The AVI teamcame in andfixed a messanother vendorhad left andturned it into asystem peopleare happy touse today.– BRETT TAYLORIOWA HEALTH SYSTEMTechnologythat worksfor you, notthe otherway around.avisystems.com2013/2014 Corporate ProfileOMAHA,NEBRASKATD AmeritradeUNMCBlue Cross Blue ShieldChildren’s HospitalSIOUX FALLS,SOUTH DAKOTAAvera HealthSanford HealthRaven IndustriesSioux Falls School DistrictSouth Dakota National GuardState of South DakotaST LOUIS,MISSOURINestle-Purina Pet CareWashington UniversitySt. Luke’s HospitalForesight EnergyMaryville UniversitySAN DIEGO,CALIFORNIAAT&TSandia National LabsNBC UniversalAbbott VascularGeneral AtomicsBAE SystemsFARGO,NORTH DAKOTADakota Medical FoundationMicrosoft CorporationNDSUDoosan/BobcatSanford HealthDES MOINES,IOWAREGIowa Health SystemsEmerson Process ManagementIowa CommunicationsNetworkWellmark, Inc.Iowa Lakes CommunityCollegeGRAND RAPIDS,MICHIGANHillsdale CollegeMichigan State UniversityPerrigoUniversity of MichiganSpectrum HealthWestern Michigan UniversityDETROIT,MICHIGANTennaco AutomotivePalace Sports – DetroitPistonsDuffey, Petrosky & CompanyMI Association of PublicSchool AcademiesCBS RadioAT&T Miller CoorsMINNEAPOLIS,MINNESOTA3M CompanyCargillHennepin CountyMedtronicAllina HealthKANSAS CITY,KANSASUniversity of Kansas HospitalNetSmart TechnologiesFreightQuote.comCernerSt. Luke’s Health SystemsBRR ArchitectsMADISON,WISCONSINUniversity of WisconsinMadisonQNI BroadcastingAmerican FamilyInsuranceUW HospitalSub-ZeroMILWAUKEE,WISCONSINCaterpillarMarquette UniversitySC JohnsonKohlsJohnson ControlsBISMARCK,NORTH DAKOTANorth Dakota Supreme CourtBismarck Public SchoolsWorkforce Safety andInsuranceNorth Dakota Heritage CenterState of North DakotaCHICAGO,ILLINOISMercerAllstateUnited AirlinesSearsChicago BearsElmhurst CollegeCINCINNATI,OHIOWendy’s CompanyHamilton County RegionalOperations CenterCincinnati State Technicaland Community CollegeBaptist Healthcare SystemsGE AviationDENVER,COLORADOXcel EnergyFaegre Baker Daniels LLPBrocade CommunicationsHusch BlackwellAVI Locations &Partial Client List
Our Passion Sets Us Apart. At AVI, we live andbreathe technology. It’s just part of our DNA. We’redeeply passionate about designing and integratingthe latest audio-visual technology for our customers.From telepresence to new media to presentationand collaboration to digital signage to broadcast andproduction. But we also believe the right solution is notjust about the technology. It’s about how that technologygets used—how the hardware and software worktogether seamlessly to do exactly what you need it to do.That’s why you can trust us to design and implement asolution that not only meets your specific requirementsbut exceeds your expectations.Our Missionis To design,integrate andsupport complexaudio visual,telepresenceand broadcastsystems at acompetitive price.
