Welcome to Communications Systems, Inc. Annual Meeting of Shareholders

Transcription

1 Welcome to. Annual Meeting of Shareholders 2014

2 2013 Performance infrastructure & services for global communications Exceptional revenue and adjusted operating profit performance 2013 full year revenue of $131,300,000, a 26% increase 2013 full year adjusted operating profit of $7,006, full year net loss of ($958,000) JDL record year for revenue Strong performance driven primarily by Broward services and Miami Dade hardware sales Transition Networks business contracted due to a decline in Federal Government sales and legacy product salability Management team focused on repositioning the product franchise for growth with new products Suttle Strong year with an improved economy and key account performance 21% increase in sales and 110% increase in operating income

3 Business Process Improvement infrastructure & services for global communications New ERP system (IFS) implementation rollout is proceeding without significant problems. Offers improvements in product development, manufacturing and customer service Transition Networks has operated more than one year since implementing the new ERP system with minimal problems. Now looking to gain business advantage with implementation throughout the business operations Suttle on track to go live in the first quarter of Steady as you go implementation has reduced risk and enhanced implementation.

4 Restructuring Our Approach to Corporate Management Formed the Office of the Chair in September 2013 Appointed business presidents for Transition Networks, JDL and Suttle Improved decision making and shortened lines of authority Looking Ahead Corporate Scientist Interim CEO

5 George Wakileh Vice President of Global Business & Technology Development Appointed Corporate Scientist For outstanding technical and business development contributions. George Wakileh joined Suttle, in 2009, to implement a strategic innovation process, re structure the product roadmap, and lead the company's business development efforts. He holds a BS in Electronics Engineering Technology from Mankato State University, and has been engaged in the telecommunications industry for over 20 years. Highlights of his telecommunications career: Senior Systems Engineer at ADC. Engineering Manager and Director of Product Development and Engineering for Americable /APA Optics (now Clearfield), where he developed the company's Fiber To The Home product lines. Engineering Director and Director of Product Management and Innovation Strategy at Emerson Network Power. In this role, George directed an $85M business for Emerson's FTTX programs into Tier 1 and Tier 2 US Communication Service Providers. George is highly respected in the telecom industry as a strategic thinker and innovator, and for expanding the Intellectual Property offering and Patent Portfolio for each of his employers.

6 Interim CEO Interim CEO responsibility passes to Roger Lacey Strategic levers will remain in place Business portfolio future options assessment Focus on corporate costs and productivity Rebuilding the entrepreneurial spirit and focus on shareholder returns Office of the Chair remains intact Curt Sampson Roger Lacey Ed Freeman Appointment of new CEO will depend on portfolio assessment

7 Q infrastructure & services for global communications Q was challenging as individual businesses build for future growth and profitability. Continued to build our strong financial position. $32.7 mil cash and investments and $63 mil in working capital Made people investments with long term growth horizon. Engineering, Sales, Marketing Future Opportunities in each business unit New products and services, global expansion Maintained excellent dividend.

8 Strong Dividend Yield infrastructure & services for global communications Price $ $18 $16 $14 $12 $10 $8 $6 $4 $2 $14 1% $11 2% $15 2% $14 $16 2% 2% Stock Price, Dividend and Dividend Yield $15 3% $12 3% $14 3% $8 3% 1% $7 $8 $9 2% 2% $11 3% $10 3% $11 4% 5% 5% $10 $10 5% $12 $16 4% 5% $12 6% $11 7% 6% 5% 4% 3% 2% 1% $ Year Stock Dividend yield (Dividend/Share Price) 0% Outstanding record of dividend payments

9 Financial Results 2013 Annual Figures infrastructure & services for global communications Public Company Since 1981 Listed on the NASDAQ Stock symbol: JCS Revenues $131,320,000 Total Assets (12/31/13) $103,533,000 Adjusted Operating Income $7,006,000 Net Loss* ($958,000) Earnings Per Share ($0.11) Dividends Per Share $0.64 Stockholders Equity (12/31/13) $88,622,000 Market Cap (12/31/13) $95,284,000 Shares Outstanding (12/31/13) 8,553,320 * Includes $5.8 million goodwill impairment charge

10 Financial Results Q Figures infrastructure & services for global communications Public Company Since 1981 Listed on the NASDAQ Stock symbol: JCS Revenues $25,198, Week Range (3/31/14) $ $13.92 Total Assets (3/31/14) $101,073,000 Net Loss ($141,000) Earnings Per Share ($0.02) Dividends Per Share $0.16 Stockholders Equity (3/31/14) $87,448,000 Market Cap (3/31/14) $83,703,000 Shares Outstanding (3/31/14) 8,600,247

