATIONAL Sales Overview Q

2 Table of Contents LED Tube Impact Unique Positioning How We Do It U.S. Traction to Date Manufacturing Scalability International Traction to Date International Opportunity Energy Perspective International Goals Export Support Summary Appendix We have Market Traction from the Fortune 100 to the U.S. Military with Superior Technology that Saves Money, Creates Jobs, and builds Energy Independence. Now, we are seeing demand from overseas distributors and buyers. Charlie Szoradi, Chairman and CEO A 2

3 LED Tube Impact Foundation Facts: 20% of Global Electricity Consumption is for Lighting Fluorescent tubes have dominated Commercial Lighting since the mid 1950s. Fluorescent tubes account for at least 10% of Global Electricity Consumption. LED Tubes typically SAVE 50% of electricity over fluorescent tubes, making LEDs the most cost-effective solution in a world hungry for energy savings and cost reductions. (LED Lighting can save more electricity than solar power will produce.) Source: U.S. Department of Energy and the Economist's Innovation Summit Rising Population + Energy Costs = Global LED Demand 3

4 Unique Positioning Independence LED manufactures LED tubes, that are 65% more efficient and last 300% longer than fluorescent tubes. We sell through Distributors to commercial, industrial, and government clients. Unlike the competition, the superior engineering of our U.S. made LED tubes increases light consistency, efficiency, and longevity. We are 20% more efficient and last 20% longer than competing LED tubes. (Our Intellectual Property: Patent files are now in over 40 countries) Typ. 35 Watt Fluorescent Tube with Ballast 12 Watt Independence LED Tube 4

5 How We Do It Independence LED is on a race to the top of performance vs. a race to the bottom of price. (Performance is key for U.S. Military & long run time operations like Hospitals) Top Components and Engineering: Aircraft Grade Aluminum Heat Sinks (Deep fins to dissipate heat) Aluminum Printed Circuit Boards External Independent Drivers The Highest Quality Light Emitting Diodes Typ. Traps Heat Ours Dissipates Heat Thermal Management allows Independence LED to keep the Diodes cooler than the competition, increase efficiency, and increase the life from 30,000 to 60,000 hours (20 years in typical offices or schools). 5

6 U.S. Traction to Date: Key Points Independence LED Tubes are now the Most Efficient on the market (Over 112 Lumens / Watt vs. under 100 for competitors) Independence LED tubes have the Strongest Industry Warranty (10 year limited lifetime vs. 5 years for competitors) US sales traction across the Fortune 100 & US Government (Installations: Morgan Stanley, MetLife, U.S. Navy, Veterans Affairs Hospital, etc.) The products are now included on the GSA Schedule The website is well optimized and has attracted U.S. Resellers. (Authorized Reseller Network: Over 60 signed companies) Independence LED is regarded as an industry leader (e.g. The U.S. International Trade Commission asked Independence LED to provide a report to Congress on LED Tariffs.) 6

7 U.S. Traction to Date: Sample Private Sector 65% kwh Savings over Fluorescents Tubes 7

8 U.S. Traction to Date: Sample Public Sector Military Sealift Command + Veterans Affairs Hospital 8

9 Manufacturing Scalability USA: Boyertown, PA Contract Manufacturing Facility 4 lines x 3 shifts x 7 days = $162 M in annual sales Expansion to Lower Level if necessary or to Second and Third facilities that Independence has already identified. Representatives from Canada, Brazil, and Slovakia have already expressed interest to partner or form joint ventures for sister manufacturing facilities. 9

10 International Traction to Date Independence LED s website now includes international language pages and attracts Resellers (Multiple international requests each week to IndependenceLED.com and over 5 Companies signed in Q1 2013) Demand for LED Boot Camp Training: Over Q1 2013, Distributors from the United Kingdom, Germany, and Brazil have flown to Philadelphia to join the workshop training sessions and take the factory tour. (This level of commitment will also require reciprocal overseas travel to build relationships) Feedback: Representatives from the UK to Switzerland and Australia to Guam (They have been highly impressed with the shipped Independence LED tubes) Certifications and Patents: ISO 9001:2008, CE + Patents filed in over 40 Countries Independence LED has been awarded a major LED Tube retrofit by the Slovak Republic (30,000 over 7 Hospitals for approx. $2.4M) 10

