Gogo Inc. · NASDAQ:GOGO
Gogo — Leveraged Finance Conference (June 2015)
24 slides from Gogo's conference presentation, Jun 4, 2015
Slide 1: Leveraged Finance Conference Presentation
June 4, Leveraged Finance Conference Presentation Exhibit 99.1
Slide 2: Key Credit Highlights
LARGE GROWTH OPPORTUNITY LARGE GROWTH OPPORTUNITY HIGH BARRIERS TO ENTRY HIGH BARRIERS TO ENTRY EXPERIENCE & SCALE EXPERIENCE & SCALE LEADING POSITION LEADING POSITION ATTRACTIVE ECONOMICS ATTRACTIVE ECONOMICS KEY CREDIT HIGHLIGHTS
Slide 3: Slide 3
Slide 4: Aviation Internet Trends
AVIATION INTERNET TRENDS Connected aircraft transform global aviation – the last frontier of internet connectivity Cost, coverage, capacity and reliability are just now reaching critical inflection points Next gen technologies expected to increase speeds from 10 to 100Mbps within 5 years with a comp
Slide 5: A Large and Growing Global Connected Aviation Market
1.4x 1.2x 2.3x ADDRESSABLE CONNECTED AIRCRAFT ADDRESSABLE CONNECTED AIRCRAFT Commercial Aviation (“CA”) Commercial Aviation (“CA”) Business Aviation (“BA”) Business Aviation (“BA”) 2.6x size of CA-NA 2.6x size of CA-NA The connected aircraft industry is worth up to $30 billion The connected aircraft
Slide 6: Gogo's Impressive Scale and Reach
Largest Market Share in CA-NA Largest Market Share in CA-NA Largest Market Share in BA Largest Market Share in BA #1 Global in-flight connectivity provider Leader in North America and expanding internationally #1 Global in-flight connectivity provider Leader in North America and expanding internatio
Slide 7: Long-Term Partnerships with Our Major Aviation Partners
North America North America Original Equipment Manufacturers Original Equipment Manufacturers Fractional Jet Operators Fractional Jet Operators Commercial Aviation Commercial Aviation Business Aviation Business Aviation International International LONG-TERM PARTNERSHIPS WITH OUR MAJOR AVIATION PARTN
Slide 8: Why We Win
Specialize in aviation and telecom Specialize in aviation and telecom Excellent reliability Excellent reliability Superior technology & economics Superior technology & economics End-to-end service provider End-to-end service provider 1 2 3 4 WHY WE WIN
Slide 9: We Specialize in Aircraft and Have a Track Record of Innovation
ATG / ATG-4 2Ku Intellectual Property Other Aviation Innovations 1 2 3 4 EXPERTISE IN INTERNET, AVIATION AND TELECOM EXPERTISE IN INTERNET, AVIATION AND TELECOM WE SPECIALIZE IN AIRCRAFT AND HAVE A TRACK RECORD OF INNOVATION st generation of technology North America coverage nd generation of technol
Slide 10: Technology comparison
Technology Region Peak Speed Key Attributes Global Eagle Broadest suite of technologies and full fleet connectivity solutions Proprietary 2Ku technology: higher peak speed (70-100 Mbps) than competitors at half the bandwidth cost ATG / ATG-4: fastest deployment time (overnight) and lightest equipmen
Slide 11: Excellent Reliability
EXCELLENT RELIABILITY 75+ million sessions 7,800+ flights per day 98% + ATG End-to-End System Availability Source: Company information
Slide 12: The Most Complete End-to-End Aviation Service Provider
Real-time credit card processing Real-time weather information Other applications to enhance airlines operational efficiency Account support Network monitoring and management Passenger support services, portal design, developing and hosting Airborne equipment for ATG and satellite Certification, ins
Slide 13: Financials and Capital Structure
FINANCIALS AND CAPITAL STRUCTURE
Slide 14: Growing Revenue Drives Profitability
$8 $11 $14 $41 $78 $80 62% CAGR GROWING REVENUE DRIVES PROFITABILITY Note: Minor differences exist due to rounding (1) Please see reconciliation of Adjusted EBITDA in appendix Adjusted EBITDA (1) ($MM) $37 $160 $328 $408 $428 Q1 2015 LTM ($89) ($1) Q1 2015 LTM $49 CA-ROW Segment Loss Revenue ($MM) $
Slide 15: CA-NA: Revenue and Segment Profit Growth
11% Margin 102 Q/Q Increase CA - NA: REVENUE AND SEGMENT PROFIT GROWTH Note: Minor differences exist due to rounding (1) We define ARPA as the aggregate service revenue for the annual period divided by the number of aircraft online during that period $11 $251 $266 Q1 2015 LTM Revenue ($MM) $24 $121
Slide 16: BA: High-Margin Service Revenue Drives Profitability and Cash Flow
$72 $78 $20 $84 $81 11% 40% 40% 186 Q/Q Increase 43% CAGR $6 Q1 2015 LTM BA: HIGH-MARGIN SERVICE REVENUE DRIVES PROFITABILITY AND CASH FLOW $26 $156 $159 Equipment Revenue Service Revenue Revenue ($MM) $3 $63 $63 Q1 2015 LTM Segment Profit ($MM) Segment Profit Margin Segment Profit 2,797 2,983 Q1 20
Slide 17: CA-ROW: Focus on International Expansion
116 aircraft online as of 3/31/2015 Near global Ku-band satellite network 2Ku technology selected by 6 airlines for trial or adoption Q1 2015 Aircraft Online (end of period) Cumulative Aircraft Awards (1) Figures reflect aircraft under non-binding agreements (2) Includes Gogo awarded aircraft as of
Slide 18: Normalized CapEx Model
Capitalized software Airborne equipment Network equipment Over the past two years, Gogo’s Cash CapEx has been stable at ~$100 million Over the past two years, Gogo’s Cash CapEx has been stable at ~$100 million Equipment proceeds received from airlines and landlord incentives Cash CapEx (1) NORMALIZE
Slide 19: Gogo Capital Structure
GOGO CAPITAL STRUCTURE Note: Senior Unsecured Convertible Notes and total debt represent the principal amounts outstanding, which includes amounts treated as equity for accounting purposes. Balance ($MM) 3/31/2015 Cash & Cash Equivalents $400 Senior Secured Credit Facility $307 Senior Unsecured Conv
Slide 20: Key Credit Highlights
Attractive Credit Attractive Credit Large growth opportunity Large growth opportunity Attractive Economics Attractive Economics Leading position, high barriers to entry Leading position, high barriers to entry Experience & Scale Experience & Scale Focused Strategy Focused Strategy Gain global share
Slide 21: Q&A
Q&A
Slide 22: Appendix
APPENDIX
Slide 23: Adjusted EBITDA Reconciliation ($MM)
2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 ADJUSTED EBITDA RECONCILIATION ($MM) Net Income (142) (140) (18) (96) (146) (17) (19) (25) (24) (20) Interest Income (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) Interest Expense – Income Tax Provision – – – – – – Depreciation & Amortizatio
Slide 24: Cash CapEx Reconciliation ($MM)
2009 2010 2011 2012 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 CASH CAPEX RECONCILIATION ($MM) Purchases of Property and Equipment (69) (33) (33) (67) (105) (32) (28) (35) (37) (53) Acquisition of Intangible Assets (Capitalized Software) (8) (7) (10) (12) (16) (4) (5) (5) (3) (4) Consolidated Capi