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Exhibit 99.1 - EMRISE CORP

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Exhibit 99.1 - EMRISE CORP Powered By Docstoc
					Exhibit 99.1
        NY SE Arca : E RI
        EM RISE
        CORP OR AT ION
        EM RISE
        CORP OR AT ION A
        lea di ng multi -
        na tional
        ma nufa cturer of
        proprie tary
        ele ctroni c devic es
        and communica tions
        equipment w ith a
        growi ng ba se
        busine ss in milita ry
        ele ctroni cs, and
        servi ng suc h ne w
        growt h ma rke ts as
        in-flight
        enterta inment &
        communica tions and
        edge net works
EM RISE
CORP OR AT ION 2
The ma tte rs
di scussed in this
prese ntati on,
including any ora l
comments tha t
acc ompany the
prese ntati on or
gi ve n in re sponse to
que stions, may
contain forw ard-
looking sta teme nts
within the mea ni ng
of the P riva te
Sec uriti es L itiga tion
Reform A ct of 1995.
Forw ard-looking
state ments inc lude ,
but a re not limite d
to, orders, backlog,
fina nc ial re sul ts,
products, a nd/or
ot he r e vents tha t
ha ve not yet
oc curre d. Ac tual
re sul ts may diffe r
ma teria lly from
those forw ard-
looking sta teme nts.
Fac tors tha t could
contri bute to such
di fference s incl ude ,
but a re not limite d
to, va ria tions in
foreca sted growth
ra te of ma rke ts for
the compa ny ’s
products, c ha nges in
EM RISE ’s fina nc ial
condition and
fina nc ial re sul ts, the
company’s a bility to
di stingui sh i tself and
it’s products from
current a nd future
competit ors and
those fa ctors
containe d in the
“Risk Fac tors ”
Sec tion of the
company’s most
re cent filings w ith
the U .S . Sec urit ies
and Exc hange
Commi ssion on
Form 10-K a nd
Form 10-Q. Sa fe
Ha rbor S tate ment
Septe mber 2008
EM RISE
CORP OR AT ION 3
Compa ny
Overview • On a
tra ck of st rong top-
and bot tom-line
growt h – Base
busine ss + rec ently
acquired A CC
busine ss • Focuse d
on high-growt h
commercia l market
opportunities – Ne w
In-flight
enterta inment &
communica tions
products – Ne w
ne tw ork timing &
sync hroniz ation
products • Expande d
and grow ing
mi litary ele ct ronics
busine ss – Base
busine ss – Europe ,
else where outsi de
U.S. – ACC
acquisit ion – U.S.
and else whe re •
Esta blished
prese nce on three
continents • La rge
internationa l ba se of
bl ue -chip custome rs
– Long-term
contra cts, repe at
custom product
re ve nue •
Positioning
company to foc us
on c ore busine sses
EM RISE
CORP OR AT ION
Business O vervi ew
– 2008E
Communic ati ons
Ele ctronic D evic es
Business Se gmentsb
26% 74% North
Ame ric a E urope &
Asia Produc tion by
Regionb 38% 62%
2008 E stimat ed
Revenue – ~$62
Mi lliona a Does not
include impa ct of
any possi ble sal e of
non -core businesse s
or product lines. b
Future producti on
by region w ill trend
towa rd higher North
Ame ric a a nd future
busine ss segme nt s
and product
cat egorie s wi ll trend
towa rd eve n hi ghe r
ele ctroni c devic es
(both due to impac t
of A CC). 4 P roduct
Cate gorie sb • In -
flight e ntertainme nt
& c ommuni ca tions
16% •
Communic ati ons
26% • Mi litary
Ele ctronic D evic es
52% • Industrial &
Othe r 6%
EM RISE
CORP OR AT ION 5
Business Se gments •
Produc t cat egori es –
RF devic es a nd
subsyste ms – Powe r
syst ems – Digita l
and rota ry sw itche s
– Inte grat ed
Asse mbl ies •
Ma rke ts – Mi litary –
aviat ion, la nd & sea
pl atforms –
Comme rcia l &
ge neral a viation –
Industrial • Pri mary
growt h opportuni ty
– In-flight
enterta inment &
communica tions
(IFE &C) – U.S.
