Cpi International — Q3 FY2010 Earnings Presentation
35 slides from Cpi International's earnings presentation, Jun 4, 2010
Slide 1: Investor Presentation Q3 Fiscal Year 2010
This presentation reflects information as of June 4, 2010 Investor Presentation Q3 Fiscal Year 2010 Filed by Comtech Telecommunications Corp. Pursuant to Rule 425 of the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: CPI Intern
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Comtech Telecommunications Corp. Cautionary Statement Regarding Forward-Looking Statements Certain information in this presentation contains forward-looking statements, including but not limited to, information relating to the Company's future performance and financial condition, plans and objective
Slide 3: Q3 FY 2010 Highlights
Revenue: EBITDA(1): Bookings: Gross margin: Operating income: Q3 FY 2010 Revenue ($ millions) Q3 FY 2009 Q3 FY 2010 Diluted GAAP EPS $0.27 $0.67 See Appendix II of this presentation for the reconciliation of EBITDA to reported net income. Strongly Positioned for the Future Three segments are market
Slide 4: Comtech to Acquire CPI for $472.3 Million in a Strategic and Accretive Transaction
Comtech to Acquire CPI for $472.3 Million in a Strategic and Accretive Transaction 4 Extends Comtech's Leadership in RF Microwave Amplifier Technology + Strategic Benefits Almost triples the size of Comtech's RF microwave amplifier segment and is anticipated to generate over $50.0 million of EBITDA
Slide 5: Comtech Overview
Comtech Overview Three Complementary Business Segments Which Provide Advanced Communications Solutions Revenue and GAAP EPS Performance 2005-2009 Rev CAGR: 17.5% 2005-2009 GAAP EPS CAGR: 5.1% 5 Telecommunications Transmission One-stop-shop for satellite earth station equipment with leading market sh
Slide 6: Revenue and EPS Guidance for FY 2010
Revenue and EPS Guidance for FY 2010 Notes Sum of the quarters may not add to the year due to rounding. Total includes unallocated expenses including amortization of stock-based compensation expense. 6 No Further Delays of MTS Ruggedized Computer Shipments by Third Party Supplier No Material Merger
Slide 7: CPI Acquisition Brings Over $50.0 Million of EBITDA to Comtech Plus Expected Cost Savings
CPI Acquisition Brings Over $50.0 Million of EBITDA to Comtech Plus Expected Cost Savings 7 Acquisition Expected to be Pro-Forma Accretive Year 1 Synergies Are Expected to Range from $1.0 to $2.0 million Year 2 Synergies Are Expected to Range from $5.0 to $7.0 million Excluding the impact of amortiz
Slide 8: Our Three Operating Segments
Our Three Operating Segments
Slide 9: Telecommunications Transmission
Telecommunications Transmission
Slide 10: Telecommunications Transmission - Overview
Telecommunications Transmission - Overview 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Revenue 23045 53311 106348 78613 102634 141514 174488 197891 219935 208994 254266 161661 Telecommunications Transmission Revenue 10 Satellite Earth Station Transmission 0 to 8,000 miles Over-th
Slide 11: Satellite Earth Station Products
Satellite Earth Station Products De facto Market Leader "One-stop-shop" for satellite modems, converters, transceivers, amplifiers, gateways and network management Embedded Base of 150,000 Modems Lucrative modem upgrade opportunity Diverse and Global Commercial Market Wireless and wireline carriers,
Slide 12: Satellite Earth Station Products - Long-Term Growth Drivers
Satellite Earth Station Products - Long-Term Growth Drivers Rapid Increase in Satellite Transponder Utilization Projected to increase to 84% in 2012 from 60% in 2008 (Futron) Our efficient modems provide tangible cost savings Sustained Global Commercial Market Growth Cellular backhaul revenue projec
Slide 13: Over-the-Horizon Microwave - Long-Term Growth Drivers
Over-the-Horizon Microwave - Long-Term Growth Drivers Unique and Attractive Communications Medium Throughput of up to 40 Mbps Secure, cost effective link No annual satellite transponder cost Ideal in environments with unfriendly terrain U.S. Government $31.0 million purchase agreement to upgrade 152
Slide 14: Mobile Data Communications
Mobile Data Communications
Slide 15: Mobile Data Communications - Overview
Mobile Data Communications - Overview Global Satellite-Based Communications Tracking Hardware for Mobile, Real- Time and Secure Transmission That Are a Vital Solution to the U.S. Army Our Products and Services Satellite-based system providing location tracking and near real- time messaging for DoD v
Slide 16: MTS and BFT Programs are Critical to the U.S. Army
We Believe Our MTS and BFT Programs are Critical to the U.S. Army MOVEMENT TRACKING SYSTEMS ("MTS") $67.3 million contract ceiling increase to $672.4 million in May 2010 with deliveries through July 2011 $26.3 million MTS order received in May 2010 Final RFP for next-generation MTS not yet issued Cu
