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1 NASDAQ: AEY Company Presentation. 2 Safe Harbor Statement This presentation may contain forward-looking statements. All statements other than statements.

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Presentation on theme: "1 NASDAQ: AEY Company Presentation. 2 Safe Harbor Statement This presentation may contain forward-looking statements. All statements other than statements."— Presentation transcript:

1 1 NASDAQ: AEY Company Presentation

2 2 Safe Harbor Statement This presentation may contain forward-looking statements. All statements other than statements of historical facts, which address activities, events or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements. These statements are subject to risks and uncertainties, which could cause actual results and developments to differ materially from these statements. A complete discussion of these risks and uncertainties is contained in the Companys reports and documents filed from time to time with the Securities and Exchange Commission.

3 3 At a Glance TickerAEY ListingNASDAQ Stock Price (2/28/11)$3.16 Market Capitalization (2/28/11)$32.1 million Avg. Volume (3 Mos.)29,362 Sales (TTM 12/31/10)$46.3 million EBITDA (TTM 12/31/10)$7.7 million Net Income (TTM 12/31/10)$4.1 million EPS – Fully Diluted (TTM 12/31/10)$0.40 Number of Employees (12/31/10)122

4 4 Introduction to ADDvantage

5 5 Who We Are One of the largest sellers and service providers of new and refurbished CATV electronics equipment in the U.S. market Broad network of repair centers providing non-warranty repair services Skilled team of employees with expertise in CATV networks Strong subsidiary brands with long histories of successful operations Trusted supplier to more than 1,300 customers Alliances with leading OEMs including Cisco, Motorola and Fujitsu Frontech Extensive inventory and a reputation as the CATV industrys On Hand, On Demand equipment supplier

6 6 Our History 1985 TULSAT acquired by David and Ken Chymiak November 1999 Lee CATV, a wholly owned subsidiary of ADDvantage Media, merged with Diamond W Investments March 2001 ADDvantage Technologies acquired NCS Industries Nov 2003 ADDvantage Technologies began trading on AMEX. Ticker symbol AEY. September 2007 ADDvantage Technologies begins trading on the NASDAQ September 1999 Shareholders of TULSAT assumed control of ADDvantage Media through a reverse merger December 1999 ADDvantage Media changed name to ADDvantage Technologies Group May 2001 ADDvantage Technologies acquired Fero-Midwest (dba ComTech Services) August 2005 ADDvantage Technologies acquired Jones Broadband International October 2006 ADDvantage Technologies acquired assets of Broadband Digital Repairs June 2006 ADDvantage Technologies acquires the assets of Broadband Remarketing International November 2007 ADDvantage redeems outstanding shares of preferred stock May 2010 NCS named U.S. distributor for Fujitsu Frontech Sept 2004 ADDvantage redeems outstanding shares of convertible preferred stock

7 7 A National Presence NCS Industries Warminster, PA Tulsat-Atlanta Suwanee, GA ComTech Services Sedalia, MO Tulsat-Texas New Boston, TX Tulsat-Nebraska Deshler, NE Broadband Remarketing International Broken Arrow, OK ADDvantage /Tulsat Broken Arrow, OK

8 8 Corporate Organization ADDvantage Dave Chymiak Chairman ADDvantage Dave Chymiak Chairman Tulsat-Nebraska John Denner (Service) John Noojin (Sales) BRI David Bennett Director of Ops Tulsat Corp. Dave Chymiak President Tulsat-Texas John Lopez (Service) Tulsat-Atlanta Russ McGarr (Service) Bruce Prescott (Sales) ADDvantage Ken Chymiak CEO ADDvantage Ken Chymiak CEO Comtech Services Nick Ferolito President/GM NCS Industries Fred Baker VP/GM Finance and Accounting Information Technology Human Resources ADDvantage Scott Francis CFO ADDvantage Scott Francis CFO

9 9 Deep Industry Relationships Distributors

10 10 Current Market Trends Cable service providers are the leading triple play service providers in the U.S. While down from historical highs, cable industry capital expenditures in the U.S. still remain strong Continued investment needed to support HD and 3D TV as well as other video and data providers Recovering U.S. housing market should lead to an additional boost in capital spending Underpenetrated Latin American markets represent a growth opportunity (1)National Cable Telephone Association (2)U.S. Census bureau Video and RGU Trends (Millions) (1) Capital Expenditures (Billions) (1) Housing Starts (Thousands) (2)

11 11 What Makes ADDvantage Different?