11 International Opportunity: 1 of 4 Overseas recessions focus attention and urgency on energy savings. High cost of electricity increases ROI for overseas end users. (e.g. Europe, Australia, Brazil, and the Caribbean are twice the U.S. cost / kwh) A weak US dollar gives overseas buyers a currency advantage. The European Union has set rigorous energy efficiency standards for pubic buildings by 2018 & commercial buildings by The Obama Administration seeks to Double U.S. Exports in 5 years, and has major available support resources. The Export Import Bank now has $120 Billion in guarantees for overseas buyers of US made products, and Independence offers a popular product given distrust over Chinese quality control in lighting. 11

12 International Opportunity: 2 of 4 The Global LED Market is Large and Growing $4B 11x $44B (CAGR 46%) Compounded Annual Growth Rate The European Union population of over 500 Million represents 7.3% of global population but a significantly higher portion of global LED demand. Given that the electricity costs are more than double the US averages, the market size of the EU is more than double the US market. Source: McKinsey Global Lighting Market Model; McKinsey Global Lighting Professionals Consumer Survey 12

13 % of Total Market International Opportunity: 3 of 4 LEDs Take Over General Lighting Segment Tipping Point: 2015 Lead up to 2018 European target of energy neutral public buildings Independence LED has ramped up to hit the Tipping Point at full throttle. Incandescent = Filament Lights LFL = Linear Fluorescent Tubes CFL = Compact Fluorescent Lights LED = Light Emitting Diodes Source: McKinsey Global Lighting Market Model; McKinsey Global Lighting Professionals Consumer Survey 13

14 International Opportunity: 4 of 4 GREEN = High kwh Blue = Extremely High Independence LED targets these high electricity cost countries Legend: Color Coding by kwh Costs All of Europe, the Caribbean, and a majority of Central and South America have higher costs of electricity than the US. 14

15 24 hours / day / 7days / week Energy Perspective: 1 of 2 Calculations: 35W T8 with Ballast $.12 / kwh US $.24 / kwh EU High Energy Costs create an URGENCY in Europe for LEDs that does not yet exist in the U.S. In Europe, if you buy a $3 Fluorescent Tube, you pay over $70 / year in electricity. Or, buy a $70 LED tube and SAVE about $50 / year: $350 of savings over the 24/7 life of the LED. Purchase Cost Annual Cost to Operate (kwh) $3 United States of America Europe + High kwh Countries $36.80 $73.60 (Fluorescent Tubes in Europe: Annual kwh = 21 X the Purchase cost) $70 $12.60 $25.20 (LED Tubes in Europe: Annual kwh = 1/3 of the Purchase cost) (24/7 Stairs, ROI on LED Tubes: 34.5% 69% Hospitals Payback time in Years: Warehouses, etc.) 15

16 Energy Perspective: 2 of 2 Calculations: Average 20 MPG 12,000 miles per year $3.50 / Gallon 600 Gallons / year We have paid the electricity bills on fluorescent tubes for over 50 years, and we have lost a frame of reference on the massive annual operating cost that is 20 times over the purchase price each year. By comparison, gas would cost $1,000 / Gallon. We see outrage over rising Gas Costs, but Lighting Costs are not Posted or separated out of utility bills. 1,0000 Purchase Cost: $30,000 Annual Cost of Gas: $2,000 Annual Cost of Gas: (Adjusted to reflect fluorescent tube costs) $600,000 / Year 16

17 Energy Perspective: 3 of 3 Now, that I see how much I am paying for lighting, I am interested in your LEDs. 100s of Property Owners and Operators THE SOLUTION: The Independence LEDs auditing and ROI Calculator software illustrates the current cost of lighting for property owners and managers to give them PERSPECTIVE on why ACTING NOW to retrofit with LEDs is appropriate, even if they have just bought new fluorescent tubes. 17