A Messagefrom the ChairmanWe are fortunate to be in solid financial condition in this time of uncertainty and rapid change. Butwhat does it mean to you—our clients and prospects? Here are some thoughts:• We can continue to recruit, train and retain the highest skilled staff in the market place, and ouremployees can focus on your work without worrying about the financial uncertainty of theiremployer.• We can invest in the best tools and products and adapt them to fit the rapidly changingtechnology needs of end users.• We can be agile and add acquisitions quickly when it makes good business sense.• We can outlast the toughest of problems. In other words, we’ve got your back.As a 100% employee owned company, AVI Systems recently received our annual valuation forcalendar year 2012 from Stern Brothers Valuation Advisors. This gives us some key indications ofhow we are doing as a private company.From December 31, 2011 to December 31, 2012, the common stock price reflects an increase of39.36%, which follows an increase of 18.93% last year and 30.04% in 2010. The principle factorsaffecting the increase in stock prices are reflected below:• AVI reported increases in stockholder’s equity and working capital of 26.03% and 62.55%respectively.• The full year impact of last year’s acquisitions and office/employee expansion were realized assales and EBITA were up 46.05% and 43.97% respectively for the year.• Next year revenue and earnings forecasts have been achieved in six of the last seven years. Thelevel of projected earnings in this year’s forecast is about 20% higher than last year’s forecast.• The company had a $4.5M increase in excess working capital and $860,341 reduction in debt.Currently, the company has no short-term or long-term debt and has cash available to fundexpansion and growth.We’re just beginning the 40th year of being a part of the exciting and rewarding technologyintegration business. Our 350 employee owners thank you for your confidence in AVI Systems.Joe M. StoebnerChairman of the BoardA Track Record of Success1974 Launches audio visual equipment supply company in Bismarck, ND.’70s & ’80s Becomes premier dealer of audio, video, broadcast andpresentation equipment.1986 Adds offices in Des Moines, IA and Omaha, NE.1990 Opens Minneapolis, MN office for audio, video, presentation andconferencing systems integration.1996 Adds Kansas City, KS location. Enters video conferencing market.2000 Acquires Audio Systems Company in Bismarck, ND, addingsound masking, sound reinforcement and security systems.2001 Establishes a Total Quality Initiative for the development oftechnical standards and processes.2003 Gains a West Coast presence in a merger with Televideo San Diego.2004 Acquires offices in Chicago, Milwaukee, Madison and GrandRapids under the name AVI Midwest, LLC.2005 Launches Advanced Managed Services group providing high-end AV/IT engineering, enterprise control systems programming andproject management.2006 Continued succession planning results in bringing the overallpercentage of the company owned by its employees to 71%.2008 Audiovisual, Inc. and its subsidiaries begin to operate under thecorporate name of AVI Systems, Inc. AVI Midwest and Televideo SanDiego names are retired.2009 Launches multiple AVI Systems branded products: DigitalSignage, Asset Management and Conference Support. Jeff Stoebnerassumes role as CEO.2010 AVI Systems is now a 100% employee-owned company.2011 Acquires Workplace AV Systems in Sioux Falls, SD.2012 AVI adds two new locations in Detroit, MI and Cincinnati, OH.2013 Adds Denver, CO and acquires Antech Labs of St. Louis, MO.Launches state-of-the-art Global Professional Support Center inMinneapolis, MN.AVI At A GlanceYear Established1974Number of Employees350Number of Offices16FY 2013 Revenue$147.1MAn ESOP Company100% employee-owned
AProvenProcessPhase One: Planning For YOur SuccessFirst, we understand your functional and environmental technologyrequirements so we design the right system for your exact needs, scope,budget and timeline. This phase also helps establish the relationship andexpectations between the client, architect, contractor and us.Phase Two: Engineering For ExcellenceDesigns are drawn, details are configured and the technology componentsare selected. During this phase, equipment and material schedules andconstruction documents are created.Phase Three: fabrication, programming and testingThe integration of equipment takes place in our fabrication labs, where thesystems are wired, programmed and tested to ensure a smooth and fullyfunctional field installation.Phase Four: on-site integration and system launchDuring this stage, all structured cable and hardware are set in place, displaysare mounted and audio reinforcement and equipment racks are installed andput to the test.Phase Five: training and sign-offWith the implementation process completed, the next important step is clienttraining and system sign-off. Further adjustments and additional training oftenoccur during the first year of operation.Phase Six: Global Professional SUPPORTHigh-tech audio visual, telepresence and broadcast systems require continuingre-certification to ensure smooth operation and peak performance. Our GlobalPro Support will give you peace of mind that support is always there if orwhen you need it.UnparalleledProducts& ServicesTelepresence SystemsWe’ve been integrating complex telepresence systems since the technology existed—with easilyover 5000 systems installed to date across a variety of applications and industries. So you cantrust that we know what works and what doesn’t. Plus, we provide training and support toensure that the system works simply, beautifully, every time.New Media SystemsThere are so many amazing new ways to create, visualize and interact with video content. Buthow do you know which new media technologies are right for your needs? Our in-house expertscan help design and integrate the right technology to deliver engaging and dynamic experiences.Presentation & Collaboration SystemsNow more than ever, organizations rely on and expect flawless presentations and collaborationtechnology. A truly integrated system means combining state-of-the-art display and audiotechnology with a simple, easy-to-operate control system. Because even the most advancedpresentation and collaboration technology isn’t worth it, if it can’t be used.High Definition Broadcast & Production SystemsToday’s high-definition video and multi-media content requires professional-grade technologicalsolutions. With our roots in the television and broadcast industry—plus our years of experienceworking with network and in-house broadcast and production teams—we have the expertise todeliver the best solutions for high definition conversion, video editing, control rooms, studios,video servers and more.Digital Signage SystemsFrom single-screen to enterprise wide solutions, our Digital Media Group will design a trulyintegrated digital signage system. We offer a full range of technology, software and services—whether it’s a hosted or in-house system, content creation services, help desk support andmore. You can be confident you have a system that will always work and can adapt as yourneeds change.Global Professional Support & ServicesWe’re committed to providing unparalleled service and support for all of our audio-visualtechnology solutions to ensure you get a system that is truly integrated and works flawlessly.That’s why we offer industry leading training programs, service plans and support options.
