Fourt r h t Q u Q art ar er Fiscal scal Y ear ear 2011 Fin i ancial ci al Result l s

Size: px
Start display at page:

Download "Fourt r h t Q u Q art ar er Fiscal scal Y ear ear 2011 Fin i ancial ci al Result l s"

Transcription

1 Fourth Quarter Fiscal Year 2011 Financial Results June 9,

2 Forward Looking Statements Certain statements included in this management presentation constitute forward-looking statements, including those identified by the expressions "anticipate, "believe", "plan", "estimate", "expect", "intend" and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts but reflect the Company's current assumptions and expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current assumptions and expectations. Assumptions made in preparing the forward-looking statements contained in this management presentation include, but are not limited to, the following: The addressable market for the Company s products will grow by at least 10% annually. The Company will successfully reduce product costs to improve the Company s gross margin and/or avoid any margin erosion associated with competitive pricing pressure. The Company will develop and deliver new products on time in order to satisfy the demands of current and potential customers. The Company s new products will address the needs of new and existing customers and contribute to near term profitability. The average exchange rates for Canadian dollars and Euros to US dollars will be US$1.00=CDN$1.00 and Euro 1=US$1.40. The Company will have adequate component supply to meet customer demand. Factors that could cause actual results to differ materially from expected results include, but are not limited to, the following: The Company s quarterly revenue is generally dependent upon conversion of opportunities in the sales pipeline during the quarter and, as a result, revenue and operating results can be difficult to predict and can fluctuate substantially. The Company s success in realizing customer opportunities may be negatively impacted by depressed economic conditions, changes in sales cycles, and/or weaker than expected success versus competitors. Delays in product development programs for new products and new product features which lead to cost overruns and /or missed customer opportunities. The Company s gross margin and operating results may be adversely affected by pricing models required to compete successfully and/or a failure by the Company to achieve its product cost targets. The Company s gross margin and operating results can fluctuate substantially as a result of the volume of warranty repairs from period to period which are difficult to predict. The Company plans to become increasingly dependent upon third parties for product design and supply. Higher than expected costs and delayed or lost revenue may result if these activities are not transitioned and managed effectively. Weaker than expected market acceptance of the new products to be introduced by the Company. Product issues that result in increased costs to the Company and/or lost revenue opportunities. Longer than expected lead times from component suppliers could result in production delays resulting in delayed or lost revenue. Shifts in value of the US dollar relative to the Canadian Dollar may cause the Company s operating costs to fluctuate significantly. Additional risks are discussed herein and under "Risk Factors" in the Company s Annual Information Form available online at 2

3 Q4 and FY 2011 Highlights Record Revenues Despite Strong CAD - Record Annual Revenue of $102.8 million up 19% from FY10. - Best Q4 ever at $27.5 million up 30% vs. Q410 and 34% vs. Q311. Growth driven by major accounts in North America Op ex up only 1.5% versus FY10, excluding litigation costs Strong Q4 Gross Margin at 48% Cash up $5M in the fourth quarter to $43.5 million Excellent year in Banking and Retail 3

4 A few notable wins and milestones Associated Bank Corp Walmart relationship ScanSource 7532 NVR 4

5 FY 12 Strategic Objectives Our focus in 2012 is on 5 strategic objectives. - continue to drive 10% plus top line revenue growth - continue to expand our geographic reach to service our global customers while returning the company to net income. - accelerate the transition of our blue-chip install base from digital to IP, and build software revenues thru innovative applications - Increase gross margins on our hardware programs via cost reductions and improved design. - continue to drive a high performance culture, leveraging our world class leadership team and employee base. 5

6 Q4 Fiscal 2011 Summary Earnings Results *Non-GAAP measure: earnings (loss) before stock based compensation, amortization of acquired intangibles, special charges, interest and income taxes. This measure may not be comparable to similar measures used by other companies. 6

7 Impact of Strength of Canadian Dollar USD CAD * * Revenue weighted average fx rates 7

8 Reconciliation of Non-GAAP to GAAP Earnings 8

9 Revenue By Segment 9

10 Revenue by Region $Cdn M s 10

11 Gross Margin (% of revenue) 60% Net OH 50% 40% 14% 7% 9% 11% 9% 30% 20% 36% 48% 45% 41% 44% 10% 0% Q410 Q411 FY09 FY10 FY11 11

12 Gross Margin Direct (% of revenue) 70% Fixed Mobile Service Overall 60% 50% 40% 30% 20% 10% 0% Q410 Q411 FY09 FY10 FY11 12

13 Operating Expenses ($Cdn M s - Reported Total in Bold) 60.0 Normalized Litigation ITCs Q410 Q3'11 Q411 FY09 FY10 FY11 Excludes stock-based compensation expense, amortization of acquired intangibles and special charges 13

14 Financial Position $Millions April 30, 2011 January 31, 2011 April 30, 2010 Cash and ST investments $43.5 $38.5 $47.9 Working Capital* Working Capital Ratio* 3.4:1 4.1:1 3.3:1 DSO* 1 68 days 61 days 62 days Inventory turnover* times 4.2 times 5.7 times Deferred revenue $7.3 $7.7 $ Excludes AR associated with deferred revenue 2. Excludes inventory associated with deferred revenue * No standardized meaning under GAAP. May not be comparable to similar measures presented by other companies 14

15 Pro Forma IFRS Comparison - Earnings (IFRS Estimates unaudited) Fiscal 2011 CDN GAAP CAD Fiscal 2011 IFRS USD Major Impact Revenue $102.8 $101.7 Currency change Gross Margin Currency change Expenses and special charges (ex-amortization) Currency change Foreign exchange (gain)/ loss 0.4 (2.6) Currency change Stock based compensation Earlier rec. under IFRS EBITDA Amortization Write-down at May 1/10 Interest and taxes (1.1) (0.2) Tax on increased profit Net income (loss) ($3.8) $1.4 Diluted EPS ($0.21) $

16 Expectations for Fiscal 2012 Revenue growth 10%+ Gross margin 47%-50% Operating expenses - Invest in sales and marketing - Op ex between US$11M and $US12M per quarter Deliver net earnings Cap Ex US$4.3M 16

17 Q&A 17