Southwall
Technologies
Display Industry Investment
Conference
New York, March 2005
Forward Looking Statements
Our comments this afternoon may contain forward-
looking statements as that term is defined in the Private
Securities Reform Act of 1995, including, without
limitation, statements regarding the Company’s
expectations, beliefs, intentions or strategies regarding the
future. All forward-looking statements included in our
presentation and discussion today are based on
information available to the Company today. The
Company assumes no obligation to update any such
forward-looking statements. Further risks are detailed in
the Company’s filings with the SEC.
Southwall Company Highlights
Leading material sciences technology
company with a rich 25 year history of
product and market innovation
World class, industry-leading customers
Strong manufacturing competencies
Successfully completed turnaround in 2004
Stock Ticker: SWTX
Our Core Technology
Southwall’s core technology centers
around our ability to sputter deposit
multi-layer coatings on large-area,
flexible polymeric substrates.
Key Enabling Characteristics by Market
Electronic Display
EMI reduction / IR filtering
Enhanced Optics / Anti smudge /Anti reflective
Automotive
Solar control
Occupant comfort & energy efficiency
Architectural
Solar control
Energy efficiency / thermal insulation
Added comfort
Growth Plan – Plasma TV and Display Systems
Explosive Market Growth; > 50% CAGR through 2008
Source: Fuji/Chimera 2004; PDP units expected to grow at >50% CAGR
Plasma Segment and Growth Plan
EMI/IR blocking film for filter application
Necessary product for ALL Plasma Systems
Low cost solution in a price sensitive sector
Our competition is an Etched Mesh product
Strategic alliance & long term exclusive contract
with industry leader
Mitsui Chemical ~ 40% share in Optical filters
Southwall’s new display products are focused on
capturing hyper-growth Consumer TV market
segment
Automotive Segment
Major supplier of transparent solar-control films to the
European OEM Windscreen market since the mid
1990’s
Over 7 million European windshields produced using
Southwall’s XIR ® technology since 2001
10 - 12% market share of total European Automotive Glass
Supply to Europe’s largest automotive glass
companies
Product Offerings & Growth Opportunities
Participate in growing market trends
Complex windshields
Laminated sidelights
More glass – sunroofs , bigger windshields
Automotive Replacement Glass
Unique value proposition
Architecture Segment
Leading provider of high-performance
solutions to the glass and window industry
for 25 years
Energy efficiency even more critical with
rising oil prices
Licensed to 45 manufacturers in 24 countries
Strong Heat Mirror® brand recognition
within the Industry
Mature business and strong cash flow
Window Film Segment
One of Southwall’s fastest growing market
segments in 2004
Worldwide sales under V-KOOL and
Huper Optik® Brands
Auto and Architectural applications split ~
50/50
Distribution in over 700 locations in 25
countries
Strong growth in China
Seasoned Management Team
Thomas Hood President & CEO
Maury Austin SVP & CFO
Dennis Capovilla VP, Sales & Mkting
Wolfgang Heinze VP, Operations
Dr. Sicco Westra VP, Product & Business
Development
Mike Vargas Director, HR
2004 Financial Highlights
A year of:
Successful restructuring and financial recovery
Increasing quarterly revenues
Improving gross margins
A return to profitability & positive cash flow
Strengthening our balance sheet
2004 Financial Summary
$ in
Millions
2004 = $57.6m Revenue
Balance Sheet Summary
$40.0
$22.5
$41.7
$13.9
$1.9
2003
$36.1
$16.8
$76.6
$17.5
$2.0
2002
$44.9
Total Assets
$14.6
A/R and Inventory
$44.9
Total Liabilities
$5.2
Total Cash and
Equivalents
$16.0
Short & Long term
Debt
2004
( Period Ending $ in millions )
Target Business Model
(8)
17
12
6
7
34
12
16
37
35
100%
YTD 9/04
15 – 20
18
14
Window Film
3
2
4
Non Op Costs
8 – 15
7 – 8
6 – 8
7 – 8
35 – 38
5 – 10
35 – 40
35 – 40
~ 12 Mo.
Target
20
(79)
Net income
9
16
G&A
5
13
R&D
6
7
Sales / Marketing
42
14
Gross profit
12
10
Architecture
31
36
Display
39
40
Automotive
100%
100%
Revenues
Q4 04
2003
(percent of revenues )
2005 Financial Trends & Goals
Continued profitability and positive cash flows from
Operations
Overall growth trends of ~ 10% annual revenue growth
into 2005 (base plan).
Does not assume an incremental Plasma OEM
Plasma product cost reductions efforts underway to take
advantage of strong unit growth opportunities
Enhancements to our Marketing and Development
capabilities
Financial consistency & positioning for growth