Partnering Withthe World’s FinestManufacturersBy building strong partnerships with over 200 quality manufacturers, we help our clients get the bestproducts and prices available. We invest heavily in sales and service training for the products we carry.And we even integrate them into our own Technology Centers. So you can trust we know them andknow them well.Not Just Experts,Certified ExpertsThe experience, knowledge and expertise of staff truly sets us apart as one of the most qualifiedaudio visual technology integrators out there. One look at some of our many certifications anddesignations, and you’ll understand why.CERTIFICATION QUALIFICATIONS/INDUSTRY CERT./MANUFACTURER CERT.Diamond AVSP InfoComm’s AVSP System Integrator recognition program – highest levelCTS Certified Technology Specialist – General (over 50% of our employees carrythis certification)CTS-D Certified Technology Specialist – DesignCTS-I Certified Technology Specialist – InstallationCET Certified Electronics TechnicianIT RCDD, MCSE, MCP, MCITP, CCNA, CCNP, CCNP Voice, CompTIA A+,CompTIA Network+Professional BS-EET / BS-PS / EE / EIT / PE / CAPM / PMPControl Systems AMX ACE / Crestron Master / Xantech / ExtronVTC Systems Cisco / Polycom / LifeSize / VidyoAudio DSP Peavey / BSS / Biamp / Gentner / CrownAVID ASCRCAD AutoCAD / VidCAD / RevitSound Modeling EASE / TEF / JBL / Syn-Aud-Con / NICET LEVEL II AUDIOOther CSGM PROGRAMMING / PROCARE 6000 / Sencore / First Class FCC LicenseKEY INTEGRATEDMANUFACTURERSPARTNERDESIGNATIONCisco Authorized Technology Provider (ATP) – TelePresence Video Master PartnerSmall Business Specialization, Authorized Digital Media Specialist PartnerPolycom Channel Partner Certification Platinum Level, CSP Certified Service Partner, FederalCreston Electronics Platinum Partner LevelAMX Platinum PartnerSMART Technologies Technical Solutions Provider, Gold Tier I Education and EnterpriseExtron Electronics Engineered Systems Reseller (ESR)Platinum / Platinum (PL / PL)Hitachi American LTD Select PartnerSonic Foundry Certified Partner (highest level)Biamp Systems Select Certified Audio Integrator / PartnerCountries Only Reward PartnerDa-Lite Screen Co. VIPChristie Digital Platinum PartnerLifeSize Communications Expert PartnerChief (Milestone AV) Elite PartnerSony Product Production ResellerSystems Integrator / ResellerVidyo Premier PartnerAvid Elite Reseller, ACSR Certifications – Elite, Editing, Storage, Unity, Isis, Windows / MacBroadcast Pix Elite+ ResellerChyron US Systems Integrator / DealerEvertz US Systems IntegratorIkegami Select DealerMiranda Select DealerTektronix Authorized Video Distributor
We are an employee-owned (ESOP) company with incentive-based compensation to reward employees for superior jobperformance. We believe ownership is a powerful incentive forordinary people to do extraordinary things. Stockholders alonedo not build companies—employees build companies. Andemployee owners build great companies.GlobalPro Support:We’ve Got Your BackProudlyEmployeeOwnedWe believe in helping our customers get the most outof their technology. That’s why we don’t just install yoursystem and walk away. We offer comprehensive trainingservices and support options from reliable and responsive experts. When you contact GlobalPro Support, you don’t get an automated call center or an auto-reply email; you get a realperson with the expertise and know-how to help. Plus, you get on-site support if and whenyou need it. No hassles, no push-back. Just the peace of mind that we have you covered.Our Service SupportAgreement is totally flexible,customized for our specificneeds and far less than thecost of hiring an additionalemployee. It’s made budgetinga much easier process for us.– Bruce BrowningChief Engineer, School of BroadcastingBrown CollegeFPO
