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MicroCapClub Invitational: International Commercial Television (ICTL)


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International Commercial Television (ICTL) sells various health and beauty products through infomercials and other channels in the United States and internationally. Some of the best management teams I’ve invested in were those that successfully dug there way out of a hole and turned the company around without much dilution to shareholders. As an investor this is important because management has proven they can navigate the company through the worst of times. A few years ago ICTL was on the brink of bankruptcy, but the management team lead by Kelvin Claney and Richard Ransom would not give up. They felt they had a company-making product with the DermaWand. They ended up scratching and clawing to raise $300,000 to give it one last shot. With this little bit of capital they built the company from $3 million in revenues in 2011 to $30+ million and profitability in 2013. In 2014, the company is looking to continue its profitable growth trajectory with the launch of additional products.

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MicroCapClub Invitational: International Commercial Television (ICTL)

  1. 1. International Commercial Television Inc. Investor Presentation January 2014 OTC MARKETS: ICTL OTC MARKETS: ICTL I I
  2. 2. Safe Harbor Statement This presentation contains "forward-looking statements" made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as "anticipate," "assume," "believe," "estimate," "expect," "goal," "intend," "plan," "project," "seek," "target," and variations of such words and similar expressions are intended to identify forwardlooking statements. Such forward-looking statements are subject to certain risks, uncertainties and assumptions that may cause actual results to differ materially from those expressed by the forward-looking statements, including, but not limited to, the following: general economic, industry and market sector conditions; the Company's future growth and the ability to obtain additional financing to implement the Company's growth strategy; the ability to anticipate and respond to industry trends and preferences; intense competition. In evaluating these statements, you should carefully consider these risks and uncertainties and those described under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other Securities and Exchange Commission filings. All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws. OTC MARKETS: ICTL I 2
  3. 3. Market Overview Direct Response Marketing of Consumer Products Health, Wellness & Beauty Distribution in 35+ Countries • • • • • • • • • • • • Fiscal Year End: Symbol: Stock Price: 52-Week Range: Average Daily Volume: Shares Outstanding: Inside Ownership: Market Cap: Debt: Revenue YTD thru 9/30: Operating Income YTD thru 9/30: EPS: OTC MARKETS: ICTL I December 31 OTC Markets: ICTL $0.75 $0.08 - $0.94 97,500 shares 22mm 37% $16.39mm $0.4mm $31.2mm (+144% growth) $2.0mm (+1800% growth) $0.08 3
  4. 4. Investment Highlights Driving Growth Through Unique Brands ICTL Strategy  Create a portfolio of uniquely branded, high profile products focused on the health and beauty markets  Utilize three main promotional platforms - maximize television and internet exposure first and then moving successful products into the retail arena  Source and develop products that have potential for rapid growth and smooth transition from direct response sales to national retail chains  Create enduring shelf brands resulting in a solid business while continually testing, refining and marketing new and unique products  Monitor financial leverage (net Indebtedness/EBITDA) closely to support internal and external growth strategy ICTL Advantage  Top tier management with a successful track record of generating shareholder value in their specialized fields of marketing, including brand creation and infomercial production, finance and corporate governance  Infrastructure already created to successfully launch DRTV-to-retail sales  Established global sales and distribution channels set up in 35 countries internationally to reap the benefits from ICTV infomercials and products  Low overhead, flexible cost structure, excellent product sourcing network and compact organizational structure  Strong balance sheet due to continued growth in revenue, operating income before amortization (EBITDA) and free cash flow OTC MARKETS: ICTL I 4
