Safe Harbor Statement

Transcription

1 Western New York Investors Conference Daniel Keane President and CEO October 30 31, 2006 Safe Harbor Statement These slides contain (and the accompanying oral discussion will contain) forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the Company and its divisions, conditions affecting the Company s customers and suppliers, competitor responses to the Company s products and services, the overall market acceptance of such products and services, and other factors disclosed in the Company s periodic reports filed with the Securities and Exchange Commission. Consequently such forward looking statements should be regarded as the Company s current plans, estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 1

2 MOD-PAC CORP. Manufacturing print products since the late 1800 s Purchased by Astronics Corporation in Spun off from Astronics in On demand printer for wholesale and retail markets Custom folding cartons Stock boxes Commercial print Personalized print Operational strengths State-of-the-art manufacturing facility Software integration into production processes Short-run capabilities at lower costs Ability to fulfill thousands of individual print orders daily MOD-PAC CORP. NASDAQ: MPAC Common shares out 2.73 million Total shares out (incl. CL B) 3.44 million Market cap (10/23/06) $42.2 million 52-week price range (10/23/06) $ Avg. daily trading volume (3 mos.) 7,574 Most recent price (10/23/06) $12.27 LTD to equity 6.3% Ownership Institutional 44.1% Insider 38.0% 2

3 Product Line Diversification Commercial Print, 2% Personalized Print, 10% Custom Folding Cartons, 64% Stock Boxes, 24% Q TTM Revenue*: $41.7 million * Excludes buy out fee Custom Folding Cartons Direct sales to brand name and private label manufacturers Significant percentage of sales to consumable manufacturers, which are often non-cyclical Customer focused strategy with a dedicated, direct sales force $15.5 Revenue $23.6 $17.8 $14.7 $13.7 $ Q2 06 TTM 3

4 Stock Boxes Stock box target market is primarily the confectionary industry Steady source of revenue with modest growth potential Revenue $9.7 $9.8 $9.8 $10.1 $9.3 $ Q2 06 TTM Commercial and Personalized Print Commercial print line includes products for businesses, from presentation folders and marketing materials to letterhead and envelopes. Personalized print includes products such as napkins and invitations for special occasions, such as weddings, birthdays and corporate parties. $0.0 $0.9 Revenue Excluding VistaPrint $0.0 $0.9 $0.1 $0.8 $0.2 $1.2 $0.3 $1.4 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Personalized print Commercial print 4

5 Market Opportunity Custom Folding Carton Stock Commercial Personalized MOD-PAC TTM 2006 Sales $26.7 million $10.1 million $0.7 million (excluding VistaPrint sales) $4.3 million Market Potential FOLDING CARTONS PRINT $8 billion $25 billion Market Characteristics Growing at an average rate of 3-5% Steady base of business with moderate growth potential Fractured industry. 25,000 small printers. Localized. Not solutions oriented business models. Products and Services Creative Services Asset Mgmt. E- commerce Print and Imprint Finishing Warehousing Fulfillment Custom Folding Carton Stock Boxes Commercial Personalized 5

6 Channels to Market Direct to Customers Distributors Direct via Internet Third Party Internet Distributors Custom Folding Carton Tyco, Hersheys, Tom s of Maine Stock Boxes Confectioners Regional Commercial Local businesses and non-profits Proforma, American Solutions for Business Personalized Stationary Stores Competitors Within the Channels Custom Folding Cartons Caraustar Industries Rock-Tenn Consolidated Graphics Stock Boxes Small regional printers Print Products (Commercial and Personalized) 25,000 small U.S. printers producing $25 billion in annual print volume with less than $5 million in revenue and 20 employees Full-service print procurement providers 6

7 Meeting the Markets Needs Mass-customization Increasingly fragmented customer bases Proliferation of product variety Need to provide individualized customer products Decentralized work forces Multiple locations requiring personalized corporate identification materials: Business cards, letterhead, etc. Local representatives that want to participate in marketing activities Brand and Marketing Management Reduce inventory of marketing materials Reorder materials often due to content changes Variability in printing needs, such as multiple addresses printed on the same marketing piece Financial Highlights 7

8 Revenue Results $71.2 $19.6 $61.2 $50.2 $15.9 $2.4 $30.8 $32.1 $41.2 $47.8 $51.6 $ Q2 06 TTM Product revenue Contract buy-out fee Expense Control Reduced development and advertising expenses in 2006 for retail website First half of 2006 included $284 thousand for stock based compensation $4.6 $5.0 $6.2 SG&A* $7.7 $10.5 $5.4 $ Six mos *Selling, general and administrative expenses Six mos

9 Net Income Fiscal Trends $11.0 Quarterly Trends excluding contract buy-out fees $1.7 $2.0 $2.1 $3.7 $2.0 $6.6 -$1.2 -$1.1 -$1.0 -$1.9 -$ Q2 06 TTM Q4 05 Q1 06 Q2 06 Net Income Net Income excluding buy-out fee Minimum CapEx Needs 2006 CapEx Expected capital expenditures to remain under $1 million in CapEx Facility rehabilitation Purchased 85,000 square foot building contiguous to current facility IT infrastructure and software investments Built up print capacity and finishing capabilities Hidden Assets 4-year capital spending = $8.11/share Q2 06 book value = $8.94/share Capital Expenditures $1.4 $8.0 $8.6 $6.3 $4.7 $ Est. 9

10 Financial Flexibility $32.6 $30.8 $25.5 $20.4 $21.8 $24.3 $9.7 $0.3 $4.4 $2.1 $2.0 $ Q2 06 Shareholders' Equity Long-term Debt Vision and Outlook Expand products and services to all of our markets Expand our reach into each market through appropriate channels Grow at a pace faster than our industry Achieve historical margins Continue through transition period Continue to evolve technology and unique service model to remain flexible and responsive to address customer needs Lead the digital revolution of the print industry 10

11 Western New York Investors Conference Daniel Keane President and CEO October 30 31,