Stratex Networks
Stratex Networks — Harris — Merger or Acquisition (September 2006)
28 slides from Stratex Networks's merger presentation, Sep 8, 2006
Slide 1: Creating a Leading Global Wireless Transmission Networks Solutions Provider
Harris Stratex Networks, Inc. Creating a Leading Global Wireless Transmission Networks Solutions Provider
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute "forward-looking statements." Forward-looking statements in this presentation include, but are not limited to, the expected benefits and costs of the transaction; the anticipated timing of completion of the transaction; an
Slide 3: Additional Information and Where to Find It
Additional Information and Where to Find it Additional Information and Where to Find It This presentation is for informational purposes only. In connection with the transaction, the parties will file a registration statement on Form S-4, which will include a proxy statement/prospectus, with the Secu
Slide 4: Today's Presenters
Chuck Kissner Chairman, Harris Stratex Networks, Inc. Former Chairman & CEO, Stratex Networks Guy Campbell Chief Executive Officer, Harris Stratex Networks, Inc. Prior Experience: President, Microwave Communications Division, Harris Corporation Chief Executive Officer and President, Andrew Corporati
Slide 5: Harris Stratex Networks
Harris Stratex Networks Industry Leadership Scale Innovative solutions Financial performance Complete Infrastructure Solutions End-to-end wireless transmission capabilities Transport, access, and carrier-grade Ethernet microwave systems Nodal processors Software upgrades Network management solutions
Slide 6: Transaction Overview
Transaction Overview Financial Structure Harris contributes Microwave Communications Division and $25M of cash for approximately 56% ownership Stratex shareholders exchange their shares for approximately 44% ownership Two-year standstill, with limitations in years three and four Fiscal year ending J
Slide 7: Snapshot of the Two Companies
Snapshot of the Two Companies (Microwave Communications Division) Continuing improvement in financial performance LTM revenue of $349M and growing at 9% Generated $21.7M in Non-GAAP operating income* and margin of 6.2% Latest quarter Non-GAAP operating margin* reached 9.1% Continuing improvement in
Slide 8: Compelling Strategic and Financial Rationale
Compelling Strategic and Financial Rationale Creates significantly greater scale -- the largest independent provider of wireless transmission network solutions Compared to all suppliers - #3 Globally and #1 in North America Delivers complementary global distribution channels Minimal customer overlap
Slide 9: A Leading Global Provider of Wireless Transmission Network Solutions
Global Market Harris Stratex 15% Stratex 6% Harris 9% A Leading Global Provider of Wireless Transmission Network Solutions North American Market Harris Stratex 48% Estimated based on calendar year 2005 global market of $3.5 billion Source: Management estimates Harris 46% Stratex 2%
Slide 10: Microwave Market Growth
Microwave Market Growth Expected Total Global Market Growth of 8%; Strong Positioning in Higher Growth Segments Source: Management estimates 2006 2007 2008 2009 PDH access 2317 2461 2608 2859 PDH Transport 200 210 210 215 SDH Access (incl Ethernet) 713 847 976 1083 SDH Transport 705 711 750 780 ($ i
Slide 11: The Economics of Microwave
Monthly backhaul price points $1,000 45 155 Mbps backhaul Microwave Backhaul demand per cell site [2 Cxrs] $2,000 $3,000 $4,000 OC3 DS3 Backhaul alternatives for a cell site Source: Stratsoft, Georesults, Visant Today's installed copper 3 10 28 Copper Fiber The Economics of Microwave North American
Slide 12: Geographic Strengths and Opportunities
Geographic Strengths Geographic Opportunities Strong HSN Market & Product Positioning - Significant Growth Opportunities 3G Triple Play (Voice, Data & Video) Government Private Net North America Asia/Pacific Africa & Middle East Europe HSN Multi-Application Product Portfolio, Distribution, and Key C
Slide 13: Unmatched End-to-End Product Portfolio
Unmatched End-to-End Product Portfolio Other Independent Suppliers Transport SDH PDH Access SDH PDH Network management solutions IP Turnkey planning, engineering, and implementation Source: Management estimates
Slide 14: Solid, Achievable Plan for Cost Synergies
Solid, Achievable Plan for Cost Synergies Cost of goods sold Increased outsourcing on some products to low-cost contract manufacturers Supply chain volume leverage Low-cost design architecture "best of the best" Operating expenses* Duplicate administrative and overhead costs Adherence to common engi
Slide 15: Harris Stratex Networks Performance Targets
Harris Stratex Networks Performance Targets Latest twelve months performance* Latest twelve months performance* Targets Harris Microwave Stratex Networks 2008-2009 Year-over-year revenue growth 9% 28% 10-15% Gross margin 34% 30% 40% Operating expenses as % of sales 27% 24% 25% Operating income margi
Slide 16: In Summary
In Summary The transaction is projected to be accretive to both Stratex and Harris shareholders From inception, creates a leading global provider of wireless transmission network solutions with leadership products and services Provides the scale to win major contracts, deliver sustainable growth, an
Slide 17: Harris Stratex Networks
BARRIS stratex Harris Stratex Networks investor Beng 8 Ta Sale vo, Seneber 2006
Slide 18: Financial Information Appendix
Financial Information Appendix
Slide 19: Combined Pro Forma Latest Twelve Months Ended June 30, 2006
Combined Pro Forma Latest Twelve Months Ended June 30, 2006 ($ in millions) * See reconciliation of non-GAAP financial measures in the Financial Information Appendix
Slide 20: Combined Pro Forma Balance Sheet as of June 30, 2006
Combined Pro Forma Balance Sheet as of June 30, 2006 ($ in millions) * Represents cash, cash equivalents and short-term investments
Slide 21: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Harris Stratex Networks, Inc. September 2006
Slide 22: Non-GAAP financial measures explanation
To supplement the published financial statements for the Microwave Communications Division of Harris Corporation and Stratex Networks, Inc., presented in accordance with accounting principles generally accepted in the United States (GAAP), we provide additional measures within the strategic overview
Slide 23: Reconciliation of Non-GAAP Financial Measures: Snapshot of the Two Companies
Reconciliation of Non-GAAP Financial Measures Slide Title: Snapshot of the Two Companies
Slide 24: Reconciliation of Non-GAAP Financial Measures: Snapshot of the Two Companies
Reconciliation of Non-GAAP Financial Measures Slide Title: Snapshot of the Two Companies
Slide 25: Reconciliation of Non-GAAP Financial Measures: Cost Synergies
Reconciliation of Non-GAAP Financial Measures Slide Title: Solid, Achievable plan for Cost Synergies
Slide 26: Reconciliation of Non-GAAP Financial Measures: Cost Synergies
Reconciliation of Non-GAAP Financial Measures Slide Title: Solid, Achievable plan for Cost Synergies
Slide 27: Reconciliation of Non-GAAP Financial Measures: Performance Targets
Reconciliation of Non-GAAP Financial Measures Slide Title: Harris Stratex Networks Performance Targets
Slide 28: Reconciliation of Non-GAAP Financial Measures: Combined Pro Forma LTM
Reconciliation of Non-GAAP Financial Measures Slide Title: Combined Pro Forma Latest Twelve Months Ended June 30, 2006