telecolead.com, February 2018 Carriers, consumers and ... · LISTED SGSI. 15. Through our sector...
Transcript of telecolead.com, February 2018 Carriers, consumers and ... · LISTED SGSI. 15. Through our sector...
Carriers, consumers and enterprises will spend ~$1.5 trillion on telecommunications services.
LISTED SGSI
NOVEMBER 2018INVESTOR PRESENTATION
© 2018, Spectrum Global Solutions, All Rights Reserved
telecolead.com, February 2018
This presentation contains forward-looking statements. The statements contained in this presentation that are not statements of historical fact, including but not limited to,statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate,“ "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan,""potential," "project," "seek,“ "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trendsand the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number ofrisks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and includestatements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward lookingstatements are not guarantees of future performances, and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filingsmade by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. TheCompany expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company'sexpectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based except as required by applicable law andregulations.
FORWARD LOOKING STATEMENTS
2LISTED SGSI
The 5G rollout will create 3 million American jobs and drive over $500 billion U.S. GDP growth.
1991 1998 2008 20200.1 Mb/s 1.0 Mb/s 15 Mb/s 1.4 Gb/s
WE ENGINEER, UPGRADE, INSTALL AND MAINTAINNEXT-GENERATION TELECOMMICATION NETWORKS
3LISTED SGSI
We are a comprehensive, single-source provider for the development, deployment and maintenance of network infrastructure
Our Services range in scope from a single activity, to multi-year, multi-region large scale turnkey development contracts
Our experience encompasses national/international programs worth over $1.5 billion, management of 1500+ staff
We are professionally registered in 49 States, 3 US territories (Puerto Rico, USVI, Guam), 6 Canadian Provinces in support of our clients.
ABOUT SPECTRUM GLOBAL
Spectrum Global Solutions have successfully executed on projects across the United States and internationally. We provide cost-effective, scalable and robust solutions for communication carriers, utilities, enterprise
clientele, OEMs and professional service companies.
4LISTED SGSI
COMPANY HISTORYFeb 2017
ACQUISITIONS:AW Solutions Inc.,
AW Solutions Puerto Rico LLC. andTropical Communications Inc.
(Formed respectively 2006, 2011 & 1984)
Jan 2007
FORMATIONMantra Venture Group Formed
Dec 2017
RENAMINGSpectrum Global
Solutions, Inc.
Feb 2018
ACQUISITIONS: ADEX Corporation and ADEX Puerto Rico LLC
(Formed respectively 1993 & 2008)
LAYING FIBERConnecting metro and local areas, telecom sites and facilities withnew and upgraded fiber
CONSTRUCTING NEW SITESWorking as the local contractor for new site design, construction andinstallation
INSTALLING & CONNECTING LOCATIONSDelivering new network infrastructure
ENABLING NETWORKSONE OF THE FEW ELITE, NATIONWIDE, FULL-SERVICE ENGINEERING, CONSTRUCTION, INSTALLATION, MAINTENANCE AND PROFESSIONAL SERVICE FIRMS
5LISTED SGSI
LONG HAUL AND LOCAL FIBER TO METRO LOCATIONS
COMMISSIONING CELL TOWERSAND SMALL CELLS
LAST MILE CONNECTIONSTO LOCAL NODES
ENABLING PRIVATENETWORKS
CARRIERS
AGGREGATORS
ORIGINAL EQUIPMENT MANUFACTURERS UTILITIES
PROJECT MANGEMENT ORGANIZATIONS (PMOs)
OUR CUSTOMERSTHE LARGEST AND MOST RESPECTED COMPANIES IN THE INDUSTRY
6LISTED SGSI
ENTERPRISE/GOVERNMENT
ROGER PONDER CEO & DirectorMr. Ponder has served as a director of the Company since April 2017. Mr. Ponder has been the President and Chief Executive Officer of Summit Broadband LLC, andSummit Capital Advisors, LLC, a provider of consulting services to private equity and institutional banking entities in the telecommunications, cable and media/internetsectors since August 2009. Mr. Ponder has served as a member of the board of directors of InterCloud Systems, Inc., and served as its Chief Operating Officer fromNovember 2012 to March 2015.. From January 2005 to August 2009, he was the President - Midwest/Kansas City Division of Time Warner Cable. Mr. Ponder was amember of the United Way Board of Trustees - Kansas City from January 2006 to January 2011. Mr. Ponder started his telecommunications career with Winter ParkTelephone in 1972 and after many successful years retired from Time Warner as President/CEO of Time Warner Cable-Kansas City Division in 2009. Mr. Ponder hasheld many senior executive leadership positions in the telecommunications, broadband and entertainment industry with Time Warner, Sprint and United/SprintManagement Company. During his career he also held the positions of President of Oceanic Communications/TWC Hawaii and prior to that Vice President Business &Strategic Planning, Time Warner Telecom in Denver Mr. Ponder received his B.S. from Rollins College in Business Administration and Economics. Mr. Ponder bringsextensive business development, strategic planning and operational experience to the Company.
