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October 2017
Tom Schmutz, CEO
FLYHT Aerospace Solutions Ltd.
TSX.V: FLY
OTCQX: FLYLF
2TSX.V: FLY
OTCQX: FLYLF Oct 2017
Forward Looking Statements
This discussion includes certain statements that may be deemed “forward-looking statements” that are subject to risks and uncertainty. All statements, other than statements of
historical facts included in this discussion, including, without limitation, those regarding the Company’s financial position, business strategy, projected costs, future plans,
projected revenues, objectives of management for future operations, the Company’s ability to meet any repayment obligations, the use of non-GAAP financial measures, trends
in the airline industry, the global financial outlook, expanding markets, research and development of next generation products and any government assistance in financing such
developments, foreign exchange rate outlooks, new revenue streams and sales projections, cost increases as related to marketing, research and development (including
AFIRS 228), administration expenses, and litigation matters, may be or include forward-looking statements. Although the Company believes the expectations expressed in such
forward-looking statements are based on a number of reasonable assumptions regarding the Canadian, U.S., and global economic environments, local and foreign government
policies/regulations and actions and assumptions made based upon discussions to date with the Company’s customers and advisers, such statements are not guarantees of
future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ
materially from those in the forward-looking statements include production rates, timing for product deliveries and installations, Canadian, U.S., and foreign government
activities, volatility of the aviation market for the Company’s products and services, factors that result in significant and prolonged disruption of air travel worldwide, U.S. military
activity, market prices, foreign exchange rates, continued availability of capital and financing and general economic, market, or business conditions in the aviation industry,
worldwide political stability or any effect those may have on our customer base. Investors are cautioned that any such statements are not guarantees of future performance and
that actual results or developments may differ materially from those projected in the forward-looking statements.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove
to have been correct. The Company cannot assure investors that actual results will be consistent with any forward-looking statements; accordingly, readers should not place
undue reliance on forward-looking statements. The forward-looking statements contained herein are current only as of the date of this document. The Company disclaims any
intentions or obligation to update or revise any forward-looking statements or comments as a result of any new information, future event or otherwise, unless such disclosure is
required by law.
www.flyht.com
Disclaimer
3TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Canadian Public Company (~$50M Market Cap)
• Calgary, Alberta
• TSX Venture: FLY
• OTCQX: FLYLF
• Leading provider of real-time data streaming technology that enhances the efficiency and
safety of aircraft
• Saves aircraft operators money
• Helps streamline their operations
• Proactively enhances safety, which help to prevent accidents and save lives
• FLYHT technology
• Airborne - Automated Flight Information Reporting System (AFIRSTM)
• Ground Server - UpTimeTM Cloud Service Platform
• FLYHT is a rapidly growing, “company to watch” in the aviation technology space
Who is FLYHT?
4TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Enhanced management & BOD with industry veterans
• Factory option on Airbus A320, A330 and Bombardier CRJ
• Other platforms in process
• Over 1,800 shipments and growing rapidly
• Over 70 Airline customers…and growing
• Major success in China, fastest growing market
• Cultivated a significant sales backlog (> $25M)
• Supplemental Type Certificates (> 70 STC)
• Barrier to Entry
• Right to install
• Most extensive Satcom catalogue in world
• Qualified on 95% of commercial aircraft types
FLYHT Overview
Automated Flight Information
Reporting System - AFIRSTM
5TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Grow overall and monthly recurring revenue by at least 25%
(1H17 revenues +16%)
• Continue success in China – secure a major services deal
• Win new contracts in South East Asia, Europe and the Middle East
• Secure business with a new OEM position
• Remain EBITDA Positive
• Grow public value through strategic business initiatives
2017 FLYHT Plan
6TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Civil Aviation Administration of China (CAAC) legislated standards for state of the art aircraft communications
• Chinese SATCOM Voice Regulation
• Between Airline Operations Center (AOC) and Aircraft
• Within 4 minutes, while in Chinese airspace
• Deadline is December, 2017; but provisioning will proceed over the next several years
• FLYHT provides outstanding solution for China through its AFIRS product
Industry Drivers - China
7TSX.V: FLY
OTCQX: FLYLF Oct 2017
• International Civil Aviation Organization (ICAO – United Nations Body)
• Adopted new amendments to Annex 6 (Operation of Aircraft)
• Takes effect between now and 2021
• Amendment 39
• Applicable November 1, 2018
• Normal Aircraft Tracking – 15 minute interval
• Amendment 40
• Newly manufactured aircraft from January 1, 2021
• Autonomous Distress Tracking (ADT)
• 1 minute interval tracks
• Distress circumstances
• Timely Access to Flight Recorder Data
• Flight recorder data recovered and made available in a timely manner.