Mi litary • Produc t
cat egorie s –
Ne twork Ac ce ss –
Timing &
Synchroniz ati on •
Ma rke ts – Public &
privat e netw orks –
Util ity netw orks –
Mi litary netw orks •
Pri mary growth
opportunity – Edge
ne tw ork timing &
sync hroniz ation
Ele ctronic D evic es
Communic ati ons
Equipment
EM RISE
CORP OR AT ION 6
Ke y C ust ome rs –
Ele ctronic D evic es
Asia Europe
AIRBU S U SA
EM RISE
CORP OR AT ION 7
Ke y C ust ome rs -
Communic ati ons
ASIA (T ai wa n)
EU RO PE Bri tish
Mi ni stry O f D efenc e
Fre nch M inistry Of
De fe ns e U SA F AA
MO T OR OL A
EM RISE
CORP OR AT ION 8
Pri nc ipal M a rke ts •
La rge growt h
ma rke t opportunitie s
– In-flight
enterta inment &
communica tions
(IFE &C) –
Communic ati ons
ne tw ork timing &
sync hroniz ation •
Base busine ss –
Mi litary ele ctronic
de vice s – stea dy
growt h • Ac quired
busine ss – ACC –
Mi litary ele ctronic
de vice s – sol id
incrementa l grow th
EM RISE CO RPO RA TIO N 9 •
Ne w Fe atures ge nerate
additional reve nue for ai rline s
– Mult imedia enterta inment •
Sate llite T V (Pay pe r vie w) •
Vide o on D ema nd • Ga ming –
Produc tivity/communic ations •
GSM • Broa dba nd: Inte rne t, e -
ma il, mes saging • Ac cel erate d
growt h for IFE &C in ne w a nd
re trofit ai rc ra ft • EM RISE
average sale could grow from
~$50,000 to $100,000 •
EM RISE M arket O pportunity
– $120+ mi llion annuall y by
2010 M arket O pportunity –
IFE &C 520 540 560 580 600
620 640 660 680 700 720 2008
2009 2010 1 & 2 Source :
Compa ny estima tes ba sed on
avail able i ndustry data 2 $120+
MM $113+ M M $100+ M M
Annual N umber IF E&C
Equipped A ircraft & M arke t
Opport unit y 2 1
EM RISE
CORP OR AT ION
10 K ey IFE &C
Diffe re ntia tors •
Abilit y t o provide
ele ctroni c & RF
sol ut ions – Turnke y
communica tions
sol ut ions –
Individual de vice s
and subsyst ems •
Prove n t echnic al &
ma nufa cturing
capa bility • Mult i-
ye ar experie nc e in
original In-flight
enterta inment
ma rke t • Sell t o a ll 3
ma jor syst em
supplie rs of Boei ng
& A irbus • Sell t o
and continue
pa rt ne ri ng w ith
ma nufa cturers of
onboard G SM base
stations a nd
broadband
connect ivity
EM RISE
CORP OR AT ION
11 • Ne w c onve rge d
public netw orks
combining
tra ditional c irc uit-
ba sed & IP pac ket -
ba sed net works •
De pl oyme nt of so
cal led “ Ne xt
Ge ne ra tion
Ne tworks” that
include ne twork
ma nage ment
protocols • Edge
ne tw ork
proliferation vs.
