pacific insight electronics corp. · this presentation includes forward-looking statements about...

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CONFIDENTIAL Pacific Insight Electronics Corp. June 2016

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Page 1: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Pacific Insight Electronics Corp.

June 2016

Page 2: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Forward-Looking Statements

This presentation includes forward-looking statements about Pacific Insight Electronics Corp., including, but not limited to, its business operations, strategy and expected financial performance and condition. Forward-looking statements may include, but are not limited to, those with respect to annual revenue growth targets, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements, liquidity of the Company, plans and references to future operations and results and critical accounting estimates. In certain cases, forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, and/or can be identified by the use of words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’,‘budgeted’, ‘estimates’, ‘forecasts’, ‘targets’ or negative versions thereof and similar expressions, and/or state that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or ‘will’ be taken, occur or be achieved.

Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company’s operations, economic factors and the industry generally, as well as those factors referred to in the section entitled “Risk Factors and Risk Management” in the Company’s Annual Information Form. Copies of our AIF can be found under our profile on the SEDAR website maintained by the Canadian Securities Administrators at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those expressed or implied by forward-looking statements made by the Company, due to, but not limited to important factors such as the Company’s ability to attract and retain customers, continue to innovate in product design, respond to changes in legislation, react to uncertainties related to regulatory action, raise capital under favourable terms, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance the system of internal controls. The Company cautions that the foregoing list is not exhaustive.

The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements, which may not be appropriate for other purposes. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless required by law.

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Page 3: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Overview

Pacific Insight Electronics Corp.

• Company Overview

• Management

• Locations

• Strategy

• Markets and Customers

• Expertise

• Systems and Products

• Financial Highlights

• Summary

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Page 4: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

About Pacific Insight

• Established: 1989

• Currency: Canadian dollars

• Listing: PIH listed on TSX

• Revenues: F2014 $59M F2015 $82M F2016 YTD (Q1-Q3) $96M

• Year end: June 30th

• Employees: Approximately 1,000 (including contractors and through agency relationships

• Customers: OEMs and Tier 1s in North America, Europe, Asia

• Products: LED lighting systems

Electronic control modules

Wire harnesses

Instrumentation

• Certifications: TS16949 ISO9001 ISO14001

• Share Structure: 6.8M basic shares outstanding (diluted 7.8m shares)

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* Information as of June 1, 2016

Page 5: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

S. Ross

Chief Executive Officer

J. Fogg

Chief Financial Officer

I. Scott

Chief Operating Officer

L. Curtil

Vice President,

Business Development

P. Gresser

Vice President,

Global Supply Chain

A. Lozano

Director,

Mexico Operations

D. Mann

Director,

Manufacturing (Nelson)

C. Semenick

Director,

Quality Management

M.Medvec

Director,

Engineering

D. Chappell

Director,

Human Resources

Management Team

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Page 6: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Vancouver, BC, Canada

(Administrative Office)

Nelson, BC, Canada

(Manufacturing, Engineering)

Detroit, Michigan, USA

(Sales, Engineering, Supply Chain)

Laredo, Texas, USA

(Third party run logistics)

Fresnillo, Zacatecas, Mexico

(Manufacturing, Engineering)

Locations

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Page 7: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Strategy

Pacific Insight is an electronics solutions provider which has recently experienced strong growth in LED lighting products and systems.

Our strategy is to:

• Continue profitable organic growth.

• Prioritize advanced lighting and electronics.

• Expand automotive footprint; diversify into adjacent markets.

• Continue to expand our customer base to other OEMs, Tier 1s and non-automotive customers

• Innovate and focus on industry trends including autonomous vehicles, electrification, and connectivity.

• Attract and retain the best talent

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Page 8: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Markets and Customers

Commercial Vehicle

• Class 4-8 on-road

• Off-road utility

Specialty

• Recreation

• After-market

Automotive

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Page 9: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Advanced technology

• concept development and realization with customer

• multiple light sources, user interfaces, functions and assemblies

Engineering

• software, hardware, mechanical, test design and build

• optics and thermal modelling

• advanced printed circuit board design

Manufacturing

• high-speed SMT (surface mount technology)

• computerized functional EOL (end of line) testing

• 164,000 square feet of manufacturing facilities

PACIFIC

INSIGHT

Optical Design

Electronic Design &

Build

Software Design &

Build

Plastics Design

Wiring Harness Design &

Build

Test Equipment Design &

Build

Expertise

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Page 10: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Solutions

• Advanced ambient lighting

• Interior task, functional lighting

• RGB (red green blue) LEDs offer

infinite colour palettes

• Discrete signal or network input

operation

• Calibrated lighting outputs for

colour harmony, intensity

Products

• Single/multi-colour interior LED ambient lighting

• Indirect/direct lighting systems

• Static/dynamic lighting operation

• Illuminated kick-plates, logos

• Network and discrete controls

• Molded and extruded light pipes

• Exterior marker, stop, turn and tail lamps

Markets

• Automotive

• Commercial vehicle

• Specialty vehicle

• Aftermarket

LED Lighting Products and Systems

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LED lighting products and system revenues for the three months ended March 31, 2016 and 2015 were $25.7 million and $14.8 million.

