America s Leading Multi-Channel Bill Payment Network. August 2016

Transcription

1 America s Leading Multi-Channel Bill Payment Network August 2016

2 Corporate Overview Leading Multi-Channel Billing and Receivables Management Processor In North America Processing over $9B/year TIO Networks Corp. (TSVX-TNC) Over 3 Million Unique End-User Customers per month (~8M/yr) Serving the Cash-Preferred, Underbanked User Community 98%+ Residual/Recurring Revenue Recently completed 3rd acquisition in 2 years (Softgate Systems Inc.) which increases TIO s Revenue to over $100M+ and EBITDA to $15M+ ~79M Transactions Processed Annually Significant portfolio amongst the largest wireless and utility companies in North America Over 69k location endpoints in the US for bill payments at retail

3 TIO Facts and Figures (not including Softgate) Truly national provider of bill pay and financial services for underbanked Quarterly Revenue (Based on fiscal Q3 2016, TIO s fiscal year ends July 31, 2016) $17.9M Gross Margin % (Based on fiscal Q3, 2016) 49.6% Quarterly Gross profit (based on fiscal Q3 2016) Quarterly Adjusted EBITDA (based on fiscal Q3 2016) $8.9M $2.88M # of over the counter locations 69,000 # of Self Service Kiosks serviced 1,200 # of Devices owned by TIO 1,000 # of TIO consumer accounts (incl CS) (As at April 30, 2016) 1.24M # of billers supported by TIO 9,200 # of "expedited" or "same day" billers 700

4 Multi-Channel Platform for the Underserved KIOSKS Leading fintech in the self-serve kiosk industry for over 19 years WALK-IN WEB MOBILE IVR API 25,000 bill payment POS systems & money order systems Over 850,000 members on direct-to-consumer platform TIO.com 24 native mobile application & mobileoptimized web programs Automating payments in real-time via interactive voice response Connecting hundreds of partners to over 69,000 locations across N. America CHANNELS REPRESENT 20% 100% OF A BILLER S RECEIVABLES

5 Consistent and Accelerating Multi-Year Revenue and Adjusted EBTIDA growth Source: PI Financial Corp.(forecasts based on PI Financial Corp. estimates)

6 Increased Scale To Help Drive Operating Leverage and Free Cash Flow Generation Source: PI Financial Corp. (forecasts based on PI Financial Corp. estimates)

7 Revenue & Transactions

8 Gross Profit & Gross Margin

9 Net Cash & Debt In 000 s and CA$ April 30, 2016 January 31, 2016 July 31, 2015 July 31, 2014 $ $ $ $ Cash (On Hand Or In Transit) Cash and Cash Equivalents Restricted Cash Funds to Settle Bill Payment O/S Funds to Settle Money Orders O/S Biller Funds Bill Payment Obligations Money Orders Outstanding Operating Line (United and BofA) Net cash for use in operations Accounts Receivable Accounts payable and Accrued Liabilities Net Cash After AR/AP (1.22) (0.77) Total Current Assets Total Current Liabilities Working Capital (1.14) (0.91) SVB (Current = $1.43M) 7.15 Promissory Note(s) 5.18 Net Debt 12.33

10 Fortune 1000 Clients Biller Retail Network/Payment System

11 Acquired Global Express in January 2014 Global Express adds the following strengths to TIO s business: Expanded Biller Catalog Strong/experienced team in Silver Spring, MD Expanded Location base in the South Eastern US, adding 3,000 new locations SILVER SPRING, MD

12 Acquired ChargeSmart.com from VeriFone in August 2014 Largest non-bank, payment card powered multi-purpose bill payment site on the web, allows any card not present (CNP) cardholder to pay any bill safely and easily. $548M TPV processed in the last 12 months 851,000 unique members ChargeSmart has built a unique risk management system that significantly suppress chargebacks in CNP environment. One-stop shop with wide variety of billers and frictionless checkout Easily create and manage recurring payments Rebranded TIO.com in May 2016

