Communications Systems, Inc infrastructure & services for global communications Welcome to...

Communications Systems, Inc

infrastructure & services for global communications

Welcome to Communications Systems, Inc. Annual Shareholder Meeting

2012



2011 Performance

• Strong revenue and profit performance– 2011 full year revenue of $143,755,000– 2011 full year profit of $9,798,000

• Large project for Transition Networks major contributor to revenue increase over 2010.



Continuous Improvement

• Constantly working to improve our products, service, and processes.

• Changes taking place in all business units and all facets of the business– Austin Taylor Integration

• New ERP– Selected IFS as our partner– Reviewing, streamlining, improving our processes– Offers improvements from product development,

manufacturing, to customer service



Acquisitions

• Patapsco acquired in July of 2011– UK Company – Technology target– Integration into Transition Networks

• Ongoing Search– Continue search and discussions with companies– Targets

• Strategic fit for existing business unit• Standalone entity



Q1 2012

• Dissatisfied with earnings results• Strong financially

– $40.6mil Cash and $75.9mil in Working Capital– Continue to support dividend

• Continuing to invest with long term horizon– Engineering, Sales, Marketing

• Bright future– Opportunities in each business unit– New products and services, global expansion



Public Company Since 1981 Every Year Profitable Listed on the NASDAQ Stock symbol: JCS Revenues $143,775,000 Total Assets (12/31/11) $116,659,000 Net Income $9,798,000 Earnings Per Share $1.15 Dividends Per Share $0.60 Stockholders Equity (12/31/11) $97,531,000 Market Cap (12/31/11) $119,043,000 Shares Outstanding (12/31/11) 8,467,000

Financial Results2011 Annual Figures



Public Company Since 1981 Every Year Profitable Listed on the NASDAQ Stock symbol: JCS Revenues $24,244,000 52 Week Range (5/21/12) $10.41 - $20.93 Total Assets (3/31/12) $112,447,000 Net Income $55,000 Earnings Per Share $0.01 Dividends Per Share $0.16 Stockholders Equity (3/31/12) $97,173,000 Market Cap (5/21/12) $92,127,000 Shares Outstanding (3/31/12) 8,507,000

Financial ResultsQ1 2012 Figures



JDL Technologies



Strategic Focus For 2012Transition from Services to Solution SellingCombine Our Services into a Compelling Solution Comprising:–Managed Services–Virtualization–Wired and wireless network design and deployment–Converged infrastructure configuration and deployment



JDL’s Focus is on Solutions That…

– Reduce costs with increased efficiency, productivity & performance

– Increase workplace flexibility & agility – Enhance end user experience

– Upgrade level of availability & security

– Improve disaster recovery & business continuity



Target Markets

– Education • We continue our focus on Broward Public Schools and are working on

bringing additional solutions to bear thus expanding our penetration within the account

• Additional Markets– Miami Dade – Palm Beach School Districts– Private Education

– SMB (Small to Medium Businesses)• Target the SMB space defined as 250-2,000 employees

– Potential Verticals - Leveraging existing clients to carve our new verticals

• Medical• Manufacturing• Retail



CIO Top 3 Initiatives – Number 1• Key Initiative: Increase Efficiencies

– Increased Cost Sensitivities Encourage “More with Less”– Increased Access to Business Analytics Drives Change

• Solutions

– Managed Services enables greater reach without increased head count

– Virtualization maximizes existing infrastructure– Converged Infrastructure – Right Provision the DC

Factoid – SMB IT Spend in 2012 forecasted at 150 billion by IDC



CIO Top 3 Initiatives – Number 2• Key Initiative: Cost Reduction

– Lower Resource/Employee Costs– Increase Employee Productivity– Increase Resource Utilization– Decrease IT Footprint– Lower IT Overhead Costs– Identify Areas for Consolidation (i.e. Virtualization)– Execute Consolidation and Cost Containment Plan

• Solutions– Managed Services– Virtualization– Converged Infrastructure– Networking

Factoid – IT Spending in the K-12 space expected to top 110 billion with BYOD support being a key spend item



CIO Top 3 Initiatives – Number 3

• Key Initiative: Enable Security while Maximizing Access

– Allow Employees to Focus on Core Competencies– Enable End Users to Maximize Performance (BYOD / Mobility)– Provide a Predictable and Reliable Environment– Build Platform for Disaster Recovery and Business Continuity– Prepare for Compliance & Auditing– Establish Site and Device Security

Factoid – South Florida is home to more than 174,036 small businesses



Suttle



Suttle Key Objectives • Enable The Truly Connected Home

– Multi-Dwelling Unit (MDU) is principal target for expanded capabilities

• Focus on Customer Relationship– Collaborative process in determining customer’s needs and solving problems

• Organizational Development– Industry Experience– Global Presence– Workforce Development Ecosystem In Costa Rica

• Market Expansion underway in Latin America, EMEA, and Canada– South America, Eastern Europe, and Middle East in focus– Resources in place in Europe, Middle East and LAM



The truly connected home G.hn–the new standard in home entertainment networking

• G.hn technology is an emerging global standard in the home networking space

• Promoter member of Homegrid Forum

• Voice, data, and video services

• Home energy management services



FutureLinkTM FTTX Enhanced Networks Solutions• Scalable, versatile, and customized fiber distribution solutions for

multi-dwelling unit (MDU) and single family unit (SFU) enhanced network deployments.

• Markets in North America, Latin America, Europe, and the Middle East are in early stages.



FutureLinkTM FTTX Enhanced Networks Solutions• High Speed Tool-less copper distribution solutions for multi-dwelling

unit (MDU) and single family unit (SFU) enhanced network deployments

• Emerging XDSL technologies leverage existing copper cabling infrastructure



Transition Networks



Strategic focus• Vision:

– Transition Networks is the preferred technology partner providing innovative networking solutions and specialized products worldwide.

• Media converters• Switching and aggregation devices• Network Accessories



Strategic focus 2012 & Beyond• Staying focused and expanding on identified

markets– Maintain strong leadership in the enterprise &

government market while growing Telecom and Industrial Markets for differentiation and diversification

– Telecommunication Service Providers for businesses– Cell phone towers connectivity (Backhaul)– Security & Surveillance

• Physical security• Connectivity for Security cameras

– Government/Enterprise• Military, Cities, State/Province• Office environment• Retail• Education

– Industrial• Oil & Gas, Energy Management (Smart Grid), Manufacturing, Transportation



Strategic focus• Vertical focus areas

– New product development for specific vertical markets

– Expanding channel coverage especially in specific vertical markets

– Geographic expansion of all vertical markets– New technology, products and capabilities from

Patapsco’s Acquisition– More targeted marketing efforts– Organic growth & Acquisitions– Vertical focus areas

• User Experience• Operations efficiency• Innovation



Strategic focus• Globalization

– Key groups expanded on three continents• R&D; emphasis on software• Test, Verification, Interoperability• Tech Support• Global Sales Engineering & Business Development• New Warehouse & Repair Center in Europe (UK)• Transactions in multiple currencies• Better localization



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