pacific insight electronics corp. · this presentation includes forward-looking statements about...
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CONFIDENTIAL
Pacific Insight Electronics Corp.
June 2016
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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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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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
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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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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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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CONFIDENTIAL
Markets and Customers
Commercial Vehicle
• Class 4-8 on-road
• Off-road utility
Specialty
• Recreation
• After-market
Automotive
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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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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.
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.
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 $2.0 million.
CONFIDENTIAL
Instrumentation
Solutions
• Full line of data bus instrumentation solutions
• Advanced mounting systems
• Customized features
Products
Driver Displays
• Stand-alone or integrated in gauges and light bars
• Alphanumeric or graphic LCDs
Gauges
• Variable diameter
• Custom dial-face graphics, backlighting, and needle pointers
Markets
• Commercial vehicle
• Specialty vehicle
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Instrumentation revenues are included in the electronic modules product line for reporting purposes and are not separately disclosed.
CONFIDENTIAL
Summary
• High volume LED lighting systems supplier to OEMs and Tier 1s.
• Innovation and quality focus.
• Excellent customer support and responsiveness from concept to final product.
• North American market focus and manufacturing footprint.
• Last twelve month revenue growth through March 31, 2016 of 74% as result of
significant product launch activity. LTM EBITDA margin of 14%.
• Outstanding shares of 6.8M (as of June 1, 2016) with significant insider participation
greater than 25%.
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CONFIDENTIAL
Financial Highlights(In millions of CDN$ 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
CONFIDENTIAL
Financial highlights
1.41.0
0.6
2.5
3.7
4.2 4.3
5.3
0
1
2
3
4
5
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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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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
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