2013 AGM Presentation

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FLYHT's 2013 Annual General Meeting Presentation to Investors.

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2013 AGM Presentation

  1. 1. FLYHT Aerospace Solutions Ltd. TSX.V: FLY AGM May 7, 2013
  2. 2. Disclaimer Forward Looking Statements This discussion includes certain statements that may be deemed “forward-looking statements” that are subject to risks and uncertainty. All statements, other than statements of historical facts included in this discussion, including, without limitation, those regarding the Company’s financial position, business strategy, projected costs, future plans, projected revenues, objectives of management for future operations, the Company’s ability to meet any repayment obligations, the use of non-GAAP financial measures, trends in the airline industry, the global financial outlook, expanding markets, research and development of next generation products and any government assistance in financing such developments, foreign exchange rate outlooks, new revenue streams and sales projections, cost increases as related to marketing, research and development (including AFIRS 228), administration expenses, and litigation matters, may be or include forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on a number of reasonable assumptions regarding the Canadian, U.S., and global economic environments, local and foreign government policies/regulations and actions and assumptions made based upon discussions to date with the Company’s customers and advisers, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include production rates, timing for product deliveries and installations, Canadian, U.S., and foreign government activities, volatility of the aviation market for the Company’s products and services, factors that result in significant and prolonged disruption of air travel worldwide, U.S. military activity, market prices, foreign exchange rates, continued availability of capital and financing and general economic, market, or business conditions in the aviation industry, worldwide political stability or any effect those may have on our customer base. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct. The Company cannot assure investors that actual results will be consistent with any forward-looking statements; accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are current only as of the date of this document. The Company disclaims any intentions or obligation to update or revise any forward-looking statements or comments as a result of any new information, future event or otherwise, unless such disclosure is required by law. www.flyht.com TSX.V: FLY -2 -FLY – May. v1
  3. 3. Industry Changes • Future Air Navigation System (FANS) in the US • Controller Pilot Data Link Commands (CPDLC) in Europe • Evolution of IPad to the Cockpit • Iridium Certification for Safety Services Messages TSX.V: FLY -3 -FLY – May. v1
  4. 4. Financial Performance ($millions) 2012 2011 2010 Revenue $6.5 $5.5 $4.7 Customer deposits & unearned revenue $3.5 $2.9 $3.4 R&D Expenditures $2.4 $3.3 $5.8 Loss (before R&D) $2.5 $3.2 $3.2 Net Loss $4.9 $6.5 $9.0 Disputed AP $1.8 $1.8 $0.0 TSX.V: FLY -4 -FLY – May. v1
  5. 5. Market Drivers • Need for better communications acknowledged in FANS and CPDLC • BEA report on AF447 disaster and recommendations leads to mandates • Pilots want IPads not luggage • NetJets evaluations show savings of $100,000 per plane per year • Airlines save money with better and more timely information TSX.V: FLY -5 -FLY – May. v1
  6. 6. Avionics Investment vs. Recurring Revenue • R&D investment creates significant recurring revenue opportunities • Hardware asset life of 10-30 years creates large, long term recurring revenue streams • AFIRS 220 • $1.2 mm investment • $15 mm hardware revenue • $75 to $100 mm in recurring revenue at 80% margin. $7,000 $6,000 R&D Exp Recurring Rev $5,000 $4,000 $3,000 $2,000 $1,000 $0 -$1,000 TSX.V: FLY -6 -FLY – May. v1 Hardware Rev
  7. 7. M2M TSX.V: FLY -7 -FLY – May. v1
  8. 8. Company Making Opportunities • Airbus factory and fleet installs • China with Satcom mandate • C130 upgrade programs • Business aviation evolution TSX.V: FLY -8 -FLY – May. v1
  9. 9. China Opportunity • China has mandated satellite communications for all aircraft • Benefits of FLYHT - Iridium relationship now recognized and approved • Inmarsat is the alternative satellite system, but Iridium is more reliable and economical • Inmarsat has 3 fixed, high-altitude satellites • Iridium has 66 low Earth orbiting satellites with pole to pole coverage • Iridium satellites are physically closer to earth, requiring less power to communicate with aircraft • Exclusive distribution agreement with SkyBlue Technologies (Gov’t owned) • Orders are slowly building • Large potential is realistic but forecasting and timing are difficult TSX.V: FLY -9 -FLY – May. v1
  10. 10. C130 Up Grades • 2,442 on the planet in service • Major overhaul centers • CMC in Montreal • IAccess in California • Snow Aviation in Cincinnati • Installed 26 for RSAF • PO for 7 more received in May TSX.V: FLY -10 -FLY – May. v1
  11. 11. Business Aircraft Strategy • NetJets is a Berkshire Hathaway company • Largest global fractional operator • Total global fleet – 650+ business jets • Conducted 2 Year in Service Trial • Initial Contract (Europe) – 30 Hawker Beechcraft • $600k up front • $6 million 5 year contract • $2k/month/aircraft once installed • Contract represents less than 5% of total global fleet • OEM’s being approached as NetJets refreshes it’s fleet TSX.V: FLY -11 -FLY – May. v1
  12. 12. Management Objectives for 2013 • Become cash flow positive in 2013 • Land major Airbus operator for fleet retrofit by first half 2013 • Begin shipping from Airbus factory by late 2013 • Priority is to drive a substantially higher valuation through accelerated revenue growth and profitability • Build on our strategic relationships to accelerate growth • Protect our markets by providing superior technology and service TSX.V: FLY -12 -FLY – May. v1

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