February 2007 Investor Presentation
Investor Presentation
August 2008
Safe Harbor Statement
This material contains statements that are not statements of historical fact, but instead are forwardlooking statements. All forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking statements. Such factors include,
but are not limited to, the company’s ability to market existing and new products, ability to access
capital for expansion, and changes from anticipated levels of sales, future national or regional
economic and competitive conditions, changes in relationships with customers, dependence on our
relationship with our primary supplier and other factors detailed from time to time in the Company's
filings with the United States Securities and Exchange Commission and other regulatory authorities.
The company undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. This presentation
is based upon information available to the public, as well as other information from sources
which management believes to be reliable, but is not guaranteed by GVSS as being accurate
nor does it purport to be complete. Opinions expressed herein are those of management as of the date of this presentation and are subject to change without notice.
Investment Opportunity
•
•
•
•
Successful Turnaround Led by Experienced Team
Six Straight Profitable Quarters
Currently trades at less than 7X Earnings
We are Samsung Electronics Security Business in the
Americas
• Working with Samsung to Double Market Share over the
Next 3 Years
• Security “Pure Play”
Successful Turnaround
Six Straight
Profitable Quarters
Q1 2007 – Q2 2008
• New Management Team and Board
Net Income 2007
$2.6
million
• Eliminated Loss-Making Activities
• Set Appropriate Expense Levels and Implemented Controls
• Focused on Key Working Capital Items
• Strengthened Samsung Strategic Partnership and Contract
• New $15M Credit Facility Established with Wells Fargo Business Credit
Experienced Management
Steven E. Walin, CEO/Chairman – Former president of GE
Security Enterprise Solutions; former Senior VP for the security
systems division of Siemens Building Technologies; former
President / COO of Security Technologies Group (STG)
Joseph Restivo, COO/CFO – Former VP of North American
Services and Business Development for Siemens Building
Technologies. President/COO of Casi-Rusco
A team with a track record
of successful growth and
investor wins in the
security industry!
Michael Capulli, Sr. VP North American Sales – 26 years of experience in security sales;
was VP of Sales for Tri-Ed Inc.; recently was Director of Global Accounts for Tyco Safety Products.
Fernando Tomasiello, Sr. VP International Sales – Eight years of experience in the security
industry; was Director of Sales for South America for Global Options International Inc.; from 1998 to
2000, was VP of Sales for International Security Experts Systems.
Duncan Havlin, VP Product Management – 11 years of experience in the security industry;
former Vertical Marketing Manager for GE Security.
Esra Pope, VP Marketing – 7 years of experience in the security industry; former leader of
project integration for Military and Government security sales in Turkey.
A Successful Track Record
4x
Access Control
10x
Strategic Acquisitions
GVSS
Strategic Partner: Samsung Electronics
• The World’s Largest and Leading Electronics and
1
IT Company
•
•
•
•
Source:
1Korea
#1 Consumer Electronics Brand Worldwide
Annual Sales over $100 Billion US
Operates in over 100 Countries
Wants to be #1 in Security Electronics
Herald
2 BusinessWeek
2
Strategic Partner: Samsung Electronics
+
=
+
Sales Channels
Samsung
Distributor
GVI
GVI Brand
Installer
End User
Dealer
• Samsung and GVI Branded Video Security Surveillance
Systems
• Sell Through Distributors, Installers and Dealers
• Industry Leading Service and Technical Support
• 75% Samsung, 25% GVI Branded Products to
Supplement Samsung Line
Leading Edge Products
Strong Sales Force in the Americas
5 Canadian Salespeople
55+ US Salespeople
20+ International Salespeople
80+ Salespeople
Selected Customers
MAJORRETAILER
Baton Rouge
Parish Schools
Banco
de la Republica
Colombia
Aduana Mexico
Gov’t Customs
Organization
Tribunal of
Justice de Rio
de Janeiro
Sarasota
School
District
MAJOR APPAREL
RETAILER
Chesterfield
County VA
Schools
Joshua Independent
School District
Poder Judicial
Republica de
Chile
Brazil
Metro
North Carolina
Department of
Corrections
Guatemala
Government
Customs Agency
Los Angeles
Air Force Base
An Exciting Market
Americas Market for
Video Surveillance Equipment
Millions of U.S. Dollars
3,500
Market Drivers
Post 9/11 Security Awareness
3,000
2,500
Move To Digital Technology
2,000
1,500
Productivity Applications
1,000
500
Broadband Network Availability
0
2005 2006 2007 2008 Source:
2009IMS Research
2010
Changing Architecture Creates Big Opportunity
Closed Circuit Video
Stand-alone systems loosely
integrated via relays or custom
software
Closed Circuit Video
Access Control
IP Video
IP based systems integrated via
common standards with a master
control console
Network Video Management
Network Video Storage
IP Video
Access Control
Market Transition to IP
Global Video Surveillance
Camera Revenue Forecast
9,000
8,000
Millions of Dollars
7,000
IP Servers
6,000
5,000
IP Cameras
4,000
3,000
2,000
Analog
Cameras
1,000
0
2004
2005
2006
2007
2008
2009
2010
Targeting the Mid Market
The High End Enjoys:
• Larger project sizes
• Reduced price sensitivity
Number of Employees
>1000
50 to 1000
High End
Market
Market
Sweet Spot
Mid Market (SMB)
<50
Americas Video
Mid Market
Size: $1.3B
CAGR: 12%
Source:
Phare Consulting Inc.
