Tempo Automation Hldgs Inc · OTC:TMPOQ
Tempo Automation Hldgs — Tempo Automation — SPAC Merger (October 2021)
58 slides from Tempo Automation Hldgs's SPAC merger presentation, October 2021
Slide 1: Transforming Product Development with Software and AI
STRICTLY PRIVATE & CONFIDENTIAL TRANSFORMING PRODUCT DEVELOPMENT WITH SOFTWARE AND Al TEMPO
Slide 2: Disclaimer
Disclaimer This presentation (this Presentation) is provided for informational purposes only and hasbeen prepared to assist interested partis in making their own valuation with respect toa potential business combination between Tempo Automation, Inc. (collectively with its subsidiaries and proforma
Slide 3: Disclaimer (continued)
Disclaimer (continued) Industry and Market Data This presentation ha been prepared by Tempo and ACE and includes market data and other statistical information from sources belived by Tempo and AC tobe eile, including independent industry publications, governmental publications or other published ind
Slide 4: Our Presenters Today
Our Presenters Today TEMPO EXECUTIVES ACE EXECUTIVE Joy Weiss Ryan Benton PRESIDENT & CEO CHIEF FINANCIAL OFFICER dust Eases CO a Jeff Kowalski CHIEF PRODUCT OFFICER \ AUTODESK Behrooz Abdi CHAIRMAN & CEO InvenSense. Qualcomm OCTOBER 2021 & STRICTLY PRIVATE & CONFIDENTIAL
Slide 5: ACE Overview
ACE Overview AT A GLANCE Mandate Identify and acquire emerging leader in IT infrastructure and SoC markets ~$230M' held in trust Backed by cross-border Tech PE Manager, ACE Equity Partners, which has led more than $1B in transactions across its investments i 1 Assumes no redemptions by AC existing s
Slide 6: Tempo Automation + ACE: Value-added Partnership
Tempo Automation + ACE: Value-added Partnership ‘| temeo ACEV NASDAQ: ACEV, ACEVW, ACEVU SOFTWARE-ACCELERATED ELECTRONICS MANUFACTURING, UNIQUE BLEND OF DOMAIN EXPERTISE TRANSFORMING PRODUCT DEVELOPMENT WITH SOFTWARE AND Al AND TRACK RECORD OF SCALING COMPANIES Y) Leveraged by many of the world’s mo
Slide 7: Transaction Overview
Transaction Overview =l * Software-accelerated electronics manufacturer leveraged by many of the world’s most innovative companies to get products to market faster + Inconnection with its business combination with ACE, Tempo expects to acquire two targets, Advanced Circuits and Whizz Systems, creati
Slide 8: Introduction
STRICTLY PRIVATE & CONFIDENTIAL s fae SAvev fll € . = Pant SA/OV Fo 1. DA/6 Introduction ‘[Tremro
Slide 9: Tempo Automation Investment Highlights
Tempo Automation Investment Highlights . . : PRO FORMA REVENUE Software-accelerated electronics manufacturing, transforming product development for the world’s innovators in a $2908 market $331 $272 $220 Proprietary software platform, with Al that learns from every order, $142 $146 $178 || [- J rede
Slide 10: Tempo's Platform Streamlines Electronics Product Realization
Tempo’s Platform Streamlines Electronics Product Realization Y ® FRONT-END CUSTOMER BACK-END PORTAL SOFTWARE MANUFACTURING SOFTWARE CONNECTED NETWORK OF SMART FACTORIES Front-end Customer Portal Software i) Frictionless quoting, ordering, and complex data ingestion via secure cloud-based interface i
Slide 11: Leadership: Strong Record of Value Creation
Leadership: Strong Record of Value Creation JOY WEISS RYAN BENTON JEFF KOWALSKI BILL SCHMITT RALPH RICHART MATTIAS CEDERGREN DAWN SPRAGUE PRESIDENT, CEO & DIRECTOR CHIEF FINANCIAL OFFICER CHIEF PRODUCT OFFICER CHIEF REVENUE OFFICER CHIEF TECHNOLOGY OFFICER CHIEF MANUFACTURING _VICE PRESIDENT OF PEOP
Slide 12: The Product Development Journey is the Same
