Isco International — Shareholder Meeting (June 2006)
39 slides from Isco International's shareholder meeting presentation, Jun 20, 2006
Slide 1: Shareholders Meeting 2006
—=—[ en, ISCO INTERNATIONAL Shareholders Meeting 2006 Optimal Wireless. Simplified.
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation will include “forward looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995. What we and the Act mean by forward looking statements are all statements we make other than those dealing specifically with historic
Slide 3: Agenda
Agenda Corporate Profile Progress & Momentum New Products & Key Innovations Sales: Strategy, Process & Team The Vision: Growth & Differentiation Q&A
Slide 4: ISCO Overview
ISCO Overview We are a provider of custom RF solutions that condition and enhance the RF link for all wireless access technologies. ISCO Products RF2 Integrated Sub-systems ANF, dANF RF Filters (Duplexers, Diplexers, Tx Filters) Ground Mounted Amps Tower Mounted Amps ISCO Competencies Wireless Syste
Slide 5: ISCO Innovation & Company Milestones
ISCO Innovation & Company Milestones ISCO Founded First commercial base-station trial 1 Patent Pending (1995) First High Commercial Contracts Patents Issued (1998) ANF technology acquired from Lockheed-Martin (2000) 1 Patent Issued (2000) 2 Patents Issued (2001) 13 Patents Pending (00-01) Introduced
Slide 6: ISCO Corporate Profile
ISCO Corporate Profile Current business: RF Cellular Aftermarket (Custom) Product families: RF2, ANF, Filters, GMA, TMA Employees: 35 Manufacturing: Multi-vendor outsourced Founded: 1989 Stock: Amex (ticker: ISO) Location: Chicago (Elk Grove), IL
Slide 7: Management Team
Management Team Mr. John Thode—President and CEO Motorola Executive for 25 years P&L responsibility for Handset and Infrastructure Businesses Dr. Amr Abdelmonem – CTO Extensive filter design background with advanced technology focus Holds 9 design patents with additional patents pending Mr. Frank Ce
Slide 8: Agenda
Agenda Corporate Profile Progress & Momentum New Products & Key Innovations Sales: Strategy, Process & Team The Vision: Growth & Differentiation Q&A
Slide 9: Financial Momentum
Financial Momentum Financial Update Sales FY’05 Booked = $8.3m Revenue = $10.3m YTD ‘06 Booked = $ 5.1m ISCO Orders and Revenue $ in millions Revenue Orders $12 $9 $6 $3 $0 $3.2 $2.6 $10.3 $5.1 2003 2004 2005 2006 YTD
Slide 10: Capitalization (subject to closing)
Capitalization (subject to closing) Q206 Capitalization $5m of Convertible debt, 5% compounded, 4 year note $.33 convert price, 12% premium (at $.29) No ratchet or warrants Best option (vs. discounted equity) to fund strategic projects Use of Money Ongoing ‘In-band Interference’ (AIM) Platform Devel
Slide 11: Quality and Outsourced Manufacturing
Quality and Outsourced Manufacturing Quality Quality Policy Delivering defect free products and services to our customers. Continual improvement in production cycle time Quality Goals 100% compliance with customer requested ship dates. Achieve a field return rate of less than 2%. 2005 Field Failure
Slide 12: Our International Partners
Optimal Wireless. Simplified. Our International Partners @ AGORA Solucdes em Telecomunicacdes €9[AlanDick| ‘Communication Infrastructure Solutions EXi telecoms 1500 Gasidaehd oul Pecebeny.
Slide 13: Brand, Team, Culture
Brand, Team, Culture (Beyond Strategy, Products, Money) Brand New WEB Site Better Marketing Better PR More IR Culture Goal Focused Acting with Urgency Working Together Accelerating Change Team Seasoned Leadership Upgraded Sales Team Upgraded Eng. Team Ongoing Leverage Agents, Partners, Outsourcing
Slide 14: Agenda
Agenda Corporate Profile Progress & Momentum New Products & Key Innovations Sales: Strategy, Process & Team The Vision: Growth & Differentiation Q&A
Slide 15: ISCO 2004 Portfolio of Solutions
ISCO 2004 Portfolio of Solutions ANF ( CDMA 850) ANF ON Wheels RF2 Receive Trays RF2 filter/LNAs
Slide 16: ISCO Expanded RF2 Family
ISCO Expanded RF2 Family Trays Multicouplers Diplexers Transmit Filters
Slide 17: New Technologies & Key Innovations
New Technologies & Key Innovations New platforms Ceramic duplexer Major opportunity using ceramic technology with components from Japan and manufacturing in China. TMA/GMA Tower mounted amplifiers and Ground mounted amplifiers for US and Latin America. Manufacturing in China. All digital ANF Next ge
Slide 18: ISCO 2006 New Products
ISCO 2006 New Products Tower Mounted Amplifiers PCS Duplexers Ground Mounted Amplifiers Modules ISCO Confidential and Proprietary
Slide 19: ISCO 2006 New Solutions
ISCO 2006 New Solutions (Work-in-Progress) dANF 1900 – CDMA/UMTS Tunable Site Filter dANF 850 – CDMA/UMTS Ceramic filters
Slide 20: dANF platform
dANF platform Configuration Keypad and Display Status & Activity LED for each RF Module Power, USB, Ethernet and Alarms Technology Fast Digital Scan (330 usec/Mhz) Analog Filter 6 Paths ( 3 sector main & diversity) Configuration Local with PC Connection Remote via on-board ucLinux web server. Config
Slide 21: Results – dANF
Results – dANF Adaptive Interference Removal 1. Example of 4 CDMA Carriers (F1-F4) 2. Random narrowband Interferer appears on F3 3. The interferer raises the noise floor requiring the BTS to request an increase in Mobile TX power of ~5dB 4. dANF notch is dynamically applied to narrowband interferer