11 JDL Technologies

12 Enabling Your IT to do MORE June 4, 2014 Shareholders Meeting

13 JDL Technologies Inc Services Organization Education Commercial Infrastructure Sales / Service Contract Services Infrastructure Sales Professional Services Managed Services erate Wired/Wireless Networking Core Infrastructure Bring Your Own Device Broward School Network Operations Center (NOC) Technical Staffing Wireless Networks Servers Storage End Compute Software Virtualization Virtualization Networking Microsoft Stack Assessments o HIPAA o Network IT Managed Services Application Support Staff Augmentation IaaS BaaS AaaS

14 JDL Technologies Inc Education Infrastructure Sales / Service Contract Services erate Wired/Wireless Networking Core Infrastructure Bring Your Own Device Broward School Network Operations Center (NOC) Technical Staffing

15 JDL Technologies Inc Healthcare Commercial Infrastructure Sales Wireless Networks Servers Storage End Compute Software Virtualization Professional Services Virtualization Networking Microsoft Stack Assessments o HIPAA o Network Managed Services IT Managed Services Application Support Staff Augmentation IaaS BaaS AaaS HIPAA Regulations & Meaningful Use; Driving Opportunity

16 JDL Technologies Inc Other Principal Verticals Commercial Legal & Financial Business Services/Manufacturing/Logistics Infrastructure Sales Wireless Networks Servers Storage End Compute Software Virtualization Professional Services Virtualization Networking Microsoft Stack Assessments o HIPAA o Network Managed Services IT Managed Services Application Support Staff Augmentation IaaS BaaS AaaS Leveraging Existing Clients Building Niche Messaging / Vertical Offerings

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19 Transition Networks Annual Shareholders Meeting June 4, 2014 Minnetonka, MN

20 TN Transformation Focus on Organizational Excellence Business Stability Support channel model while building direct capabilities Take advantage of current opportunities in Fed and Enterprise segments Strengthen relationships with service providers Refine product roadmap

21 Customer Solution Space Carrier Ethernet Service Providers Surveillance Integrators Ethernet Connectivity Power Utilities Security Data Security Government Integrators Hardened Solutions for Security Applications Hardened Equipment

22 Carrier Ethernet Solutions Why Carrier Ethernet Standardized Services Scalability Reliability Quality of Service Carrier Ethernet Differentiators Rapid service turn up Performance guarantees Flexible, on demand, dynamic bandwidth allocation infrastructure & services for global communications Cu Macro Cell S3280 Fiber Multiple Carrier Opportunities, domestic and abroad

23 Hardened Ethernet Remote Outdoor Environments Hazardous environments Power Utility Wastewater Mining Oil Exploration Airports Sea Ports Gas Distribution Supports domestic and global applications Grain Processing

24 Data Security Solutions Vulnerable Copper Hackers can tap connections and detect electrical signals Breach undetected Compromised data Secure Fiber Properties of fiber provide needed security Try to tap into fiber... Fiber will break Links will go down Network managers alerted Fiber Cu Serves Federal Government and Enterprise Channels

25 Physical Security PoE Camera more than 100M away Access Security Locks, Card Readers Surveillance & Monitoring Copper PoE+ Media Converter PoE+ Switch Indoor PoE Camera within 100M COAX Legacy CCTV Camera Emergency IP Phone within 100M IP Video Encoder Fiber Media Player Composite Video Addresses enterprise data security concerns PTZ Control

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27 Delivering Innovative, Customer Centric Solutions Suttle Customer Engagement Model Operational Capabilities U verse Technology & Market Expertise Innovative Customer Centric Solutions Knowledge of Customer Business Strategies FIOS Prism Strategic Partners Customer Relationships Sales & Mktg

28 Market Forces The Ultrafast Broadband Era One Gigabit Broadband Build Drive for Higher Speeds Internet of Things Growth in Connected Devices The new FutureLink TM brand is Suttle s next generation of fiber and high-speed copper connectivity solutions, which meet market demands at a lower cost of ownership from the Central Office all the way into the Premise.

29 Enabling Truly Connected Home infrastructure & services for global communications High Speed Copper Fiber Wireless 1Gigabit Broadband Distribution

30 Thank You Questions and Answers.