Add Your Title Here - DDS Wireless International Inc
34
Investor Presentation March 2013
Transcript of Add Your Title Here - DDS Wireless International Inc
Investor Presentation
March 2013
Forward-looking statements regarding future events or
DDS Wireless’ future financial performance may be made
in this presentation that involve risks and uncertainties.
Such statements are simply predictions, and actual
events or results could differ materially from those
anticipated. Please refer to the 2012 Annual Report and
AIF and other filings with SEDAR, which contain and
identify important factors that could cause the actual
results to differ materially from those contained in our
projections and/or forward-looking statements.
Safe Harbor Statement
History with Acquisitions
1988 IP Xfer from Motorola
• Dispatch S/W for taxis
1999 MDSI Transportation BU
• European + Asian customers
• Road side assistance market
• Path Finder product
2007 StrataGen + Mobisoft
• Global Paratransit
and Demand
Response
• TaxiBook™ product
1992 Kustom Electronics
• Hardware MDTs
• System supplier with H/W & S/W
2002-2003 Aspiro in Sweden
• eFleet Product
TSX listing in 2003
2008 Structured in 3 units
Major install Office
Our Global Advantage
215 employees worldwide
Head office in Vancouver
Regional offices: Seattle,
Sweden, Finland & UK
Repair center in Singapore
370 systems worldwide > 60% of revenue is recurring 100,000 units shipped ≈90% of revenue is derived from outside ofCanada
-$4,000
$6,000
$16,000
$26,000
$36,000
$46,000
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Annual Revenues & EBITDAS* 25 Year History (1988 to 2012)
History of Growth & Profitability
* EBITDAS Earnings before Interest, Taxes, Depreciation, Amortization and Share-based Compensation
Markets Served
Taxi
Limousines
Transit
Motor Coach
Taxi
Operating Business Units
Taxi Transit
Vertically focused business units leveraging wireless core competence
Scalable model for future expansion
New Markets Limos, Buses & Airport
Shuttles
Payment Gateway
Mapping, AVL
Hosted
Web
Platform
New Markets
Networks &
Certification
Web Booker
& IVR
Devices
Network
Management
Scalable Business Model
Management
Our Business and Products
• We provide complete wireless mobile solutions:
• Patented applications & wireless mobile computers
• Project management, installation and configuration
• mCommerce and mobile media products
• Long term maintenance contracts
Established Markets
Enterprise Systems
• In our emerging market verticals we provide:
• Wireless infrastructure
• Mobile computers
• Interfaces to 3rd party applications
Emerging verticals
OEM
• For smaller fleets we provide Hosted, Bundled SaaS solutions:
• TaxiBook™, eFleet and eTransit
• Smart phones/devices & DDS Wireless devices
Smaller Fleets
Hosted SaaS
How the System Works
Job Requests
Dispatch
Routing &
Scheduling
Passenger
Pick-up
Payment GPS
Based
Time Based
Attributes
Typical DDS Wireless System Components
Enterprise Dispatch Software
Web Bookers
& IVR
Ticketing Kiosk
Ride-Request
Apps
GPS
Cloud-based
Dispatch Software
Wireless Network
Control Systems
Mobile Data
Terminals
Dispatch
Apps
Payment Gateway
Our Mobile Computer Products
Vector-9000 Vector-5000
Win CE 6.0
Blue Tooth
Wi-Fi
Linux O/S
Win CE 6.0
Dedicated keys
3G networks
7” ultra bright LCD
Browser enabled
3G networks
4.3” ultra bright LCD
Wi-Fi
Product Offerings
PathFinder (Taxi Dispatch System)
Enterprise Solution. Oracle based, distributed architecture
Complete solution includes servers, licenses, MDTs, professional
services and 3 - 10 year service agreements
ADEPT TM (Transit Routing & Scheduling System)
Enterprise Solution. Patented Routing & Scheduling engine
15% or more efficient routing over competitors’ systems
Subscription Based Systems
