MicroCapClub Invitational: Xplore Technologies (XPLR)


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Xplore Technologies (XPLR) manufactures two forms of tablet computers: Ultra rugged, which has been their core business for many years, and rugged, which is a new growth driver that expands their previously addressable market by a factor of 10. Their legacy, ultra-rugged product has customers on record such as AT&T (T) and the US Military. This highly differentiated product is waterproof, can withstand a 7 foot drop, and can function in a temperature range of -40 to 167 degrees. One of the key reasons we became involved with the stock is their new rugged line of tablets, called Ranger X. In July of this past year, they unveiled the Ranger X, which the company just recently announced its first multi million dollar purchase order from a major U.S. telecom provider. We expect the Ranger X to be a major growth catalyst in 2014. Phil Sassower, Chairman and CEO, owns 33% of the company through his private equity vehicle, and has successfully led the company to the inflection point on which it stands today.

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MicroCapClub Invitational: Xplore Technologies (XPLR)

  1. 1. Investor Overview january 2014 1
  2. 2. a global leader and innovator in rugged tablet PCs for over fifteen years developers of the most rugged tablets in the market 2
  3. 3. Notice: This Presentation (the “Presentation”) has been prepared by Xplore Technologies Corp. (the "Company") solely for informational purposes. THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY. The information contained herein has been prepared to assist interested parties in making their own evaluation of the Company and its prospects and does not purport to contain all of the information that a prospective investor may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company and the data set forth in this Presentation and further documents transmitted to the recipient in the course of its evaluation of the Company. The Company makes no representation or warranty as to the accuracy or completeness of this Presentation, including any projections or statements about the prospects of the Company, and shall have no liability for any representations (expressed or implied) contained in, or for any omissions from, this Presentation or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Company. Only those representations and warranties that are made by the Company in a definitive purchase agreement will have any legal effect. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF THE COMPANY NOT CONTAINED IN THIS PRESENTATION. IF YOU RECEIVE ANY SUCH INFORMATION OR REPRESENTATION, YOU SHOULD NOT RELY UPON IT. IF YOU HAVE ANY QUESTIONS RELATING TO THIS PRESENTATION, YOU SHOULD DIRECT YOUR QUESTIONS TO THE COMPANY’S CHIEF EXECUTIVE OFFICER OR CHIEF FINANCIAL OFFICER. This Presentation includes “forward-looking statements.” All statements made in this Presentation that are not of a historical nature are forward-looking statements. These forward-looking statements reflect the Company’s current expectations, estimates and predictions about future results and events. Such projections and statements are based upon assumptions about future events that are inherently uncertain and subjective. Although the Company believes that the expectations contained in these forward-looking statements are reasonable, it cannot give any assurance that these expectations will prove to be correct. Actual results may vary materially from those described in the forward-looking statements. The Company is under no duty to update any of the forward-looking statements after the date of this Presentation or to conform these statements to actual results. Nothing contained herein is intended to be, nor should be relied upon as, a promise or representation as to future performance of the Company. 3
  4. 4. company profile Headquarters d Austin TX NASDAQ Since 2012 d XPLR Xplore: Manufacturer of the Most d Rugged Tablets in the Market 4
  5. 5. a pioneer in rugged tablet technology First with automatic touch and pen input Developers of the first and best sunlight viewable display First to Market Most Powerful Desktop Processor in Tablet First Telco / Cable specific tablet (HDMI-In/RJ-45) 5
  6. 6. xplore’s rugged tablet users span multiple markets Field Install & Repair Techs Military & Special Ops Personnel Oil Field Pipeline Inspectors Forklift Drivers Warehouse Inventory Managers First Responders / EMS Pharmaceutical Scientists Medical Personnel 6
  7. 7. Providers In The Rugged Tablet Market Xplore’s products have historically served the “Ultra Rugged” space. The product line expansion will more than triple Xplore’s addressable market. Revenue in Millions Key: VDC Market Estimates for CY 2013 Note: Highlighted vendors have either exited the market or significantly reduced presence this calendar year 7
  8. 8. Market Growth: Fully Rugged Tablet by Deployment Environment (VDC Estimates) Revenue in Millions Markets enabled and expanded by new product lines 8 Key Take-Away: Xplore Traditionally Plays in the UltraRugged Niche of the Rugged Space – Approx 30% of Total Opportunity. By delivering fully rugged tablets (IP65), lighter weight & lower cost tablets, Xplore will expand it’s addressable market to the entire rugged tablet market opportunity.
  9. 9. Xplore: Most Rugged Tablets iX140C5 Series: Waterproof Shockproof Readable in Direct Sunlight Always Connected Extreme Temperatures Ranges RangerX Series Most Powerful Rugged Android Tablet in the Market Fastest Processor Most Storage capacity Best drop rating Water and Dust Resistant Brilliant sunlight readable display Only tablet with HDMI-In & Gigabit Ethernet – perfect for Telco & Cable Google Certified 9 in the market
