Transcript Communication Systems 2011 Annual Shareholder Meeting

Welcome to
Communications Systems, Inc.
2011 Annual Shareholders Meeting
Communications Systems Inc.
 Management Change
 Jeff Berg retired as President and CEO of CSI after 21 years of
service, but remains a member of the board of directors
 Bill Schultz becomes President and CEO of CSI, he has also
been named to the board of directors
 2010 Financial Results
 CSI had strong financial results in 2010 with an increase in
revenue of 9% and operating income before taxes increased
53% over 2009.
CSI Initiatives
 Acquisitions
 In 2010 we were very active in searching for potential
acquisitions. While we were not able to make an acquisition in
2010 the effort will continue in 2011.
 We are looking for companies or product lines to augment our
current business units.
 Enterprise Resource Planning (ERP) System
 CSI is in the process of selecting a new ERP system that will be
used across all business units.
 This will help make processes throughout the organization more
efficient and cost effective.
CSI Initiatives Continued
 Product and Services Innovation
 In 2011 we will continue to invest in people, software, and
equipment to help bring innovative products to market.
 It is imperative to our long term success that we continue to
bring new products to our existing customers and develop
products for new markets as well.
 Leverage Shared Resources
 While we have unique business units we continue to find ways to
take advantage of best practices, shared support groups, and
facilities across CSI.
 Established a new position for Director of Marketing for CSI.
 Transition Networks opened a logistics center in UK at Austin
Taylor facility.
Austin Taylor
 The financial performance of Austin Taylor has not improved




so we are making changes to the organization.
The plastics business will be integrated into Suttle, allowing
Suttle to use Austin Taylor’s infrastructure, distributors, and
customer base as a launch point into the EMEA market.
This will help with Suttle’s initiatives to expand globally.
Transition Networks has established a logistics center at the
Austin Taylor facility.
We are exploring strategic alternatives for Austin Taylor’s
metal works business.
Strong Financial Results











Public Company Since 1981
Listed on the NASDAQ
2010 Revenues
52-Week Range (3/15/2011)
Total Assets (12/31/10)
2010 Net Income
2010 Earnings Per Share
Dividends Per Share
Stockholders Equity (12/31/10)
Market Cap (3/5/2011)
Shares Outstanding (12/31/10)
Every Year Profitable
Stock symbol: JCS
$120,072,310
$16.40 - $10.08
$109,070,227
$9,715,433
$1.15
$0.59
$91,396,693
$116,679,000
8,422,890
Strong Financial Results











Public Company Since 1981
Listed on the NASDAQ
Q1 2011 Revenues (3/31/2011)
52-Week Range (3/31/2011)
Q1 2011 Total Assets (3/31/2011)
Q1 2011 Net Income (3/31/2011)
Q1 2011 Earnings Per Share
Q1 2011 Dividends Per Share
Stockholders Equity (3/31/2011)
Market Cap (3/31/2011)
Shares Outstanding (3/31/2011)
Every Year Profitable
Stock symbol: JCS
$31,022,802
$16.40 - $10.08
$110,317,973
$2,557,838
$0.30
$0.15
$92,959,024
$129,779,000
8,432,658
Technology
Advancements
Evolving
Business
Models
Changing
Workforce
Business Requirements
Infrastructure
Consolidation
Ubiquitous Remote Access
Mobility
VDI
Switching
Disaster Recovery
Business Continuity
(Virtual Desktop Infrastructure)
Storage
Managed Services
Networking
 Secure Access to Business Critical Applications
 Any where … Any time … Any device
 Moving toward the Post PCWorld … Device Independent … BYO
 Market Focus
 Historical K-12
 Today & Future
1.
2.
3.
4.
Commercial Enterprise (50 to 1,000 users)
Healthcare
Government
K-20 Education
 Gartner Predicts $65.7 billion in VDI revenue and 49
million users in 2013
 VDI revenue growth from $1.3 billion in 2009 to $65.7 billion in 2013.
 VDI grew by 14% in 2009 and will have a compound growth rate from 2009 to 2013
of 113% each year.
 Reasons for VDI market growth:
 Green technology, companies save money by increasing life cycle of hardware,
consolidate hardware, decrease energy consumption and recycle current hardware.
 Increased efficiency, productivity and reliability.
 Standardizes the infrastructure, increases up time, decreased RTO (Recovery Time
Objective) and rapid deployment of infrastructure.
 Gartner’s Top 10 Strategic Technology Trends
1.
2.
3.
4.
5.
6.
Cloud Computing
Mobile Applications & Media Tablets
Next Generation Analytics
Social Analytics
Social Communications and Collaboration
Video
9.
Context-Aware Computing
Ubiquitous Computing
Storage Class Memory
10.
Fabric-based Infrastructure
7.
8.
Suttle
2011 Key Objectives
 Expand Markets Geographically
 Expand efforts in Latin America Market (LAM)
 Integrate Austin Taylor and leverage into EMEA
 Define APAC Entrance Strategy
 Invest in Technology and Operational Capabilities
 Evolve Infrastructure to support market expansion and new product
platforms.
 Outside Plant, Fiber, Active
 Automation
 Advance 3 Main Product Initiatives
 Home Networking
 Connectivity
 Outside Plant/Configurations
Global Product Strategy
Home Networking
Actives
Passives
G.hn and G.hem| Homeplug | HPNA| MOCA |
xDSL Gateways
xDSL Splitters | Balluns | Diplexers | Filters |
Video Products
Global Product Strategy
Connectivity
Copper
Fiber
Tool-less Jacks & Blocks | Protection
Line Modules | Bridge Modules
High Count Termination | Optical Components
Global Product Strategy
OSP/Configurations
Plastic
Metal
Splice Closures | Building Entrance | NEMA Boxes
Next Gen SOHO Enclosures | OSP Rated
Enclosures
Fiber/Copper X-Connects
Global Market Strategy
Americas
EMEA
Product and Customer
Expansion
Focusing on emerging
markets such as Brazil
Integrate Austin Taylor including
channel and customer base
Focus on Home Networking and
copper connectivity products
APAC
Formulating strategy for
expansion into the APAC
market
Identifying key customers
Transition Networks
Strategic focus
 Transition Networks supports communication of various products
applications and services over fiber optical media
 Staying focused and expanding on identified markets
 Service Providers
 Telecom
 Internet Service Providers
 Cell phone towers connectivity (Backhaul)
 Security & Surveillance
 Connectivity for Security cameras
 Government
 Military, Cities, State/Province
 Retail
 Connectivity for cash registers, warehouse devices, wireless access points
 Enterprise
 Industrial
 Energy, Manufacturing, Transportation
 Education
Strategic focus
 Vertical focus areas
 New product development for specific vertical markets
 New software capabilities as key differentiator
 Certifications & approvals
 Investment in New equipment to support products
 Geographic expansion of all verticals
 Adding resources throughout the organization
 More marketing efforts – Social media, tradeshows, web
development
Strategic focus
 Key groups expanded




R&D; emphasis on software
Test, Verification, Interoperability
Tech Support
Global Sales Engineering & Business Development
 Process Improvement
 Customer escalation system
 Development Verification Testing (DVT)
 Globalization
 New Warehouse in Europe
 Started transactions in additional currencies
 Better localization
Thank you