18 International Goals A) Leverage the Company s U.S. traction to date and the export support from the U.S. Government to accelerate international growth. B) Build an international Distribution Network of qualified Authorized Resellers and/or Manufacturer s Representatives. C) Reinforce the relationships with marketing and other Support Services to help the international sales network thrive. 18

19 Export Support U.S. Government Manufacturing Distribution $120B in Financing Congress has approved support for exports across multiple agencies: Export Import Bank of the United States (The financing is for the overseas buyers, with only a 15% down payment on low interest 5 year terms. This makes the Independence LED products even more appealing.) Small Business Administration Export Solutions Group U.S. Trade Development Agency (USTDA) World Trade Center U.S. Department of Commerce 19

20 Summary Independence LED is the poised to make a global impact on energy reduction across both public and private sectors. #1: Proven Track Record #2: Multiple Industry FIRST #3: The Made in America Advantage #4: The Right Technology #5: The Right Quality Assurance and Warranty #6: The Right Management and Support Team #7: The Right Auditing and Proposal Software #8: Rebate Ready Products #9: Industry Leadership #10: $0 Down Financing for Cashflow Positive Results 20

21 A APPENDIX Index: Sample Savings Report Technology Differentiation Additional Files 21

22 A APPENDIX Sample Savings Report 22

23 SAMPLE Savings Report - Part 1:2 (1 Hospital) At $.20 / kwh European Union levels Sample EU Hospital Square Footage: 300,000 3/11/2013 4,000 LEDs vs T8 Fluorescent Annual Current Cost Per Sqft: $2.04 W/Sqft: Annual LED Cost Per SqFt: $0.70 ASHRAE: 1.2 Price per kwh: $0.200 Current: 1.17 Annual kwh Saved: 2,014,690 LED: 0.4 ANNUAL LIGHTING SAVINGS: 68% Annual Lifetime Current Lighting Electricity Cost $613,166 $4,586,928 Projected Lighting Electricity Cost (LED) $210,228 $1,572,661 Reduction in Electricity Costs with LEDs $402,938 $3,014,267 Additional Operating Savings: Annual Lifetime Bulb Replacement Savings $8,760 $60,000 Maintenance Labor Savings $15,000 $102,745 Reduced Heating/Air Conditioning Load $12,088 $90,428 Total Additional Operating Savings $35,848 $253,173 Total Savings with LEDs SAVINGS REPORT Annual Lifetime $438,786 $3,267,440 *Bulb Replacement Savings based on standard cost of existing lamps *Maintenance Labor Savings based on $0.01/sq. ft. for Parking Garages, and $0.05/sq. ft. for all other facilities *Reduced Heating/Air Conditioning Load based on an average of $0.03 for every dollar saved on lighting *Lifetime calculations based on rated lifespan of each product. Weighted average rated life of LEDs = 6.8 years. 23

24 SAMPLE Savings Report - Part 2:2 (1 Hospital) At $.20 / kwh European Union levels FINANCIAL ANALYSIS Payback (Months) ROI Cost of LED Bulbs $750, > 21 59% Installation Estimate (15%) $112,500 Total Estimated Cost* $862, > 24 51% Less Possible Rebate/Subsidies Total Net Cost to Customer* $862, > 24 51% *Note: Pricing valid for 45 days from issue; does not include sales tax and shipping FINANCING OPTIONS: Monthly Cash Flows Payment LED Savings Net Cash Flow 36 8% ($27,028) $36,565 $9, % ($17,488) $36,565 $19,077 FINANCIAL METRICS NPV: $755,687 IRR: 50% BONUS INCENTIVES Sample US Tax Deduction $180,000 ($0.60/sqft) Deduction Cash Value $63,000 (Based on 35% tax bracket) Payback 22 Property Value Increase $4,387,856 (Based on 10% cap rate) EcoAdvantage: CO2 Emissions Reduction 19,592,735 lbs. or 1,633 *EPAct Federal Tax Deduction is an estimate based on standard IRS and DOE guidelines. Actual numbers may vary. *Only areas that have bi-level switching qualify for EPAct incentives (80% of space or more typically qualifies). *Property Value Increase calculated with 10% cap rate applied to reduction in operating costs. *EcoAdvantage: based on 1.3 lbs. of CO2 for every kwh of electricity saved (lifetime estimates). SUVs off the road ACT NOW! GO GREEN AND SAVE! Daily Cost of Waiting $1,202 Monthly Cost of Waiting $36,