Slide 17: RF Microwave Amplifiers
RF Microwave Amplifiers
Slide 18: RF Microwave Amplifiers Overview
RF Microwave Amplifiers Overview Design and manufacture high-power, broadband amplifiers in close collaboration with customers Address electronic warfare (radar, IFF), jamming, aviation and medical markets Customers include prime contractors such as ITT, Raytheon, L-3, Rockwell Collins and EADS Incu
Slide 19: RF Microwave Amplifiers - Long-Term Growth Drivers
RF Microwave Amplifiers - Long-Term Growth Drivers Solid-State, High-Power Amplifiers Deployed in Radar Systems, Electronic Warfare, Jamming, and Medical Systems and TWTAs Used in Ground and Airborne Satellite Communications Rich and High Quality Target Market Scale and expertise attracts business f
Slide 20: CPI Expands Our One-Stop Shop Approach
20 Radar/Electronic Warfare Medical Industrial Communications Scientific CPI Expands Our One-Stop Shop Approach
Slide 21: Summary Highlights
Summary Highlights Market Leadership Innovative Products Powerful Technology High Growth Military Markets Attractive Commercial Markets Core Manufacturing Competency Proven Management Team Focused Acquisition Strategy 21
Slide 22: Appendix I Overview of Operating Segments
Appendix I Overview of Operating Segments
Slide 23: Appendix I: Three Operating Segments
Appendix I: Three Operating Segments Telecommunications Transmission Telecommunications Transmission Telecommunications Transmission Mobile Data Communications RF Microwave Amplifiers Satellite Earth Station Products Satellite Earth Station Products Over-the-Horizon Microwave Systems Mobile Data Com
Slide 24: Appendix I: Three Operating Segments
Appendix I: Three Operating Segments Telecommunications Transmission Telecommunications Transmission Mobile Data Communications RF Microwave Amplifiers Satellite Earth Station Products Over-the-Horizon Microwave Systems Mobile Data Communications RF Microwave Amplifiers % of FY09 Revenue 43.4% 43.4%
Slide 25: Appendix II Historical Data and Trends
Appendix II Historical Data and Trends
Slide 26: Market Data
Market Data General Market Information NASDAQ Symbol: CMTL Institutional Holders(2): 204 52 Week Range(1): $26.65 - $ 38.17 Research Coverage: 9 Source: NASDAQ Historical Information for Fiscal Years Ended July 31, and YTD FY10 Notes 52 Week Range indicates the high and low closing prices during the
Slide 27: Recent Quarterly Operating Results
Recent Quarterly Operating Results Notes (1) See Appendix II of this presentation for the reconciliation of EBITDA to reported net income. (2) Comtech's fiscal year end is July 31. $ in 000s 27
Slide 28: Recent Annual Operating Results
Recent Annual Operating Results $ in 000s Notes (1) See Appendix II of this presentation for the reconciliation of EBITDA to reported net income. (2) Comtech's fiscal year end is July 31. 28
Slide 29: Historical Revenue Results
Historical Revenue Results 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Revenues 37886 66444 135931 119357 174035 223390 307890 391511 445684 531627 586372 521251 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Revenue 23045 53311 106348 78613 102634 141514 174488
Slide 30: Our Customer Base
Our Customer Base 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD International 0.6 0.71 0.46 0.412 0.4 0.45 0.44 0.36 0.26 0.27 0.32 0.256 Domestic 0.24 0.2 0.31 0.25 0.16 0.148 0.14 0.17 0.13 0.07 0.12 0.062 U.S. government 0.16 0.09 0.23 0.338 0.44 0.4 0.42 0.47 0.61 0.66 0.56 0.6
Slide 31: Historical Bookings and Backlog
Historical Bookings and Backlog Strong Backlog Provides Solid Visibility 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Bookings 61071 78345 135487 113384 230056 206797 377655 424204 388721 603705 883750 383518 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD Backlog
Slide 32: Total Research and Development Expense
Total Research and Development Expense Unwavering Commitment to Investment in New Technologies Research and Development Expense 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD R&D 3801 6916 11846 13070 16504 21656 24156 30243 36639 48224 64955 43288 LINE 0.097 0.078 0.077 0.082 0.091
Slide 33: Recent Balance Sheet Trends
Recent Balance Sheet Trends Strong Balance Sheet Notes (1) On August 1, 2009, we adopted ASC 470-20, which changes the historical accounting and reporting relating to our 2.0% convertible senior notes. As a result, our historical financial data has been retroactively adjusted. (2) Comtech's fiscal y
Slide 34: Reconciliation of EBITDA to Reported Net Income
Reconciliation of EBITDA to Reported Net Income(1) Notes On August 1, 2009, we adopted ASC 470-20 "Debt with Conversion and Other Options", which changes the historical accounting and reporting relating to our 2.0% convertible senior notes. As a result of the adoption of ASC 470-20, our historical C
Slide 35: SOMIEGH
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