Hosted SaaS model with airtime, mobile device and support
Typical contracts for 3-5 years
Bundled Solutions for Taxi, Limos and Buses
Attractive monthly pricing depending upon device and feature set
Key Business Strategies
Key Strategy Current Positioning Growth Strategies
1. Leadership
position in all
markets
Leader in the Taxi
market
Transit marquee NA
customer base
Growth through acquisition to
leadership Transit position
2. Expand recurring
revenue streams
> 60% of current
revenue is recurring
Expand SaaS customer base
in Taxi (TaxiBook™)
Enhance maintenance
revenue streams from Taxi
enterprise base
3. Leverage shared
technology
SaaS offering (eFleet)
for limousine market
Expand eFleet offering into
niche markets
Expand into back seat in Taxi
market
4. Establish and
maintain marquee
customer base
Taxi customers in NA
and Europe are
industry leaders
Retention through customer
service
Stickiness due to evergreen
software
Market leader, particularly in Large Fleets
• Majority market share in US (14 of 22 largest fleets)
• 6 of 10 largest fleets in Europe & North America
• Systems in Helsinki, Paris, Düsseldorf, Copenhagen & Stockholm
NA Addressable Market
• 6,300 taxi companies & 225,000 taxis
• Small fleets represent 80% of fleets
• Pursuing growth opportunity in small & medium fleets
“Back of Cab” payment interface and mobile media
• Revenue in new devices, transaction fees and media
• Legislative changes & new revenue for taxi co. are key drivers
• Credit card penetration rates have increased to 50% (New York)
Market Overview
North American Addressable Market for Taxis
North American Taxi Market only 2006 data from Taxi, Limousine, and Para-transit Association (TLPA). Our estimates for 2011
Fleet Size
> 100 vehicles
50 to 100 vehicles
< 50 vehicles
6% 14%
80%
99,000
69,750
56,250
Taxis by fleet size
14% 6%
Hosted Solutions for Small to Medium Fleets (“SMF”)
TaxiBook™ is a complete hosted solution for small taxi
companies without private radio and IT infrastructure
SMF market of 126,000 taxis is under-penetrated
Small fleets underserved by Dispatch & Mobile Resource
Management solutions
No capital costs for customers; TaxiBook™ is a SaaS
business model
Currently 6,200 taxis using TaxiBook™ worldwide
15% penetration of SMF in North America alone represents
$12 million ANNUAL revenue opportunity @ ($50 ARPU)
Investment made in sales and marketing in 2011 & 2012
• Leverage DDS installed base
• Revenue from advertising and payment processing
• Technology in place and ready to deploy
Mobile Media & Passenger Zone Systems
A Customer Base of Industry Leaders
Key customer Longevity Fleet size Comments
Key European Customers
Copenhagen Taxi Since 2000 800 Upgraded to Vector 9000 in 2011
G7 Taxis, Paris Since 2001 7,000 Upgrading to Vector 9000 from 2011
Taxi Stockholm AB Since 2001 1,700 PathFinder user. Upgraded to Vector
9000 in 2011
Helsinki Taxi Since 2003 1,400 Upgraded to Vector 9000 in 2011
Taxi Düsseldorf Since 2010 1,200 PathFinder and Vector 9000
Key North American Customers
Veolia
Transportation
Since 1993 >2,000 Baltimore, Denver, Kansas City &
Portland
Dallas Yellow
Cabs
Since 1998 1,000 Both Taxi and Transit customer
San Gabriel
Transit
Since 1990 900 Both Taxi and Transit customer
United
Independent Taxi
Since 1995 600 Upgraded to Vector 9000
Market Overview
Acquired StrataGen business in late 2007
Has grown from $5 M in 2007 to ~$12.5M in 2012
Market Leadership in Demand Response
Leader in Large Fleet segment
4 of top 5 transit fleets in North America
Large account installed base, including New York,
Boston, Los Angeles, Detroit & Fort Lauderdale
Expanding global footprint with Helsinki, Stockholm & others
Attractive Market Structure:
Market participants include:
Public transit agencies (US alone has over 6,000 agencies with many