The Product Development Journey is the Same, Whether the End Goal is 100 units/year or 1M units/year Each successive iteration progresses a product to manufacturability at ON-DEMAND volume, and to ensuring it fulfills its ambitious performance oe PRODUCTION < 1000 UNITS Example electronics product d
Slide 13: Prototype & On-Demand Production Are Different Than Volume Production
Prototype & On-Demand Production Are Different Than Volume Production VOLUME PRODUCTION 1,000+ UNITS PROTOTYPE & ON-DEMAND PRODUCTION < 1,000 UNITS NON-US US MARKET SIZE MARKET SIZE $1.3T $608 $379B $2908 # OF DESIGN ITERATIONS 1 14 # OF UNIQUE COMPONENT # CHANGE ORDERS PRIMARY GOAL PRODUCTS PER INV
Slide 14: The US Outsourced Market is Served Primarily by Small, Owner-Operated Businesses
The US Outsourced Market is Served Primarily by Small, Owner-Operated Businesses Volume manufacturers often refer out prototyping and on-demand production business Aging, expert workforce is retiring, COMPANIES WITH $500M+ REVENUE along with their tacit knowledge COMPANIES WITH < SSOM REVENUE COMPAN
Slide 15: Require More and More Complex Electronics
Require More and More Complex Electronics a Het ae ’ j SEMICONDUCTOR AVIATION & DEFENSE INDUSTRIAL *& ECOMMERCE INDUSTRY SIZE AND GROWTH RATE : Expected to reach Estimated to reach Medical Device industry to be Industrial loT market to reach Set to grow from A . . . 1 via a via a via a viaa 2 3 4 5
Slide 16: Electrical Engineers Have Become Frustrated
Electrical Engineers Have Become Frustrated By an Industry Rife with Quality + On-time Delivery Issues rT rT] “I've experienced the worst of the worst from other “was pleasantly surprised today with a package from [vendors] in the 8 years I've been an [electrical engineer]. your factory, and | am in
Slide 17: Tempo's Software Platform Helps Companies Iterate Faster
Tempo’s Software Platform Helps Companies \terate Faster STATUS QUO APPROACH oe MANUAL ening MANUFACTURABILITY REVIEW © AUTOMATED QUOTING © AUTOMATED MANUFACTURABILITY REVIEW © AUTOMATED PROCUREMENT © AUTOMATED SETUP & MANUFACTURING " Iustrative STRICTLY PRIVATE & CONFIDENTIAL
Slide 18: Case Study: GE Healthcare Iterates in Days vs. Weeks
Case Study: GE Healthcare Iterates in Days vs. Weeks STATUS QUO MANUFACTURER Their previous vendor's lead times were usually 3 - 4 weeks and could take up to 5 weeks. Getting a quote for a new design took an entire week. Additionally, the quality was lower than desired. THE TEMPO EXPERIENCE Tempo de
Slide 19: Faster Iterations = Faster Time to Market
Faster Iterations = Faster [ime to Market EXAMPLE TIME TO MARKET: TOP 5 SPACE, AVIATION, AND DEFENSE COMPANY' smarusaue PO 22-24 MOUTHS! vein TEND PO MONTHS! dé “Tempo is all about agility, speed, and focus on prototyping. They've enabled us to get hardware into our labs and begin integration far fa
Slide 20: Technology Platform
Slide 21: A Highly Manual Status Quo Slows the Development Process
A Highly Manual Status Quo Slows the Development Process 4 Z a, DISCONNECTED PROCESS IN AN INDUSTRY UNDERSERVED BY TECHNOLOGY & O =! La Se CAD Software + Design Files > Sent through Various Methods -> Reviewed byHumans —> Produced Labor-Intensively ® sLow © ARbuoUS ® OPAQUE @ UNRELIABLE © UNPREDICTA
Slide 22: Tempo Weaves a Digital Thread, From First Touch to Delivery
tempo Weaves a Uigital Thread, From First Touch to Delivery Customer journey connected by continuous digital thread, initiated as soon as design is uploaded TEMPO DIGITAL THREAD T Design File Upload ——> Patents underpin algorithms that analyze design, determine component availability, and deliver qu
Slide 23: Tempo Platform Underpins Logistics
