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Enabling the Digital World in the Home

180 CONNECT INC. INVESTOR PRESENTATION. Enabling the Digital World in the Home. Forward-Looking Statement.

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Enabling the Digital World in the Home

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  1. 180 CONNECT INC. INVESTOR PRESENTATION Enabling the Digital World in the Home

  2. Forward-Looking Statement This investor presentation contains forward-looking statements which reflect Management's expectations regarding the Corporation's future growth, results of operations, performance and business prospects and opportunities. Statements about the Corporation's future plans and intentions, results, levels of activity, performance, goals or achievements or other future events constitute forward‑looking statements. These statements reflect Management's current beliefs and are based on information currently available to Management. Forward‑looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward‑looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward‑looking statements. Although the forward‑looking statements contained in this investor presentation are based upon what Management believes to be reasonable assumptions, the Corporation cannot assure that actual results will be consistent with these forward‑looking statements.

  3. Table of Contents • Executive Summary • Business Overview • Satellite • Cable • Network Services • Digital Interiors – Home • Growth Opportunities • Financial Overview • Conclusion

  4. Executive Summary

  5. 180 Connect Overview • North America’s largest provider of installation, integration and fulfillment services to the home entertainment, communications, security and home integration service industries • Dominant player in rapidly growing industry • More than 3,300 highly-trained technicians and a fleet of over 3,000 Company-owned vehicles • Operates 85 branches across the United States and Canada • Performs approximately 2.5 million in-home visits per year • Only national contractor dedicated to the residential market • Scalable, market driven, technology centric operating service model • 2006E Revenue and EBITDA of $316 and $14.0 million, respectively, representing revenue growth of 13% over 2005 180 Connect is in a position to leverage these dynamics to become a leader in the broader home services industry 1

  6. The Critical Connection QUALITY HUMAN CAPITAL TRAINING Infrastructure Trend toward outsourcing Family of Companies Ironwood Digital Interiors - Home Digital Interiors – Security Wirecomm Piedmont Network Services TECHNOLOGY 2

  7. Business Transformation • Focus on Core Earnings and Cash Flow v. Revenue Growth • Intense analysis of technician efficiency, fleet utilization, use of sub- contractors and operating metrics • Local management compensation based on branch profitability • Significant focus on customer satisfaction experience, resulting in customer bonus eligibility • Balance Sheet Strengthening • Natural de-leverage of capital leases • As a result of prepaid insurance plan with current provider • Rebuilding True Partnership with Customers • DIRECTV desires greater throughput and customer satisfaction • Economic model rewards quality performance • Cable customers looking to expand 180 Connect within existing branch network • Develop New Programs associated with Core Assets – 2.5 million home visits per year 3

  8. Digital Interiors – Consumer Electronics Network Services • Demand for residential fulfillment has attracted 180 Connect to a variety of new customers • In home technical initiatives requiring fulfillment and integration positions 180 Connect well • Currently negotiating with potential new partners with Vonage, Slingbox and UControl • Provides fiber-to-the-home(“FTTH”) network design services and national construction and installation project management for developers, municipalities, commercial ventures and utilities • Division developed in 2005 with the addition of four fiber optic network engineers and 13 project managers, currently over 50 employees • High margin business with current backlog of contracts for approx. $5 million in 2007 Diversified Service Offering Satellite Cable • Performs satellite installations, upgrades and service calls for DIRECTV residential and commercial customers • 54 branches, primarily in the western U.S., with approximately 2,800 technicians and 2,300 Company-owned vehicles (“COVs”) • Second largest of 13 members in the DIRECTV HSP Network • Formulating up-sell initiatives to enhance margins • Performs residential cable installations, reconnections, disconnections, service upgrades and downgrades as well as general service calls • Operates in 28 branches, primarily in the eastern U.S., employing approximately 675 technicians • Growth in popularity of digital cable, VoIP, and data services are increasing the size of this business Digital Interiors – Home • Home integration services business that functions as a subcontractor to home builders and developers to install video, audio, security, telecommunications and data cabling in new homes • Developed through the acquisition of Digital Interiors in March 2005 • Currently in California and Texas with expansion plans into the southwestern U.S. 4