Entry Level Market
Entry Level Enjoys:
• Higher unit volumes
• Reduced system complexity
• Reduced sale complexity
• Shorter sales cycles
Samsung Strategic Partnership
• Strong Strategic Partnership with Samsung
• Samsung has High Growth Goals – Double Market Share
• Strong Partner – $1.5 Million Initial Investment thru Q1
2009
• Samsung Increasing Investment in R&D / QA for Security
• Demonstrated Willingness to CoInvest in Growth and Acquisitions
• Samsung is Poised to Extend their
Leadership in Electronics and IT to
the Full Electronic Security Market
with GVI as their Strategic Partner
Acquisition Strategy
• Complimentary to Video
• Video Management Software
• Access Control
• Accessories
Samsung
Complementary
Technology
Video
Management
Software
• Offering a More
Sophisticated
Solution
Takes Samsung to:
 More Upscale Markets
 More Successful Dealers
 Higher Margin Sales
• Customer Projects Often
Require Both
• Repeat Sales
• $4B Global Market
• 15% Growth Rate
Access
Control
Accessories
•
•
Very High Margins
A Complete Branded
Solution
Growth Strategy
• Build on our Unique Strategic Partnership with Samsung
• Deliver Enterprise Level Technology to the Middle Market
• Expand Revenue and Margins
• Acquire Technologies such as Access Control and Video
Management Software
• Continue to Build Already Strong Sales Channels
• Target: Double Market Share in 3 Years
Income Statement
($ in thousands)
2005
2006
2007
2006
Net Sales
43,973
45,025
23,294
24,164
Gross Profit %
15.0%
28.4%
27.3%
29.9%
Operating Income
(7,887)
(9,388)
2,475
(7,887)
Net Income
(16,491)
2,637
469
EPS (fully diluted)
($12.99)
($4.46)
($4.46)
$0.08
$.05
$0.01
Net Income
6 mo2007
2007(est.)
6 mo 2008
1,103
2,300
1,517
695
$0.02
Gross Margin
$ 3, 000
30. 0%
$ $ (3, 000)
2006
2007
6 mo
6 mo
2007
2008
20. 0%
$ (6, 000)
10. 0%
$ (9, 000)
$ (12, 000)
$ (15, 000)
0. 0%
2006
2007
6 mo 2 0 0 7
6 mo 2 0 0 8
Balance Sheet
6-30-08
12-31-07
12-31-06
22
313
225
Current assets
22,543
21,752
15,846
Total assets
23,778
23,356
16,472
6,405
9,292
17,850
20,440
20,892
17,912
3,338
2,464
($ in thousands)
Cash and cash equivalents
Current liabilities
Total liabilities
Stockholder’s equity
(1,440)
Favorable Credit Facilities
• $15 Million Secured Credit Facility
• Prime + .75%
• Resets to Prime + .25% on
$1M Net Profit in 2008
Attractive Valuation
Ticker
Price
8/5/2008
Market
Cap
GVI Security
GVSS
0.60
Henry Bros. Electronics
HBE
Mace Security International
P/S
(ttm)
P/E
(ttm)
16.9M
0.37
6.99
6.00
35.5M
0.57
43.4
MACE
1.59
26.0M
0.50
Loss
Vicon Industries
VII
4.55
21.7M
0.33
3.53
Napco Security Systems
NSSC
4.43
84.6M
1.27
15.22
Company Name
Pelco - Acquired by Schneider Electric in October
for $1.54 Billion or 3X Sales of Approximately $500M
Sources: Yahoo
Equity Snapshot
Exchange/Symbol:
OTCBB/GVSS
Price (8/5/2008):
Shares Outstanding:
$0.60
28.1M
Market Capitalization:
Price/Earnings (ttm)
$16.9M
6.99X
Price/Sales (ttm):
Sep
0.37X
Nov
Jan 08
Investment Opportunity
• Emerging Player in Rapidly Growing Security and
Surveillance Industry
• Experienced Management Team in Place
• Focused on the $2.4B Americas Market for Video
Surveillance Growing at 10% CAGR
• Clear Strategy Aimed at Underserved Middle Market
• Strong Samsung Strategic Partnership
• An Exciting and Executable Plan
A Successful Track Record
4x
Access Control
10x
Strategic Acquisitions
GVSS