INDUSTRY EXPEIENCE PUBLIC MARKETS CUSTOMER RELATIONSHIPS
45 YEARS YES
INDUSTR Y EXP EIENCE P UB LIC MAR K ETS CUSTO M ER R ELATIO NSH IP S
40 YEARS YES
MANAGEMENT
7LISTED SGSI
KEITH HAYTER President & DirectorMr. Hayter has served as a director of the Company since April 2017. Mr. Hayter also served as the Chief Executive Officer and President of AW Solutions Inc. andAW Solutions Puerto Rico LLC since November 2006. Mr. Hayter has been the Vice President and General Manager of Alcoa Wireless Services from November 2001to November 2006. Mr. Hayter has been the Principle and Vice President of Pacific 17 from April 1997 to November 2001. Mr. Hayter has been the Vice President ofKercheval Engineers April 1993 to April 1997. Mr. Hayter also served in both the US and British armies. Mr. Hayter has held many senior executive leadershippositions in the telecommunications and broadband industry. Mr. Hayter has over 40 years of international and national industry expertise in operations, businessdevelopment, operational financial management, sales/marketing and business start-ups, business integrations, mergers, acquisitions and divestitures, managingbusinesses with headcounts of over 450 personnel in multiple service locations generating revenues of over $120 million a year. Mr. Hayter brings extensive multi-national experience in the start-up, development, management and growth of companies in the telecommunication, engineering and construction industry.
42% INSIDE OWNERSHIP
PROVEN OPERATOR IN THE HIGH-GROWTH telecom infrastructure and Enterprise Solutions market
ONE OF THE FEW ENGINEERING, PROFESSIONAL SERVICE AND INSTALLATION COMPANIES able to provide a full suite of telecom and enterprise services and the ability to bundle its services for telcos, all delivered by highly-experienced engineering teams
PROVEN TRACK RECORD with top-tier Fortune 1,000 companies worldwide
REPLICABLE, SCALABLE SERVICES MODEL supported by industry-recognized strategic partnerships
EMBEDDED CUSTOMER RELATIONSHIPS FOSTER REPEAT CUSTOMERS at minimal customer acquisition costs
PROFESSIONALLY REGISTERED IN 49 STATES, 3 US TERRITORIES (PUERTO RICO, USVI, GUAM) AND 6 CANADIAN PROVINCES
INTERNATIONAL EXPERIENCE IN ASIA AND CENTRAL AND SOUTH AMERICA
PROVEN, EXPERIENCED MANAGEMENT TEAM with extensive industry, sector and public market experience
INVESTMENT HIGHLIGHTSGROWTH COMPANY HIGH-GROWTH MARKETS SEASONED TEAM UNIQUE SERVICES
8LISTED SGSI
TELCOS’ RACE TO GIVE CUSTOMERS MORE SPEED, BANDWIDTH AND FUNCTIONALITY CREATES A GROWTH SECTOR FOR
ENGINEERING & INSTALLATION FIRMS
9LISTED SGSI
3,0764,384
5,9808,274
12,042
17,457
2018 2019 2020 2021 2022 2023
US MOBILE DATA GROWTH – 4x (‘000 of Terabytes)
INCREASED WIRELESS COVERAGE 5G, 300,000 new sites FirstNet, 20,000 –40,000 new sites nationwide Dish Network, 30,000 –50,000 new sites FCC to auction new Spectrum for carriers / services 4G Maintenance and upgrades of 190,000 sites Small cell deployments - 849,000 new sites IOT & BYOD technology explosion Enterprise & Private new networks
5G is really where the world's going. We are about 5G and building out the next layer of connected
consumers.