central office timing
source – Homel and
Sec urity requiring
secure ne tworks •
Public ne tworks
more se cure w ith
di spe rs ed edge
ne tw ork sourc es of
timing – More
acc ura te ti ming for
ne xt generat ion of
cel l phone tra ffic
and broadba nd –
Util ities,
gove rnment &
mi litary pri va te
ne tw orks M arket
Opport unit y M a rke t
Opport unit y -
Ne twork Timi ng
Ne twork Timi ng
EM RISE
CORP OR AT ION
12 K ey
Diffe re ntia tors K ey
Diffe re ntia tors –
Ne twork Timi ng
Ne twork Timi ng
Ne w E M RISE
“TIE MP OT M ”
6400 – Ne twork
Timing a nd
Synchroniz ati on
Produc t • Ma rke t
lea di ng E dge
Ne twork port
de nsity – 64 outputs
vs. 9 outputs for key
competit or –
Sca lable from 64 t o
128 outputs •
Ma naged via
EM RISE custom &
industry standa rd
tool s • Me ets U S,
Europe an & w orld
standards • Small
physic al siz e • More
cost effect ive –
lowe r c ost pe r
output
EM RISE
CORP OR AT ION
13 Corpora te
Growth S tra tegie s
Corporate G rowth
Strate gi es • Increa se
Revenue and
Profita bi lity –
Ac cel erate organic
growt h • Focus on
ne xt generat ion
IFE &C a nd E dge
Ne twork Timi ng &
Synchroniz ati on
products • Capita lize
on ba se of e lec tronic
de vice customers •
Le verage
opportunities
through ope ra tions
in N orth Ame ric a &
Europe – ACC
acquisit ion •
Expands e xi sting
EM RISE E uropea n-
ba sed RF &
mi crowa ve business
into U S c ommercia l
& mi litary
aerospac e markets
& A CC e xpansion
into E urope • Cre ate
more focuse d
company –
Eva luating possible
sale of non-core
busine sses a nd
product line
EM RISE
CORP OR AT ION
14 A CC A cquisiti on
- complete d
8/ 20/08 • Ac cretive
for EM RISE
sha re holders –
Esti mate re ve nue of
$17 to $18 million
in 12 months
follow ing close –
Signifi cant bott om
line contributions •
EM RISE N OL s
provide ta x she lte r
for consolidate d
income –
Ma ximize s net
income/E PS ,
improves c ash
flow • $18 mill ion
pric e – $13 mill ion
de bt plus $5 mil lion
earn out • Favorable
va luati on (vs.
comparable
EBIT DA and
re ve nue multiple s) •
ACC e arn-out
be nefits E M RIS E
stockholders –
Ensures that ACC
continuing
exec utive
ma nage ment and
EM RISE are
stra tegic ally
aligned • Broa de r
product offe rings for
U.S. a nd E urope an
ma rke ts – ACC ’s
U.S. loc ation opens
door to EM RISE in
U.S. mil itary market
– Existi ng P asc all
subsidi ary' s U.K .
domic ile ope ns door
for ACC products in
Europe an mili tary
ma rke t
EM RISE
CORP OR AT ION 15
Potentia l Sa le of Non-
Core Businesse s •
First asse t sale
complete d – EM RISE
Circ uit D ivision –
Mode st proc eeds
from sa le , favorable
supplie r a gre eme nt –
Inconse que ntial
re ve nue and net
income impa ct –
Reduce s ope rating
costs – Avoids cost of
ne ar term
di scretiona ry shut
dow n • Asse ssing sale
of other non-core
busine sses/products –
Use of proc ee ds – pa y
dow n ac quis ition debt
– Strengthen bal ance
she et, reduc e financia l
risk – Annual inte re st
savings about equa l to
non-core annual profit
EM RISE
CORP OR AT ION •
Rationa le/P otentia l
Benefits – Reta in
NY SE Arca listing •
Removes overhang of
de -listing and move
to B ulleti n B oa rd •
Ma y improve
effe ctive ne ss of
inve stor rel ations
act ivities • Compa ny
re ma ins exe mpted