  5. 5. Management and Board Expertise in Corporate Management and Finance, Retailing and DRTV Kelvin Claney CEO Richard Ransom President, CFO Kelly Willett Director of Sales Stephen J. Jarvis Director William N. Kinnear CPA, CA, Director OTC MARKETS: ICTL I A founder of ICTL; established int’l reputation with over 20 years as a dynamic and creative marketer. Began in the US Direct Response (DR) sector as an independent contractor to National Media Corp; sourced and executive-produced major infomercial projects, incl.: Euro Painter™, HP9000™, Auri®, Color Cote 2000 polymer sealant™, Dustmaster 2000™, LeSnack™, Sterling Spring™, Iron Quick™, Fatfree Express™. Created the successful children's toy BetterBlocks® ; advertised and sold nationally and internationally for 15 years. Principally oversaw the production of ICTV's Derma Wand® infomercial and responsible for sourcing all related skin care products in ICTV's DermaVitál® brand. Total sales generated by infomercials he has initiated or overseen now exceed $500 million. Joined ICTV in July 2008 as the Company's Controller, appointed Chief Financial Officer in December 2008 and appointed as President in September 2011. Over 8 years of experience in financial management roles at Traffic.Com, Hildebrandt International, and Grant Thornton. He is a graduate of Pennsylvania State University with a degree in Accounting, and received his MBA from Delaware Valley College in December, 2009. Responsible for managing ICTV’s televised home shopping operations in the U.S., and managing the Company’s International sales and distribution channels with over 35 countries. He assists the Company’s CEO in managing new product development. He has over 25 years of experience in television and film production, and has been a very successful presenter on the Home Shopping Network (“HSN”) in the U.S. His career also includes television and film management with Stephen J. Cannel Productions Inc, Lions Gate Entertainment, Carroll Street Studios, and Culver City Studios. At Stephen J. Cannel Productions, he was head of production services, duties included overseeing all physical facilities, purchasing, inventory control, product placement and merchandising. 30 years DR marketing industry experience; formed Direct Response Advertising, Inc., generating and qualifying DR leads for co.’s dealing in luxury consumer items. Several successful products taken to the Aus. DR market; notably BetterBlocks™ sold via DRTV and all major Aus. retailers. Co-founder and Pres. of Positive Response Vision, Inc., Manila; grew to leading DR marketing org. in SE Asia; marked and distrib. a vast range of products. Responsible for product sourcing and acquisition, inventory, finance control, design issues, and sales back-end programs. Produced infomercials privately; licensed them to Positive Response Vision, Inc. and other int’l infomercial co.’s. Recently established an outbound call center, Vision TV Philippines Inc, and produced 8 new shows for int’l distrib. Chartered accountant in Canada with over 40 years of experience as a senior officer at a variety of companies, both public and private, in the accounting and financial disciplines. Currently Corporate Secretary for a private investment company, and provides corporate secretarial services to a variety of companies, working closely with stock exchanges and security commissions within Canada. His experience includes the areas of mortgage underwriting and finance, point of sale, steel fabrication, secretarial services, and investments. He spent 15 years as President of Corsec Canada, Inc., providing corporate secretarial services to small cap public companies. 5
  6. 6. Industry Highlights Branding through Direct Response Television OTC MARKETS: ICTL I 6
  7. 7. Global Sales and Distribution Channel Established in 35 Countries Internationally  Direct to consumer via infomercial  Direct to consumer online  Live TV home shopping networks  International sales through local distribution partners  Successful products to be sold through retail OTC MARKETS: ICTL I 7
  8. 8. Business Model Highly Scalable to Support Growth People, Process, Technology  Product flow thru network of relationships & tradeshows  Create & develop infomercials  Media management  Direct to consumer via DRTV and online  Build recurring revenue consumables  Expand internationally  Retail  Customer support Outsourced Relationships OTC MARKETS: ICTL I 8
  9. 9. Our Flagship Product: DermaWand® DermaWand is an at-home, handheld RF beauty tool that reduces the appearance of fine lines and wrinkles and improves overall skin appearance  ICTV has an exclusive license to manufacture and market worldwide  Approaching 2M units sold to-date  Current infomercial launched in Q4 2011  One of the Top 10 Longest Running Infomercials  #21 Ranked Long-Form Retail Product Sold on TV by Media in September 2013  Expanding domestic and international sales  OTC MARKETS: ICTL I 9