INCREASED FIBER CONNECTIONS
$130.0 B to $150.0 B in new fiber investment 5-7 years (Deloitte)
Ericsson Traffic Exploration, 2018
Tim Armstrong, CEO, OATH, a Verizon SubsidiaryJune 8, 2018 – CNBC Interview Excerpt
GROWTH DRIVES SPENDOUR MARKET IS IN GROWTH MODE
10LISTED SGSI
US CARRIER CAPEX SPENDING($US Billions)
$50.2$51.8
$53.4$55.2
$57.0
2017 2018 2019 2020 2021
1. RULE CHANGE: Contractors must now bundle services, respond more timely, and provide seamless delivery of multilocation projects. Michael O'Mara, CEO, NTA
CRITERIA REVIEW Years Operational Nationally-Licensed Engineers on Staff No. of Active MSAs Range of Services OEM Expertise
METRIC 10+Customer and 2/3/4G
experience
PREFERREDAbility to service multiple
states
DEDICATEDBenefit to inhouse vs. sub-
contracting
50+Recognized performance
FULLAbility To provide
comprehensive services through one company.
YES
2. Telcos expectations for contract award have increased
11LISTED SGSI
INSTALLATION DEMAND SPIKES, BUT SUPPLY OF QUALIFIED FIRMS IS LOW
A MARKET TREND WE CAN LEVERAGE
3. Previous sector contraction, plus current firms’ inability to meet service standards are creating attractive acquisition opportunities.
ENABLING ~$150B IN TELECOM CAPEX UPGRADES PLANNED THRU 2023
WE ARE TRUSTED AND QUALIFIED TO BUILD AND SERVICE END-TO-END COMMUNICATION NETWORKSSERVICES
PROJECT MANAGEMENT RF DESIGN ASSET AUDIT / REVIEW
R.O.W / R.O.ELEASING/ACQUISITION ZONING
REGULATORY COMPLIANCE ENVIRONMENT GEOTECHNICAL STUDIES
12LISTED SGSI
North American enterprises are forecast to deploy a total of 400,000 small cells during 2018, up compared to 292,000 the previous year.
Small Cell Forum, 2018
DRONE SERVICES / STRUCTURAL MAPPING
ENGINEERING CIVIL STRUCTURAL ELECTRICAL
PERMITTING
CONSTRUCTION MANAGEMENT / INSPECTION
CONSTRUCTION (OSP / ISP)INSTALLATION / TECHNICAL
SERVICES
WAREHOUSING, PROCUREMENT &LOGISTICS
STAFFING SOLUTIONSMAINTENANCE &
DECOMMISSIONING
1313SGSI 1313LISTED SGSI
CASE STUDY #1
CASE STUDY #2
Client: Tier 1 National CarriersProject Locations: Alabama, California, Florida, Louisiana, Mississippi, New Mexico, TexasProject Details: Deployment of over 450 fully equipped copper and fiber splicers, installation and repair technicians, T-40 line crews, engineers and other personnel to repair and restore voice and data telecommunications networks and cabling after natural disaster eventsClient Benefits: Cost effective, single source, multi-region, rapid response and resource sustainable full service vendorRevenue Value: $80 million
Emergency Telecommunications Restoration Services
Client: Tier 1 National Infrastructure AggregatorProject Locations: US, Puerto Rico, USVIProject Details: Site Acquisition/Zoning, A&E Design, Structural Engineering, Asset Audits, Permitting, Construction Management/Inspection, Construction, Modifications, Installations, Logistics and Procurement for the development and Installation of macro sites, small cells and fiber optic networks.Client Benefits: Cost effective, single source, multi-region, discrete and turnkey vendor for full service offeringsRevenue Value: $43 million
Infrastructure Development Services
OUR FAST GROWTH IS DUE TO CLIENTS WHO FOUND VALUE IN OUR..
NOW, SEE HOW WE GROW EVEN MORE
WE CREDIT OUR GROWTH TO OUR..
