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Forward-looking statements
Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, among others, the following: our dependence on the successful development and market introduction of new products; our ability to integrate any business, technologies, product lines or services that we have or will acquire; our dependence on revenue generation from our legacy products in order to fund development of our new products; current market conditions, including the lack of liquidity in the markets and economic slowdown, may increase our operating costs or reduce our revenue, thereby negatively impacting our operating results; our ability to operate profitably and generate positive cash flows in the future; the impact of the current economic crisis on our suppliers and customers and our ability to transfer parts to other suppliers; our dependence on our foundry suppliers and third-party subcontractors; order cancellations and deferrals by our customers; our substantial indebtedness could adversely affect our financial position; the cost and accounting implications of compliance with new accounting standards; and other factors referenced in our Annual Report on Form 20-F. Investors are encouraged to consider the risks detailed in this filing. 2
Todays Presenters
Kirk Mandy
Who we are
Communication products
Medical products
>400 customers in more than 100 countries 100M chips shipped per year >900 active products 30+ year operating history
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Medical products
~ 12% of revenue
*Company sold optical business May 17, 2010, so results have been reported as discontinued operations for current and comparative periods **~10% of revenue derived from custom products
Increasing Revenue from Increasing Revenue from New Products New Products
key trends
Driving Growth
3. Wireless Healthcare
Improve patient care, reduce physician visits, eliminate surgeries Standards-compliant, low-power, medical-grade radios
New High Bandwidth Content Overwhelming Traditional Networks T1/E1 lines connecting base stations with network backbone unable to meet bandwidth demands created by new content & expensive to operate
Ethernet Backhaul Higher bandwidth, lower cost packet networks to connect cellular sites and network backbone Requires timing at base stations and routers to synchronize network and ensure services for new and existing communication applications 9
Stay on TDM
Annual cost per connection
or move to Ethernet
Source: Mobile Backhaul Equipment and Services Market Size, Share and Forecast, Infonetics Research Inc., April 2010
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METRO
CORE
OTN
New ClockCenter platform targets core network upgrades ClockCenter supports all communication services over optical networks to help solve capacity and bandwidth issues, allow carriers to deliver services over least amount of infrastructure Single-chip devices competing solutions require multiple devices, increasing design complexity and cost 11
(in millions)
900
AG C
15% R
600
$936
300
$1,037
$699 $532
$782
2011
2012
2013
2014
2015
12 12
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fiber
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14
Replace this
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Gastric stimulator
Bladder control
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Penetration of wireless technology expected to outpace overall market growth as new therapies and devices come to market
500 400
Revenue ($USM)
300 200 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: BMO Capital Market Report on Medical Technology; Global Industry Analysts Neurostimulation report; Weston Bioconsulting Research; ZL data
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Financial review
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$4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Jan-05 Jan-06 Jan-07 Jan-08
4 5 6 7 1 2 3 4 5 6 7
Jan-09
Jan-10
1 Divests consumer business to Intel 2 Acquires line circuit business from Legerity 3 Exits fab business with sale to MHS
Proxy contest Financial crisis, stock hits C$0.22 low Divests optical business to Tyco Sells Swedish campus
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OPEX
$60
48%
49%
50%
50%
$50 40%
(In millions)
$40
$48.3 $46.9 $49.7 $49.8 $50.0 $55.2 $58.7 $59.9
$10
10%
0%
All values in USD unless otherwise stated *Company sold optical business May 17, 2010, so results have been reported as discontinued operations for current and comparative periods
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Q 1
Q 2
Q 3
Q 3
Q 4
Q 4
Q 1
Q 2
Legacy Products
New Products
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$USD
Q2 F11
$59.9M 51% $10.7M $9.6M $7.2M $9.4M $0.06 $0.07
Q1 F11
$58.7M 51% $10.6M $10.1M $10.3M $8.6M $0.08 $0.06
Q2 F10
$49.8M 50% $9.4M $9.5M $0.7M $6.2M $0.0 $0.05
Revenue Gross Margin R&D SG&A Net Income Non-GAAP Net Income* Basic EPS Non-GAAP Basic EPS*
**For a full definition, see Companys MD&A and Financial Statement and notes filings for the period ended September 24, 2010.
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$USD
As at September 24 2010
$109.6M $158.6M $38.5M $69.0M
As at June 25 2010
$98.9M $165.6M $54.9M $68.3M
As at March 26 2010
$74.4M $152.7M $41.7M $68.9M
Cash and cash equivalents* Total current assets Total current liabilities Long-term debt (convertible debentures)
* Subsequent to quarter-end, on September 29, 2010, the Company announced the sale of real estate in Sweden, adding an additional $14 million to the cash balance
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$110
($ in millions)
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*All values in USD unless otherwise stated 1 Excluding any potential impact of f/x gains/losses related to the Companys Canadian dollar denominated debenture, and the impact of the sale of real estate in Jarfalla, Sweden
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Growth strategy
Communication products
Leverage network evolution required to support new services to grow timing and line circuit business
Medical products
Enable new wireless applications and therapies that improve patient quality-of-life and reduce healthcare costs
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