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

www.ddswireless.com

Vari Ghai, CEO

Caroline Dunn, CFO