25 A APPENDIX Technology Differentiation 25

26 1. We use External Independent Drivers. This is the real Thermal Fix, by pulling the Drivers out of the Tube all together. Installers already have to open the fixture to override the ballast, so you might as well just use the same time with two wire nuts or speed clips to change it out. New Driver =.996 Power Factor LED Driver vs Fluorescent Ballast Size Comparison of Ballast (Old) to LED Driver (New)

27 2. We use a Smart Clip System. Connect the Independent Driver directly to the Tube rather than through the Tombstones. The Smart Clip System includes safety features and a lock guard for ease of installation and circuit longevity. Smart clip reduces the risk of arcing at Tombstones or repairing faulty connections. Smart Clip System

28 3. We use Deep Fin Heat Sinks. Avoid No Fin or a Thin Fin System to shed the heat. The Eagle LED Tube s Deep Fin Heat Sink (Right) vs. some other Tube s Shallow Fin Heat Sink. Plus, this illustrates the channel connection of the Eagle s Aluminum Circuit Board (ACB) to the thermal mass vs. the floating fiberglass PCB that traps the damaging heat inside the tube cavity. Heat is Trapped in an enclosed Tube Cavity vs Dissipated with a Heat Sink

29 4. We use Surface Mounted Diodes. Use (SMD) vs. Through Hole Diodes to Transfer Heat directly to an Aluminum Circuit Board. Through Hole Diodes fall short for several reasons: The pins lift the diode away from the Circuit Board and reduce heat transfer. The backside protrusions reduce the ability to effectively slide the Circuit Board into a Heat Sink. The quality assurance is more difficult given tighter automation tolerances applying SMDs. Through Hole Diodes are typically Epoxy covered and less stable than SMDs with Silicone

30 5. We use Aluminum Circuit Boards. Use (ACB - Conductors) vs. Fiberglass Printed Circuit Boards (PCB - Insulators) to transfer Heat to the Heat Sink. Heat moves through conductive materials, so it is only logical to remove heat via an Aluminum Circuit Board (ACB) rather than a Fiberglass Printed Circuit Board (PCB) that holds the heat like a sponge. Each set of ACBs are Engineered for a specific numbers of Diodes to match the desired Lumen output levels. Aluminum Circuit Boards with and without SMDs at different densities

31 6. We use a Modular Circuit Board System. Gain Scalability at 12 increments for 1 to 8 Tube lengths. Modularity creates efficiencies in Manufacturing which translate into more cost effective products, which in turn, increase Returns on Investment (ROI) for Property Owners and Managers. Plus, in the event of any failure, the modular Light Engines (Diodes on 12 Boards) can be easily replaced, like changing one tire on a car vs. discarding the whole car. Length 1' 2' 3' 4' 5' 6' 7' 8' Modular Aluminum PCBs for Manufacturing at 1 to 8 lengths

32 7. We use a Smart Bridge System. Secure the Aluminum Circuit Boards along the length of the Tube. Each Tube includes a Master Aluminum Circuit Board (ACB) at the end of the Tube with the power terminal. This Master ACB links to the adjacent ACBs subject to the length of the Tube. By contrast, Fiberglass PCBs typically run 24 and reduce the Modular advantages. Eagle Bridge System, linking Circuit Boards along desired Tube length

33 8. We use a FlexDensity Diode System. Low > Medium > High Output 3 Wattage & Custom Options The EAGLE LED TUBE has the FlexDensity Diode System that facilitates light matching. Certain Tubes can include high power chips, such as the one on the left above, to reach custom Color Rendering Index (CRI) levels. Plus, the FlexDensity Diode System (on the right above) has a higher density for reducing the number of traditional Fluorescent Tubes by 4 to 3, 3 to 2 or, in some cases even 2 to The Flex Density Diode System provides the right level of light for the end user 33

