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Telanetix Corporation (OTC BB: TNXI) Corporate Presentation October 2009. Safe Harbor Statement.
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Telanetix Corporation (OTC BB: TNXI) Corporate Presentation October 2009
Safe Harbor Statement This presentation includes forward-looking statements regarding Telanetix’s business, financial condition, products, competition, technology, customers and prospects that are subject to various risks and uncertainties that may cause actual results to differ materially from those referred to in the forward-looking statements. The forward-looking statements made in this presentation are based on information known to us today and we do not undertake any obligation to update them. We refer you to Telanetix's periodic filings with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q. These documents describe important risk factors that could cause actual results to differ materially from those contained in our projections and other forward-looking statements.
An Historic Shift: Communication is moving from Hardware to Software Paradigm Shift HARDWIRED Into the Devices and the Network SOFTWARE-BASED Flexible Devices, Separation from the Network
SMB Segment Spend Paying Too Much for a Solution that Doesn’t Fit Their Needs cBeyond • Lock-in model of Long Term Contracts • High Cost Features • Directory Assistance = $1.99/call • International Calling = $1.49/min • International Roaming = $1.29/min • Minimal Service Feature Innovation • Complex Purchase Process $37 Billion
Paradigm Change Disrupting the Business Communications Industry App or Service Provider Data Pipe Provider (DSL, Broadband, Wireless) Separation of the “Pipe” from the Application/Service allows • Reduced Cost • Enhance Features/Functionality • Greater Service Flexibility • Simplified Implementation
Disrupting Distribution Current Indirect Model SMB Market 1 of 10,000+ Regional Telco Agents Purchase/Implementation Time: Weeks Disruptive Direct Model National Coverage Simple Internet Ordering SMB Market Purchase/Implementation Time: Days
Business Voice Market Business Voice Market Over 25 Million Businesses in the U.S. Number Of Businesses In Each Segment (US) • SIP Trunking • Individual Services • SIP Trunking • DPS • Individual Services
Hosted Market Opportunity 23 Million U.S. Businesses Have Less Than 50 Employees • Key Purchasing Criteria = Hosted Voice Services • Does this save us money? • Is it simple to buy, install and use? (normally small or no IT dept.) • Is feature rich? • And, I need great support • Hosted Digital Phone Service • 25% of 23M SMB’s @ $200/mo = $1.15 Billion/Month • Monthlyrecurring market opportunity • Just 25% represents a $12 billion annual market opportunity
Our Product Offerings • The Best Fit • works “with” existing network or voice solutions • Fortune 100 features • Digital Phone Service: • Launched in 2008 • VoIP Dial Tone on your existing network • Business Phone System • SMB focus • SIP Trunking: • VoIP Dial Tone for existing voice service • Up market solution • Individual Services: • Virtual attendant • Conferencing • Find me/ follow me # • Toll free number • Voicemail & Fax • Easiest to Acquire, Implement and Use • Technology design is premised on “ease of use” • Low Cost Provider Advantage • Technology ownership – we provide applications ( SaaS margins)
Key Channel Partners 76% Of Sales Are Made On One Of Our 18 Websites
Our Value Proposition (SMB Example: 3 Phones + 3 Lines for 1 Year) • Hosted VoIP Solutions • Telanetix Digital Phone Service • Bundled package includes: • 3 business phones • 3 lines • No installation necessary • Full PBX feature set • Product support • Total cost = $1,800 • 60% COST SAVINGS Traditional Business Voice • Hardware • $1,500 upfront for 3 business phone systems • Installer (Indep. Telco Agent) • $1,000 upfront installation • $100 per year maintenance • Phone Service • $50+ per line per month Total cost = $4,400
Competitive Advantage Simple Hosted Talkswitch Emerging Private Co. 8x8 cBeyond Comcast Verizon Sprint AT&T Qwest Bundlers Avaya Simplicity Carriers Premise Equipment Telanetix Complex Low High Cost
Sales/Growth Strategy Investing For Growth In Hosted VoIP Solutions • Increased Channel reach and Web/Marketing • Just beginning to ramp advertising to reach the market • With Internet advertising, clear ROI on dollars spent • Increasing each quarter • Leveraging Brand Power and Exclusivity • Costco: “Business Phone Services” • Office Depot Click Through Rate: 2.1% (varies by product/campaign) • High channel loyalty/ long standing relationships • Inorganic growth • New entrants and complimentary services
Company overview and Financials
Company Overview Hosted VoIP Solutions For Business Communication • 2008 Financial Results: • Revenues: $32.6M • Voice: $26.1M • Video: $6.5M • Gross Profit Margins: 49% • Net Loss: $9.7M, or $0.36 • 1H09 Financial Results: • Revenues: $16.2M, up 3% • Voice: $13.9M, up 11% • Video: $2.2M, down 27% • Gross Profit Margins: 53% • Cash Flow Positive • Video Business: • Exploringstrategic alternatives • Founded: 2001 • Public: 2006 (reverse merger) • Acquisition: AccessLine, 2007 • Customers Lines: 77,000 + • Business Segment: • SMB • Employees: 120 full time • Key Partners: • Costco • Office Depot • Mitel • Headquarters: Bellevue, WA
Guidance • Double digit annual growth in total voice business • Majority of growth in 2H09 • Cash flow positive by end of 2009 • Looking for strategic opportunities for Video business
Investment Summary • The New Telanetix – Well positioned • Focused on the high growth, Hosted SMB voice market • While seeking strategic alternatives for video • Significant Recurring Market Opportunity • Hosted voice market - $4.4 B monthly recurring market • Significantly Improved Financial Results • Core Voice revenue at 18% • Adjusted EBITDA loss improved to $129,000 versus $1.3 million last year • Solid Guidance • Double digit annual growth in total voice revenue • Cash flow positive by end of 2009
Telanetix Corporation (OTC BB: TNXI)