more in Europe), social care (e.g. VA, Medicaid), schools, senior care
Private transportation providers (including taxi fleets), brokers
Segmentation by volume drives need, competitiveness
Favorable market drivers
Aging population/demographics/social policy drive
Usage & growth in ridership
Public sector budget pressure drives need for efficiency while maintaining service
Recovery in public spending
ROI investments gaining traction over services growth
Additional Modules, Hardware and Upgrades
Larger customers are upgrading and expanding use of additional modules
Upgrade and expansion orders from installed base will continue in 2013
Proven ROI for MDT use will likely encourage hardware upsell
Market Drivers
Competitive advantages:
Patented technology:
Scheduling and routing
algorithms that provide
15-20% efficiency
gains
Scalable from 200
trips/day to 30,000
trips/day
Complete solution:
Applications, MDTs,
services and multi-fleet
provider experience
Growth initiatives:
Installed base:
Upgrades to new platform
Customer Service efficiency: web access, IVR options
Fleet optimization (intermodal trip planning, taxi offload)
MDT – integrated solution
Transactions management
Expanded market coverage:
Mid-market
Non-emergency medical
Europe
Value Proposition and Growth Drivers
A Customer Base of Leading Agencies
Key customer Longevity Trip Count Comments
New York City
MTA
Since 2002 30,000 per day Committed investment of $22
million contract to date
Boston
MBTA
Since 2004 9,000 per day Significant upgrade & expansion,
payments and taxi integration
Los Angeles
ASI
Since 2008 8,000 per day Expanded base system with IVR,
payment systems, MDTs
Fort Lauderdale
BCT
Since 2005 4,000 per day System overhaul , ADEPT
upgrade, MDT deployment in ’12
City of Helsinki
Finland
Since 2008 >3,000 per day Extensive add-on business –
vehicle growth; payments
integration; service tools
Oakland, CA
EBPT
Since 2000 2,500 per day System overhaul , ADEPT
upgrade, currently in progress
Detroit
SMART
Since 2007 >2,000 per day Significant base system with
expansion with new MDTs in ’12
Victoria, BC
BC Transit
Since 2005 2,000 per day ADEPT and Vector 9000
upgrade starting early 2013
Marquee Customer Base
eFleet – Web-Based Dispatch & Fleet Management
Key Markets Served
Livery
Limousine
Shuttle
Motorcoach
Business Model Customers subscribe to eFleet services based on monthly fees
per vehicle
Typical contract terms are 36, 48 or 60 months
MDTs required for each vehicle are purchased in advance or financed over the term of the contract
Primary Features
Dispatch
AVL
Payment processing
Messaging
Premium Features
Web Booker
Ticketing/Kiosk
Driver Logs
Engine Diagnostics
Financial Review
Increasing Recurring Revenues
59% 64%
56%
51%
62%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2008 2009 2010 2011 2012
Revenue Mix & Growth % = Recurring Revenue as a % of Total
Enterprise Solutions
Small Hardware Orders
Maintenance
SaaS & transaction Based
Generated over $15 M of EBITDAS1
in last 3 years
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2008 2009 2010 2011 2012
1
Earnings before interest, tax, amortization, depreciation & stock compensation
Financial Highlights
A growing business with a stable recurring revenue base…
100% revenue growth over 5 years 2007 ($20.5 M) to 2012 ($40.7M)
62% Recurring Revenue
A strong history and track record of profitability…
24 years of profitability
$15.5 M of EBITDAS in last 3 years
$3.8 M EBITDAS or 9% of revenues in 2012
Q4 2012 record EBITDAS of $3.2 M
A high gross margin business…
48% adjusted gross margin before amortization & share compensation
A compelling investment opportunity…
$29 M Market Cap less $10 M of cash & equivalents translates to $19 M of
enterprise value