Slide 22: Agenda
Agenda Corporate Profile Progress & Momentum New Products & Key Innovations Sales: Strategy, Process & Team The Vision: Growth & Differentiation Q&A
Slide 23: The Opportunity
The Opportunity Early Observations New EVP of Sales On-board 60 days Significant Upside Adaptive Interference Management suite Expanded RF-Optimization product portfolio General Market Feedback Recognize ISCO’s high-performance RF solution prowess Responding positively to product differentiation Exp
Slide 24: Strategy
Strategy Sales Execution Skillset Assessment / Development Enhanced sales-tool arsenal Funnel Growth Larger Opportunity Base More Predictable Deal Management through Funnel process Increased Visibility / Revenue Yield Thorough Forecasting / Activity Tracking Methodologies Weekly Group and One-on-One
Slide 25: Process
Process Enhanced Sales Coverage Model Discreet Regional Assignments Dedicated Corporate Business Development resources Extended Sales Leverage Leveraged sales agent model -— International Markets Strategic Direct Sales hires -— Domestic Rigorous Forecasting Process Targeted deal identification / clo
Slide 26: Looking Forward
Looking Forward Refinement Sales Methodologies Refinement Skillset / Personnel Development Strategic Inflection Adaptive Interference Management (AIM) platform Business & Financials International revenue realization Continued “Up-and-to-the-Right” trend $$
Slide 27: Agenda
Agenda Corporate Profile Progress & Momentum New Products & Key Innovations Sales: Strategy, Process & Team The Vision: Growth & Differentiation Q&A
Slide 28: ISCO’s Blueprint for the Future
ISCO’s Blueprint for the Future 2006 Initiatives Digital ANF Introduction –Phase 1 Expanded Portfolio of Products Strategic Growth in “core competencies” Key Customer Trials in Future Technologies ISCO Strategy Business Process Software Defined Adaptive Interference Management Technology Architectur
Slide 29: The industry continues to consolidate . . .
The industry continues to consolidate . . . June 2006 RF Conditioning Equipment ISCO SCON RFS/Celwave Others Powerwave ADC/Andrew Source: World Information Technologies “ Wireless Infrastructure Equipment Markets 2001-2006
Slide 30: The industry continues to navigate . . .
The industry continues to navigate . . . OEM’s have made selective acquisitions of specialty wireless companies in strategic markets Motorola / Mesh Networks Qualcomm / Flarion, Systems providers continue to make “value-driven” acquisitions of companies that will allow them to reduce cost & fill por
Slide 31: But, where is the spend?
But, where is the spend? Billions of Dollars 70 60 50 40 30 20 10 0 $64.5 B WCDMA CDMA GSM Global Spending on Cellular Infrastructure by Technology (2006) X Cabinets, Huts & Shelters 2% Power Equipment 5% Antennae & Coax 6% Network Equipment 39% Base Station Equipment 45% Towers 3% Global Breakdown
Slide 32: It’s a good market, but we need the “next step”
It’s a good market, but we need the “next step” 35 30 25 20 15 10 5 0 $29.0 B Global Spending on Cellular Base Station Equipment X Mechanical 8% Channel Cards 12% Filters & Duplexers 15% Fans, Cables Backplanes 20% XCVR 20% Power Amps 25% Breakdown of Typical BTS Cost Structure =$ 2.6 B* Let’s assum
Slide 33: Key Elements for ISCO Success
Key Elements for ISCO Success Diversify customer base and product offering Spread SG&A costs over larger “critical mass” of business Continue to reinvest in new customer-driven solutions Defensible Portfolio from Time-to-Market, IP and Know-How Provide a differentiated solution that will command abo
Slide 34: Our Vision – Adaptive Interference Management
Our Vision – Adaptive Interference Management Opportunity HW DIF 1st Product—dANF DSP Based Standalone Product Category Primary Channel Carrier/Operator Creates Foundation for future technology SW DIF SW- based stack for imbedded applications Fundamentally cost-reduced dANF Channel—OEM Handsets Infr
Slide 35: Competitively – Where does AIM fit
Competitively – Where does AIM fit ISCO is THE only company working on inter-system interference ISCO is THE only company focused on the Operator/Legacy ($$) Channel All other competitors in AIM-like technologies are start-ups No existing commercial products, no customer relationships Exclusively fo
Slide 36: The next step: AIM = Growth
The next step: AIM = Growth GROWTH SW=10% Of Revenue SW=30% Of Revenue 2006 2007 2008 2009 2010
Slide 37: The Growth Strategy – Business, Markets, Products
The Growth Strategy – Business, Markets, Products Grow the current business top/bottom line RF2 sales & margins >50% US EVDO build out remains Intl. expansion (Mexico, Brazil and China) partnerships Significantly reduce ANF cost Improve margins, opportunistically pursue volumes Ongoing focus on fina
Slide 38: Agenda
Agenda Corporate Profile Progress & Momentum New Products & Key Innovations Sales: Strategy, Process & Team The Vision: Growth & Differentiation Q&A
Slide 39: ISCO International Shareholders Meeting 2006
——_> ISCO INTERNATIONAL Shareholders Meeting 2006 Optimal Wireless. Simplified.