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Flyht 2018-october-investor-presentation


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Facts and additional detail for investors on FLYHT Aerospace Solutions.

Published in: Investor Relations
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Flyht 2018-october-investor-presentation

  1. 1. October 2018 FLYHT Aerospace Solutions Ltd. TSX.V: FLY OTCQX: FLYLF
  2. 2. TSX.V: FLY OTCQX: FLYLF October 2018 2 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. Disclaimer
  3. 3. TSX.V: FLY OTCQX: FLYLF October 2018 3 FLYHT at a Glance Canadian public company • Established: 1998 • Headquarters: Calgary, Alberta • Market Cap: ~$30M • TSX Venture: FLY • OTCQX: FLYLF Customer success • Financial savings • Streamline operations • Enhance safety Patented technology • Airborne - AFIRS™ • Ground – UpTime™ Panasonic Weather Services (PWS) acquisition • Airborne – TAMDAR™ • Ground - AirMap™ • Airborne – FlightLink™ FLYHT: Leading Provider of Real-Time Aircraft Data Streaming Technology
  4. 4. TSX.V: FLY OTCQX: FLYLF October 2018 4 • Accomplished Senior Management Team • BOD comprised of aviation industry veterans • Factory option on Airbus A320, A330 and Bombardier CRJ • 80+ customers…and growing • 2,350+ shipments and growing rapidly • Major success in China: fastest growing market • Significant sales backlog (> $25M) • Supplemental Type Certificates (> 100 STC) • World’s most extensive Satcom catalogue • Qualified on 95% of commercial aircraft types • Significant barrier to entry for competitors • Right to install FLYHT: Insight. Action. Control. AFIRS™ (Automated Flight Information Reporting System)
  5. 5. TSX.V: FLY OTCQX: FLYLF October 2018 5 Leadership Team: Industry Veterans Tom Schmutz CEO Matieu Plamondon COO David Perez VP Sales Alana Forbes CFO Steve Newell VP BD Derek Graham CTO Jeffrey Rex VP BD
  6. 6. TSX.V: FLY OTCQX: FLYLF October 2018 6 Barry Eccleston former President Airbus Americas, Inc. Industry-Connected Board Members John Belcher former Chairman and CEO, ARINC Jack Olcott former President National Business Aviation Association Mark Rosenker former Chairman National Transportation Safety Board Jacques Kavafian former Analyst Bay Street Bill Tempany Chairman, former CEO FLYHT Doug Marlin Software Entrepreneur Marlin Ventures Paul Takalo CPA, CA Audit Chair Mike Brown Partner Geselbracht Brown LLP
  7. 7. TSX.V: FLY OTCQX: FLYLF October 2018 7 2018 • FLYHT acquired assets of Panasonic Weather Solutions • Integration with Spectralux FANS datalink • Sales contracts, customer renewals, PO’s: • Q3 2018: USD $4.8 million • Q2 2018: USD $4.45 million • Trials: Boeing ecoDemonstrator & Inmarsat • Inmarsat Certified Application Provider • Canadian patent for FLYHTStream™ • UpTime achieved 2 Million Flights / 3 Million Flight Hours 2017 • New Sales: $16.9 million USD • Revenue: $14.0 million CAD Building on Recent Successes
  8. 8. October 2018 TSX.V: FLY OTCQX: FLYLF 8 Asset Acquisition: Panasonic Weather Solutions • Technology and IP • TAMDAR™ sensor • AirMap™ enterprise aircraft situational display server • FlightLink™ Iridium satellite data unit • Service contracts: 10 airlines in NA, Europe and SE Asia, including AirAsia • Key contract: weather data to NOAA • Employees: 27 in Littleton, CO • Iridium Value Added Reseller license • FAA Parts Manufacturing Approval certification capability
  9. 9. 9 ONBOARD ENABLER FLIGHTLink Command Unit • Satellite communications management • ARINC standard installation • Aircraft data processing & routing TAMDAR Weather Sensor • 4D raw weather data collection • Worldwide operational sensor network Multi-Function Antenna • Single or dual Iridium poles • Dedicated GPS TAMDAR FlightLink Antenna
