Stratex Networks — AeA Classic Financial Conference 2006
21 slides from Stratex Networks's conference presentation, Nov 9, 2006
Slide 1: AeA Classic Financial Conference November 2006
(NASDAQ: STXN) AeA Classic Financial Conference November 2006
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation constitute "forward-looking statements." Forward-looking statements in this presentation include, but are not limited to, the expected benefits and costs of the transaction; the anticipated timing of completion of the transaction; an
Slide 3: Our Strategic Innovation Model - Initiated 2002
Our Strategic Innovation Model - Initiated 2002 Legacy Pt-Pt Microwave Eclipse Nodal Architecture Served Market Expansion Licensing Solution Expansion Scale Expansion Operating Leverage Negative Profitable 10-12+% 12-15% ROS Size
Slide 4: Stratex Investment Highlights
Stratex Investment Highlights Eclipse approach - strong results Growing profitability Established market presence Expanding global customer base Expanding markets and channels Solid strategy for the future Innovation Creating Sustainable Results
Slide 5: Annual Revenue Profile
Annual Revenue Profile FY03 Q104 Q204 Q304 Q404 FY04 Q105 Q205 Q305 Q405 FY05 Q106 Q206 Q306 FY06 Q406 Q107E Eclipse 0 36 36.9 40.3 40.9 3 41.3 35.5 37.3 26.4 24 30.1 25.7 22.2 134.6 17.9 Revenue Other 180 3.3 153 4.7 8.1 12.2 14.7 156 24.8 30.9 33.3 96.4 46.1 Eclipse 2.8 4.6 Estimate 64 Deferred Re
Slide 6: Value Innovation Driving New Business Model
Value Innovation Driving New Business Model Eclipse Nodal Transmission System Product Platform Value-Added, Software Based Solutions Legacy Point-to-Point Microwave Products (Multiple) Eclipse Innovation Model Quarterly Releases Generational Releases
Slide 7: Eclipse Product Family Revenue
Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Revenue 36 36.9 40.3 40.9 41.3 36.2 41.8 35 48.4 47.3 46.2 Eclipse 3.3 4.7 8.1 12.2 14.6 24.8 30.9 33.3 46.1 51 50.8 Eclipse 2.8 4.6 Eclipse Product Family Revenue
Slide 8: Significant Financial Improvements
Significant Financial Improvements Excludes FAS123R and non-cash restricted stock plan charges Net Income Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 $(0.04) $(0.01) $0.01 $0.03 $0.05 $0.06
Slide 9: Summary Income Statement
Summary Income Statement $ in Millions except EPS
Slide 10: Key Balance Sheet Items
Key Balance Sheet Items $ in Millions
Slide 11: Harris Stratex Networks
Harris Stratex Networks Industry Leadership Scale Innovative solutions Financial performance Complete Infrastructure Solutions End-to-end wireless transmission capabilities Transport, access, and carrier-grade Ethernet microwave systems Nodal processors Software upgrades Network management solutions
Slide 12: Transaction Overview
Transaction Overview Financial Structure Harris contributes Microwave Communications Division and $25M of cash for approximately 56% ownership Stratex shareholders exchange their shares for approx. 44% ownership Two-year standstill, with limitations in years three and four Fiscal year ending June 30
Slide 13: Compelling Strategic and Financial Rationale
Compelling Strategic and Financial Rationale Significantly greater scale Compared to all suppliers - #3 Globally and #1 in North America Complementary global distribution channels Minimal customer overlap, significantly expanded customer footprint Large market with expected strong growth over next f
Slide 14: Unmatched End-to-End Product Portfolio
Unmatched End-to-End Product Portfolio Other Independent Suppliers Transport SDH PDH Access SDH PDH Network management solutions IP Turnkey planning, engineering, and implementation Source: Management estimates
Slide 15: Microwave Market Growth
Microwave Market Growth Expected Total Global Market Growth of 8%; Strong Positioning in Higher Growth Segments Source: Management estimates 2006 2007 2008 2009 PDH access 2317 2461 2608 2859 PDH Transport 200 210 210 215 SDH Access (incl Ethernet) 713 847 976 1083 SDH Transport 705 711 750 780 ($ i
Slide 16: Solid, Achievable Plan for Cost Synergies
Solid, Achievable Plan for Cost Synergies Cost of goods sold Increased outsourcing on some products to low-cost contract manufacturers Supply chain volume leverage Low-cost design architecture "best of the best" Operating expenses Duplicate administrative and overhead costs Adherence to common engin
Slide 17: Harris Stratex Networks Performance Targets
Harris Stratex Networks Performance Targets Targets 2008-2009 Year-over-year revenue growth Year-over-year revenue growth 10-15% Gross margin Gross margin 40% Operating expenses as % of sales Operating expenses as % of sales 25% Operating income margin Operating income margin 15% Targeting Double-Di
Slide 18: Strong Quarterly Results
Strong Quarterly Results (For the Period ending Sept. 30, 2006) Stratex Networks Revenue increased 19% Y/Y to $67.3 million Operating income*: $5.9 million Operating margin*: 8.8% Harris Microwave Communications Division Revenue increased 24% to $93.6 million Operating income: $7.9 million Operating
Slide 19: Summary
Summary From inception, creates a leading global provider of wireless transmission network solutions Leadership in products and services Scale to win major contracts, deliver sustainable growth, and continue industry-leading innovation Complementary geographic coverage and customer base Combines man
Slide 20: A New Global Leader
A New Global Leader HARRIs stratex
Slide 21: ( )
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