Tempo Platform Underpins Logistics Automated analysis confirms Components ordered via integrated Factory programmed for assembly manufacturability of design interface with vendors | * = | a = | ; = | - -£ | oe = Manufacturability Check & Network of Pre-qualified / Parts Check-In, Issue Resolution Au
Slide 24: Tempo Platform Streamlines Assembly
Tempo Platform Streamlines Assembly Automated monitoring of manufacturing Automated process Tracked, on-time shipment execution data drives higher yields confirms quality product BeagleBone Black — > Assembly ——————————————> Quality Assurance —-—————————_ Delivery ——————______» OCTOBER 2021 26 STRIC
Slide 25: Tempo Visualizer
Tempo Visualizer: Limited Stock MPN 06031A100FA12A 2 Required 1 Available REFDES C22, C33 Tombstone Issue On this placement for: Rev A: 10% of boards Rev B: 5% of boards Rev C: 1% of boards DO AVAILABLE CILIMitep stock CO END OF LIFE Bi our oF stock Print Preview + Spellcheck for Electronics 25 STRI
Slide 26: Tempo Roadmap Redefines the Manufacturing Process
Tempo Roadmap Redefines the Manufacturing Process @ @®@ STATUS QUO DATA Inconsistent, Incomplete Data PROCESSES — Disconnected Processes PROCESSORS Human Processors ¢ Manual Effort + Tacit knowledge + Not portable rr 9,971,338 and 10,481,585. Connected Information Digital Thread * Continuous + Bi-Di
Slide 27: Growth: Organic + Inorganic
STRICTLY PRIVATE & CONFIDENTIAL Growth: Organic + Inorganic ‘[Tremro
Slide 28: Customers, Technology, and M&A Drive our Growth
Customers, lechnology, and M&A Drive our Growth Harness our end-to-end, Enhance our automated, Continue to make disciplined vertically integrated platform intelligent process inorganic investments + 7,000+ customer base provides enormous + More orders imply more data; more data + $290B fragmented la
Slide 29: Blue Chip Customer Base Provides Significant Growth Headroom
Blue Chip Customer Base Provides Significant Growth Headroom With 7,000+ customers, if all we do is grow within them, we will have an enormous business LAND AND EXPAND EXAMPLE: LEADING COMMERCIAL SPACE COMPANY LAND AND EXPAND EXAMPLE: LEADING ELECTRIC CAR COMPANY 147% 97% 213% 316% ot (stom $60M $50
Slide 30: Initial Acquisitions Position Tempo to Transform Every Step
Initial Acquisitions Position Tempo to Transform Every Step of the Electronics Development Process Engineering Design Services Printed Circuit Board Fabrication = | WHIZZ mins ‘tempo WHIZZ WHIZZ . v moins coat Printed Circuit Board Assembly: On-Demand Production
Slide 31: Tempo's Platform Drives Growth and Profitability in Targets
Tempo’s Platform Drives Growth and Profitability in Targets TOP LINE BENEFITS TO ACQUIRED COMPANIES Customer Portal helps acquired companies unlock growth in new and existing accounts Increased speed and quality help acquired companies maintain and grow their customers Self-service customer interact
Slide 32: Actionable Pipeline
Actionable Pipeline Enables Rapid Execution of Further Tech-Enabled M&A 2025E REVENUE BRIDGE 1,000+ COMPANIES. 100+ ~$11B° REVENUE OPPORTUNITY IDENTIFIED opronruniries $300-$500 Vv 10 IN CONTACT & UNDER REVIEW \w contact REPRESENT ~$750M IN FY20 SALES $331 READY TO CLOSE WITH SPAC 2025E ORGANIC INOR
Slide 33: Advanced Circuits Overview
Advanced Circuits Overview CACORE CAGEG Premier provider of printed circuit board fabrication and prototype printed « BR ADVANCED circuit board assembly CIRCUITS A subsidiary of Compass Diversified Holdings (NYSE: COD!) $98 1 M 43% GAAP Gross Margin 2020A REVENUE vs. 20% US electronics manufacturing
Slide 34: Whizz Systems Overview
