Investor Conference Presentation Jeff Armstrong Chief Executive Officer Keith Marchiando Chief Financial Officer January 2015 NASDAQ: PRCP Public Release 1
Safe Harbor Statement Cautionary Statement Certain statements made or incorporated by reference in this presentation reflect management’s estimates and beliefs and are intended to be, and are hereby identified as, “Forward -Looking Statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements often include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, or similar expressions. These statements are based on certain assumptions that Perceptron has made in light of its experience in the industry as well as its perspective of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of risks and uncertainties. These risks and uncertainties are set forth in Perceptron’s Annual Report on Form 10-K and other filings from time to time with the Securities and Exchange Commission. We disclaim any obligation to publicly update our forward- looking statements after the date of this presentation. Public Release 2
Company Overview Global technology company offering best-in-class advanced manufacturing solutions • Founded in 1981 with headquarters in Michigan. • 14 company locations worldwide. • Laser-based, 3D machine vision & robot guidance systems. • Real-time, non-contact measurement and automation. • Extensive hardware and software intellectual property. • Significant competitive advantages. • Provider to all top 10 luxury brand automobile makers. • Global standard for several major car makers. • Profitable with a strong balance sheet. • New management team to reinvigorate growth and increase shareholder value. Perceptron enables better quality and lower costs for industrial manufacturing customers Public Release 3
Product & Service Offerings • Non-contact 3D machine vision solutions for: – Production line measurement: Real time 100% measurement and analysis – Production line robotic assembly : Automated assembly and analysis – Off-line measurement systems: Robotic and portable measurement and analysis • Value proposition to manufacturing customers: – Improve quality: In process and finished goods – Reduce cost: Minimize scrap/rework and increase automation – Shorten product development: Reverse engineering and/or direct use of Computer Design files – Global solutions with local support: Training, service, and support from 14 company locations worldwide – Complete offerings: Offer turnkey, fully integrated delivery options Public Release 4
Automated Measurement Solutions Reduced rework and scrap with better quality. 100% Inspection with Robotic and/or Fixed Sensors Reference installations: Over 900 active installations, in almost 200 plants, with over 40 automobile makers and Tier 1 suppliers. Public Release 5
Automated Robotic Assembly Solutions Reduced labor costs with better quality. Fully automated robotic installation with 100% Inspection. Door installation Roof installation Public Release 6
Automated Door Installation Perceptron solutions simplify complex operations 7
3D Scanning Solutions 3D scanning systems for prototyping, reverse engineering and inspection. Handheld Coordinate Measurement Portable Arms Machines (CMMs) Public Release 8
Fully Integrated Solutions Complex Data Delivered As Simple, Actionable Results. Powerful software enables ease of use and understanding. Public Release 9
Competitive Advantages • Technological – Best in industry laser based optical systems – Fully integrated software with extensive analysis tools & ease of setup – Significant, ongoing R&D to develop great solutions – ~ 45 patents covering hardware and software intellectual property – Extensive compatibility with plant networks, robots, and OEM systems • Customer focus – Training, service, and support from 14 company locations worldwide – Ability to provide turnkey, fully integrated solutions – Software and documentation published in 13 languages – Deep experience = lowest financial, schedule and performance risk • Extensive industry knowledge: – Automotive market and technical leader – Global standard for several major OEMs with ~ 60% market penetration – Solution provider to the top 10 luxury brands worldwide – Strong relations with major robot makers and integrators Public Release 10
Financial Overview Revenue Income from Continuing Operations $6,130 $57,379 $60,886 $59,612 $54,307 $2,827 $2,650 $50,847 $2,427 $38,287 $40,199 $70 $(1,345) $(6,595) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 2014 Revenue Profile Americas Europe Asia 31% 23% 46% $ 18.3 Mil. $ 27.8 Mil. $13.5 Mil. Public Release 11 11
Served Market Segments $5 Billion Potential Market 3D Scanning Industrial Metrology Robotic Automation Market Growing at Estimated 8-11% CAGR Based on Frost & Sullivan, IHS and management’s best estimates Public Release 12
Strategies for Growth • Profitable Organic Growth in Core Markets. • Prudent Market Diversification while the Automotive Cycle is Positive. • Broaden and Extend Our Technical Leadership. • Maintain Operational Excellence and Fiscal Discipline. Commitment to Growth and Increasing Shareholder Value. Public Release 13
Profitable Organic Growth • Global auto production forecast 4% CAGR for 2015-2020: – Exceed that by leveraging our experience, expertise, and relationships: o Gain new customers (Tier 1 suppliers, agricultural, etc.). o Develop new solutions e.g. collaborative robot systems. o Expand our turn-key system offerings. o Offer lower price point Advantage Solutions for lower cost OEMs. • 3D scanning market forecast 8-11% CAGR for 2015-2020: – Match that performance with existing and new products: o Our ScanWorks products provide best in market performance. o Target strategic relations e.g. 3D printer OEMs. o Deliver new, innovative products. – Increase channels to market by offering fully integrated solutions: o Develop complete mover, sensor and software packages. o Partner with targeted OEMs. o Direct and select distributor sales. Public Release 14
Prudent Diversification • Target 30% diversification in three years. • Pursue while the automotive cycle is favorable. • Some core growth brings diversification – Tier 1 suppliers. • 3D scanning growth provides a path to diversification, higher gross margins, and a higher CAGR. • Target adjacent industries where we are already finding work e.g. aerospace, agricultural, appliances, etc. • Capitalize on our worldwide sales, support, and relationships. • Pursue acquisitions to expand reach and capabilities. Public Release 15
Extend Technical Leadership • Target R&D spend on adjacent and transformational products. • Continue software ease of use initiatives for a broader market with lower skill levels. • Increase our competitive advantages through partnerships. • Continue to maintain leading edge sensor performance. • Focus our on low cost, quick feedback, lean start-up activities. • We will be delivering more new products in the next nine months than at any time in our history – with a strong focus on the 3D Scanning Solutions market. Public Release 16
Maintain Fiscal Discipline • Focus on profitable top line growth. • Target our product mix for higher gross margins: – Maintain a 45% gross margin benchmark. • Reduce SG&A costs & increase OI: – Improve operational efficiencies as we grow the top line. • Maintain operational excellence: – Focus on continued high customer satisfaction. • Prudent capital allocation: – Wise use of cash to maximize shareholder value. – Maintain a strong balance sheet. Public Release 17
Recent Shareholder Items • Upcoming Investor Presentations — Sidoti Emerging Growth Forum in NYC on 1/12/2015. — Needham Growth Conference in NYC on 1/13/2015. — Stifel Technology Conference in SF on 2/9/15. • Board actions and considerations — Adopted term limit guideline of 10 years. — Adopted age limit guideline of 75 years. — Adopted minimum share holding requirements for the BOD and the Executive Team. — Reduced external Directors to six from seven. — Active discussions on best use of cash. — Active discussions on Poison Pill and By Laws. Public Release 18
Summary Perceptron is a global technology company offering best-in-class advanced manufacturing solutions. Strong and growing automotive business. Technology with broad market applicability. Large adjacent markets for future product expansion. Focused growth strategy. Financially strong. Experienced, motivated management team. New management team with Board mandate to drive growth, diversify and increase shareholder value. Public Release 19
Thank you for you time and interest. Questions? Public Release 20
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