  10. 10. October 2018 TSX.V: FLY OTCQX: FLYLF 10 Panasonic Weather Solutions Brings New Customers & Technology • Strong fit with FLYHT’s current product portfolio • Adds new weather data to FLYHT’s real-time data collection and streaming solutions • Weather services = new revenue vertical to support growth • Adds 10 new airline customers + 1 key weather contract • Brings IP, technology and diversified expertise • Immediately adds revenue to FLYHT operations • Technology synergies will help reduce costs
  11. 11. TSX.V: FLY OTCQX: FLYLF October 2018 11 • CAAC legislated SATCOM regulations • CCAR 121 R5 - December 2019 • Airline Operations Center aircraft within 4 minutes • Destination China! • 25% of aircraft on order • UN: ICAO’s Annex 6: Operation of Aircraft • Amendment 39 - November 2018 • Normal Aircraft Tracking – 15 minute intervals • Amendment 40 - January 2021 • Autonomous Distress Tracking – 1 minute intervals • Timely Access to Flight Recorder Data: recovered & available Industry Drivers Global China
  12. 12. TSX.V: FLY OTCQX: FLYLF October 2018 12 Boeing ecoDemonstrator (Q1 2018): success! • FedEx B777 flight tests: data streamed from AFIRS to UpTime via both Iridium and Inmarsat networks • Confirmed: AFIRS 228S delivers on Amendment 40 requirements • Autonomous Distress Tracking: 1 minute intervals • Timely Access to Flight Recorder Data: recovered and available • Whitepaper jointly presented at AEEC conference (Aug 2018) Inmarsat trial (TBD 2018) • AFIRS will send data to UpTime Cloud via Inmarsat to test “Black Box in the Cloud” capability • FLYHT the first recipient of “Inmarsat Certified Application Provider” status (May 2018): Certification FLYHT Trials
  13. 13. October 2018 TSX.V: FLY OTCQX: FLYLF 13 Boeing ecoDemonstrator: Recreating the Pilot’s Experience with a Virtual Cockpit • Real-Time Flight Data • Real-Time Cockpit Area Microphone • Flight Profile • Map Location • Aircraft Attitude • Flight Deck Instrumentation • Situational Awareness!
  14. 14. TSX.V: FLY OTCQX: FLYLF October 2018 14 Boeing ecoDemonstrator: Streaming Black Box Data in Real-time via Inmarsat
  15. 15. TSX.V: FLY OTCQX: FLYLF October 2018 15 Iridium SATCOM Enhanced Global Flight Tracking Aircraft Health Monitoring FDR Streaming Fuel Management Weather Data FLYHTVoice FLYHTMail ACARS over Iridium FLYHTLog FLYHTASD AirMap FLYHTHealth FLYHTStream FLYHTFuel TAMDAR Core Products Where FLYHT Competes Unique, Value-Added Services FLYHT Upsells • Saves aircraft operators money • Streamlines their operations • Enhances operational safety • “Bread and Butter” Products
  16. 16. TSX.V: FLY OTCQX: FLYLF October 2018 16 AFIRS - Competitive Advantages Feature FLYHT Other Satcom OEM Tracking Solutions QAR/Health Monitoring Global Voice Coms ✓ ✓ ✓ FANS/Safety Services ✓ ✓ ACARS over Iridium ✓ ✓ QAR ✓ ✓ ✓ Aircraft Health Monitoring (Trends & exceedances - engine/airframe) ✓ ✓ ✓ ICAO: Global Flight Tracking ✓ ✓ Autonomous Distress Tracking ✓ ✓ Live Black Box Streaming ✓ Real-time Systems Diagnostics ✓ TSO C-159A (Voice & Data) ✓ STCs Supporting 95% of Air Transport Aircraft ✓ 4D weather data ✓
  17. 17. TSX.V: FLY OTCQX: FLYLF October 2018 17 FLYHTASD – Aircraft Situational Display XX1234 XX1234