Page 11: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Electronic Control Modules

Solutions

• Proprietary electrical hardware design

• Model driven software development

• Customized input/output features

• Multiple vehicle communication protocols

• Microprocessor based modules

Products

• Single and multi-colour ambient lighting control

• Interior lighting control

• Interior climate/comfort control

• Automatic headlight control

• Instrumentation, driver information displays, light bars and gateway modules

• Windshield wiper, turn signal and climate/comfort controllers

Markets

• Automotive

• Commercial vehicle

• Specialty vehicle

• Aftermarket

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Electronic control module revenues for the three months ended March 31, 2016 and 2015 were $7.2 million and $6.1 million.

Page 12: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Wire Harnesses

Solutions

• Extensive OEM expertise

• Low to high volume requirements

• Design and build-to-print services

• Value-driven, identify potential cost reduction opportunities

• Fast access to vendor codes

Products

• 26g to 2g wire harnesses

• Standard to high temperature wire grades

• All common global connectors and terminals

• Multi-conductor and battery cables

• Integrated wire and mechatronics

• 100% EOL harness testing

Markets

• Automotive

• Commercial vehicle

• Specialty vehicle

• Aftermarket

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Wire harness revenues for the three months ended March 31, 2016 and 2015 were $2.0 million and $2.0 million.

Page 13: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Instrumentation

Solutions

• Full line of data bus instrumentation solutions

• Advanced mounting systems

• Customized features

Products

Driver Displays

• Stand-alone or integrated in gauges and light bars

• Alphanumeric or graphic LCDs

Gauges

• Variable diameter

• Custom dial-face graphics, backlighting, and needle pointers

Markets

• Commercial vehicle

• Specialty vehicle

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Instrumentation revenues are included in the electronic modules product line for reporting purposes and are not separately disclosed.

Page 14: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Summary

• High volume LED lighting systems supplier to OEMs and Tier 1s.

• Innovation and quality focus.

• Excellent customer support and responsiveness from concept to final product.

• North American market focus and manufacturing footprint.

• Last twelve month revenue growth through March 31, 2016 of 74% as result of

significant product launch activity. LTM EBITDA margin of 14%.

• Outstanding shares of 6.8M (as of June 1, 2016) with significant insider participation

greater than 25%.

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Page 15: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Financial Highlights(In millions of CDN$ except for per share amounts)

• For the last twelve months ended March 31, 2016 revenues were $123.2M with and Basic EPS was $1.49 per share compared with $70.8 million and $0.18 per share for the previous twelve month period ended March 31, 2015.

• Basic Earnings per share was impacted by a Private Placement completed in Q2 (681k shares issued) as well as exercises

of stock options in Q2 and Q3 which increased the weighted average number of shares outstanding.

0

5

10

15

20

25

30

35

40

Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '15 Q2 '15 Q3 '15

Sales by Product Line

LED Lighting products and systems Electronic control modules * Wire harness

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-0.10

-

0.10

0.20

0.30

0.40

0.50

Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '15 Q2 '15 Q3 '15

Basic Earnings per share by quarter

Page 16: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Financial highlights

1.41.0

0.6

2.5

3.7

4.2 4.3

5.3

0

1

2

3

4

5

6

Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '15 Q2 '15 Q3 '15

EBITDA

EBITDA is a non-GAAP financial measure that does not have any standardized meaning and therefore may not be comparable to similar measures presented

by other issuers. EBITDA is provided as additional information to investors in order to provide them with an alternative method for assessing our financial

condition and operating results. The most directly comparable measure determined under GAAP would be our net income. The next slide to this presentation

discloses our net income for comparable periods together with a reconciliation of EBITDA to our net earnings.

For the last twelve months ended March 31, 2016, EBITDA was $17.5 million compared to $5.5 million for the previous twelve month period ended March 31, 2015.

(In millions of CDN$)

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Page 17: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Financial Highlights

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Reconciliation of net income for the periods to EBITDA (in thousands of dollars)

Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16

Net income (loss) 348 88 313- 931 1,739 1,988 2,404 3,181

Add: Income tax expense (recovery) 70 33 91- 527 618 1,127 860 1,063

Add: Depreciation 527 516 536 518 506 522 536 562

Add: Amortization 283 254 264 301 634 262 291 332

Add: Interest expense 127 137 183 222 219 258 185 187

EBITDA 1,355 1,028 579 2,499 3,716 4,157 4,276 5,325

Page 18: Pacific Insight Electronics Corp. · This presentation includes forward-looking statements about Pacific Insight Electronics Corp., ... Global Supply Chain A. Lozano ... • Windshield

CONFIDENTIAL

Thank you.

Global solutions provider offering design, development, manufacturing and delivery of electronic products and full service solutions to the automotive, commercial vehicle and specialty markets.

www.pacificinsight.com