12 12 Investment Highlights Differentiated business model positions ADDvantage as a key component of the CATV value chain Deep industry relationships with service providers, OEM partners and other distributors Well positioned to capitalize on future growth opportunities Consistently strong cash flow generation and high margins Strong management team and highly skilled employee base

13 13 Opportunities for Long-Term Growth Expansion of Existing Initiatives Long-Term Cash Flow Growth Pursuit of New Opportunities Improved CATV capex spending environment Expansion in Latin America Additional value- added services for current OEM partners Enhanced Operational Efficiencies Relationships with new OEM partners Enhanced broadcast product line Additional services Expansion into the Telco video market Selected acquisitions Inventory efficiencies Fully automated inventory management system Review sales strategy

14 14 Products and Services

15 15 Product and Service Overview Nearly $32 million in new product sales represented approximately two thirds of total FY 2010 revenue Refurbished product sales of $9.5 million accounted for an additional 20% of FY 2010 revenue The vast majority of remaining revenue ($5.7 million) came from ADDvantages repair service operations FY 2010 Revenue by Business Line

16 16 Customers

17 17 Customers Top MSOs – Time Warner, Cox, Comcast, Charter Smaller, mid-market cable companies and telcos Distributors/brokers International market, primarily Latin America, either directly or indirectly through brokers Private cable systems – hospitals, universities, hotels

18 18 OEM Partners

19 19 Relationship extends back to 2001 (Scientific Atlanta) Achieved Premiere Partner status for Ciscos Service Provider Video Technology Group (SPVTG) Distributes virtually all SPVTG products and has exclusive relationship for certain legacy products Authorized third-party non-warranty repair center for certain legacy products Relationship began in 1978 Stocking distributor for Motorola Mobility and predecessor entities since 2004 One of only two distributors in the U.S. for Motorola Broadband Access Networks products Ability to repair a broad range of Motorola products Currently the master stocking distributor for certain Fujitsu products in the U.S. Products include video encoders and decoders Products target the satellite and broadcast markets New relationship (March of 2010) Key OEM Relationships

20 20 Supporting OEM Partners OEM Partner Relationship SinceProducts 1992Headend 2003Other Hardware 1992Headend 2000Test Equipment 2003Headend

21 21 Financials

22 22 Income Statement Summary FY 2010FY 20091Q 20111Q 2010 Net sales47,30642,2449,22910,219 Gross profit14,45612,9282,8803,330 Income from operations7,5545,7681,3811,599 Net income4,1863, Earnings per share EBITDA7,9526,1791,4691,698

23 23 Balance Sheet Summary 12/31/109/30/109/30/09 Cash10,3998, Inventory, net28,58927,41133,167 Current assets43,24042,77539,544 Total assets52,49252,26049,433 Current liabilities5,9385,9065,483 Long-term debt11,60512,05813,993 Equity33,93433,04428,907

24 24 Summary

25 25 ADDvantage Investment Thesis ADDvantage represents a strong value proposition relative to its recent trading range The Company has developed a unique and valuable position in the industry with a broad set of customer and OEM partner relationships Numerous opportunities exist to leverage this position and increase cash flow growth including: Improved cable capex spending environment Expansion in Latin America Addition of new OEM partners and customer verticals Expansion into the broadcast industry Value-added services for OEM partners Additional repair services Continued monetization of existing inventory These opportunities represent meaningful potential growth

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