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Confidential & Proprietary RF Monolithics, Inc.
Southwest Ideas Investor ConferenceSouthwest Ideas Investor Conference
November 11, 2010November 11, 2010
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995This presentation contains forward-looking statements that involve risks and uncertainties. Statements of the Company’s plans, objectives, expectations and intentions and statements containing terms such as “believe”, “expects”, “plans”, “anticipates”, “may” or similar terms are considered to contain uncertainty and are forward-looking statements. Similarly, statements that describe the Company’s business strategy, outlook, objectives, plans or goals also are forward-looking statements and are based on information available to management at the time of such statement. Such statements are not guarantees of future performance and involve risks, uncertainties and assumptions, the ability to compete in the highly competitive markets, rapid changes in technologies that may displace products and services sold by the combined company, declining prices of networking products, the combined company's reliance on distributors, delays in product development efforts, uncertainty in consumer acceptance of the combined company's products, changes in the company’s level of revenue or profitability, expectations and stability of the international business environment in which the company operates, availability and cost of raw materials and labor, loss of major customers or significant change in demand from company forecasts, projections of future performance, future financial and operating results, as well as the other risks detailed from time to time in the Company’s SEC reports, including the report on Form 10-K for the year ended August 31, 2009. The company does not assume any obligation to update any information contained in this release. This disclosure speaks as of the date of its most recent posting November 2010, and the Company cannot assure its accuracy after that date and does not undertake to update the disclosures contained herein.
RF Monolithics, Inc. 2
Wireless is…RFM®
Successful Brand name for over 30 years
Focused on M2M Market Opportunities
Top 100 M2M Company List 4th year in a row
Broad Product Offerings for Target Markets
Long-standing relationships with network of worldwide market channels and customers
Weathering 2009/2010 economic downturn and re-established Financial Stability / Profitability
Low Cost Business / Manufacturing Model – Increased Sales without substantially increasing fixed cost
New Strategic Equity and Collaboration
Strong Banking Relationship
Seasoned Leadership meets Challenges
RF Monolithics, Inc. 3
Market Cap~ $13M
$33.6M Revenue
$312KNet Income
$2.2MEBITDA
110%+ Stock Price Increase from 52 week Low
(Nasdaq: RFMI)
Revenue $33.6 Million and Growing
Strong EBITDA Over $2 Million
Operating Cash Flow Over $1 Million
New Strategic Equity Raise at a Premium
52 week range:
~$0.62 - $1.50 Stock Price
~$6.2 - $15.0 Million Market Cap
Value Indicators
RF Monolithics, Inc. 55
Machine-to-Machine (M2M)According to Harbor Research:
• The number of intelligent device shipments will grow from 73 million units in 2008 and to 430 million units in 2013. Total device revenue is expected to exceed $12 billion by 2013. Much of the growth will be due to Wireless PAN technology, including ZigBee and other 802.15.4 related technology, particularly those used in Wireless Sensor Networks (WSNs).
"We're currently on the cusp of a transformation in the marketplace… Over the next five years, we're going to see that the true value held in connected devices will shift towards value-added services where there's unheralded potential for revenue generation.“
Glen Allmendinger, President of Harbor Research
Harbor Research Inc. is the leading provider of research services to manufacturers, services organizations and core technology clients in intelligent device communications and the connected services market place.
RF Monolithics, Inc. 7
Target Markets / ApplicationsMedical• Implanted Devices• Body Sensor Networks• Medical Telemetry• Patient Monitoring and Tracking• Medical Equipment Tracking• Wireless Sensor Networks
Industrial • Automated Meter Reading (AMR)• Smart Grid• Wireless Mesh Networks and Automation• Condition Monitoring and Active RFID• Oil & Gas Pipeline Monitoring• Surveying
SAW-based VirtualWire Radios
RFIC Short-rangeRadios
ZigBee and 802.15.4
Bluetooth
Proprietary MeshRFM and Wireless HART Networks
Proprietary Frequency HoppingSpread Spectrum
802.11b/gBattery PoweredWi-Fi
RF Monolithics, Inc. 8
M2M Market Focus: Product Mix
Short-RangeRadios
StandaloneDevices
RF Components
OR
Ready-MadeRF Modules
Unlicensed Radio Band Certification
RF Engineering Capabilities and / or Wireless Networking Expertise
Facilities / Equipment for RF Design, Engineering & Testing
RF Manufacturing Capabilities
Time-to-Market
MustCertify
Product Certified
MustPossess
NotNeeded
MustPossess
NotNeeded
MustPossess
NotNeeded
Slower Quickest
MAKE BUY
RF Modules andBoxed Radio Products
RF Components andSubsystem RF Products
Global Connectivity
Simple Connectivity
Go-To-Market Strategy
RF Monolithics, Inc. 10
Murata RelationshipInvestment by Murata Electronics North America.