• FLY has active R&D program and trials with Boeing and Inmarsat targeting the above two
amendments
Industry Drivers – Global
8TSX.V: FLY
OTCQX: FLYLF Oct 2017
• 2016 revenue record $14.3 million
• 2016 EBITDA positive at $2.5 million
• 1H17 revenue of $7.1 million; +16% vs. 1H16
• Booked USD $10.5 million in sales 1H17
• Q217 Voice and Data Services revenue up 14% over Q216
• Q217 Parts revenue up 31% over Q216
• Payment of $5.6 million in matured debentures in 2016
• Very little resulting debt (~$1.6M, SADI, low coupon, long term)
• Received Western Economic Diversification Canada WINN repayable contribution for
$2.35M - 0% coupon loan
• AS9100 Quality System externally certified
• Strong pipeline of major opportunities
Recent Successes
9TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Multiple revenue streams
• Initial hardware sales with gross margin of 40-60%
• Robust SAAS recurring revenue gross margins of 70-85%
• Licensing arrangement with OEM of close to 100% margin
• A la carte collection of SAAS products
• Five-year customer contracts
• Simple pricing, per aircraft per month with bundled airtime
• 100% retention
• Greater than 2.7 million flight hours and 1.8 million flights using AFIRS
• Certified on 95% of all aircraft used for commercial air transport
• Agreements in place with two global OEMs
• Major growth of sales in China – 23 airline customers
• Signed 4 new airlines in 2017; 8 airlines in 2016
• Launched real-time data services in China! Three users
• Significant remaining opportunity in sales funnel
Investment Highlights
10TSX.V: FLY
OTCQX: FLYLF Oct 2017
AFIRSTM – More Than Just Tracking
11TSX.V: FLY
OTCQX: FLYLF Oct 2017
Iridium SATCOM
Enhanced Global
Flight Tracking
Aircraft Health
Monitoring FDR Streaming Fuel Management
FLYHTVoice
FLYHTMail
ACARS over Iridium
FLYHTLog
FLYHTASDFLYHTHealth FLYHTStream FLYHTFuel
AFIRS & UpTime Core Products
Where FLYHT
Competes
Unique, Value-Added
Services FLYHT Upsells
• Saves aircraft operators money
• Streamlines their operations
• Enhances operational safety
• “Bread and Butter”
Products
12TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Timely access to Flight Data Recorder (FDR) Information
• Leading the industry with real-time FDR (black box) streaming technology
• Technology raises the standard of tracking and automated alerting
• Customizable triggers for streaming, frequency of flight following reports
and selectable data that is streamed to the ground
Patented, Real-time Data Streaming
13TSX.V: FLY
OTCQX: FLYLF Oct 2017
FLYHTASD – Aircraft Situational Display
14TSX.V: FLY
OTCQX: FLYLF Oct 2017
AFIRS alerted an airline customer to a high engine vibration• Customer was able to take the aircraft out of service to diagnose and fix the issue
• The replacement cost for the engine: $5.2 million
• The repair cost based on AFIRS-driven data: $780 thousand
• Savings: Over $4 Million
FLYHT created geo-fencing in its software to alert an airline customer when
the aircraft entered or exited specific boundaries• Kept all parties advised, in real time, on the progress of each flight
• Improved customer satisfaction
• Reduced costs for the airline associated with poor communication and logistical support issues
FLYHT provided data to satisfy a customer’s lease agreement• The customer had a requirement to conduct 10% of takeoffs at reduced thrust
• Using AFIRS, the customer was able to monitor the parameters of operations and create real-time reports
• Savings of hundreds of thousands of dollars in lease penalties
Example Customer Success Stories
15TSX.V: FLY
OTCQX: FLYLF Oct 2017
AFIRS - Competitive Advantages
Feature FLYHTOther Satcom
OEM
Tracking
Solutions
QAR/Health
Monitoring
Global Voice Coms X X X
FANS/Safety Services X X
ACARS over Iridium X X
QAR X X X
Aircraft Health Monitoring
(Trends & exceedances - engine/airframe)X X X
ICAO: Global Flight Tracking X X
Autonomous Distress Tracking X
Live Black Box Streaming X
Real-time Systems Diagnostics X
TSO C-159A (Voice & Data) X
STCs Supporting 95% of Air Transport Aircraft X
16TSX.V: FLY
OTCQX: FLYLF Oct 2017
Annual Revenues
$6,469,806
$8,000,364
$6,882,028
$10,457,125
$14,331,191
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2012 2013 2014 2015 2016
Strong Revenue Growth!
