Investor Presentation November 2015 Apivio Systems Inc. (APV.V)
Disclaimer The information contained in this document is submitted to parties on a confidential basis for use solely in connection with their consideration of the investment opportunity described herein. By its acceptance hereof, the recipient agrees that neither it nor any of its employees or advisors shall use the information for any purpose other than the evaluation of the investment opportunity, nor shall it divulge the information, disclose that it has received this information or that this process is ongoing, or distribute this document to any other party, in whole or in part, at any time without the prior written consent of Apivio. This summary does not constitute an offer to sell or the solicitation of an offer to buy any securities and is intended for informational purposes only. This summary does not purport to summarize all of the conditions, risks and other attributes of an investment in Apivio. Certain of the information contained herein includes forecasts, predictions and other such forwardlooking statements, which involve particular risks and uncertainties since they depend on assumptions that may not prove to be accurate and could cause the actual results to differ materially from the forecasted or predicted results. cc 1
About Apivio Apivio is a global leader in voice technology solutions that bring Android, Wi-Fi and VoIP technologies together. Established: 2002 Employees: 80 Locations: Richmond, BC (HO) Anyang, South Korea Ticker TSX:V APV 52 Week Hi/Low $0.23 / $0.65 # of Shares O/S 52.7M (basic) 71.3M (fully diluted) Market Cap $25M (FD @$0.35) Price/Sales 0.5x Financial ($M) H1 2015 2014 2013 Revenue $26.7 $46.6 $35 Adj. EBITDA $0.7 $1.4 ($0.1) 2
Our Business Leading supplier of Voice Over IP (VoIP) handsets to all the Korean Telecom leaders, including Korea Telecom, LGU+, SK Broadband, CJ Hellovision for over seven years Other past and present customers include NTT of Japan and NEC, North America More than 4,500,000 handsets sold, mostly in Asia. Began selling in North America in 2015 3
Products Monet Series Android-based Video Phones Dexter Series Desktop IP Phones Liberty Series Mobile Wi-Fi Wireless Phones Launched 2015 In Market Launched 2014 Launching 2015 4
Android Smart Desk Phone Developed for NEC Our Vision: One day all Enterprise desk phones will be smart phones. Apivio developed and delivered an Android deskphone to NEC North America in 2015 on time and on budget within a year These phones allow enterprises to develop and run value added apps on the Android O/S Apivio shipped 10,000 phones to NEC by Q3 2015 NEC is now introducing the UT880 globally (beyond North America) Apivio is collaborating with NEC to develop business friendly apps for the enterprise market for recurring revenue streams Monet Series Android-based VoIP Desk-Phones 5
Applications for Vertical Mkts Voice / Video Recording SIP Clients Security RFID Media Interface Security (motion) Smoke Detectors Cordless Wi-Fi 6
Liberty Series Wi-Fi Phone Our Vision: Wi-Fi telephone technology will replace DECT (traditional cordless phone technology) and ATA (Analog Terminal Adapters used by Vonage, Magic Jack etc.) 2014 launched the Liberty L1 that authenticates on any Wi-Fi network and enables home phones to be portable Users can make calls from anywhere on their original home phone plan no additional roaming or long distance charges About 4,500 L1 phones sold in test marking to date The next generation L2 phone will have a limited launch during H2 2015 in North America The L2 will register on our cloud based auto-registration service under development ( CLive ) CLive will allow ease of use, upgrades, tracking and features that make the phone easy for carriers to deploy and endusers to activate out of the box Liberty Series Mobile Wi-Fi Wireless Phones Launched 2014 Launching 2015 7
Liberty L2 Overview The new 2-line Liberty L2 Portable Wi-Fi phone is suitable for home or office use Enables mobility for your home or office phone Allows seamless hand-off from one Wi-Fi AP to another L2 is a dual mode phone that operates in the 2.4GHz and 5GHz bands with outstanding reliability. Excellent HD sound quality using HD codecs (G.722 and AMR-WB). Launching in H2 2015 8
Dexter Series VoIP Phones Our Vision: To be the dominant vendor of VoIP phones to carriers that offer Centrex Services Apivio, through its subsidiary in South Korea, started developing and selling these phones more than 10 years ago To-date, more than 4.5 million phones have been sold and Apivio has established itself as the leading vendor of these phones to the four largest carriers in South Korea Company plans to leverage knowledge gained in the South Korean market to other markets as Carriers move from traditional and Transformational to pure VoIP (Centrex) service Dexter Series 9