from c erta in
“ BlueSky” law s •
Broa de r pool of
pote ntial inve stors •
Can help broke rs
ove rc ome ce rt ain
complianc e issue s –
Esta blishes sha re -
count more
appropriate for
Compa ny size •
Low er share -count
improves E PS –
Higher stock price •
Higher stock price
he lps shed nega tive
image of stock tha t
tra des below $1.00 •
Can help overcome
certa in mi nimum
stock -pric e
re quireme nts Rea lign
Capita liza tion -
Reverse S tock Spli t
EM RISE
CORP OR AT ION
Rea lign Capita liz ation
Reverse S tock Spli t •
Proc ess – Obta in
stockholder approva l at
Novembe r 6 spec ial
me eti ng –
Imple me ntat ion ba sed
on a nd follow s closing
ACC a cquisit ion –
De termine minimum
re ve rse -spl it ra tio at
time of
impl ement ation •
Ma rke t conditions •
Stock price – Support
with proact ive invest or
re lations a ctivity •
Regular new s fl ow,
P/R, invest or
communica tions •
Increa sed reta il and
institutional i nve stor
outrea ch – Investor
road show s –
Me eti ngs/ confe re nce s
17
EM RISE
CORP OR AT ION
18 F inancia l and
Investme nt
Highlights
EM RISE
CORP OR AT ION
19 A nnua l Fina ncia l
Highlights $46 $41
$30 $51 $0 $10 $20
$30 $40 $50 $60
$70 $80 $90 $100
2004 2005 2006
2007 2008 E *
2009E * ($ in
Mi llions) ~ $62
Revenue Trend Ba se
Business A CC ~$80
*N ote: Does not
include impa ct of
any possi ble sal e of
non -core businesse s
or product lines
EM RISE
CORP OR AT ION
20 $1.5 ($3.6) ($1.9)
$1.2 $1.3 2003 2004
2005 2006 2007 N et
Income Trend
($ M illions) Annual
Financ ial H ighlights
1 1 Includes $1.5
mi llion audit & le gal
costs for 2006
re audit; $620,000
di scretiona ry
enginee ring cost s 2
2 Include s fina l
re audit-re late d costs
of $300,000 and
$200,000 of debt
fina nc ing re late d
charges
EM RISE
CORP OR AT ION
21 Q 2 Highlights
(T hous ands, exce pt
%, E PS) Q2 2008
Q2 2007 R ecord
qua rte rl y reve nue
$ 14,049 $ 12,067
Gross margi ns up
35.5% 33.8% Ne t
loss $ (256) $ (623)
EP S – fully dilute d
$ (0.01) $ (0.02) •
Rec ord sec ond
qua rte r reve nue
driven primarily by
sale s of: – Current
in-flight
enterta inment
products – Ne w
IFE &C produc ts –
Ne twork acc ess
products
EM RISE
CORP OR AT ION
22 Investme nt
The sis • Strong top-
and bot tom-line
growt h • High -
growt h c ommercia l
ma rke t opportunitie s
– Ne w In-flight
enterta inment &
communica tions
products – Ne w
ne tw ork timing &
sync hroniz ation
products • Expande d
and grow ing
mi litary ele ct ronics
busine ss – Base
busine ss – Europe ,
else where outsi de
U.S. – ACC
acquisit ion – U.S.
and else whe re •
Esta blished
prese nce on three
continents •
Business
approa ching critic al
ma ss • La rge
internationa l ba se of
bl ue -chip custome rs
– Long-term
contra cts, repe at
custom product
re ve nue • Va lued
at .34X 2008E s ale s
vs. 1.2X pe er group
average
EM RISE
CORP OR AT ION
23 S tock
Informat ion
Common sha re s
NY SE Arca : E RI
52 -we ek pric e range
$0.42 - $1.04
Rec ent pri ce
(8/27/08) $0.56
Average daily
tra ding volume
42,775 Common
sha re s outstanding
38.3 milli on M a rke t
capit aliz ation $21.4
mi llion Insti tutional
ow nership 26%
Insider ow ne rship
(offic ers &
di re ctors) 5%
EM RISE
CORP OR AT ION
24 Q &A

				
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