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1 Investor Presentation Craig Hallum Roadshow May/June 2006.

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Presentation on theme: "1 Investor Presentation Craig Hallum Roadshow May/June 2006."— Presentation transcript:

1 1 Investor Presentation Craig Hallum Roadshow May/June 2006

2 2 Forward-looking Statements in this Presentation Include various risks and uncertainties Actual results may differ materially from those in the forward-looking statements Investors are directed to the Company's filings with the Securities and Exchange Commission For example Form 10K, 10Q, etc. Includes a more complete description of the risks and uncertainties relating to forward looking statements made by the Company Also includes a description of other aspects of the Company's business


4 4 Income Statement – Q1 2006 vs Q4 2005 Q1 2006Q4 2005 Proforma* *Q1 2006 and Q4 2005 results exclude nonrecurring charges/(benefits) of $1.1M and ($1.0)M, respectively Proforma* Total revenue$ 112.0$ 128.9 Gross margin16.714.9%15.512.0% Operating expenses24.922.2%24.719.1% Operating (loss)/income(8.2)(7.3%)(9.2)(7.1%) Non-operating expense(7.0)(6.3%)(0.4)(0.3%) Income before tax(15.2)(13.6%)(9.6)(7.4%) Net income$ (15.3)(13.6%)$ (8.9)(6.9%) EPS $ ( 0.39)$ (0.22)

5 5 Balance Sheet – 3/31/06 vs 12/31/05 3/31/06 12/31/05 Cash & Marketable Securities $ 78.2$ 80.1 Accounts Receivable 69.270.9 Inventories 49.966.4 PP&E 8.77.2 Other Assets 32.239.2 Total Assets $ 238.2$ 263.8 Accounts Payable 66.374.7 Accrued Liabilities 28.930.9 Other LT Liabilities 3.03.0 Equity 140.0155.2 Total Liability / Equity $ 238.2$ 263.8

6 6 2005 10-K and Q1 10-Q Filing Update Nasdaq granted extension for filing10-K and 10-Q until July 7 and July 17, respectively Believe we will be able to meet deadlines Audit committee investigations now substantially complete Import/export findings with OFAC and BIS for review China and revenue recognition reports being drafted KPMG currently reviewing work of investigators Findings Import/export situation results in a handful of reported possible violations, significantly less than originally anticipated No major findings at this point in China or revenue recognition investigations

7 7 Restructuring Plan Delivering Improving Financial Results Core projection business focus Alternatives for wireless initiative and The University Network expected to be complete in late Q2/early Q3 Reduced quarterly operating expenses Headcount down 15% worldwide Lower infrastructure costs Control of discretionary spending Improved gross margins Expect to achieve targeted range of 16 to 18% in Q2 Supply chain efficiencies New products shipping now resulting in lower product costs (volume shipments a little later than originally planned but now ramping)

8 8 Major Restructuring Initiatives Focus on largest and most profitable international geographies UK, France, Germany, Nordics, Australia, China, India Focus on largest, most profitable and fastest growing US channels Retail, PC Distribution, direct fulfilled Driving supply chain efficiency to reduce product costs Leveraging new contract manufacturing relationships Changing the game regarding key business terms with partners Improving inventory velocity and touches between contract manufacturers and end user customers Driving end user awareness and preference to pull product through retail, our web store, and other channels where customers want to buy


10 10 Installation / Integration Meeting Room Value / Mobile Industry Leading Products CommercialConsumer Home Cinema Home Entertainment IN24 and IN26LP 120 8xx Family SP777 Home Theater IP74 and IN76 IN72 LP 600 and 640

11 11 Consistent Award Winning Products IN72, IN74, IN76: CES Innovations Award Winners, January InFocus ScreenPlay 5700: “Best Buy” and “Test Winner” for “cinematic dexterity” and “fine detail response.” What Projector? UK, August InFocus ScreenPlay 4805: Group Test Winner described as “The Swiss army knife of projectors.” WHAT HI FI? Sound and Vision – UK, August Global industry awards recognize our excellence in product design and innovation IN72: CEA Technology is a Girl’s Best Friend Winner, January IN72: PC Magazines Last Gadget Standing Finalist, January

12 12 And the award goes to….

13 13 Strong Channel Position #1 market share in the business and consumer retail projector market #1 market share in PC Distribution #1 recognized brand among projector buyers Source: NPT Intellect, TFCInfo

14 14 Low Cost Supply Chain ODM Partners: Foxconn, Funai, Delta. Joint Venture: SMT, a JV between InFocus and TCL (China) Supplier to parent companies and OEM vendor to third parties 50% of profits and royalty stream to InFocus Use lowest cost resources on mainstream product Invest InFocus R&D on breakthrough innovations


16 16 Our Market Is Growing *DTC Q1 2006 Forecast

17 17 Key Industry Growth Trends Growth in Consumer (Home Theater) and Educational markets Home Theater expected to grow 65% annually through 2008 (per IDC) Total market is 1/3rd education that is less than 30% penetrated (PMA,SRI) Growth in retail channel 2004 thru 2007 CAGR for the retail channel is 55% (IDC) Growth in value categories at $799 to $1,099 ASP “sweet spot”

18 18 Major Growth Opportunities Less than 4% of mobile professionals carry a projector when they travel. 80% of small businesses don’t use projectors Only 5% of conference rooms are projector enabled. There is only 1 projector for every 3 to 4 classrooms (NA). Over 13 million “big screen displays” sold to consumers in 2005. Over 20 million gaming consoles sold in USA in 2005 Source: DTC, IDC, iSuppli, Jupiter Research, PMA, QED

19 19 Market Growth Drivers Over the Next 12 Months Lower ASPs Increased awareness CE retailer adoption, validation of projection category New content / devices HD gaming consoles, HD broadcast content, HD DVD, iPod type devices New technologies driving device costs down


21 21 InFocus – Focused Positioned for profits 80/20 geographic / channel distribution plan World-class operations – manufacturing and logistics Lean SG&A cost base Positioned for continued leadership Positioned for growth Consumer insights driven, marketing company Bring to market award winning, breakthrough products Drive demand with consumer focused marketing

22 22 New Products in 1H 2006 Introduced new home and business projector models – all new design language based on customer research Now it’s about usage, usability and style – beyond feeds and speeds

23 23 Brand Health - Why it’s so important…. AwarenessKnowledgeDesire Consumer Purchasing Cycle SatisfactionPurchase Metrics Total Awareness Aided Un-Aided Brand equities Emotional (Personality) Rational (Benefits) Consideration Persuasion Recommendation Satisfaction Loyalty Advocacy Sales / Revenue

24 24 Brand Personality Traits

25 25 1H Brand Campaign: Print Creative Target Audience: Young Indulgent Male Publication: Golf Digest Sporting News

26 26 In Summary We have a strong competitive position An industry and market share leader Breadth and depth of product portfolio The market opportunity for our products is robust Improving financial results Restructuring substantially complete-lower costs Supply chain efficiencies increasing gross margins New products shipping positioning us for revenue growth as we enter 2H 2006. Strong balance sheet


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