FinancialsAVI Systems, Inc. is an open book company, we openly share financial information withthe people and companies that have a vested interest in our financial success. We seethose people and companies as being our customers, our supply chain partners andour shareholders.Our client base has a vested interest in our financial stability because many of ourcustomers are moving away from managing their audiovisual systems on a projectby project basis to managing those systems, and in the process their cost ofownership, over the effective life of those systems. To do this they need a financiallysound audiovisual partner that can and will support and service their systems for thelong haul.A sound financial foundation is important to our supply chain partners as well, becausethey want and need to know that the trade credit they extend to us is safe and secure.We measure and monitor Accounts Payable In Days because we believe that earningthe trust and respect of our supply chain partners helps us better serve our customers.As a 100% employee owned company our employee/shareholders naturally takean interest in the finances of the company, so based on the same philosophy thatfinancial information is and should be shared openly, we share our financial results withour employees so they can determine how their investment in the company is beingmanaged and how their commitment to our customers creates shareholder value.Over the last two years, AVI Systems has invested heavily in acquisition related growthand those investments and our acquisition strategy are generating tangible financialresults. Revenue for the fiscal years ending March 31, 2013 and 2012 has grown by 29%and 24%, respectively.We have managed our balance sheet prudently over this period of rapid growth. Thecompany has approximately $21 million dollars of working capital, our current ratio isbetter than 2.0 to 1.0, there’s a significant amount of liquidity in our working capitalassets, and the metrics we use to manage and measure how well we’re managinginventory and our accounts receivable are some of the best in our industry.We have also made notable progress in terms of our capital structure. We paid offall of the Company’s term debt in fiscal year 2013, and with Debt to Tangible NetWorth and Debt to Equity ratios of 0.9 to 1.0 and 0.7 to 1.0, respectively, AVI Systemshas the capital and financial wherewithal to hire leading edge talent, grow the AVISystems brand and make the investments needed to provide best-in-class service toour customers.Randi BorthChief Financial OfficerAVI Systems, Inc.Consolidated Balance Sheets MARCH 31, 2013 and 2012Assets 2013 2012Current Assets Cash $ 14,238,252 $ 3,734,903Certificates of Deposit – 3,614,060Accounts Receivable 21,098,357 21,754,923Costs & Estimated Earnings in Excess of Billing 931,762 842,765Inventories 1,260,325 1,019,152Prepaid Expenses 387,128 253,571 37,915,824 31,219,374Other AssetsSecurity Deposits 224,983 158,410Certificates of Deposit 504,520 –Intangible Assets, Net 4,120,431 4,285,045 4,849,934 4,443,455Property & Equipment, Net 2,496,665 2,008,360 $ 45,262,423 $ 37,671,189Liabilities And Stockholders’ Equity Current Liabilities Current Maturities On Long-Term Debt $ – $ 690,979Accounts Payable 6,533,574 6,944,607Billings In Excess Of Costs & Estimated Earnings 230,935 271,993Accrued Expenses 6,014,534 5,580,642Unearned Maintenance Contract Revenue 4,236,610 3,657,644 17,015,653 17,145,865Long-Term Portion of Unearned System Support Revenue 1,972,313 495,063EquityCommon Stock 386 386Additional Paid In Capital 2,034,342 2,034,342Retained Earnings 36,729,599 30,485,403 38,764,327 32,520,131Less: Treasury Stock (12,489,870) (12,489,870)Total Equity 26,274,457 20,030,261 $ 45,262,423 $ 37,671,189Key Financial Metrics MARCH 31, 2013 and 2012Liquidity 2013 2012Working Capital In Dollars $ 20,900,171 $ 14,073,509Current Ratio 2.2 to 1.0 1.8 to 1.0Accounts Receivable In Days 55 Days 58 DaysAccounts Payable In Days 25 Days 27 DaysInventory Turnover 75 Times 77 TimesCapital Structure Debt to Tangible Net Worth 0.9 to 1.0 1.1 to 1.0Debt to Equity 0.7 to 1.0 0.9 to 1.0Pre-Approved Bonding Capacity Single Job $ 5,000,000 $ 5,000,000Aggregate $ 15,000,000 $ 15,000,000
Video ConferencingConference RoomsBroadcast & ProductionHOUSES OF WORSHIPDistance Learning / Classroomsdigital signage CorporateAuditoriumsCommand CentersTraining RoomsBoard RoomsProviding MoreSolutions.Serving MoreIndustries.· Boardrooms· Training Rooms· Houses of Worship· Command Centers· Broadcast Production· Auditoriums· Digital Signage· Large Venues· Conference Rooms· Video Conferencing / Telepresence· Distance Learning· Classrooms· Corporations· Educational Institutions· Broadcast and Production· Healthcare· Municipal & Government· Legal & Correctional· Utility & Transportation· Telecommunications· Manufacturing· Hotels· Entertainment· Retail· Federal Government· Military Defenseavisystems.comAVI At A GlanceFY 2013 Individual Projects2,020 CompletedTechnology Value$85,133,350Average Project Size$42,145Largest Project SizeOver $5M