Innovate Corp. · NYSE:VATE
Innovate — Primus Telecommunications Group — Investor Presentation (September 2009)
23 slides from Innovate's investor presentation, Sep 23, 2009
Slide 1: Investor Presentation
Investor Presentation Exhibit 99.1
Slide 2: Safe Harbor
Safe Harbor This presentation and related oral statements and communications contain “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on current expectations, and are not str
Slide 3: Primus Today
Primus Today Global reach supported by extensive network assets Providing a broad suite of communications services to residential and business end- users and carrier customers Optimizing return on the deployment of capital by product mix through a growth focus on broadband, IP-based voice, local, wi
Slide 4: Slide 4
Slide 5: Slide 5
Slide 6: Slide 6
Slide 7: Global Reach Supported By Extensive Network Assets
United States Europe Canada Wholesale Australia Global Reach Supported By Extensive Network Assets IP soft Switches TDM Switches Fiber Capacity IP-based softswitch network supporting wholesale and international traffic Leased domestic fiber and leased / owned oceanic fiber to Europe and Australia IP
Slide 8: Current Revenue Mix
Q2 2009 Current Revenue Mix Products Geography Services Focus on Growth Services which include broadband, IP-based voice, local, wireless, data and data center solutions vs. traditional voice and dial-up Internet services Primary retail businesses in Australia and Canada Serving a mix of residential
Slide 9: Broad Suite of Communications Services
Wholesale 26% Growth Services 31% Traditional Services 43% Broad Suite of Communications Services Focusing on high-growth and high-margin services in the Company’s primary markets – Internet includes broadband services for business and residential in Australia and Canada – VoIP (IP-PBX and SIP servi
Slide 10: Australia Overview
Revenue Adjusted EBITDA (1) Business overview th largest full-service provider with brand- recognition, scale and scope for growth Improving regulatory environment Provides a complete set of services to business and residential customers including: local and LD voice, broadband, data (Ethernet, VPLS
Slide 11: Canada Overview
Revenue Adjusted EBITDA (1) Canada Overview Business overview Largest alternative communications carrier in Canada with brand-recognition, scale and scope for growth Stable regulatory environment Extensive facilities-based infrastructure 7 data centers in 5 cities; 29,000 sq. ft. built and 118,000 s
Slide 12: Wholesale Overview
Revenue Adjusted EBITDA (1) Wholesale Overview Business overview Provide global buying and routing function for retail operations Over 400 carrier customers with some billing over $500K in revenue per month Diversified customer base including Tier 1 international carriers, multi-national carriers, w
Slide 13: Overview of Other Primus Businesses
US (USD) Europe (Euro) Brazil (BRR) Corporate (USD) Managing for cash flow Overview of Other Primus Businesses Europe Broadband Access 5% Retail VoIP 8% Datacenters 23% Wholesale VoIP 64% Revenue – Q209 $16.9 €9.6 R 6.2 - % Revenue Growth (sequential Quarter) (6.5%) (8.4%) (18.2%) - Adjusted EBITDA
Slide 14: Financial Highlights
Repositioning Business to Drive Profitable Growth Solid Free Cash Flow (1) Generation Strengthened Balance Sheet Financial Highlights Drive high-growth and high-margin business in primary markets of Australia and Canada Optimize returns and cash from other markets / businesses Cost rationalization r
Slide 15: Financial Summary
Revenue Adjusted EBITDA (1) Capital Expenditures Free Cash Flow (1) $1.9 $14.2 $0 $4 $8 $12 $16 $20 Q109 Q209 $2.8 $2.9 $1 $2 $3 $4 Q109 Q209 Financial Summary (US$ Millions) $194.5 $196.7 $100 $150 $200 $250 Q109 Q209 $19.7 $20.4 $10 $14 $18 $22 $26 $30 Q109 Q209 3.2% % of Revenue 10.1% 10.4% % of
Slide 16: Foreign Currency Effects
Foreign Currency Effects Natural in-country currency hedge for revenue and costs Translation risk upon conversion of foreign currency to US$ for financial reporting Cash impact limited to movements of foreign currency from profitable foreign operations primarily to service U.S. dollar denominated de
Slide 17: Cost Reduction
Savings by Type of Expense Cost Reduction Ongoing initiative to reduce annual costs by $10 million Efforts well underway Implementation substantially completed by year-end 2009; material benefit expected in Q1 2010 One-time costs to implement of $0.9 million in 2 nd half 2009
Slide 18: 2009 Estimated Capital Expenditure Allocation
2009 Estimated Capital Expenditure Allocation Capital Expenditures IT Infrastructure / Systems 12% Network - Voice 1% Network - Infrastructure 23% Admin 1% Data Center 31% Network - Broadband 25% Other 7% Strategy emphasizes primary markets while optimizing cash flow in other markets Clear return on
Slide 19: Strengthened Balance Sheet
$ $ 256 Strengthened Balance Sheet ($US Millions) Emerged from expedited, prearranged, holding company Chapter 11 reorganization on July 1, Total debt reduced by 55% to $256 million Annual cash interest expense reduced by 50% to $31 million Net leverage of 3.2x LTM Adjusted EBITDA (1)(2) No material
Slide 20: Projected Debt Maturities and Scheduled Amortization
Projected Debt Maturities and Scheduled Amortization 2H09 Canadian Credit Facility - - Senior Secured Term Loan - - Capital Leases - - Senior Subordinated nd Lien Secured Notes - - - - Total $6 $16 $111 $0 $123 (US$ Millions) $0 $20 $40 $60 $80 $100 $120 $140
Slide 21: 2009 Financial Performance Objectives
2009 Financial Performance Objectives Continue to track ahead of the 2009 Adjusted EBITDA (1) projection of $66 million contained in the Plan of Reorganization Manage business to generate free cash flow (1) exclusive of expenses related to the reorganization Manage 2009 capital expenditures not to e
Slide 22: Near-Term Strategic Priorities
Near-Term Strategic Priorities Drive Profitable growth Focus on high-growth and high-margin businesses including broadband, VoIP, hosting, local services, and wireless MVNO in primary markets of Australia and Canada Continue cost rationalization Complete implementation of $10 million cost reduction
Slide 23: Appendix: Non-GAAP Measures
Appendix Non-GAAP Measures Adjusted EBITDA Adjusted EBITDA, as defined by us, consists of net income (loss) before reorganization items, net, interest, taxes, depreciation, amortization, share-based compensation expense, gain (loss) on sale of assets, gain (loss) on disposal of assets, asset impairm
Primus Telecommunications Group — Investor Presentation (September 2009) on 6ix