SEE SELECT PROJECTS AND OUR GROWTH PLANS
14LISTED SGSI
OUR TRACK RECORDUnparalleled Industry and Professional Staff Experience
PROJECTS COMPLETED – 150,000+ National & International
STAFFING SOLUTIONS – 138,000+ Personnel Database
SITES ENGINEERED – 70,000+ National & International
SITES CONSTRUCTED/INSTALLED – 8,500+ Towers, Antennas, Small Cells, Facilities
FIBER AUDITED – 3,456,000 Strand Miles
FIBER INSTALLED – 586,944 Strand Miles
SAFETY RECORD - 100% Accident Free Zero lost work days, Zero Incidents
CLIENT RE-ENGAGEMENTS - 98%+
15LISTED SGSI
Through our sector research and industry relationships we have identified multiple companies who meet our acquisition criteria and can be immediately accretive to earnings. We look for…
CRITERIA Synergistic Strategic Value Accretive to Earnings & Growth History of Profitability
Strong Management/Retention Long Term Customer Relationships Sufficient Size to Add Scale
CONSIDERATIONS Clean (No Issues) Ease of Acquisition Speed of Acquisition Cost : Value and return to
shareholders
Ease of Integration Geographic Location/Overlap New Clients New Business Lines
Established and reputable wireless and wireline companies Servicing carrier, enterprise, government, utilities and OEM’s Strong management teams and controls Profitable Structured for growth Excellent client relations/retention Private or public, clean companies
STRATEGIC AND TACTICAL ACQUISTIONSGROWTH OPPORTUNITY #1
16LISTED SGSI
SPECTRUM REVENUE PROJECTIONS POST-ACQUISITIONS
($USD Millions)
$10.7 $11.5 $12.0 $13.5
$22.0 $23.0$26.0
$6.0
$7.5
$16.0
2017 Actual 2018Forecasted
2018 Projected 2019 Projected
SGSI ADEX Acquisition 2 Acquisition 3
$41.0 P
$31.5 F
$63.0 P
1. Focus sales team at new service provider targetsThe inability of competitors to meet the recent increase in service provider criteria puts us in an advantageous position to win more contracts
GROW MARKETSHARE AND LEVERAGEORGANIC REVENUE AND MARGIN GROWTH
While assessing highly-accretive acquisition opportunities, we will close on organic market opportunities to grow our current streams of infrastructure and staffing service revenues. We will….
GROWTH OPPORTUNITY #2
2. Expand corporate marginsThe low number of qualified services firms in the expanding market is raising fee pressures on competing carriers for our in-demand services. Also, the bundling of services boosts revenues and margin potential on projects
3. Execute new OEM and PMO partnershipsNew market entrants create expanded opportunities for our comprehensive suite of services. Targeting companies in the sector that SGSI has not marketed to or penetrated to-date.
4. Expand and deepen relationships with current clientsExpansion of service footprint and new services allows SGSI to provide a deeper and wider breadth of services fulfillingmore in-demand deployment service needs over a longer period of time.
5. Execute on coordinated sales strategyLeverage operating subsidiaries clients, services and relationships to maximize cross-selling opportunities
17LISTED SGSI
PERFORMANCE METRICS & FINANCIAL REVIEW
PROJECTS TO DATE
150,000 +2018 REVENUE FORECAST
$32 M2018 9 MONTH REVENUE GROWTH
543 %TRADING AS % OF SALES
7.5 %
18LISTED SGSI
LISTED SGSIINDUSTRY:TELECOMMUNICATIONS $2.4 M MARKET CAP $0.33 SHAREPRICE 42% INSIDE OWNERSHIP
$0.1
$10.7
$32.0
2016 2017 2018
REVENUES ($M)(Excludes pending acquisition)
GROSS MARGIN TRENDING ($M)(Excludes pending acquisition)
KEY FINANCIAL METRICS
$0.1
$1.4
$5.2
2016 2017 2018
301,787257,780
381,217438,400
2016 2017 2018 2019
BILLABLE STAFFING HOURS
