AGM Investor Update December 11, 2003 Derek Spratt, President & - PDF document

Title Title Helping Engineer Solutions for the Connected World AGM Investor Update December 11, 2003 Derek Spratt, President & CEO Helping engineer solutions for the connected world Agenda • Business Description / Model • Market Stats • Product & Service Offerings • Customers & Partners • Q4 (Aug 31) / Q1 update • FY04 Baseline Revenue, Profitability, & Upside Helping engineer solutions for the connected world

Business Model • Continue our tradition of being a strong device based IP innovator • Continue to sell our IP and professional services to device OEMs for incorporation into their products (moving to larger deals) • Move further up the value chain by partnering with our device OEM customers and sell to their installed base our enterprise device integration and enterprise bus IP and services • Enhance the sales of our “bridging” IP to enterprise customers with the addition of more IP and professional services (expand solutions) • Build end-to-end product based solutions for specific markets (client-side and enterprise applications - M&A to accelerate this) • Revenue target mix: 50% licensing and product sales, 50% services, 50-60% blended margins Helping engineer solutions for the connected world Business Model Strong point source solutions and relationships – moving to vertical plays Public / Private Networks Enterprise Bus deviceCOM/OPC/Shield JaNET Content J-Integra Carriers / (Corp Data, Music, Networks Video, Games) Vertical Market Solutions CerfWorks Certification Customers O/S Vendors (Microsoft, Symbian, Linux, Palm) Device OEMs Professional Services Reference Designs Silicon Vendors RIL (xScale, PPC, MUX Arm) uPhone deviceCOM/OPC CerfWorks Turboboot Helping engineer solutions for the connected world

Business Model The vertical play: Device Apps + Enterprise Solutions Application Specific Mobility Apps Verticalized Applications Common Mobility • Financial Building Blocks Services Vertical Market Solutions • Healthcare Voice/Data RF (GSM/GPRS, • Logistics CDMA/1X) • Location based services O/S Vendors • Industrial (Microsoft, Symbian, Linux, Palm) Silicon Vendors (xScale, PPC, Arm) Helping engineer solutions for the connected world Connected Devices Mainstream (Mass Market Volumes) » Device Management Volumes & Enterprise Applications Early Adoption » Specialized Intelligent (Unit Volumes Accelerate) Devices » Moore’s Law Innovation » IP Emerges (Services) » Emerging Standards O/S chips, broadband, wireless » Strategic Investments » Proprietary Software & Hardware 2002 2003 1996 2005 Helping engineer solutions for the connected world

Business Model Shifting Demand / Opportunities (Windows CE/.NET example) ISV/SI major focus on devices 2000 ISV/SI major focus on networked applications 1996 Windows CE Microsoft .NET rolls out 2001 (enterprise and devices) 1998 PocketPC 2004 + 2002 MS SmartPhone / Derivatives 200? 2004 Management, Content, Enterprise Integration Customer pull for 3 rd party tools and components from ISVs and Professional Services from SIs Helping engineer solutions for the connected world Market Growth Embedded Applications Wireless Devices 1200 1 00 $106 B 1000 $1 B 80 800 60 600 $ millions $ billions 40 400 $600 M $40 B 200 20 0 0 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 By 2007, we estimate the market for embedded It is estimated worldwide revenues for mobile operating systems, bundled tools, and related services devices and wireless solutions will grow from a will reach over $1 billion. Shipments to Asia-Pacific total of US$40 billion at year-end 2002 to markets are expected to lead growth in terms of US$106 billion by year-end 2006, driven geographical regions, while automotive, consumer mainly by new device capable of handling electronics, and military/aerospace are expected to lead voice, data and images. Source: Radicati Group 2002 growth in terms of vertical markets. Source: VDC 2003 Helping engineer solutions for the connected world

Device OEM Outsource Value Proposition Increasing Time-to-market pressure Powerful Complex Silicon Limited Budgets & Resources Global 1000 Customer Intellectual Property Competitive Differentiation Networked Applications Helping engineer solutions for the connected world Enterprise Outsource Value Proposition Emerging Client Device Platforms Unix/Linux Limited Budgets & Resources Global 1000 Customer Intellectual Property Windows/.NET Distributed Applications Helping engineer solutions for the connected world

Product Categories » MSFT, Symbian, Linux Create Intelligent Devices » RIL, MUX, uPhone » Mobility / Smartphone » CerfBoard/Cube/Pod » Fixed Display » uPDAs » Headless Network » Enterprise Bus Networking Software » Enterprise » J –Integra Software » Ja.Net » deviceCOM/OPC Manage » Device Management Software » CerfWorks Management & » Turbo Boot Control Helping engineer solutions for the connected world Market Focus … Mobility/Smartphones Consumer & Application Healthcare Networked Specific Devices Networked Applications Applications Industrial/ Building Financial Automation/Logistics Services Helping engineer solutions for the connected world

Global Customers 2,000 customers of which 45 are Fortune 100 companies Helping engineer solutions for the connected world OEM Customer Products Helping engineer solutions for the connected world

GameTrac Device Helping engineer solutions for the connected world Key Partnerships / Co-Travellers Helping engineer solutions for the connected world

Industry Recognition 2003 4 th year on the Deloitte and Touche Fast 50 / US Fast 500 lists • 2003 2 nd year on the Canadian Profit 100 list • 2003 3 rd year as Microsoft partner of the year (embedded ISV) • • 2003 Vancouver Sun Top 100 list • 2002 Finalist for the EDN innovation of the year award (uPDA) • 2001 Control Engineering editors choice award (deviceCOM) • 2000 Cahners top 10 embedded products of the year award (IX) • 1997 Comdex, selected by Microsoft as 1 of 14 exceptional emerging technology companies Helping engineer solutions for the connected world Quick Q4 / Q1 update • Completed strategic planning process and new business plan, management and corporate re-alignment • Currently 110 staff worldwide • Moving to significant multi-year $M contracts, improving backorder quality and proforma projection • Q4 -> Q1 revenues and earnings improving as a result • Approx. $4M in revenues per Q to break-even • Balance sheet healthy – Cash, A/R, Inventory • Excellent new business opportunities in the mobility space for 2004 • Some continued exposure to C$ volatility Helping engineer solutions for the connected world

FY04 Baseline Revenues, Upside • Driving for profitability moving through FY04 • Blended 50+% margins • Revenues will be higher with improved profitability assuming moderate improvement in economy and good traction within enterprise market • Seeing FY05 as our breakout year after transition in FY04 Helping engineer solutions for the connected world