Whizz Systems Overview ‘CAGE CAGAG Premier provider of prototype and on-demand printed circuit board assembly, as well as engineering design services 43% GAAP Gross Margin (46% 2020A Non-GAAP Gross Margin) vs. 20% US electronics manufacturing industry average Trusted partner for leading technology a
Slide 35: Financials
Slide 36: Detailed Transaction Overview
Detailed fransaction Overview SOURCES AND USES (5 \N) MiLLions) SOURCES $ AMOUNT ACE Cash in Trust $230 PIPE - Common Equity 82 PIPE - Convertible Debt 25 Structural Capital Senior Term Debt, net proceeds’ 54 Shareholder Rollover Equity’ 549 Total Sources $940 USES $ AMOUNT Equity Consideration Equi
Slide 37: Strong Organic Growth Momentum
Strong Organic Growth Momentum $220 : - 2021E 2022E 2023E 2024E 2025E $146 REVENUE’ Source: Management Projections Pro forma (PF) figures include the acquisitions of Compass AC Holdings, Ine (Advanced Circuits" “A") and Whiz Systems, Ic. ("Whiz Systems” or “Whiz") which ae expected to clase substant
Slide 38: Operating Leverage — Organic Non-GAAP Gross Margin
Operating Leverage — Organic Non-GAAP Gross Margin NON-GAAP COST OF GOODS SOLD ($) AND NON-GAAP GROSS MARGIN (%)'” SIN MILLIONS @ NON-GAAP GROSS MARGIN © @ DIRECT LABOR 59% OVERHEAD @ DIRECT MATERIALS OVERHEAD Improved overhead costs with combination $136 - - . synergies and increased economies of s
Slide 39: Operating Leverage — Organic Non-GAAP Operating Expenses
Operating Leverage — Organic Non-GAAP Operating Expenses NON-GAAP OPERATING EXPENSE’ ~ $ IN MILLIONS @ % OF ORGANIC REVENUE @ RESEARCH & DEVELOPMENT RESEARCH & @ SELLING, GENERAL & ADMINISTRATIVE DEVELOPMENT 34% Continued investment in Tempo platform *——$__ y development and rollout 27% 27% 28% -O o
Slide 40: Organic Non-GAAP Operating Margin Bridge
Organic Non-GAAP Operating Margin Bridge NON-GAAP OPERATING PROFIT ($) AND NON-GAAP 1.4% , , OPERATING MARGIN (%)':? BRIDGE 2021E - 2025E 7.6% 0.4% 27.1% $ IN MILLIONS (1.5%) 7.0% 19.8% (0.6%) ° (2.1%) 9.1% $44 6.5% 2021E GROSS MARGIN SG&A INCREMENTAL SBC CHANGE 2023E GROSS MARGIN SG&A INCREMENTAL S
Slide 41: Overview of Organic Financial Performance
Overview of Organic Financial Performance’ REVENUE($) AND GROWTH RATE(%) $ IN MILLIONS cAGR 23% $220 . / || 2021E 2022E 2023E % GROWTH 3% 22% 23% 24% 22% NON-GAAP GROSS PROFIT(S) AND GROSS MARGIN (%)° case 33" $ IN MILLIONS $113 2021E 2022E 2023E 2024E 2025E % MARGIN 42% 48% 51% 55% 59% Source: Mana
Slide 42: Valuation
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Slide 43: Tempo Highlights: Defining the Opportunity vs. Peer Groups
Tempo Highlights: Defining the Upportunity vs. Peer Groups eeeee Tr REVENUE ‘21E - '23E Differentiated tech-enabled focus on fragmented $290B et electronics prototyping and on-demand production market Proprietary software platform, with Al that learns from every order, redefines the customer journey
Slide 44: Tempo is at the Intersection of Multiple Growth Segments
Tempo is at the Intersection of Multiple Growth Segments DIGITAL MANUFACTURING ADVANCED MANUFACTURING SOFTWARE EjPright ., FR] Fast Rapius Machines. . 7 a. ase Se ‘Ansys — (\ AUTODESK FATHOM @Markforged cAadence iS otc . stratasys = @ MB ign $ stratasy materialise PROTOLABS SYNOPSYS’ Xometry + Softw
Slide 45: 2023 EBITDA Margin vs. Revenue CAGR
2023 EBITDA MARGIN Tempo’s Combination of Margins and Growth is Unique Amongst its Peers 2021E - 2023E REVENUE CAGR VS 2023E EBITDA MARGIN 50% ‘ e/Ansys 45% < cadenceg a @ AQ autovEsk. ‘ 40% Sptc e °° coGNex } 1 2 35% synopsys" [ TEMPO UPSIDE FROM M&A GROWTH ———> |!| TEMPO + M&A 30% . FATHOM 25% . e
Slide 46: Tempo vs. Comparable Companies - Revenue Multiples
