Slide 1: Q2 FY 2015 Financial Results
Q2 FY 2015 Financial Results October 28, 2014 Lee D. Rudow President and CEO John J. Zimmer Sr. Vice President of Finance and CFO
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and assumptions that often are identif
Slide 3: Long-Term Objectives
Long-Term Objectives Leverage our strong foundation to drive future growth Service segment • Double-digit revenue growth through organic and acquisition strategies • Take market share particularly in the Healthcare space • Grow pipeline of larger, multi-year enterprise opportunities • Continue margi
Slide 4: Second Quarter FY 2015 Execution
Second Quarter FY 2015 Execution Strategy continues to deliver 4 •Service segment revenue of $12.6 million, up 9.8% •22 consecutive quarters of year-over-year Service segment revenue growth •Distribution segment sales increased 6.4% Record second quarter revenue •Consolidated operating income grew 1
Slide 5: Consolidated Annual Top-line Growth
$17.4 $18.5 Q2 FY 14 Q2 FY 15 Q2 Distribution Segment 5 $59.9 $73.6 $71.6 $70.3 $71.4 $31.3 $36.4 $40.7 $48.2 $49.7 FY 2011 FY 2012 FY 2013 FY 2014 Q2 FY 15 TTM Consolidated –Annual Top-line Growth $118.5 $91.2 $110.0 $112.3 $121.1 ($ in millions) $11.5 $12.6 Q2 FY 14 Q2 FY 15 Q2 Service Segment Ser
Slide 6: Operating Income
$4.4 $5.6 $4.6 $4.3 $4.0 $0.2 $1.3 $2.4 $2.6 FY 2011 FY 2012 FY 2013 FY 2014 Q2 FY 15 TTM Consolidated –Annual $6.5 $4.6 $5.4 $6.7 $5.9 10.7% CAGR* $1.0 $0.9 Q2 FY 14 Q2 FY 15 Q2 Distribution Segment • Q2 Service operating income improved to $0.7 million, an increase of 156% • Q2 Service operating m
Slide 7: Contribution Margin
$8.5 $10.2 $9.2 $9.6 $8.9 $3.1 $3.2 $5.2 $6.1 $6.5 FY 2011 FY 2012 FY 2013 FY 2014 Q2 FY 15 TTM Consolidated –Annual 7 • Service segment CAGR nearly 24% (FY 2011-Q2 FY 2015 TTM) • 8.7% reduction in expenses held to offset Distribution gross margin pressure $1.1 $1.7 Q2 FY 14 Q2 FY 15 Q2 Service Segm
Slide 8: Adjusted EBITDA and Margin
$5.3 $6.8 $5.8 $5.4 $5.0 $1.8 $2.0 $3.1 $4.6 $4.8 FY 2011 FY 2012 FY 2013 FY 2014 Q2 FY 15 TTM Consolidated –Annual 8 $1.3 $1.1 Q2 FY 14 Q2 FY 15 Q2 Distribution Segment $0.8 $1.3 Q2 FY 14 Q2 FY 15 Q2 Service Segment Adjusted EBITDA and Margin* Service Distribution ($ in millions) $9.9 $7.1 $8.8 $10
Slide 9: Bottom-line Performance
$2.8 $3.3 $3.7 $4.0 $3.8 FY 2011 FY 2012 FY 2013 FY 2014 Q2 FY 15 TTM Annual 3.1% 3.0% 3.3% 3.4% 3.1% $0.8 $0.9 Q2 FY 14 Q2 FY 15 Quarterly 2.7% 2.8% 9 • 9.2% CAGR for net income (FY 2011-Q2 FY 2015 TTM) • 20% EPS growth in Q2 % of Revenue Bottom-line Performance $0.37 $0.43 $0.49 $0.54 $0.52 EPS ($
Slide 10: Balance Sheet Supports Acquisition Strategy
$5.3 $3.4 $8.0 $7.6 $16.3 FY 2011 FY 2012 FY 2013 FY 2014 Q2 FY 2015 Long Term Debt 10 • $10.8 million in availability under amended and upsized revolving credit facility • Purchased Ulrich Metrology Inc. in late August • CapExfocused on service capabilities and IT • Financial flexibility to facilit
Slide 11: Historical Trailing Month Key Investments and Current Quarter Debt Balance
Historical Trailing 12 Month Key Investments and Current Quarter Debt Balance
Slide 12: Investments Focused on Growth
Ulrich Acquisition C3 Software Web 3.0 Investments Focused on Growth
Slide 13: FY 2015 Outlook
13 FY 2015 Outlook Continue to ExecuteStrategic Plan Realize the inherent leverage in the Service segment • Grow operating income at a faster rate than revenue Leverage leading Distribution position to drive Service growth Capital allocation focused on growth initiatives • Leverage new website and C
Slide 14: Upcoming Investor Relations Calendar
Upcoming Investor Relations Calendar November 19 1:1s Chicago and Milwaukee 2015 Late January Q3 FY 2015 Earnings February 1:1s West Coast 14
Slide 15: Supplemental Information
SUPPLEMENTAL INFORMATION TRANSAT tec nso
Slide 16: Adjusted EBITDA Reconciliation
16 The Company believes that when used in conjunction with GAAP measures, Adjusted EBITDA, or earnings before interest, taxes , depreciation and amortization, and noncash stock compensation expense, which is a non-GAAP measure, allows investors to view its performance in a manner similar to the meth
Slide 17: Contribution Margin Reconciliation
17 The Company believes that when used in conjunction with GAAP measures, Contribution Margin, which is a non-GAAP measure, allows investors to view its performance in a manner similar to the methods used by management and provides additional insight into its operating results. Contribution Margin i