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Forward-looking statements contained in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements can be identified by words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “continue” or other similar expressions. There are certain important factors that could cause results to differ materially from those anticipated by the forward-looking statements made herein. Reference is made to the company’s Annual Report on Form 10-K for the year ended December 31, 2006 for further information on such risk factors.
Safe Harbor Statement
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NASDAQ: “IIN”; Founded in 1977
625 employees
Proprietary firmware that enhances
performance of body-worn devices
Expertise in ultra-miniature
mechanics & electronics
International presence
$60+ million revenue; profitable
Company Information
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IntriCon’s mission is to enhance the mobility &
effectiveness of body-worn devices that connect
people to people & to the devices around them.
Our Mission
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Ear-Worn Head Sets
Ear-Worn Mics
Wireless Push-To-
Talk Radio Adapter
Wireless Glucose Sensor
Digital Hearing Aids
Drug Delivery Sets
Body-worn Devices
IV Delivery Sets
Future – Medical Biotelemetry
(EKG, EEG, etc.)
---- Established Core Business
---- Emerging Core Business
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Premium pricing power through application of digital
firmware (e.g., “Intel Inside”) & wireless technology to our
established core business
Actively pursuing appropriate M&A opportunities to build
our leadership position in body-worn devices (e.g.,
Tibbetts)
Maximizing R&D spending to expand established core
business
Market share expansion – higher volume
Emerging core business – biotelemetry
Profit Drivers
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Proprietary Technology
Hearing Instrument Assemblies
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Proprietary technology (firmware) means high-value, body-
wearable features
Hearing & professional audio & security
Adaptive feedback canceling
Directional microphone arrays
Active noise canceling
Voice feature extraction
Noise reduction
Emerging Medical Biotelemetry
Proprietary Technology
Ultra-Low-Power Digital Signal Processing
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Proprietary Technology
Ultra-Low-Power Wireless
Performance comparison to Bluetooth:
Allows miniaturization
25 times lower power consumption
Lower power supply voltage
Ultra-low-power wireless is superior in critical applications:
Hearing
Professional Audio
Security
Medical Biotelemetry
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Founded as RTI - 1977
Acquired by Selas - 1993
Mark Gorder Appointed CEO - 2001
Purchased Lectret - 2001
AMIS Strategic Alliance - 2003 (DSP & ULP)
Sale of Non-Strategic Assets - 2001-2005
Rebranded as IntriCon (IIN) - 2005
Company Evolution
Acquired Tibbetts - 2007
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Mark Gorder President, CEO & Founder
Scott Longval CFO, Secretary & Treasurer
Chris Conger VP of Research & Development
Mike Geraci VP of Sales & Marketing
Dennis Gonsior VP of Global Operations
Greg Gruenhagen VP of Quality & Regulatory Affairs
Steve Binnix VP of RTI Electronics
. . . combined 135 years with IntriCon
Experienced Management Team
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Arden Hills, MN (HQ)
Vadnais Heights, MN
Singapore
Camden, ME
Munich, Germany
Anaheim, CA
Established Presence & Low-cost Manufacturing
International Presence
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Experienced Corporate Governance
Michael J. McKenna Chairman of the Board
Retired Vice Chairman, President and Director,
Crown Cork & Seal Company, Inc.
Nicholas A. Giordano Chairman of the Audit Committee
Business Consultant
Former President & CEO, Philadelphia Stock Exchange
Robert N. Masucci Director
Chairman, Barclay Brand Ferndon, Inc.
Chairman, Montgomery Capital Advisors
Philip N. Seamon Director
President, Philip N. Seamon, Inc.
Former Senior Managing Director,
Corporate Finance, FTI Consulting, Inc.
Former Partner, Price Waterhouse Coopers
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Over-65 age group fastest growing segment in U.S., Europe
& Japan
Increased spending on security, intelligence & defense
Wireless becoming connectivity standard
Telemedicine using wireless miniature biosensors
Demand for quality
Growth Drivers:
Body-Worn Devices
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Revenues
(in millions)
For the nine-months ending
September 30, 2007 revenue
increased 33% over same
prior-year period (organic
growth of 26%)
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For the nine-months ending
September 30, 2007 income
from continuing operations
increased $443K, or 58%,
over prior-year period
2007 YTD results include
$110K prepayment penalty &
$65K deferred financing write-
off related to May refinancing
Income From
Continuing Operations
(in millions)
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For the nine-months ending
September 30, 2007 EPS from
continuing operations increased to
$0.22, or 57%, over year-ago
period (includes $0.03 charge
relating to debt refinancing)
EPS From
Continuing Operations
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Balance Sheet
Q3 2007
2006
Cash
$ 1,092
$ 660
Working capital
$10,655
$ 8,445
Total debt
$ 9,968
$ 4,783
Shareholders’ equity
$17,038
$15,607
Cash cycle days of 70
Working capital continues to increase to support
revenue growth
$10.0M of debt - $5.5M revolver, $4.4M long-term note,
$0.1M capital leases
(in thousands)
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Cash Flow
Q3YTD
2007
Full Year
2006
Net cash provided by operating activities
$ 870
$ 1,578
Net cash used by investing activities
$ (6,362)
$ (565)
Net cash provided (used) by financial activities
$ 5,884
$ (1,568)
Effect of exchange rate changes on cash
$ 31
$ 45
Net increase (decrease) in cash
$ 423
$ (510)
$3.2M of capital expenditures in 2006
Closed on $4.5M acquisition of Tibbetts in May 2007
Secured new $14.5M credit facility in May 2007
(in thousands)
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New credit facility
Strategic acquisition of
Tibbetts
Singapore & Minnesota
facilities expanding
Biotelemetry opportunities
Prepared for Continued Growth
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While our business can fluctuate quarter-to-quarter, we are
targeting low double-digit revenue growth in 2008
Our goal is to improve gross margins from 25 percent to 30
percent by 2012
While we intend to prudently control operating expenses,
we are committed to increase R&D as a percentage of
sales
We are anticipating capital expenditures of approximately
$3.0M in 2008
Our goal is to complete one acquisition per year that
contributes to the enhancement of our position as the
body-worn device company
Financial Goals
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Why IntriCon?
Leader in high-performance body-worn devices
Increasing market opportunity for body-worn devices
Proprietary technology is well positioned for future market
opportunities
Real markets - Realistic goals
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Questions & Answers