Tempo vs. Comparable Companies - Revenue Multiples FIRM VALUE / 2023E REVENUE 12.8x 10.8x 10.9x MEDIAN 8.2x ee 5.7x 31x Tr - ‘Treneo GDR. — GMarkfoged = Kometry FATHOM FS) rast ravius FIRM VALUE / 2022E REVENUE MEDIAN MEDIAN [sax 13.4x 12.2x 8.7x 72x 95x 4.2x 34x 8.7x 16.6x 12.1x 6.0x 2.0x 9.0x 12.5
Slide 47: Tempo vs. Comparable Companies - EBITDA Multiples
Tempo vs. Comparable Companies - £8//0A Multiples FIRM VALUE / 2023E EBITDA 53.0x MEDIAN 33.3x We 26.1% 21.9% 21.4x MEDIAN 21.4x 22.7x 16.1x 13.4x i NM NM NM NM ‘Teneo momome «= FATHOM = Marktorged — DFE 2ros st anwus. Xometry CoeNEX % stratasys sortwane FIRM VALUE / 2022E EBITDA weoian weoian (be 2
Slide 48: Transaction Overview
Transaction Overview =l * Software-accelerated electronics manufacturer leveraged by many of the world’s most innovative companies to get products to market faster + Inconnection with its business combination with ACE, Tempo expects to acquire two targets, Advanced Circuits and Whizz Systems, creati
Slide 49: Appendix
STRICTLY PRIVATE & CONFIDENTIAL Appendix ‘[Tremro
Slide 50: Proforma Financial Summary
Proforma Financial Summary’ $ IN MILLIONS REVENUE GROWTH % (-) COST OF GOODS SOLD NON-GAAP GROSS PROFIT’ NON-GAAP GROSS MARGIN (-) OPERATING EXPENSES NON-GAAP OPERATING PROFIT® NON-GAAP OPERATING MARGIN % (+) DEPRECIATION & AMORTIZATION (+) STOCK-BASED COMPENSATION EBITDA® EBITDA MARGIN % (-) CAPITA
Slide 51: Reconciliation to EBITDA
Reconciliation to EBITDA SINMILIDNS 5 Proform 12 Months Ended 12/31/19 12/31/20 Revenue $146.2 $142.5 Trans Adj.” ($0.9) ($0.3) PF Revenue $145.3 $142.3 Net Income $3.0 $0.4 Income Taxes $5.5 $29 Depreciation and Amortization $4.9 $5.8 Interest Expense $6.4 $6.7 Remeasurement of Convertible Debt $0.
Slide 52: Risk Factors
Risk Factors RISKS RELATING TO TEMPO'S BUSINESS AND INDUSTRY We are an early-stage company with a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future. Our limited operating history and rapid growth makes evaluating our current busin
Slide 53: Risk Factors (continued)
Risk Factors (continued) RISKS RELATING TO TEMPO'S BUSINESS AND INDUSTRY (CONTINUED) + We purchase a significant amount of the materials and components we use from a limited number of suppliers. If our suppliers become unavailable or inadequate, our customer relationships, results of operations and
Slide 54: Risk Factors (continued)
Risk Factors (continued) RISKS RELATING TO TEMPO'S BUSINESS AND INDUSTRY (CONTINUED) + We are subject to taxes in numerous jurisdictions. The Company's future effective tax rates could be affected by changes in the mix of earnings in jurisdictions with differing statutory rates and changes in tax la
Slide 55: Risk Factors (continued)
Risk Factors (continued) RISKS RELATED TO BECOMING A PUBLIC COMPANY (CONTINUED) + Changes in accounting rules and regulations, or interpretations thereof, could result in unfavorable accounting charges or require us to change our compensation policies. + Provisions in our proposed charter documents
Slide 56: Risk Factors (continued)
Risk Factors (continued) RISKS RELATED TO THE BUSINESS COMBINATION AND ACE (CONTINUED) + There is no assurance that a stockholder’s decision whether to redeem its shares for a pro rata portion of ACE's trust account will put the stockholder in a better future economic position. + If the Business Com
Slide 57: Risk Factors (continued)
Risk Factors (continued) RISKS RELATED TO THE BUSINESS COMBINATION AND ACE (CONTINUED) ‘Subsequent to consummation of the Business Combination, the combined company may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring a
Slide 58: Tempo
TEMPO WWW.TEMPOAUTOMATION.COM 58 STRICTLY PRIVATE & CONFIDENTIAL