Cash Stock Purchase of approximately 535,000 shares, 4.99% of diluted shares, at a Premium to Market.
Joint Collaboration Agreement with Murata Manufacturing Co. Ltd. of Japan (6981.OSE/TSE) and all Murata subsidiaries (including SyChip locally). Covering Modules and Components.
Initially Identified Areas to Collaborate with emphasis on the wireless solutions portion of both companies’ product portfolios for specific markets and joint development of wireless solution products.
Murata is a $5.7B Global Electronics Company
RF Monolithics, Inc. 12
$11.4
$6.6 $6.5
$7.5
$8.5
$7.9
$8.7 $8.6
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Quarterly Revenue
FY 2009 FY 2010
Mill
ion
RF Monolithics, Inc. 13
$0.640
($0.840)
$0.084
$0.640$0.550
$0.640 $0.640
$0.410
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Quarterly EBITDA
FY 2009 FY 2010
Mill
ion
RF Monolithics, Inc. 14
$4.024
$1.011
$3.556
$0.910
$4.214
$0.742
$2.575
$0.602
$2.550
$0.621
$2.545
$0.589
$2.614
$0.589
$2.736
$0.490
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY 2009 FY 2010
Operating Expenses / G & A ExpensesQuarterly
$1.6
34 R
estru
ctur
ing
and
Impa
irmen
t
Mill
ion
RF Monolithics, Inc. 1515
FY’10 SummaryVery Good Recovery Year.
Revenue: $33.6M (over 5% increase).
Gross Profit Margins: 33.5%.Operating Expenses: $10.4M (~$4M improvement):
$2M less due to impact of cost reduction efforts, per Plan.$2M less due to lack of restructuring and impairment costs of FY’09.
Operating Income: $0.9M (~$3.7M improvement). $1.8M improvement without Restructuring & Impairment.
Five consecutive quarters of positive Operating Income.
Net Income: $0.3M (~ $3.8M improvement).
EBITDA: $2.2M.
RF Monolithics, Inc. 1616
FY’10 SummaryNet Income adjusted for non-cash items: $1.7M.
Working Capital: $5.2M.
Operating Cash Flow: $1.2M.
Capital Spending: $0.2M.
Total Bank Debt: $2.9M (reduced by $1.6M).
Total Equity: $7.2M.
Balance Sheet Items:
Cash $0.6MReceivables $5.3MInventory $5.0MTotal Assets $14.2M
Payables $2.5MRevolver $2.1MMortgage $0.8MTotal Liabilities $7.0M
RF Monolithics, Inc. 17
$7.9
$5.8
$4.6
$0.895
$3.6
$0.880
$3.9
$0.865
$3.4
$0.850
$3.6
$0.835
$2.1
$0.820
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY 2009 FY 2010
Bank Revolver/MortgageM
illio
n
RF Monolithics, Inc. 18
ViewPoint BankOne-Year Committed Revolving Line of $5.0M. Originally funded December 1, 2009 at $4.2M.
Reduced $2.1M in 9 months.Monthly Borrowing Base:
80% on Insured A/R.50% of FG Inventory up to $1.0M.
Interest Rate: Prime + 2% (Floor of 7%).
Financial Covenants:Current Ratio 1.0 to 1.0 (Measured Quarterly).Minimum Equity $4.8M (Measured Quarterly).
Expiring November 30, 2010.Received Commitment for Two-Year Renewal (on similar terms).
Banking Relationship
RF Monolithics, Inc. 20
Experienced Management
David Kirk – President & CEO
Buddy Barnes – Chief Financial Officer
Farlin Halsey – SVP M2M Business / Marketing
David Crawford – VP Sales
Focused on increasing Stockholder Value
RF Monolithics, Inc. 2121
Summaryl RFM - Successful Brand name for over 30 years with a Low
Cost Business / Manufacturing Model.
l Focused on WSN Opportunities within M2M Market with a Broad Product Offering.
l New Strategic Equity with Murata and Collaboration Agreement.
l Weathering 2009/2010 economic downturn. Grew Revenue, Generated Operating and Profitable.
l Favorable Bank Relationship and Experienced Management Team.
l We believe RFM is a Good Investment with Stockholder Growth Potential.