The World’s Highest Performance Digital Oscilloscopescdn.teledynelecroy.com/files/corporate... ·...
Transcript of The World’s Highest Performance Digital Oscilloscopescdn.teledynelecroy.com/files/corporate... ·...
The World’s Highest
Performance Digital
Oscilloscopes
Company Overview
August 2011
Safe Harbor Statement
and Presentation of non-GAAP Financial Information
The information in this presentation contains forward-looking statements, including those relating to plans and expectations for LeCroy’s business. These forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions, estimates and projections concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which are outside management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.
You are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. All forward-looking statements are based on information available to management on this date, and LeCroy assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The risks, uncertainties, assumptions and other important factors that could cause actual results to differ materially from the results discussed in the forward-looking statements are described in LeCroy’s reports on file with the Securities and Exchange Commission.
Presentation of non-GAAP Financial Information: This presentation contains both GAAP and non-GAAP financial information pertaining to actual results and estimates of future performance. Non-GAAP financial information excludes primarily non-cash charges for acquired in-process research and development, write-down of inventory, impairment of intangible asset, share-based compensation, incremental cost of sales related to fair-value adjustment to inventory, business realignment charges, including severance and impairment of goodwill. Non-GAAP financial information is indicated by an asterisk (*) where applicable and reconciliations of the non-GAAP information to GAAP information are included in the final slide of this presentation.
2 LeCroy Overview August 2011 2
Designed with Oscilloscopes…
3
Oscilloscopes are primary design
tools critical to the development of
virtually all electronic devices
LeCroy Overview August 2011
LeCroy Corporation (LCRY) HQ: Chestnut Ridge, NY
LeCroy Overview August 2011 4
* non-GAAP
Product: Digital Oscilloscopes The primary electronic circuit design tool. Used by engineers to validate100% of electronic circuit-board prototypes in the design phase.
Market: ~$1B/year ~10% growth ~35% Americas, ~35% Asia-Pacific, ~30% EMEA
Segments: Hi/Mid ~50%, Low ~50% Hi/Mid via direct sales; Low via 3rd party distributors
ASP: Hi~$80K, Mid~$25K, Low~3K Hi/Mid growth >15% due to new technology demands
Competitors: Danaher (DHR), Agilent (A) DHR + A = 70%, LCRY~15%, Others (10)~15%
LCRY Share: Hi/Mid ~25%, Low~5% LCRY: Sustainable Technology Lead in Hi/Mid LCRY: Opportunity to Increase Share in Low
LCRY Growth: 2 year CAGR = 27.5% 9 consecutive quarters of sequential growth
LCRY Sales: $178M Annual (Jun 2011) ~1/3 each Americas, Asia-Pacific, EMEA
LCRY Margin: ~16% Operating Margin* GM*~62%, R&D*~19%, SG&A*~27%
LCRY Users: No Customers >2% Computers/IT Makers, Consumer Electronics, Automotive Electronics, Telecom, Avionics
LCRY Staff: 494 employees Experienced Management Team. 7-member Exec Team formed in 2007; extensive industry experience
Connectivity Trends are Driving Oscilloscope Needs
Cloud Computing Mobile Devices
LeCroy Overview August 2011 5
Faster data-rates = faster signals
Need for faster scopes in mid market
Overloaded Digital Networks
Need for more Bandwidth in Hi-end
“Signal Integrity” Problems High-Speed Data Networks
Upgrade Cycle in
Midrange Oscilloscopes
New Buys for Hi-End
Oscilloscopes
LCRY Opportunities and Challenges
Accelerating demand for high-bandwidth oscilloscopes driven by
high-speed, next-generation data communication networks
Sustainable competitive advantage based on patented technology
Well established world-wide sales organization
Expanding operating margins and financial ratios
Successfully compete with much larger competitors
Unique technology advantages
Niche market segments
High degree of focus
LeCroy Overview August 2011 6
LeCroy Executive Management Team
Tom Reslewic, President and CEO (27)
Sean O’Connor, Vice President and CFO (5)
Dave Graef, Vice President and CTO (21)
Roberto Petrillo, Vice President WorldWide Sales (22)
Conrad Fernandes, Vice President Sales: Asia (27)
Corey Hirsch, Vice President and CIO (30)
Andy Schmit, Vice President Operations (5)
LeCroy Overview August 2011 7