2016 Revenue: +37% increase over 2015
2015 Revenue: +52% increase over 2014
17TSX.V: FLY
OTCQX: FLYLF Oct 2017
30.5%
27.4%
40.6%
1.5%
Voice and data services (SAAS)
AFIRS sales
Parts (and License Fees)
Services
2016 Revenue by Source
Total 2016 Revenue:
$14,331,191
18TSX.V: FLY
OTCQX: FLYLF Oct 2017
EBITDA
-$4,204,166
-$2,914,987 -$3,321,959 -$3,156,430
$2,503,610
-$5,000,000
-$4,000,000
-$3,000,000
-$2,000,000
-$1,000,000
$0
$1,000,000
$2,000,000
$3,000,000
2012 2013 2014 2015 2016
*Paid back $5.6M in matured debentures in 2016
19TSX.V: FLY
OTCQX: FLYLF Oct 2017
Gross Margins: All Revenue Sources
57.2%
59.2%
62.9%
69.3%68.4%
50%
55%
60%
65%
70%
75%
2012 2013 2014 2015 2016
20TSX.V: FLY
OTCQX: FLYLF Oct 2017
Sales Order Backlog > $25M, Growing
**Contracted hardware backlog plus 60 month value of contracted,
undelivered services – does not include license fees
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
Sep-16 Oct-16 Nov-16Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17
CAD
Backlog for AFIRS units and Subscription Services, Only
$26,216,452
21TSX.V: FLY
OTCQX: FLYLF Oct 2017
Revenues Based on Location
• Over 1,800 shipped and/or
installed units, all channels
• 1.8 million flights and 2.7 million
hours of in-service use on units
providing SaaS subscription voice
and data services
22TSX.V: FLY
OTCQX: FLYLF Oct 2017
Leadership
David Perez
VP Sales & Marketing
Derek Graham
Chief Technical Officer
Thomas R. Schmutz
CEO
Paul Takalo
Interim CFO
Matieu Plamondon
VP Operations & Customer
Fulfillment
23TSX.V: FLY
OTCQX: FLYLF Oct 2017
• Barry Eccleston, President of Airbus Americas, Inc.
• John Belcher, former Chairman and CEO of ARINC
• Mark Rosenker, former Chairman of the National Transportation Safety Board
• Jack Olcott, former President of the National Business Aviation Association
• Canadian Board Members: Bill Tempany, Mike Brown, Jacques Kavafian, Doug
Marlin, Paul Takalo
Industry-Connected Board Members
24TSX.V: FLY
OTCQX: FLYLF Oct 2017
Capital Market Profile Share Price – As of October 2, 2017 (all dollar figures are in Canadian dollars)
Share Price $2.47
Market Capitalization $50.2 million
52-week low $1.70 - high $3.00
Share Structure - As of August 31, 2017 * using post-consolidation (July 17, 2017)
amounts
Shares 21,038,617
Diluted (assuming all instruments converted/exercised) 23,868,870
Diluted (assuming only instruments of value converted/exercised)21,763,941
Warrants Outstanding (weighted avg. exercise price ($2.49))1,716,000
Stock Options Outstanding (weighted avg. exercise price ($2.49))1,124,253
Insider Holdings (Directors and Officers) 4.7%
Debt (Low-interest, government debt) $1.8 million