Investor Presentation March 2013
Safe Harbor Statement Forward-looking statements regarding future events or DDS Wireless future financial performance may be made in this presentation that involve risks and uncertainties. Such statements are simply predictions, and actual events or results could differ materially from those anticipated. Please refer to the 2012 Annual Report and AIF and other filings with SEDAR, which contain and identify important factors that could cause the actual results to differ materially from those contained in our projections and/or forward-looking statements.
History with Acquisitions 1992 Kustom Electronics Hardware MDTs System supplier with H/W & S/W 2002-2003 Aspiro in Sweden efleet Product TSX listing in 2003 2008 Structured in 3 units 1988 IP Xfer from Motorola Dispatch S/W for taxis 1999 MDSI Transportation BU European + Asian customers Road side assistance market Path Finder product 2007 StrataGen + Mobisoft Global Paratransit and Demand Response TaxiBook product
Our Global Advantage 370 systems worldwide > 60% of revenue is recurring 100,000 units shipped 90% of revenue is derived from outside ofcanada 215 employees worldwide Head office in Vancouver Regional offices: Seattle, Sweden, Finland & UK Repair center in Singapore Major install Office
History of Growth & Profitability $46,000 Annual Revenues & EBITDAS* 25 Year History (1988 to 2012) $36,000 $26,000 $16,000 $6,000 -$4,000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * EBITDAS Earnings before Interest, Taxes, Depreciation, Amortization and Share-based Compensation
Markets Served Taxi Motor Coach Limousines Transit
Operating Business Units Taxi Transit New Markets Limos, Buses & Airport Shuttles Vertically focused business units leveraging wireless core competence Scalable model for future expansion
Scalable Business Model Payment Gateway Web Booker & IVR Networks & Certification Hosted Web Platform Devices Network Management Mapping, AVL New Markets
Management
Our Business and Products Established Markets Enterprise Systems We provide complete wireless mobile solutions: Patented applications & wireless mobile computers Project management, installation and configuration mcommerce and mobile media products Long term maintenance contracts Smaller Fleets Hosted SaaS For smaller fleets we provide Hosted, Bundled SaaS solutions: TaxiBook, efleet and etransit Smart phones/devices & DDS Wireless devices Emerging verticals OEM In our emerging market verticals we provide: Wireless infrastructure Mobile computers Interfaces to 3 rd party applications
How the System Works Job Requests Dispatch Payment GPS Based Time Based Attributes Passenger Pick-up Routing & Scheduling
Typical DDS Wireless System Components GPS Mobile Data Terminals Payment Gateway Dispatch Apps Cloud-based Dispatch Software Wireless Network Control Systems Ride-Request Apps Ticketing Kiosk Web Bookers & IVR Enterprise Dispatch Software
Our Mobile Computer Products Vector-9000 Vector-5000 Win CE 6.0 3G networks Linux O/S 3G networks Blue Tooth 7 ultra bright LCD Win CE 6.0 4.3 ultra bright LCD Wi-Fi Browser enabled Dedicated keys Wi-Fi
Product Offerings PathFinder (Taxi Dispatch System) Enterprise Solution. Oracle based, distributed architecture Complete solution includes servers, licenses, MDTs, professional services and 3-10 year service agreements ADEPT TM (Transit Routing & Scheduling System) Enterprise Solution. Patented Routing & Scheduling engine 15% or more efficient routing over competitors systems Subscription Based Systems Hosted SaaS model with airtime, mobile device and support Typical contracts for 3-5 years Bundled Solutions for Taxi, Limos and Buses Attractive monthly pricing depending upon device and feature set
Key Business Strategies Key Strategy Current Positioning Growth Strategies 1. Leadership position in all markets 2. Expand recurring revenue streams 3. Leverage shared technology 4. Establish and maintain marquee customer base Leader in the Taxi market Transit marquee NA customer base > 60% of current revenue is recurring SaaS offering (efleet) for limousine market Taxi customers in NA and Europe are industry leaders Growth through acquisition to leadership Transit position Expand SaaS customer base in Taxi (TaxiBook ) Enhance maintenance revenue streams from Taxi enterprise base Expand efleet offering into niche markets Expand into back seat in Taxi market Retention through customer service Stickiness due to evergreen software
Market Overview Market leader, particularly in Large Fleets Majority market share in US (14 of 22 largest fleets) 6 of 10 largest fleets in Europe & North America Systems in Helsinki, Paris, Düsseldorf, Copenhagen & Stockholm NA Addressable Market 6,300 taxi companies & 225,000 taxis Small fleets represent 80% of fleets Pursuing growth opportunity in small & medium fleets Back of Cab payment interface and mobile media Revenue in new devices, transaction fees and media Legislative changes & new revenue for taxi co. are key drivers Credit card penetration rates have increased to 50% (New York)
North American Addressable Market for Taxis North American Taxi Market only 2006 data from Taxi, Limousine, and Para-transit Association (TLPA). Our estimates for 2011 Taxis by fleet size Fleet Size 6% 14% 56,250 99,000 69,750 6% 14% 80% > 100 vehicles 50 to 100 vehicles < 50 vehicles