  10. 10. differentiation is in our DNA The Most Rugged Tablets in the Market– Tested by Tougher Methods Only Tablet With Onsite Repair And Upgrade Capability Long Life Cycle Generates Greater Savings Award-Winning Sunlight Viewable Displays Outstanding Performance & Data Protection Safely Operates in Explosion Prone Environments Ability to Customize Configurations for Large Opportunities Unique Configurations for Telco / Cable (RangerX) 10
  11. 11. Xplore A-List End Users in multiple verticals Field Service / Utilities Military Hydro One Inc. Dycom Industries Inc U.S. Army Texas-New Mexico Power Co. Arkansas Utility Protection Services . Raytheon SAAB Training Systems Energy / Oil & Gas Public Safety / Government Pharmaceutical / Medical Wyoming Department of Health: EMS Merck U.S. Navy Detroit Police Department CVS Pharmacy U.S. Air Force Helsinki City Rescue Department Procter & Gamble Abu Dhabi Police Manufacturing / Distribution Transportation PennWest Energy Daimler Nissan Kizer Energy Mercedes Benz FedEx Corporation E.ON Climate and Renewables North America Sealed Air Airports Argentina 2000 Canadian Tire BNSF Railway Company Clare Rose Air Berlin PLC & Co. Scottish Power 11
  12. 12. Xplore: strength in relationships Strategic Development Alliances Experienced, Well-Known Resellers Intel VT Miltope Hewlett-Packard Microsoft GroupMobile ProSys Wistron 12 Coppernic
  13. 13. recent success and announcements Launched a new fully rugged Android Tablet – the RangerX – and secured first major order of approximately $4 million from a Major U.S. telecommunications provider Continued expansion of $17M+ relationship with Major U.S. telecommunications provider for iX104C5 DMSR Multiple millions of dollars in US Military orders for iX104C5 DMSR – M1, recently won first major program award Multiple millions of dollars in orders from Medical Equipment Manufacturer in an OEM relationship 13 Launch of the iX104C5 DMSR LTE and DMSR – M2 Ranked #3 in the 2013 ABI Research Media Tablet Market Analysis behind Samsung and Apple - Xplore was the only Rugged Tablet Manufacturer included in the rankings! Named Official Tablet of 2013 Reebok Spartan World Championships
  14. 14. paradigm shift: new market opportunity Traditional Segmentation Lines are Blurring… Tablet Sales Are At An All Time High, With Expectations For Continued Growth Non-rugged commercial tablets being used in the corporate space are experiencing high failure rates as well as IT management issues Rugged Tablets Are Fastest Growing Form Factor – VDC Fulfilling enterprise needs through experience and expertise. Rugged tablets finding new markets as rugged needs emerge in new market segments Xplore From $0.5B in the Ultra Rugged Mkt* 13x To $6.9B in the Total Rugged Mobility Mkt* The Two Markets Meeting Create A New, Enormous Segment With Rugged Needs We Believe Xplore Is Best Positioned To Exploit This Disruptive Opportunity Commercial Tablets *Data from 2012 VDC Research 14
  15. 15. Xplore Technologies Market Objectives Leverage Leadership Position in Ultra Rugged Space Expand Reach With Lower Weight / Lower Cost Fully Rugged Products Take Advantage of Converging Tablet Space with Android & Windows Offerings 15
  16. 16. historical growth Year over Year Revenue Comparison $35,000,000 $35 $30.5 $30,000,000 $27.5 $30 Revenue in Millions $25,000,000 $25 $20,000,000 $20 $17.6 $15,000,000 $15 $10,000,000 $10 $5,000,000 $5 $0 FY11 FY12 **Fiscal year ends March 31st 16 FY13
  17. 17. financial highlights of FY2013 Large revenue growth and first year of profitability Generated approximately $3 Million of cash from operations Gross profit of approximately 34%, an improvement of 13% Completed Recapitalization whereby Raised $10 Million by public sale of common stock Converted all preferred stock to common stock Up-listed to Nasdaq exchange 17
  18. 18. Xplore Technologies strengths Solid Existing Business Line Most Rugged Tablet in the Market Exploding Market with High Growth Potential Pioneer & Leader In Rugged Tablet Computing Replicable, Scalable ODM Model with Key Strategic Alliances with Industry Leaders Proven Ability to Sell and Support Fortune 100 companies Development of New Products for Convergence of Consumer/Commercial Tablet with Growing Rugged Mobile Market Xplore believes it is best positioned to exploit the larger market opportunity Phoenix Venture Fund and affiliates have invested $25 million 18
  19. 19. investor considerations Global Provider of Rugged Tablets In a Market with Exploding Growth Potential With Opportunity to Triple its Addressable Market With New Products Being Launched During Calendar 2014 Debt Free Positive Working Capital (Current Ratio 4.2:1) $7.6 million in Cash $86 million Net Operating Tax Loss Carry Forward Market Capitalization of $52 million on January 1, 2014 Phoenix Venture Fund and Affiliates Ownership of 37% at an Average Cost of approximately $7.50/Share Financial Data as of September 30, 2013 19
  20. 20. key executives leading the Xplore growth With experience in managing various large and small high tech firms, the Xplore team is well equipped to lead the company to success and continued growth. Their proven management capabilities in larger tech firms enables Xplore to transform into a larger rugged tablet market provider. Bates Manufacturing Company, Inc. | Newpark Resources, Inc. | Cabletron Systems Communication Intelligence Corp. | Wavestat Wireless Inc. | Texas Instruments Digital Equipment Corp. Acxiom | Dell | TippingPoint Technologies, Inc. Sirific Wireless | Acer Advanced Labs, Inc. The Executive Team Philip S. Sassower Chairman & CEO Michael J. Rapisand CFO & Corporate Secretary Bryan J. Bell VP of Engineering 20 Mark Holleran President & COO Randy W. Denny VP of N. American Sales Michael W. Zimmerman VP of Operations
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