A Leading Provider of Investment, Merchant Banking and Advisory Servicesto Companies and Investors in the Satellite, Media and Telecom SectorsThe View from Wall Street & DISAprepared forISCe 2008June 2008
Financial Health of Satcom 2FSS Operators– Global commercial demand for capacity generally strong despite economy Video distribution tends to be recession resistant– Government demand has been strong and important Mostly benefitting largest fleet operators– Investor concern about future demand Congressional review of DISA Post Iraq Post launch of government owned assets (e.g. WGS)MSS Operators– Commercial health of many MSS operators in question Particularly with LEO fleet replacements and funding of ATC systems– Government use helpful, but not sufficient to make operators profitable Still waiting for government sponsorship of national systems for Homeland Security COTM threatens futureSatcom Ground Segment Companies– Very fragmented, mostly small-cap other than aerospace primes and lead subcontractors– Easier today to start a Satcom related company, harder to grow to critical scale for good ROI– Consolidation of 2nd and 3rd tier Satcom related contractors gaining momentum Leading antenna, equipment and component manufacturers DSTS-G Players acquired (SpaceLink and Arrowhead) or in play (Artel)
Public Market Analysis(as of Friday, June 6th, 2008)Large-Cap Space and Defense6%( , in millions, except per share price)Market Cap 065,21034,530EV ,97035,910Close Price ormance3 Month6 Month 12 2%( , in millions, except per share price)Market Cap 3,390.005,0903,2505,1606,9907,7001,7708,9505,125EV 4,8407,9404,8805,5708,5008,2702,4509,8206,755Close Price 103.4052.0878.6037.5555.8957.1941.5055.663 Month3%22%35%55%-5%20%8%1%14%Performance6 Month 12 52008E12.612.117.526.411.014.013.112.312.83 months6 monthsMid-Cap S&D12 monthsS&P 500Russell 2000Mid-Cap S&D10%5%Return52 WeekLowHigh 95.00 166.9437.2049.4253.2476.00Large-Cap S&D2%Mid-Cap Space and DefenseCompanyAlliant TechsysBall CorpDRS Technologies IncFLIR Systems IncGoodrich CorpHarris CorpMoog (Class A)Rockwell Collins IncMedianDow Jones IndustrialS&P 5004%P/EReturnCompanyBoeingGeneral Dynamics CorpHoneywell International IncI.T.T.IndustriesLockheed Martin CorpNorthrop CorpRaytheon CoL-3 Communications Holdings IncUnited TechnologiesMedian52 WeekLowHigh 71.58 4485.2152.2867.4990.11115.3365.2082.50Large-Cap S&D0%-5%-10%Small-Cap Space and Defense( , in millions, except per share price)-15%52 WeekLowHigh 35.45 2.715.7719.0636.49Market Cap 5EV ose Price .155.0322.003 ce6 Month 12 27%-11%-11%62%50%0%-3%5%27%53%-7%-35%-30%-9%-7%3 .818.322.610.712.217.015%Small-Cap S&D12 monthsRussell 2000NASDAQSmall-Cap S&D5%0%-5%-10%-15%36 months10%ReturnCompanyComtech Telecommunications CorpCPI International IncEMS Technologies IncGeoEye IncGenCorp IncGilat Satellite Networks LtdGlobecomm Systems IncHughes Communications IncIntegral System IncKVH Industries IncOrbital Sciences CorpTeleCommunication Systems IncViaSat IncMedian3 months6 months12 months
Ground Systems Competitive LandscapeRecently AcquiredIn the s**Publicly nRamTelUS SatelliteSegovia IP orp.AdvantechAMTNorSatMore governmentand military oriented4Has Products***Has Products &ServiceIDC***GCSSYS TechCPI**COMTekAgiosatArrowheadGlobalsatHas ServiceSize of bubblerepresents annualrevenue figureCapRockSED SystemsMarshall Artel(div. of Calian)Globecomm*ViaSatNERA (div of iteq(Satcom)Paradise DataHeliusNewtec* ShironIpricot(i2e)More enterpriseoriented
Recent M&A TransactionsAnnounce Date5AcquirorTargetValue 4 BillionValuation12/06LoralTelesat7.1x Sales; 13.4x EBITDA2/07CaprockArrowhead4/07GlobecommGlobalsat 18.4 million0.9x Sales4/07L-3GCS 153 million1.7x Sales5/07Cobham plcPatriot Antenna Systems6/07BC PartnersIntelsat (76% stake)7/07RadyneAeroAstro 18.0 million8/07Abertis TelecomHispasat (28.4% stake) 199 million1/08SES GlobalSpacecomREJECTED1/08Alliant TechsystemsMDA Satellite Div.BLOCKEDCD 1.3 billion offer; 2.7x Sales2/08KratosSYS Technologies 50 million0.6x Sales2/08JSATSpace Communications Corp.3/08Mivtach Shamir HoldingsGilat Satellite Network3/08Transdigm GroupCEF Industries5/08ComtechRadyne5/08Finmeccanica S.p.A.DRS Technologies5/08Cobham plcM/A-Com’s RF components unitNot disclosed 18 m E-out 17 Billion7.7x Sales; 11.3x EBITDA5.8x Sales; 7.9x EBITDANot disclosed 475 million 83 million 195 million 5.2 Billion 425 million38% premium2.8x Sales33% premium, 1.3x Sales32% prem, 1.8x Sales, 13.6x EBITDA0.9x Sales, 6.8x EBITDA
2 Financial Health of Satcom FSS Operators - Global commercial demand for capacity generally strong despite economy Video distribution tends to be recession resistant - Government demand has been strong and important Mostly benefitting largest fleet operators - Investor concern about future demand Congressional review of DISA Post Iraq Post launch of government .