Hosted Solutions for Small to Medium Fleets ( SMF ) TaxiBook is a complete hosted solution for small taxi companies without private radio and IT infrastructure SMF market of 126,000 taxis is under-penetrated Small fleets underserved by Dispatch & Mobile Resource Management solutions No capital costs for customers; TaxiBook is a SaaS business model Currently 6,200 taxis using TaxiBook worldwide 15% penetration of SMF in North America alone represents $12 million ANNUAL revenue opportunity @ ($50 ARPU) Investment made in sales and marketing in 2011 & 2012
Mobile Media & Passenger Zone Systems Leverage DDS installed base Revenue from advertising and payment processing Technology in place and ready to deploy
A Customer Base of Industry Leaders Key customer Longevity Fleet size Comments Key European Customers Copenhagen Taxi Since 2000 800 Upgraded to Vector 9000 in 2011 G7 Taxis, Paris Since 2001 7,000 Upgrading to Vector 9000 from 2011 Taxi Stockholm AB Since 2001 1,700 PathFinder user. Upgraded to Vector 9000 in 2011 Helsinki Taxi Since 2003 1,400 Upgraded to Vector 9000 in 2011 Taxi Düsseldorf Since 2010 1,200 PathFinder and Vector 9000 Key North American Customers Veolia Transportation Dallas Yellow Cabs San Gabriel Transit United Independent Taxi Since 1993 >2,000 Baltimore, Denver, Kansas City & Portland Since 1998 1,000 Both Taxi and Transit customer Since 1990 900 Both Taxi and Transit customer Since 1995 600 Upgraded to Vector 9000
Market Overview Acquired StrataGen business in late 2007 Has grown from $5 M in 2007 to ~$12.5M in 2012 Market Leadership in Demand Response Leader in Large Fleet segment 4 of top 5 transit fleets in North America Large account installed base, including New York, Boston, Los Angeles, Detroit & Fort Lauderdale Expanding global footprint with Helsinki, Stockholm & others Attractive Market Structure: Market participants include: Public transit agencies (US alone has over 6,000 agencies with many more in Europe), social care (e.g. VA, Medicaid), schools, senior care Private transportation providers (including taxi fleets), brokers Segmentation by volume drives need, competitiveness
Market Drivers Favorable market drivers Aging population/demographics/social policy drive Usage & growth in ridership Public sector budget pressure drives need for efficiency while maintaining service Recovery in public spending ROI investments gaining traction over services growth Additional Modules, Hardware and Upgrades Larger customers are upgrading and expanding use of additional modules Upgrade and expansion orders from installed base will continue in 2013 Proven ROI for MDT use will likely encourage hardware upsell
Value Proposition and Growth Drivers Competitive advantages: Patented technology: Scheduling and routing algorithms that provide 15-20% efficiency gains Scalable from 200 trips/day to 30,000 trips/day Complete solution: Applications, MDTs, services and multi-fleet provider experience Growth initiatives: Installed base: Upgrades to new platform Customer Service efficiency: web access, IVR options Fleet optimization (intermodal trip planning, taxi offload) MDT integrated solution Transactions management Expanded market coverage: Mid-market Non-emergency medical Europe
A Customer Base of Leading Agencies Key customer Longevity Trip Count Comments New York City MTA Boston MBTA Los Angeles ASI Fort Lauderdale BCT City of Helsinki Finland Oakland, CA EBPT Detroit SMART Victoria, BC BC Transit Since 2002 30,000 per day Committed investment of $22 million contract to date Since 2004 9,000 per day Significant upgrade & expansion, payments and taxi integration Since 2008 8,000 per day Expanded base system with IVR, payment systems, MDTs Since 2005 4,000 per day System overhaul, ADEPT upgrade, MDT deployment in 12 Since 2008 >3,000 per day Extensive add-on business vehicle growth; payments integration; service tools Since 2000 2,500 per day System overhaul, ADEPT upgrade, currently in progress Since 2007 >2,000 per day Significant base system with expansion with new MDTs in 12 Since 2005 2,000 per day ADEPT and Vector 9000 upgrade starting early 2013
Marquee Customer Base
efleet Web-Based Dispatch & Fleet Management Business Model Customers subscribe to efleet services based on monthly fees per vehicle Typical contract terms are 36, 48 or 60 months MDTs required for each vehicle are purchased in advance or financed over the term of the contract Primary Features Dispatch AVL Payment processing Messaging Premium Features Web Booker Ticketing/Kiosk Driver Logs Engine Diagnostics Key Markets Served Livery Limousine Shuttle Motorcoach
Financial Review
Increasing Recurring Revenues 50,000 45,000 40,000 35,000 59% 64% Revenue Mix & Growth % = Recurring Revenue as a % of Total 56% 51% 62% 30,000 25,000 20,000 Enterprise Solutions Small Hardware Orders Maintenance SaaS & transaction Based 15,000 10,000 5,000-2008 2009 2010 2011 2012
Generated over $15 M of EBITDAS 1 in last 3 years 7,000 1 Earnings before interest, tax, amortization, depreciation & stock compensation 6,000 5,000 4,000 3,000 2,000 1,000-2008 2009 2010 2011 2012
Financial Highlights A growing business with a stable recurring revenue base 100% revenue growth over 5 years 2007 ($20.5 M) to 2012 ($40.7M) 62% Recurring Revenue A strong history and track record of profitability 24 years of profitability $15.5 M of EBITDAS in last 3 years $3.8 M EBITDAS or 9% of revenues in 2012 Q4 2012 record EBITDAS of $3.2 M A high gross margin business 48% adjusted gross margin before amortization & share compensation A compelling investment opportunity $29 M Market Cap less $10 M of cash & equivalents translates to $19 M of enterprise value
www.ddswireless.com Vari Ghai, CEO Caroline Dunn, CFO