  9. Leading Provider of Outsourced Home Installation Services • Ability to manage large contracts which are geographically dispersed • One of the largest members of the DIRECTV Home Service Provider (“HSP”) Network of installers • Largest installation contractor of cable services for Cablevision and Rogers • Superior quality and customer satisfaction ratings • Recently awarded contracts with ONteriors and Boise Airport 180 Connect Service Locations Cable dominates serviceoffering in eastern U.S. Satellite dominates serviceoffering in western U.S. Pro Line upsell, Digital Interiors and Network Servicesbusinesses can leverage the existing infrastructure 5

  10. Large and Growing End-Markets 180 Connect is well-positioned to enable the digital world in the home • DIRECTV subscriber base projected to grow at a 7.7% CAGR from 15 million in 2005 to 22 million in 2010. DIRECTV reacting to the cable triple play with “partnered offerings” and heavily subsidized high definition equipment • Convergence of technology driving demand for additional installation services in the home, including “Triple Play” (voice, data and video) in the cable industry. Increased demand for fully integrated security offering into existing “Triple Play” platform • Strong upgrade trend from basic to digital cable • Introduction of a variety of other new technologies (e.g.,HDTV, DVRs, increased local channel access, foreign language programming) in both cable and satellite markets • Growth of “digital homes” wired for sound, security, and data combined with historically strong housing starts (in 2006 over 60% of the two million new homes built will have an advanced structured wiring feature built into the base specifications) • Market primed for consultative up-sell arising from the complexity of in-home technology which supports 180 Connects up-sell initiative. 6

  11. Significant Operating Leverage & Margin Expansion Opportunity • Recent investments in infrastructure, personnel and vehicles position the Company to realize the benefits of significant growth opportunities • Centralized back-office and off-shore call center operations • Fleet of over 3,000 Company-owned vehicles • Additional margin expansion opportunities available through product and market synergies, further benefits of scale, the elimination of redundant corporate overhead and improved insurance rates 7

  12. Strong, Experienced Management Team M. Brian McCarthyExecutive Director35 Years of Experience Peter GiacalonePresident & CEO25 Years of Experience Steven WestbergCFO30 Years of Experience Brian DalmassPresident – Digital Interiors and Network Services20 Years of Experience Nick WainwrightPresident – Cable20 Years of Experience Zachary McGuirePresident – Satellite 15 Years of Experience Ed NollingerSenior VP – Business Operations 34 Years of Experience • Over 150 years of combined experience primarily in the satellite, cable and telecommunications industries • Proven record of successful entrance into adjacent markets with rapid revenue growth 8

  13. Recently Completed Initiatives • Deployed over 2,200 new Company-owned vehicles in 2005 • Launched Network Services, a fiber network engineering line of business that has earned significant new contracts • Acquired Digital Interiors • Consolidated all back-office functions to one shared service center • Relocated a portion of call center operations off-shore • Upgraded technical skills of over 3,300 technicians • Recruited top IT professionals enhancing controls and financial reporting • Initiated remote technician dispatch • Initiated regionalized dispatch operations • Completed the re-financing of the Company’s long term debt 9

  14. Business Overview

  15. Satellite

  16. Accomplishments Assumptions • Completed POV/COV conversion, acquired 2,000 DIRECTV compliant vans and hired 950 technicians • Completed outsourcing of approximately 60 CSR’s to Philippines, resulting in $100,000 monthly savings • Initiated remote technician dispatch resulting in reduced fuel and overtime expense • Initiated regionalized dispatch operations resulting in reduced headcount • DIRECTV rate card increases in California • DIRECTV 2006 4% rate cut offset with 12% increase in volume. Additional 150,000 installations forecast by Ironwood in 2006 • DIRECTV currently re-evaluating rate card and work rule structure for the entire network • HSP network grows to approx.80% (up from 60%) of DIRECTV • Revenue growth in 2005 of approx. 33% expected to increase 9% in 2006 • Over 2 million truck rolls per year • DIRECTV implements bi-weekly fulfillment pay Satellite 10