  18. 18. TSX.V: FLY OTCQX: FLYLF October 2018 18 1. High engine vibration • Solution: FLYHTHealth alerted customer to engine exceedance • Customer was able to take the aircraft out of service to diagnose and fix the issue • Savings: • Replacement cost for the engine: $5.2 million • Repair cost based on AFIRS-driven data: $780 thousand • Net Savings > $4 Million 2. Logistical support issues • Solution: geo-fencing solution built into software • Alerts sent to customer showing aircraft entering/exiting specific boundaries • Keeps all parties advised, in real-time, on the progress of each flight • Savings: reduced costs for the airline associated with poor communication and logistical support issues 3. Lease agreement required 10% of takeoffs at reduced thrust • Solution: UsingAFIRS,the customerwas ableto monitortheparameters of operations andcreatereal-time reports • Savings: hundreds of thousands of dollars in lease penalties Customer Successes: Flexible Solution
  19. 19. TSX.V: FLY OTCQX: FLYLF October 2018 19 Customer Specific Reporting (FLYHTHealth) Landing Gear Warning Report Cabin Pressurization and Door Status Report Hydraulic Pressure Report Oil Pressure Report Fuel Door State Report Fuel Door Warning Reports Electrical Warning Report Gate Door State Reports APU Usage Report Customized Out, Off, On, In Reports incl. FOB Real-time Engine Fault Code Report Battery Status Report “A one percent increase in on-time performance equates to several hundreds of thousands of dollars per year savings for a 50 aircraft operation”
  20. 20. TSX.V: FLY OTCQX: FLYLF October 2018 20 • Multiple revenue streams • Hardware sales with gross margin of 40-60% • Robust SaaS recurring revenue gross margins of 70-85% • Five-year customer contracts • 100% retention for going concerns • Licensing arrangement with OEM of close to 100% margin • $44M sales backlog • Contract with government organizations to provide weather data • 20-year proven track record • Greater than 3 million flight hours and 2 million flights using AFIRS • Certified on 95% of all aircraft used for commercial air transport • Agreements with 2 global OEMs (L3T/Airbus, Bombardier) • Major growth of sales in China • 23 airline customers • Contracted with 4 new airlines in 2017; 8 airlines in 2016 • 2016: launched real-time data services in China! • Significant remaining opportunity in sales funnel; significant backlog Investment Highlights
  21. 21. 21 Financial Performance Annual Revenues Gross Margins 8000364 6882028 10457125 14331191 14018750 $0 $3,750,000 $7,500,000 $11,250,000 $15,000,000 $18,750,000 2013 2014 2015 2016 2017 59% 63% 69% 68% 66% 50% 55% 60% 65% 70% 75% 2013 2014 2015 2016 2017
  22. 22. TSX.V: FLY OTCQX: FLYLF October 2018 22 Revenue by Source 2017: $14,018,750 0.308 0.414 0.268 0.01 SaaS AFIRS hardware Licensing Technical services 0.3 43 0.2 72 0.3 57 0.0 28 Q2 2018: $3,146,266
  23. 23. TSX.V: FLY OTCQX: FLYLF October 2018 23 Geographical Revenue • 2,200 AFIRS shipped and/or installed units, all channels • 2 million flights and 3 million hours of in-service use on Uptime server providing SaaS subscription voice and data services NORTH AMERICA EUROPE ASIA CENTRAL & SOUTH AMERICA AFRICA MIDDLE EAST AUSTRALASIA 28.0% $3,930,995 2.4% $333,152 22.1% $3,092,593 3.2% $442,603 5.5% $774,407 6.2% $873,546 5.8% $819,153 TOTAL 2017 REVENUE $14,018,750 LICENSING 26.8% $3,752,301
  24. 24. Thank You
  25. 25. TSX.V: FLY OTCQX: FLYLF October 2018 25 • AEEC – Airline Electrical Engineering Committee • AFIRS – Automated Flight Information Reporting System • CAAC – China Civil Aviation Authority • CCAR – China Civil Aviation Regulations • GADSS – Global Aeronautical Distress and Safety System • ICAO – International Civil Aviation Authority • NOAA - National Oceanic and Atmospheric Administration • OEM – Original Equipment Manufacturer • TAMDAR – Tropospheric Airborne Meteorological Data Reporting • TFRD – Timely Recovery of Flight Data • UN – United Nations Technical Terms