FLYHT's Second Quarter Presentation 2014.
- 1. FLYHT Aerospace Solutions Ltd. TSX.V: FLY OTCQX. FLYLF August 2014
2. - 2 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Disclaimer 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 Companys financial position, business strategy, projected costs, future plans, projected revenues, objectives of management for future operations, the Companys 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 Companys 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 Companys 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 3. - 3 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF AFIRS Technology A six pound heavy-weight that will drive a cultural change on how an airline operates and manages its data. Works on any aircraft Continuous monitoring Safety and economic benefit Enhances all existing technologies Global coverage Expanding menu of applications Offers real-time data transmission Satellite based Iridium Network 4. - 4 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF The Solution More Than Tracking 5. - 5 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF FLYHT Products AFIRS Automated Flight Information Reporting System Regulatory certification for installation on 30 widely used aircraft types AFIRS 220 1,500,000 flight hour mark AFIRS 228B in the field and generating revenue AFIRS 228S Certified for safety services use AFIRS Dragon for Helicopters and light aircraft UpTime Introduced in 2004 Converts small data packets into valuable information Allows aircraft operators to manage and monitor operations AFIRS gathers, stores, analyzes and transmits data UpTime is a client-web interface that delivers information in real-time Reports to aircraft operators via e-mail, browser or integrated to systems 6. - 6 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Value Add Products FLYHTStreamTM An emergency data streaming mode Can be manually activated by the flight crew, ground support or automatically triggered by predefined emergency parameters FLYHTStream sends critical data such as global position, equipment status and black box information to ground-based operations Patent pending service uses the Iridium satellite network Flight Data Management (FDM) SMS Dashboard FLYHTFuel Automatically identify fuel consumption trends 7. - 7 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Investor Consideration Unparalleled, proprietary, patented and patent pending real-time data streaming technologies Commercial today with significant and growing base of customers Recognized global leader airline industry Saving customers money, time and driving efficiencies Scales to large multi-aircraft contracts Proven recurring revenue model with multi-year contracts Absolute customer satisfaction to date 8. - 8 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Capital Market Profilecontd at August 12, 2014 Share Price $0.37 Market Capitalization (per TSX:V) $62.8 million 52 week low $0.22- high $0.80 Shares (per TSX:V) 169.7 million Share Structure At June 30, 2014** Management, Directors and Officers Diluted 183 million Institutional Ownership % Approx. 40.0% Insider Holdings** 4.2% 2010 2011 2012 2013 1st 2014 Revenue $4.7 $5.5 $6.5 $8.0 $2.9 R&D Expenditures $5.8 $3.3 $2.4 $2.1 0 Net Loss $9.0 $6.5 $4.9 $4.1 $0.4 Financial Results Snapshot ($millions) 9. - 9 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Sierra Nevada Inc. Multi billion dollar private company Headquarters Reno Nevada Large US military supplier Will run secure UpTime Will use AFIRS to generate revenue 10. - 10 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Reported Revenue of $1.5 Recurring revenue (AFIRS UpTime usage) of $921,116, an increase of 12.9% Distribution expenses were $780,050, representing an increase of $99,185 R&D expenses were $(1.3) due to recovery from SNC China shipments started Airbus in service evaluation completed Second Quarter Highlights 11. - 11 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF MH 370 Kuala Lumpur conference May 26-27 The tragedy of complacency The track, alert, analysis approach Causing buying decision delays while regs developed We are in the thick of the hunt for change 12. - 12 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Competitive Analysis No other product offers breadth of AFIRS Satcom only included Aircell, Skytrac, Latitude ACARS over Iridium include ICG and Avionica FLYHTStream has no competitor Real time FOQA has no installed competitors EFB connections have no installed competitors AFIRS is certified for all of the above Patents and patent pending exist on the technology Proven cost savings OEM installs help the buying decision 13. - 13 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Market Drivers Need for better communications acknowledged in FANS and CPDLC AF447 and MH370 disasters leading to mandates Customer evaluations show savings of $100,000 per plane per year Airlines save money with better and more timely information reduce turn around time reduce fuel consumption have the right people in the right place at the right time reduce repair costs by having better information to make decisions 14. - 14 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Regulatory environment is a natural barrier to entry FLYHT holds patents on its technologies Obtained nearly 60 Supplemental Type Certificates (STC) for 30+ models Required for installation on each aircraft type Additional STCs are pending or in progress A decade of developing industry relationships Went through strenuous due diligence processes by customers, partners and regulators Massive Barriers To Entry 15. - 15 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Business Model Certify and Sell Kits Build Applications Recurring Revenue AFIRS 220 AFIRS 228B AFIRS 228S Fuel management Engine trending Cockpit data Exceedence reporting Bill for hourly flight usage per month Monthly charges for applications Hardware Software Usage 16. - 16 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Recurring Revenue Model Sell AFIRS with necessary engineering package to install and activate $35 to $60 thousand per aircraft for retrofit Factory install at Airbus - L3 pays FLYHT royalties Provide various functions on usage basis Operational features to provide cost savings for customer Voice and data connectivity to the cockpit for safety Average recurring revenue greater than $1200 per month per aircraft Recurring revenue gross margin 80% 17. - 17 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Turning Data into Information 18. - 18 - Aug (v.1) TSX.V: FLY OTCQX. FLYLF Customer Feedback FIRST is a key element to any fuel conservation initiative, it is the big M within the PEMC framework Plan, Execute, Measure, Correct. And the system does it accurately and timely, always. The dash-board functionality gives the Operations Manager the right information at the right time to make the best decisions. Now it is possible to act, on the spot, using actual and unbiased data. Also, the what-if capacity is widely used in scenario analysis, my company can discuss different operation scenarios and operation policies with immediate calculation of potential savings, without the need to perform special test flights or waiting for new flight data. FLYHT knowledge and flexibility to accommodate specific requirements is remarkable and makes the AFIRS and FIRS