  17. Cable

  18. Accomplishments Assumptions • Became largest installation contractor for Cablevision, ramping up to a total of 225 technicians in 2006 • Launched new operations for Time Warner in Greensboro and WOW in Detroit all of which contributed to earnings in 2006          • Rebuilt New Orleans and Beaumont operations after Hurricane Katrina/Rita. Currently “prime” contractor for Cox/Time Warner • Wirecomm Systems (servicing Rogers Communications, Canada) turnaround achieving 25% revenue growth and significantly improved earnings • Re-organized the cable division into logical operating units • Modest in-branch growth supporting MSO triple-play needs • Revenue growth of approximately 35% • Significant opportunities exist for additional technician growth outside of existing branch network • Growth in popularity of digital cable, VoIP, and broadband services are increasing the size of the business Cable 11

  19. Network Services

  20. Accomplishments Assumptions • Entry into growing FTTH market with little up front development costs • Launched operations in Q4 2005 via transition of four engineers and 13 project management support personnel from Tetra Tech. Now operates with over 50 personnel • Transferred existing contracts totaling approximately $2 million • Budgeted existing backlog only – upside revenue potential • High margin business – 20% to 25% achievable with scale • New Contracts with for the City of Ontario, California and Santa Clara, California and Boise Airport • Significant acceptance and interest from developer community for Network Services offering: • Planning and network engineering • Network construction and management • Customer drops to the home • Content and communication services (video, voice, data, security) • Network monitoring and operations, providing recurring revenue Network Services 12

  21. Digital Interiors – Home

  22. Accomplishments Assumptions • Completed acquisition in March 2005 • Consolidated and integrated operations into Denver operations hub • Rationalized sales organization • Developed relationship with ONteriors in Phoenix and Houston • Compliments Network Services division – one point of contact for municipalities, developers and builders • Respond to requests to expand presence with national and regional home builders • Estimated that in 2006, 60% of the 2 million homes built will have advanced structured wiring built into the home’s base package • Areas of expansion include monitored security, communications, distributed audio and home theater Digital Interiors – Home 13

  23. Growth Opportunities

  24. Pro Line Upsell Network Services Digital Interiors Cable DIRECTV New Services New Services Growth Opportunities 180 Connect has positioned itself for significant growth driven by a combination of opportunities across each of its business components • Cable and satellite operators are increasingly outsourcing residential services to professional installers • Strong DIRECTV subscriber growth and cable subscriber churn will continue to drive increased installation volume • 180 Connect has earned significant DIRECTV customer satisfaction bonus’ in 2006 and is consistently ranked number 2 or 3 in the HSP network • Increased demand for new products and technology upgrades will result in additional upgrade truck rolls • Leverage infrastructure into complementary services 14

  25. Financial Overview

  26. Historical and Projected Revenue ($ in millions) 2004-2006E CAGR: 22.65% 15

  27. Historical and Projected EBITDA ($ in millions) 2004-2006E CAGR: 50.6% 16

  28. 2005: A Year of Transition • Rapid growth – significant growth related costs • Deployed 2,200 new service vehicles and 950 new field technicians • Upgraded technical skills of over 3,300 technicians • Recruited top IT professionals to focus on work order and supply chain systems • Consolidated back office functions in Denver • Settled Mountain Center acquisition liabilities and several longstanding DOL claims • Company repositioning – five operating lines of business poised for contribution • Launched Network Services and integrated Digital Interiors • Relocated major portion of call center operations off-shore • Launched Pro Line upsell • Positioned for strong future growth • Maturity of growth related costs behind us 17

  29. EBITDA Margin Improvement Initiatives Reduced Subcontractor Rate Card & Strategically Deploy Based on Seasonal Trends G&ACost Reduction Fleet Conversion Safety Training- Improved InsuranceTrends Margin Improvement ImprovedConsumable Sourcing Direct Sales Off-Shore CallCenter Technician Up-Sell Program Proline 18