34 9. We only use Chips from the Black Body Curve. Warm > Neutral > Cool White 3 Colors & Custom Options The EAGLE LED TUBE series offers three different standard color temperatures to meet the aesthetic needs of property owners and managers. We select the Chips on the Black Body Curve to ensure the highest levels of consistency. Using Chips from broader Bins reduces color consistency

35 10. We Engineer Custom Optics upon Request For Lens Configurations to meet Photometric Specifications Standard Clear Lens Sample Custom Engineered Lens for focused Beam Angle The EAGLE LED TUBE offers a standard clear and frosted Lens Cover. An enclosed Polycarbon Tube traps the heat that degrades the Diodes vs. a Lens Cover that allows the heat sink to remove the heat. Custom Lenses with peaks and valleys are available to focus light and meet certain objectives. Enclosed Tube vs. EAGLE Lens Cover to accelerate heat removal

36 2013 International Class A-10 LED Tube Standards. Independence LED has reached Class A-10 status. #1: Efficiency: 100 lumens / watt or higher. Independence LED: 112 l/w at CRI 70 and 100 l/w at CRI 85 #2: Longevity: 50,000 hour rated life or higher with third party LM80 testing. Independence LED: 50,000 hour life (L 70 ) with LM80 testing. #3: UL Certification: Underwriters Laboratories (UL) Classified, not just recognized LED Driver. Independence LED: UL Classified. #4: CE Certification: Conformity European. Independence LED conforms to the following directives: Artificial Optical Radiation Directive Low Voltage Directive (LVD) Electromagnetic Compatibility (EMC) Directive Restriction of Hazardous Substances Directive (RoHS) 2006/25/EC 2006/95/EC 2004/108/EC 2002/95/EC #5: ISO-9001:2008 Certification: The International Organization for Standardization to foster consistency in LED Tube product delivery and quality assurance. Independence LED: Certified: ISO-9001:2008and control features. 36

37 2013 International Class A-10 LED Tube Standards (Continued) #6: Thermal Management: Heat Sinks with over 7 (17.78cm) of circumferential perimeter conductive surface. Independence LED: 9.13 ( 23.19cm) of circumferential conductive surface via its deep fin aluminum heat sinks. #7: Power Supply: External Driver with multi-tube Driver Options for fixtures. Independence LED: Single, Double, Triple, Quad, and Six Tube External Driver configurations. #8: Warranty: 5 years or longer on both the Tube and Power Supply. Independence LED: 5 year Warranty on the combined Tube and Power Supply System, plus extended warranty options on the tube for facilities with occupancy sensor systems. (10 Year Limited Lifetime Warranty on 60,000 hours for the Tube, starting May 1, 2013.) #9: Rebate Ready Products: Performance Criteria across multiple regions and countries. Independence LED: The company tubes were some of the very first to qualify and set the rebate standards in 2011 through the industry leading Con Edison Commercial and Industrial Incentive program, administered by Lockheed Martin. An additional U.S. example: The DesignLight Consortium (DLC) Qualified Products List, ranging from Troffer fixtures to Industrial High Bay fixtures, sets minimum lumen output levels per fixture. The Independence LED multi-tube fixtures meet or exceed key levels. For example, the 2 x 4 (4) Tube Troffer fixture emits 4,000 lumens and the 4 (6) Tube High Bay fixture emits 19,000 lumens. #10: LED Tube Light Quality and Control: Color Rendering Index (CRI) options for 80 or higher + Dimming down to 20% or lower + Beam angle adjustment within existing tombstone end brackets. Independence LED: Offers all three of these light quality and control features. 37

38 SAMPLE: The Success of the Independence External Driver Tubes Discolorations at The Burn Zone from Internal Drivers Avoid the cheap route! Our EXTERNAL Driver Tubes Perform and have advanced Thermal Management Heat Sinks. 38