$0.0$20.0
$137.0
2016 2017 2018
OPPORTUNITY PIPELINE ($M)
19LISTED SGSI
2017 ASeptember 30
9M2018 ANET REVENUE 10,775,456 28,604,856 Cost of Revenue 9,411,552 24,436,225
GROSS PROFIT 1,363,904 4,168,631 Operating Expenses 3,058,116 4,688,369
EARNINGS (LOSS) FROM OPERATIONS - EBITDA (1,694,212) (519,738) Depreciation and amortization 239,051 194,043
Gain on disposal of subsidiaries 0 (577,299)
Accreditation on Conv Debt 1,603,407 1,477,620
Gain /Loss in Change in FV 2,093,536 175,889
Interest Expense 451,123 796,866
Gain/loss extinguishment of lia 0 (290,814)
Loss on Settlement of Debt (3,960,048) (574,375)
Stock compensation 3,976,068 (1,116,808)Impairment Loss 1,164 0Initial Derivative Expense 2,436,259 0Taxes 42,554 217,419Noncontrolling Interest (IS) 0 (53,429)Preferred Stock Redemption 0 152,187
NET INCOME (8,577,345) (3,154,653)
ADJUSTMENTS TO EBITDADuplicate accounting people - 80,682 Legal settlements 0 6,500Severance 0 42,000Legal fees -ADEX 0 58,663Exchange Gain & Loss (6,782) 0Legal & accounting acquisition and financing related 899,379 633,851Hurricane Impacts, Bad Debt 552,803
Investment Fees 0 -AEBITDA (248,812) 303,454
INCOME STATEMENT
20LISTED SGSI
Cash 301,080Accounts Receivable (Net of Allowance) 8,022,749Other Current Assets 16,126TOTAL Current Assets 8,339,955Property and Equipment 62,400Other Assets 3,854,971TOTAL ASSETS 12,257,326Accounts Payable 5,527,973Accrued Liabilities 867,295Current Maturities of Long-Term Debt 8,221,159Other Current Liabilities 6,032,521TOTAL Current Liabilities 20,658,299Long-Term Liabilities 0Other Labilities 0TOTAL LIABILITIESRedeemable Common Stock 0Preferred Stock, Common Stock, Additional Paid-in Capital, Accumulated Deficit (6,848,219)Other Equity 0TOTAL Stockholders’ Equity (6,848,219)TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 12,257,326
BALANCE SHEET
DAYS SALES OUTSTANDING (DSO)1Q2017
65.82Q2017
75.13Q2017
614Q2017
66.61Q2018
53.92Q2018
583Q2018
87.2AVERAGE DSO
66.8
21LISTED SGSI
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss (2,546,890)Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities 1,049,163Net Cash Used in Operating Activities (1,497,727)CASH FLOWS FROM INVESTING ACTIVITIES
Net Cash Used in Investing Activities 176,001CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash Provided by Financing Activities 1,593,913Effect of Exchange Rate Changes on Cash 0NET INCREASE IN CASH 272,187Cash, Beginning of Year 28,893Cash, End of Year 301,080
CAP STRUCTURE
CASH FLOW STATEMENT
COMMON SHARES OUTSTANDING 7,136,772
PREFERRED SHARES SERIES 1 (AS CONVERTED TO COMMON) 1,127,115
PREFERRED SHARES SERIES 2 (AS CONVERTED TO COMMON)* 0
WARRANTS (WAEP $7.89) 741,323
OPTIONS (WAEP $5.02) 0
22LISTED SGSI
INVESTORS and EXECUTIVE
Investor Relations
(561) 672-7068
Keith Hayter, President
(407) 260-0231
INVESTMENT SUMMARY CONTACT US
300 Crown Oak Centre Drive Longwood, Florida 32750
407-512-9102
spectrumglobalsolutions.com
LISTED SGSI
1. PROVEN MARKET OPERATOR in a high-growth telecommunication market segment
2. CLEAR, QUANTIFIABLE ORGANIC growth opportunities
3. NEAR TERM ACQUISITION OPPORUNITIES accretive to growth and synergistic
4. ONE OF THE FEW ENGINEERING AND INSTALLATION COMPANIES able to provide all services and bundle products for telcos
5. EMBEDDED RELATIONSHIPS FOSTERS REPEAT CUSTOMERS at minimal customer acquisition costs.rates
6. REGISTERED IN 49 STATES, 3 US TERRITORIES (PUERTO RICO, USVI, GUAM), 6 CANADIAN PROVINCES
7. PROVEN, EXPERIENCED MANAGEMENT TEAM with extensive industry, sector and public market experience.