Exhibit 99.1 Exhibit 99.1 Avatech Solutions, Inc. Avatech Solutions, Inc. OTC BB:AVSO George Davis President and CEO December 12 th 2007 |
Forward-Looking Statement This presentation contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words "goal," "expect," "anticipate," "estimate," "should," "believe," "intend," and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Avatech operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this presentation are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations. |
Who We Are A National Design Automation and Technology Services Company • A dominant provider in the US Design, Automaton Software and Services markets. • Largest U.S. based Autodesk (Nasdaq: ADSK) Solution Provider • Software, Consulting, implementation, customization, training, and support Providing solutions that radically improve the way clients design, develop, and manage projects, products, and facilities With an industry-focused services organization with unrivalled experience and expertise |
Avatech Solutions Our customers not only see, but also experience, their designs before they are real, empowering them to save time and money, improve quality and foster innovation |
Client Rendering |
Markets We Serve Trusted Experts in Delivering Design, Engineering and Facilities Management Technology Solutions Facilities Management Building Design Mechanical Design Civil, Survey, and Mapping |
Why we Win Industry experts • 85 Engineers – Core Value National footprint and support capabilities with focused regional support A trusted business advisor Unrivalled industry expertise; proven methodologies Customers view us as a committed partner that injects innovation into their business practices |
Avatech’s History $51 $40 $32 $28 $23 $0 $10 $20 $30 $40 $50 $60 $70 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 MM MM MM MM MM |
18,000 Clients |
National Resources, Local Service |
Avatech Current Snapshot Growth strategy successful – 50M+ sales Recommended and respected brand One of Autodesk’s largest integrators worldwide 18,000 Clients/Valuable installed base Industry leading work force and technical competency Focused on profitability Emphasis on services business Strong platform – poised for profitable growth |
Revenue Growth from 2003 $16.6 $22.5 $26.1 $32.2 $39.8 $5.5 $6.1 $7.4 $10.7 $5.9 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 Software Sales Services 21.2% of Revenues $22.5 $32.2 $50.5 $28.0 $39.6 Focus on Services Growth |
Earnings Trend $(3.8) $(0.9) 2.2 -0.6 0.5 $0.1* $(5.0) $(4.0) $(3.0) $(2.0) $(1.0) $- $1.0 $2.0 $3.0 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 * Excluding Proprietary Software Sale of $1.9MM. Focus on Profitability Q1 |
Enhanced Balance Sheet $1.06 $0.04 $0.00 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 FY 2005 FY 2006 FY 2007 Long-term debt has been eliminated. …while shareholder’s equity including preferred stock has grown to $9.8MM. Focus on Shareholder Value 0 $(1.3) $4.9 $9.8 ($2.0) $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 FY 2005 FY 2006 FY 2007 |
Profitability Focus Expense Management • $3M reduction in SGA – Annualized • SGA as a % of sales significantly reduced Streamlined organization • Sales and services focus Company wide accountability in place Collaborative focus on expense containment and margin improvement |
Financial Highlights 22.4% Annual Revenue Growth from FY03 First Quarter FY08 Profitable – will continue Enhanced Balance Sheet • Elimination of Long Term Debt • $9.8MM positive Shareholder’s Equity as of Q1FY08 • $1.3MM deficit in Q1 FY06 Positive Cash Flow from Operating Activities in FY07 |
Market Situation The restructuring of the design professions is being driven by new methods, processes technologies, demographics, values and behaviors Avatech is positioned to exploit the revolution |
Avatech Positioned to Grow Avatech’s Position Market Dynamics Service and integration requirements fit our services sweet spot. Our Professional Services Team are experts at bringing all the parts of the digital design world together The market is moving from stand alone point solutions to integrated platforms: BIM, Digital Prototyping, Data and Asset Management and Collaboration needs continue to grow rapidly Ability to leverage a large installed base movement to 3D modeling Adoption of Advanced Modeling Technology is growing rapidly |
• Gov’t-driven Improvements • Improve Site Development • Emergency Response $1.5BN CAD Solutions • Urban Renewal • Building Information Modeling (BIM) • Sustainable Design • Green Building $3BN CAD Solutions • Globalization Collaboration needs drive PDM/PLM • Shorter Product Lifecycles • Virtual prototyping Transition from drafting to modeling and integrated solutions is accelerating $12BN PLM Solutions $8BN CAD/CAM Solutions Sector Drivers Market Drivers Global Market Size* Market Opportunities Building Infrastructure Source: Daratech and Autodesk Internal Research Manufacturing |
Growth Strategy Focuses on expanding our offerings, geography and people with a clear emphasis on growing our Services business. Add new solution offerings, offer additional services and continue development of new value add solutions to fill voids in existing markets. Diversification Target companies with profitable operations and $5-15MM in revenues in new geographic regions, with an emphasis on services. Must be accretive. Acquisitions Increase efforts to attract and retain highly qualified professionals, including sales application engineers, and technical consultants. Workforce We will exploit our technical expertise in support of the evolving integrated design process economy. Organic Growth |
Future Direction FY2008 focus on profitability and modest revenue growth. Next 3-5 Years: • Targeting 10-20% annual revenue growth to achieve a $100MM revenue run rate in the next 3-5 years • Increase Net Income • Increase Services Revenues to 30-40% of Total Revenues and increase the Gross Margin • Target profitable companies with $5- 15MM in Revenues • Opportunity for increased Services Revenues ACQUISITIONS • Offer other value add solutions and services to existing customers • Continue Facilities Management expansion DIVERSIFICATION • Ramp up existing hires • Increase utilization of technical personnel SERVICES GROWTH DRIVERS |
Investment Highlights A dominant provider in the U.S. Design Automation software and services market In a position to lead the restructuring of the Design Industry Preferred position with Autodesk (Nasdaq:ADSK) – the world’s largest provider of design automation software Profitable and growing consulting services group Compelling growth opportunity in 3D modeling design conversions, integrated design platforms and Facilities Management Proven management Team supported by strong Board of Directors Diverse customer base, with no single customer generating more that 2% of revenue Focus on profitability and service growth |
Thank You |