  10. 10. Complimentary Cosmetics: DermaVitál® DermaVitál products are specifically formulated to help consumers get the most benefit out of DermaWand's advanced radio frequency technology. They were created using leading edge skin care formulations and are made of the highest grade ingredients for professional grade results  13 separate skincare items  Pre-face cleansers, moisturizers, hydrators  New proprietary formulations in development – Dr. Angel Guerrero  Consumable product packaged as a kit with DermaWand tool  Recurring revenue from monthly autoship program  Varying pricing and product options  OTC MARKETS: ICTL I 10
  11. 11. Expanding the Business: Elastin-rp™ Elastin-rp™ is delivered using a unique body heat-activated system which enables the BioLastin Complex™ to penetrate quickly to help stimulate your skin's natural ability to replenish elastin and collagen.  ICTV has licensing agreement with BioActive Skin Technologies LLC  Media test began January 18th  100% continuity model  OTC MARKETS: ICTL I 11
  12. 12. Expanding the Business: DermaNew® DermaNew offers easy-to-use at-home microdermabrasion systems for all skin types and concerns, as well as other products and accessories for total body care  ICTV has exclusive rights worldwide to patented anti-aging and resurfacing skin care system  Developed by Amby Longhofer and Dean Rhoades  Previously of Youthful Essense by Guthy Renker  To be rebranded as “Derma Brilliance”  37 person clinical study underway  Infomercial launch planned for mid-2014 OTC MARKETS: ICTL I 12
  13. 13. Expanding the Business: NatureBee® NATUREBEE™ Potentiated Bee Pollen provides the only food on earth with the 22 nutrients you need for perfect health!  ICTV currently has non-exclusive rights to market to customer base  First ingestible product marketed by ICTV  First sales made in November 2013  Will be tested as an upsell on the DermaWand campaign in late January  OTC MARKETS: ICTL I 13
  14. 14. Expanding the Business: Repairen® Repairen™ Supplement and Serum work together to repair and restore the appearance of aging skin  ICTV currently has exclusive worldwide market rights  Sales launched planned for December 2013  Created by Drs. Rick and Arlene Noodleman    Discovered the effects of combining BioCell Collagen (BCC) and topical hyaluronic acid (HA) System is dual action of an oral supplement and a serum Is currently being tested as an upsell on the Elastin RP campagin OTC MARKETS: ICTL I 14
  15. 15. Financial Performance From Turnaround Situation to Growth Opportunity  2011 = $3.1mm revenue & ($0.5mm) operating loss  2012 = $22.9mm revenue & ($0.5mm) operating loss  2013 YTD = $31.2mm revenue & $2.0mm operating income OTC MARKETS: ICTL I 15
  16. 16. 2013 Has Been a Great Year 2013 YTD thru September 30  $31.2mm revenue, +144%  $22.6mm gross profit  $2.0mm operating income, +2100%  $1.9mm net income  $0.08 EPS OTC MARKETS: ICTL I 16
  17. 17. Revenue Lags Customer Acquisition  DermaWand US Infomercial Offer  Free Trial offer  3 payment of $39.95  Revenue cannot be recognized until free trial period ends  Approximately 1.3mm of sales on consignment not recognized as of 9/30/13 OTC MARKETS: ICTL I 17
  18. 18. 2013 Revenue Breakdown  $25.1mm DermaWand U.S.  $2.9mm DermaWand international  $3.2mm DermaVital monthly continuity OTC MARKETS: ICTL I 18
  19. 19. Data Analytics: The Proof is in the #’s  Forecasted targeted media spend across 20+ vendors spanning different mediums in multiple languages  Conversion %  Customer acquisition costs  MER = media efficiency ratio  Cross-Sell %  Average order value OTC MARKETS: ICTL I 19
  20. 20. Target Model  $50mm in total revenue  6% operating margins = $3mm operating income  3-5 products  $100mm in total revenue  9% operating margins = $9mm operating income  5-10 products OTC MARKETS: ICTL I 20
  21. 21. Recap Highlights Well Positioned In-house talent and expert management team to build brands Management Product Pipeline Portfolio of unique products that have the potential for rapid growth Healthy, under-levered balance sheet Financials Share Structure OTC MARKETS: ICTL Global sales and distribution channels set up in 35 countries internationally I Excellent capital structure, heavy inside ownership (37%) 21
  22. 22. Contact Information International Commercial Television, Inc. Richard Ransom Stephen Hart President & CFO Investor Relations T: 484-598-2300 T: 917-658-7878 E: E: OTC MARKETS: ICTL I 22