(years industry experience)
LeCroy Customers: Electronic Design Engineers
Improving Productivity in Design Validation and Integration
LeCroy Overview August 2011 8
Connects to an electronic circuit via an electrical probe
Allows an Electrical Engineer to Visually Observe how his electronic circuit is behaving
Digital Oscilloscope
Protocol Analyzer
Intercepts Data Communications traffic from digital systems
Allows System Engineers to debug data-communications systems at the software level
Design
Simulate
Prototype
Produce
Test
LeCroy Products
High-Speed Data Transport Drives Our Business
LeCroy Overview August 2011 9
Digital Media Explosion Serial Data Standards
Complex Electrical Signals:
“Signal Integrity”
Complex Protocols:
“Message Integrity”
Standards Compliance
Oscilloscope Market: ~$1B
Demand Accelerating at the High-End of the Market
Hi-performance to 45GHz & $1M
Highest bandwidth needs
Direct sales force
High End
Up to 1GHz & $10K
Price/performance driven
Indirect distribution
Bench
Hi-performance 1-4GHz & $30K
Increasing bandwidth needs
Direct sales force
Lab
Less than $3K
Price driven
Indirect distribution
Economy
Hand-Held Sampling
Highest
Growth
Zone
LeCroy Overview August 2011 10
LeCroy Builds its Reputation at the High End Drives Profit in the Midrange, Builds User Base at Low End
High End
Bench Lab
Economy
LeCroy Overview August 2011 11
$2K
$5K
$17K $10K
$40K
$200K
0
5
10
15
20
25
30
35
40
45
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
LeCroy is the Performance Leader with the
Highest Bandwidth Oscilloscopes
Tektronix
Agilent
LeCroy
LeCroy Overview August 2011 12
Sustainable Competitive Advantage Digital Bandwidth Interleave (“DBI”) Multiplies Silicon Performance
20GHz
DC
DC
10GHz
10GHz BW
10GHz BW Input Signal
Scope Channel 1
Scope Channel 2
Re-combine
Signal
2 Channels @ 20GHz
20GHz DBI Scope
LeCroy DBI Technology
DC
10GHz
Split
Signal
Issued US patents 8
Issued foreign patents 2
Applications pending 4
Claims protecting the inventions >300
LeCroy Overview August 2011 13
New Hi-End and Midrange Products
Recently Launched Products Lead in All Performance Categories
Bench
Economy
LeCroy Overview August 2011 14
LabMaster Multi-Channel System
WaveMaster 845Zi 45GHz Oscilloscope
WaveRunner 6Zi 500MHz - 4GHz Oscilloscopes
Computers, IT and Consumer
Automotive and Industrial
Data Storage
Defense and Aerospace
Telecommunications
Other
Diverse Blue Chip Customer Base No Customer or Distributor greater than 2% of Sales
El Paso Natural Gas Co.
LeCroy Overview August 2011 15
Seasoned Direct & Indirect Sales Channels
84
Sales Engineer
Applications Engineer
Sales Manager
Sales Support
Service Engineers
US
Europe
Asia
Revenue Mix Sales Organization
LeCroy Overview August 2011 16
LeCroy FY11 Q4 Highlights
Record Orders of $49M
Record Sales of $47.5M
29% year-on-year Sales Growth
Record Operating Income* of 15.7%
Record EBITDA* of $9M
Net Debt ~$24M
Revenue Guidance for FY2012 ~ $195M to $200M
LeCroy Overview August 2011 17
Total Revenue: 9 Consecutive Qtrs. Of Sequential Growth
18
Millions
LeCroy Overview August 2011
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
Sales Gross Margins
Revenue and GM %: Solid near 62%
19
Millions
LeCroy Overview August 2011
Steady Improvement in run rate EBITDA
Millions
20 LeCroy Overview August 2011
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Mar '09 Jun '09 Sep '09 Dec '09 Mar '10 Jun '10 Sep '10 Dec '10 Mar '11 Jun '11
Run-Rate EBITDA Net Debt
Target Business Model Accelerating Sales, Continuously Improving Operating Margins
LeCroy Overview August 2011 21
Non-GAAP
Sep '09 Dec '09 Mar '10 Jun '10 Sep '10 Dec '10 Mar ‘11 Jun ‘11 Target Model
Sales $M 28.0 31.0 33.6 36.7 39.1 45.0 46.5 47.5 15% Growth
GM* % 56.2% 58.8% 60.0% 59.8% 60.1% 61.7% 61.6% 62.1% 61%-63%
R&D* % 21.0% 21.2% 20.5% 20.7% 20.2% 19.6% 18.6% 19.0% 18%-19%
SG&A* % 29.5% 30.1% 30.9% 29.6% 28.9% 27.1% 27.4% 27.4% 25%-27%
EBIT* % 5.7% 7.5% 8.7% 9.7% 11.0% 15.0% 15.6% 15.7% 15%-18%
LCRY Opportunities and Challenges
Accelerating demand for high-bandwidth oscilloscopes driven by
high-speed, next-generation data communication networks
Sustainable competitive advantage based on patented technology
Well established world-wide sales organization
Expanding operating margins and financial ratios
Successfully compete with much larger competitors
Unique technology advantages
Niche market segments
High degree of focus
LeCroy Overview August 2011 22
The World’s Highest
Performance Digital
Oscilloscopes
Company Overview
August 2011