13 TIO Completes Acquisition of Softgate Systems Strategically Accretive Acquisition with Softgate TIO creates a powerhouse in the US non-bank bill payment and receivables processing marketplace generating >CAD$100M top line revenue and ~ CAD$15M EBITDA: Add USD$37 million in incremental revenue and USD$5 million in incremental EBITDA to TIO s business MSB licenses in 46 states and D.C. (4 states do not require MSB licenses) allows us to leverage its licenses to operate in 50 states & D.C. Independent customer acquisition via its >4,000 direct agent location network i.e. no dependency on biller relationship Softgate operates PayXchange, state of the art proprietary POS software platform for the bill payment marketplace Deep bill payments and agent management expertise

14 The Evolution of the TIO Networks National Footprint WA MT OR ME ND ID MN CA AZ IL KS IN TX w/ Regional Coverage TIO NETWORKS National Coverage MA CT NJ VA NC TN SC AR LA PR TIO NETWORKS WV KY MS HI OH MO OK NM PA IA NE CO NY MI WY UT NH WI SD AK NV VT AL GA FL GLOBAL EXPRESS SOFTGATE ENHANCED TIO + GE/SGS JOINT COVERAGE

15 How We Make Money Revenue Model & Growth Levers

16 Revenue Model (including 8 days of Softgate) Transaction Fees Recurring Maintenance Revenue One-Time Revenue Sources 67% 27% 5% 1% Convenience fees paid by customers. Transaction fees paid by billers. Fixed monthly fees paid by billers + MO service revenue. Mainly for licenses of software or hardware. * Based on Q Financial Result

17 TIO Growth Layers How does TIO grow? ADD MORE SERVICES New Billers Incremental Services ADD MORE DISTRIBUTION Physical Virtual Kiosk Locations POS Locations Mobile Solutions Web Solutions TIO Branded OR Private Branded

18 Who We Focus On Demographic & Market Focus

19 Demographic Focus LMI Low to Moderate Income Why? Large Group (one out of every four American with GDP ~ $1 Trillion) Very specific needs ( i.e.: loans/credit, payments, transfers, prepaid etc.) An Underserved demographic (most innovators are focused on traditionally banked customer) TIO has been serving this group for over a decade and understands trends & behavior

20 Underserved/Underbanked Big & Diverse Approximately 35 million U.S. households 68 million adults are financially underserved Unbanked 9.6 MM, 7.7% Total Underserved (% of U.S. Households): 28% Banked/Unknown Status 89.3 MM, 72.3% Underbanked 24.8 MM, 20% SKEWS YOUNG and increasing! 10.5 million U.S. Millennials household NOT ALL LOW INCOME = 22% of $50-75k in HH income; 14% of income >$75k FLUID = moves in and out of fin svcs Underserved: All consumers within group by ethnicity 54% Black 46% Hispanic 42% American Indians 20% White 20% Asian Source: 2013 FDIC National Survey of Unbanked and Underbanked Households Oct 2014

21 Underbanked Market Worth > $138B in US alone in 2014 Source: CFSI 2014 underserved Market Size Dec 2015

22 The TIO Cloud Core Technology Asset = Cloud-based Billing and Payment Processing Powers TIO Ecosystem the first platform to connect Kiosks, POS, Web, Mobile! Support For Expedited Payments Is Key Differentiator Compared to Peers PCI Certified to Payment Card Industry Data Security Standard Two Datacenters: Vancouver, BC and Denver, CO Open Architecture Design and API For Ready Connectivity To Any Channel Patented Defensively With One Issued Patent And 4 Pending Process Patents Will ultimately leverage TIO Wallet to support sophisticated financial products!

23 Capital Structure SY M B O L TNC TSX.V S H A R E P R I C E $2.32 M A R K E T C A P I TA L I ZAT I O N $194.9M CAD S H A R ES O U T STA N D I N G 84M I N S I D E R OW N E RSHIP 42% *Based on Aug 3, 2016 market price

24 Key Catalysts Drive Key first 100 day expense synergies from Softgate deal The following are key catalysts for investors to track with TIO: Begin process of driving revenue synergies from combination of people, assets, locations and systems Drive incremental Organic growth from existing large enterprise customers Consolidate platform and other services across acquired subjects to drive EBITDA Expansion Continued focus on opportunistic and complementary acquisitions Continue to ramp up wallet enrolment and value added services driving incremental monetization Devaluation of Canadian Dollar Drives incremental profitability

25 Hamed