Ikanos Communications — IPO Roadshow (December 2014)
19 slides from Ikanos Communications's IPO roadshow presentation, Dec 11, 2014
Slide 1: Ikanos Communications, Inc.
NASDAQ: IKAN Dec 2014 Ikanos Communications, Inc. Exhibit A
Slide 2: Safe Harbor Statement
Safe Harbor Statement The foregoing factors should not be construed as exhaustive and should be read together with other cautionary statements included in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the Securities and Exchange Commissio
Slide 3: Ikanos is a technology leader in network access and gateway products
Ikanos is a technology leader in the development of network Ikanos Communications gateway and software products deployed by many of the world’s largest telecommunications operators. access ,
Slide 4: Corporate Overview
Sept. 2014 – up to investment commitment by the market leader (ALU) and our largest investor (Tallwood) Communications - NASDAQ: IKAN $45M Corporate Overview VDSL market sizes from Linley Group Sept 2013, remainder from Ikanos internal analysis ~230 employees: HQ – Silicon Valley; R&D – NJ & Bangalo
Slide 5: Ikanos Access, Gateway, Software solutions
* Ikanos Access , Gateway , Software solutions positioned… *
Slide 6: Access Solutions
Access Solutions *Velocitytm-3 currently shipping
Slide 7: Ethernet Connected Home
FTITHE = a Ethernet Connected Home a ikanos
Slide 8: Ikanos Software Solutions: inSIGHT BXM benefits
inSIGHT BXM (Broadband eXperience Manager) intended benefits: Reduced OpEx - resulting in reduced service costs Higher ARPU - from delivering new services Reduced Churn - through improved customer experience Ikanos Software Solutions 1. Wiring Issues 2. Noise Impairments 3. Analytics
Slide 9: Broadband Opportunity
Total number of serviceable broadband subscribers growing from ~530M in 2013 to ~660M in 2019 Source: Broadbandtrends Mar 2014 Broadband Opportunity DSL: Copper FTTx: Copper + Fiber
Slide 10: Gigabit Broadband Opportunity
*Gigabit products released Gigabit Broadband Opportunity Driving ~$1.5 Billion Addressable Market DSL Access DSL Gateway Multi-Mode Gateway *Estimated VDSL market sizes from Linley Group Sept 2013, remainder from Ikanos internal analysis
Slide 11: Plan for Return to Market Leadership
Plan for Return to Market Leadership ADSL - > VDSL VDSL - > *Gigabit Broadband - > 1999 - 2016 - 2013 - Market Leadership means: - 100% market share Japan & S. Korea - 75% VDSL share – North America - Annual revenue peaked - $ 192m/2010 *Estimated
Slide 12: Plan for Return to Market Leadership
4. Revenue seen stabilizing 5. Ramp in # of new products released 6. Market leader (ALU) invests in Ikanos 1. Market saturation by 2012 2. Limited # of new products 3. New management team ADSL - > VDSL VDSL - > Rev./$m *Gigabit Broadband - > Market Leadership means: - 100% market share Japan & S. Ko
Slide 13: Plan for Return to Market Leadership
*Gigabit Broadband ADSL VDSL 1999 - **Return to Leadership: - - - VDSL **Repositioned for Growth: - - - - - **Ikanos’ objective Plan for Return to Market Leadership *Estimated - 75% VDSL share North America - Annual revenue peaked - $ 192m/2010 10 new products planned 2 new product lines: inSIGHT &
Slide 14: Ikanos-ALU Collaboration
1. provides ALU w/proven technical leadership 2. provides ALU w/differentiated product advantages 3. ALU provides w/distribution via the market leader 4. ALU provides Ikanos w/development capital Ikanos-ALU Collaboration Ikanos Communications, Inc. – All Rights Reserved
Slide 15: Light Reading Interview: Alcatel-Lucent CEO Michel Combes
07:26 Light Reading Interview: Alcatel-Lucent CEO Michel Combes Ikanos Communications, Inc. – All Rights Reserved 7:26 - “…w e have also invested in a few companies where there was some interesting or cool technologies that we would like to have in our portfolio…. we will continue to do niche invest
Slide 16: Ikanos Funding Plan
• Up to $45M Capital Committed: Tallwood VC $22.5M - 100% Equity @ $0.41 - $11.25M in Sept. 2014 PIPE - $11.25M in Rights Offering Alcatel-Lucent $22.5M - $5M equity @ $0.41 in Sept. 2014 PIPE - $10M loan* - $7.5M NRE* • Rights Offering: • Strategic Objectives: • Return to profitability plus leaders
Slide 17: Financial Summary
Q1 FY2014 Q2 FY2014 Q3 FY2014 Q1 FY2014 Q2 FY2014 Q3 FY2014 Financial Summary $M Income Statement Revenue Gross Margin % GAAP Operating Expenses GAAP Operating Income (Loss) $M Balance Sheet Cash Inventory Short-term Debt Working Capital 14.5 11.3 48.8% 48.7% 43.8% 17.5 17.5 14.8 (10.4) (12.0) (10.3
Slide 18: Long Term Financial Model
Long Term Financial Model As a % of revenue GM 55-60% R&D 20-25 SG&A 12 Opex 32-37 Operating Margin 18-28% Long Term Financial Model
Slide 19: Investment Summary
• Market leadership in Japan, S. Korea, North America achieved for VDSL product line. • Lack of new products, market saturation combined for ‘13/‘14 revenue challenges. • New 1. Team , 2. Products , 3. $45M Investment, prime for new growth . • New 4. Broadband R&D , 5. ALU Collaboration, 6. China re