39 SAMPLE: The Failure of Competing Internal Driver LED Tubes Burn Zone Burn Zone INTERNAL Drivers Burn Out LED Tubes. Competing Tubes use Internal Driver Technology that does not meet the standards for Rebates by engineering leaders like Lockheed Martin for Con Edison. Competitors also DO NOT have Deep Fin Thermal Management Technology to protect the LEDs over the life of the tubes. 39

40 Sales Expansion: Metal Halide to LED TUBE Fixtures (Low or High Bay) Metal Halide Retrofits Applications: Warehouses Distribution Centers Factories Typical Wattage Levels: 175 Watts 400 Watts 1000 Watts Independence LED reduces the wattage by 65% or more 3 Tube Double Tube Fixtures Triple Tube Fixtures The Multi- Tube Solution is more cost effective than other LED Fixture offerings , 5, or 6 Tube Fixtures

41 A APPENDIX Additional Files 41

42 OVERVIEW 5: The Right Job Creation Opportunities JOBS LED Manufacturing Ripple Effect U.S. and International Jobs: 1. Research and Development 2. Engineering: Product & Packaging 3. Manufacturing: Components 4. Manufacturing: Assembly 5. Manufacturing: Packaging 6. Fulfillment 7. Transportation 8. Energy Auditing 9. Installation 10. Customer Services 11. Marketing Services 12. Accounting Services 13. Financial Services 14. Legal Services 15. Training Services More 42

43 Independence LED: Sample Credentials ISO 9001:2008 #: GS07F073AA/ils 43

44 Company Overview: Independence LED Independence LED is a leading U.S. Manufacturer of high-efficiency LED tubes and fixtures that replace the less efficient fluorescent tubes and metal Halide fixtures that dominate commercial lighting. We moved the manufacturing of our LED tubes from China to Boyertown, PA in Q We have seen a tremendous lift in demand resulting in revenues tripling over each of the past two years. Clients range from industrial Distribution Centers to Fortune 100 Companies and from independent businesses to National Chains. Over the course of 2011, Lockheed Martin s engineering team conducted the reviews and approved the Independence LED tube system over others for the coveted Con Edison Rebates in the NYC Metro Market. The Independence LED External Driver system has set a new standard, and it also earned the Underwriters Laboratories (UL) and the Compliance European (CE) Listings on the complete driver and tube retrofit kit system. Our Deep Fin thermal management and Flex Density system provide cost-effective U.S. manufacturing with scale and reliability. 44

45 Company Overview: Independence LED (Continued) For property owners and managers, the LED tubes cut the cost of electricity by 50% or more over fluorescent tubes. Installations range from Morgan Stanley to MetLife and from Distribution Centers like Davis and Warshow to national auto service chains like Monro Muffler. The recent retrofit of 50 different Monro Muffler locations across CT and NJ includes over 6 miles of tubes, and the Distribution Center may stand as the largest facility installation of LED Tubes in the U.S. Market to date. The Cushman and Wakefield management team for MetLife has specified the Independence Eagle LED tubes for its properties, resulting in multiple new orders across the U.S. As a reflection of its industry leadership, in 2011, the Company won the Green Business of the Year Award from the Main Line Chamber of Commerce, and this summer the U.S. International Trade Commission asked Independence LED to provide a Report to Congress on upcoming energy related legislation. To review the Technology Differentiation, Spec Sheets, and Retrofit Photo files, plus Videos, please see this page on our website:

46 Strategic Overview The World is Going Green, and Independence LED Saves Money and the Environment along with creating Jobs. CHALLENGE: The Global Demand for ENERGY is increasing, but the cost of creating renewable power is high and relies on subsidies. SOLUTION: Energy REDUCTION is more cost effective than Energy PRODUCTION. Lighting is the low hanging fruit, since about a third of commercial electricity is dedicated to illumination. RESULTS: Independence LED Lighting delivers a 2 x Return on Investment with 25% to 50% annual returns over the 7 year life of LED tubes that run around the clock. 46