Growth Drivers $3.3M private placement in March 15 provided capital for growth initiatives Continue to capitalize on our market share in Korea Expanding Global VoIP market New Android products and platform, build on initial NEC commitment of 20,000 phones New Wi-Fi products and platform Company transitioning to higher and repeat revenues 10
Revenue, Margin & EBITDA Improvement -302 305-49 -2-348 975 108 684 90 598 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 29467 Annual Revenue 35039 46553 Figures in $ 000s, except percentages 26765 FY 12 FY 13 FY 14 H1 15 1200 1000 800 600 400 200 0-200 -400-600 20.00% 19.00% 18.00% 17.00% 16.00% 15.00% 14.00% 13.00% QUARTERLY EBITDA Q 1 1 3 Q 2 1 3 Q 3 1 3 Q 4 1 3 Q 1 1 4 Q 2 1 4 Q 3 1 4 Q 4 1 4 Q 1 1 5 Q 2 1 5 Gross Margins - Quarterly 15.60% 15.20% 18.90% 19.20% 19.00% 18.20% 17.70% 16.80% 15.00% 16.20% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 11
Stronger Balance Sheet CDN $(000's) H1 2015 FY 2014 FY 2013 FY 2012 Current assets: Cash and cash equivalents 3,453 1,810 2,969 1,340 Trade and other receivables 5,408 4,970 3,311 2,786 Inventories 5,167 4,528 2,057 2,234 Other assets 874 563 900 2,019 14,902 11,871 9,237 8,379 Property, plant and equipment 1,099 1,185 1,270 1,110 Intangible assets 416 459 301 257 Other financial assets 1,064 800 447 260 Total Assets 17,481 14,315 11,255 10,006 Current liabilities: Trade payables and Liabilities 4,343 5,028 4,206 3,209 Short-term borrowings 6,976 6,724 6,330 5,784 11,319 11,752 10,536 8,993 Long-term borrowings 743 814 420 1,480 Defined benefit liabilities 732 416 174 198 12,794 12,982 11,130 10,671 Equity and Accumulated Deficit 4,687 1,333 125 (665) Total Liabilities and Equity 17,481 14,315 11,255 10,006 Working Capital 3,583 119 (1,299) (614) Net Debt 4,266 5,728 3,781 5,924 Equity 4,687 1,333 125 (665) 12
Management Key Management Rob Bakshi President & CEO David Pais CFO J. Y. Ahn CEO, Moimstone Korea S. H. Shin CTO, Moimstone Korea J. S. Kang CFO, Moimstone Korea Chang Il An Executive Director - Sales Serial technology entrepreneur Founder and former CEO of Silent Witness Enterprises CFO at three successful companies over the last eleven years. Most recently, CFO of a BC based manufacturing company that was sold to a Boston based NYSE listed US Public company for $60M Senior Vice President at Ernst & Young Corporate Finance, specializing in M&A and financing 8 years at Moimstone Korea, initially as head of Sales promoted to COO and then to CEO, Korea Experience working in Sales, Management and Logistics in several tech companies in Korea Electrical Engineer from Hanyang University, International Business Professional course from Kotra 19 years at leading electronics companies including Dasan Networks, Dain Telecom, nsystech and Hanwha working on Switching systems, Semiconductors, VoIP & Wi-Fi and DSL solutions 5 years of experience at Moimstone. Bachelors Degree in Electronics and Computer Engineering from Korea University 20 years of experience with finance and accounting at Dansung Electron, Vodus and Kolon International 7 years running the Moimstone Korea Finance department Passed the US CPA Examination, degree in Business Administration from Konkuk University 7 years of experience managing major sales accounts and International Sales for Moimstone Korea Headed Sales and Sales Engineering positions in Wareplus Co. and Wellink Co. Degree in Information and Communications from Dong Seoul College 13
Independent Directors Independent Directors Tim Howley, CA Independent Director Jason Donville Independent Director David Shaw CA, PhD Independent Director Rob McJunkin CA Independent Director CFO, Mark Anthony Group Former partner, KPMG Chartered Accountant and Chartered Business Valuator President and CEO of Donville Kent Asset Management. Previously an analyst with Cormark Securities. Jason has won numerous awards as an analyst and fund manager. In 2004 and 2005, Mr. Donville was ranked in the annual Brendan Woods surveys and recognized as the Top Stock Picker in Diversified Financial Services. The Donville Kent Capital Ideas Fund was voted the best new hedge fund in Canada in 2009. Morningstar named it the Best Opportunistic Hedge Fund in Canada in 2013 and 2014. Director of Donville Kent Asset Management and Riverrock MIC. Graduated from the Royal Military College of Canada and the Richard Ivey School of Business at Western University (M.B.A) Former Professor and Associate Dean of Ivey Business School at the University of Western Ontario Substantial board experience including Audit committee Chair for Silent Witness Enterprises from 1999 to 2003 Senior Vice President, Finance and Corporate Services of Anthem Properties Previously held senior position with Intrawest, New Century GlobalNet (Japan), AT&T Wireless (Asia and International) and KPMG 14
Questions? Contact Rob Bakshi, CEO T: 604-761-2100 rbakshi@apivio.com David Pais, CFO T: 604-340-9866 dpais@apivio.com 15