Exhibit 99.2
Exhibit 99.2
Somera
equipping networks for life
Q1 2005 Earnings Presentation
David W. Heard Kent Coker President & CEO Chief Financial Officer
Forward Looking Statement
This presentation may include forward looking statements that are based on current expectations that involve risks and uncertainties including, but not limited to, Somera’s gross margin and operating expense levels in future periods, Somera’s expected return to profitability on a quarterly basis and the timing thereof; Somera’s strategy and goals in future periods and the execution thereof; expected stabilization of and growth in revenues; expected market size of the Lifecycle Management Services opportunity; expected areas of future growth and market share gains; Somera’s ability to capitalize and execute on its Lifecycle Management Services strategy; Somera’s ability to execute on LifecyclePLUS, RecoveryPlus and RepairPLUS opportunities; and future customer spending levels. These and other forward-looking statements are based on current expectations that involve risks and uncertainties. Somera’s actual results may differ materially from the forward-looking statements made in this presentation. Factors that could cause actual results to differ include general economic conditions, particularly those affecting the telecommunications industry; capital equipment spending levels of Somera’s customer base, including the risk of continued customer spending delays associated with carrier consolidation; the impact of competition on Somera’s business; Somera’s continued ability to match equipment supply with customer demand; potential shortages in product supply; Somera’s ability to continue its international expansion; Somera’s ability to reduce operating expenses and breakeven revenue amounts; and risks related to its service business, including its lifecycle services offering. These and other risk factors are detailed in Somera’s Annual Report on Form 10-K for the year ended December 31, 2004 and Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission.
Somera - Proprietary
Target Breakeven Quarter Model
Target B/E Qtr
(in millions)
Revenue $32.00
Gross Profit % 35% Gross Profit $ $11.20
Op Expense $11.10
Op Income $0.10
Target Breakeven Model*
Revenues $31-33M Margins 34-36%
Expenses Approx +/-$11.0M
Target Revenue Mix $22-23M $1.9-2.6M
$20-21M
Base Quarter
Services & Programs
Brokerage $31-33M
+/- $6-8M
+/- $25M
Target Breakeven Quarter
Somera—Proprietary *Targeted return to profitability on a quarterly basis by the end of 2005
Somera Asset Management Strategy
Disposition Valuation Inventory Analysis Procurement
Professional, Repeatable Programs
Out of Warranty Repair Testing & Refurbishment
End of Life Management Custom Configurations Logistics Management Installation/De-Installation Spares Management
New Equipment Sales Refurbished Equipment Sales Spot Buying
Somera - Proprietary
BROKERAGE SERVICES
RECOVERY PLUS TM
REPAIR PLUS LIFECYCLE PLUS
Somera Recovery PLUS TM
Procurement
Disposition
Valuation
Inventory Analysis
RecoveryPLUS Value Proposition
Provided significant savings over last 10 years. Core competence of Somera Low to no cost risk Guaranteed improvement to ROA
Capital preservation Real dollar savings
Custom disposition options to maximize return Standardized, repeatable processes Business transparency required for SOX compliance Guarantees optimized price for sourcing and selling
Somera Asset Manager
Somera - Proprietary
Business Model
Blended Margin Contribution
Unique Business Model
Leverages service bundle with GP
Base Brokerage 28+%
RecoveryPLUS RepairPLUS LifecyclePLUS
Target Lifecycle Services 40-45%
Utilizes common infrastructure
Spares
Facilities (testing, shipping, logistics) Systems Direct Marketing Sales Customer Care
Stand Alone Brokerage
Recovery PLUS
Repair PLUS
Lifecycle PLUS
Brokerage RecoveryPLUS RepairPLUS LifecyclePLUS
Somera—Proprietary
4 Point Plan to Profitability
Drive growth in traditional equipment brokerage business
Increase international contribution
Establish a leadership position in Telecom Asset Management, resulting in an annuity-based revenue stream Tightly manage business to margins and expenses of new model
Somera - Proprietary