  30. Balance Sheet Strengthening • Refinancing Completed • Debt refinance of up to a maximum of $57 million of debt available comprising a revolving credit facility and a term facility with interest rates ranging from prime plus 3% to prime plus 5%. • Excludes $32.7 million of capital lease obligations • Recently completed $10 million refinancing of fleet resulting in $2.1 million of incremental cash flow 19

  31. AUDIT UNAUDITED ($ in millions) 12/31/04 12/31/05 09/30/06 As of: ASSETS Cash and Cash Equivalents 28.5 3.4 0.5 Accounts Receivable, Net 43.9 50.0 45.5 Inventory 17.8 20.3 17.8 Restricted Cash 6.1 14.8 14.5 Prepaid Expenses and Other Current Assets 0.7 1.4 1.7 Total Current Assets 97.0 89.9 80.0 Property and Equipment, Net 3.0 41.7 39.4 Goodwill 15.4 15.5 15.5 Customer Contracts, Net 35.8 29.0 26.2 Other Long-Term Assets 8.3 1.7 8.0 Total Assets 159.5 177.6 169.0 LIABILITIES & SHAREHOLDS' EQUITY Accounts Payable 4.0 8.9 7.2 Accrued Liabilities 67.2 67.8 62.1 Total Current Liabilities 71.2 76.7 69.3 (1) Long-Term Debt 50.7 40.0 39.9 (2) Capital Lease Obligation 0.4 34.9 29.6 Convertible Debt - - 7.7 Other Long-Term Liabilities 5.1 1.6 1.5 Shareholders' Equity 32.0 24.5 21.1 Total Liabilities and Shareholders' Equity 159.5 177.6 169.0 Balance Sheet Summary ($ in millions) • Long-term debt includes current portion. • Capital lease obligations includes current portion. 20

  32. Capital Expenditures and Working Capital Capital Expenditures Summary • Capital expenditures, excluding fleet purchases, projected to be between $2.6 million and $2.5 million annually over next three years • Capital expenditures relate primarily to supporting the Company’s IT initiatives • The Company also transitioned to a Company-owned vehicle model, resulting in purchasing 2,200 new vehicles to replace privately-owned vehicles ($ in millions) 21

  33. Conclusion

  34. Investment Highlights • Leading Provider of Outsourced Home Installation Services • One of the largest members of the DIRECTV Home Service Provider (“HSP”) Network of installers • Largest installation contractor of cable services for Cablevision and Rogers • Superior quality and customer satisfaction ratings • Large and Growing End-Markets • DIRECTV subscriber base projected to grow at a 7.7% CAGR from 15 million in 2005 to 22 million in 2010 • Convergence of technology driving demand for “Triple Play” (voice, data and video) service installations for the cable industry • Strong upgrade trend from basic to digital cable • Growth of “digital homes” wired for sound, security, and data combined with historically strong housing starts (in 2006 over 60% of the two million new homes built will have an advanced structured wiring feature built into the basic specifications) • National Footprint/ Leverageable Network • Over 3,300 highly-skilled, highly-trained technicians completing approximately 2.5 million in-home visits per year • Highly leverageable branch network capable of supporting a multitude of home services (e.g., security, data networking, home theater, communications) • 85 branch locations across the U.S. and in Ontario, Canada • Significant Operating Leverage & Margin Expansion Opportunity • Recent investments in infrastructure, personnel, and equipment position the Company to realize benefits of significant growth opportunities • Centralized back-office and off-shore call center operations • Fleet of over 3,000 company-owned trucks • Additional margin expansion opportunities available through product and market synergies, further benefits of scale, the elimination of redundant corporate overhead and improved workers’ compensation insurance rates • Strong, Experienced Management Team • Senior management has over 150 years of combined experience primarily in the satellite, cable and telecommunications industries • Proven record of successful entrance into adjacent markets with rapid revenue growth 22

  35. Fact Sheet – As at September 30, 2006 Symbol: NCT.U (TSX) Shares: 24.4 million basic Debt: Long Term: $39.9 million (includes current portion) Convertible Debt: $7.7 million Capital Leases: $29.6 million Cash: $0.5 million Restricted Cash: $14.5 million Technicians: 3,300 Branches: 85 Website: www.180connect.net 23

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