a journey of transformation & growth
TRANSCRIPT
AJourneyofTransformation&GrowthSidoti &CompanyFall2017ConferenceSeptember28,2017
www.mastechdigital.com 2CONFIDENTIALANDRESTRICTED
SPEAKERS
JoinedasthePresidentandChiefExecutiveOfficerinMarch2016
Vivekhasoverthreedecadesofexperienceinthetechnologyindustry• ChiefExecutiveofGlobalInfrastructureManagementServicesatZensar Technologies
• PlayedamajorroleinglobalgrowthofZensar
AdvancedManagementProgramfromWhartonBusinessSchool,UniversityofPennsylvania
BachelorsinTechnologyfromtheIndianInstituteofTechnology,Delhi,India
VivekGuptaPresident&CEO
JackCroninChiefFinancialOfficer
AsCFO,JackoverseesallfinancefunctionsaswellasM&A-relatedactivities
PlayedaleadershiproleinMastechDigital’sacquisitionofInfoTrellis andHudson’sITstaffingbusiness,aswellasthesaleofpastMastechDigitalsubsidiaries
18yearsatMastechDigital• ChiefFinancialOfficeratIndustrialCeramics• AssistantCorporateControlleratDravo Corporation
MBAfromKatzBusinessSchool,UniversityofPittsburgh
CertifiedCPAandCMA
www.mastechdigital.com 3CONFIDENTIALANDRESTRICTED
SAFE HARBOR DISCLOSURE
Certainstatementscontainedinthispresentationareforward-lookingstatementsbasedonmanagement’sexpectations,estimates,projectionsandassumptions.Wordssuchas“expects,”“anticipates,”“plans,”
“believes,”“scheduled,”“estimates”andvariationsofthesewordsandsimilarexpressionsareintendedtoidentifyforward-lookingstatements,whichincludebutarenotlimitedtoprojectionsofrevenues,
earnings,andcashflow.ThesestatementsarebasedoninformationcurrentlyavailabletotheCompanyanditassumesnoobligationtoupdatetheforward-lookingstatementsascircumstanceschange.Thesestatementsarenotguaranteesoffutureperformanceandinvolvecertainrisksanduncertainties,whicharedifficulttopredict.Therefore,actualfutureresultsandtrendsmaydiffermateriallyfromwhatis
forecastinforward-lookingstatementsduetoavarietyoffactors,including,withoutlimitation,thelevelofmarketdemandforitsservices,thehighlycompetitivemarketforthetypesofservicesofferedbythecompany,theimpactofcompetitivefactorsonprofitmargins,marketconditionsthatcouldcausethe
Company’scustomerstoreducetheirspendingforitsservices,andthecompany’sabilitytocreate,acquireandbuildnewlinesofbusiness,toattractandretainqualifiedpersonnel,reducecostsandconservecash,andotherrisksthataredescribedinmoredetailinthecompany’sfilingswiththeSecuritiesandExchange
CommissionincludingitsForm10-KfortheyearendedDecember 31,2016.
www.mastechdigital.com 4CONFIDENTIALRESTRICTED
ABOUT US
DigitaltechnologiescompanyhelpingglobalcorporationssolvetheirDigitalTransformationchallenges
Pittsburgh,PA-headquartered|NYSE-listed(MHH)|Minority-owned
$132Minrevenues,in2016
Today,1,500+associatesandgrowing
DeepcapabilitiesinDataManagementandAnalytics,Salesforce,SAPHANA,andDigitalLearningServices
IndustryRecognition
OurTransformationJourneyThrough theYears
www.mastechdigital.com 6CONFIDENTIALRESTRICTED
ATIMELINE OF GROWTH
Mastech1.0 Mastech1.5
MaintainedconsistentgrowthasapremierITstaffingcompany
intheU.S.
RebrandedasMastechDigital,withrecast
services,focusondigitalstaffingandintroduceddigitaltransformationservices
TransformedMastechDigitalintoadigitaltechnologiescompanywith
deepcapabilitiesinDataManagementandAnalytics
Mastech2.0
www.mastechdigital.com 7CONFIDENTIALRESTRICTED
MASTECH 1.0
Positioning:ApremierITstaffingcompanyintheU.S.
Focus:• SupplyingITcontractorstoU.S.corporations
• Organicandinorganicgrowth
• End-to-endmainstreamtechnologystaffing
Clients:Fortune500corporations,leadingmanagedservice
providers(MSP)andintegrators
• AcquiredITbusinessofHudsonin2015tobolsterdirect
clientbusiness
Delivery:Hybridstaffingmodelwithrecruitmentcentresinthe
U.S.andIndia
www.mastechdigital.com 8CONFIDENTIALRESTRICTED
MASTECH 1.5
Positioning:Adigitalandmainstreamtechnologystaffing
companywithaddedcapabilitiesinDigital
TransformationServices
Focus:• Movementtowarddigitaltechnologystaffing
(SMAC,IoT,Automation)
• InclusiveinvestmentsinDigitalTransformationServices
(Salesforce,SAPHANA,andDigitalLearning)
Clients:Increasedfocusondirectclients
Delivery:Introducedproject-baseddeliveryofdigital
transformationservices
www.mastechdigital.com 9CONFIDENTIALRESTRICTED
MASTECH 2.0
Positioning:Adigitaltechnologiescompanywithstrong
capabilitiesinDataManagement&Analytics,
Salesforce,SAPHANA,andDigitalLearning
Focus:• Consultingandproject-basedservicesinData
ManagementandAnalytics
• Practice-ledapproachinSalesforce,SAPHANA,
andDigitalLearning
Clients:• Primetarget:Blue-chipGlobalcorporations
• ContinuetoserviceleadingMSPsandintegrators
• Strongallianceswithglobalsoftwaregiantssuchas
IBMandInformatica
Delivery:Globaldeliverymodelexecutedoutof9locationsinthe
U.S.,Canada,andIndia
www.mastechdigital.com 10CONFIDENTIALRESTRICTED
INFOTRELLIS ACQUISITION
• AcquiredInfoTrellis inJuly,2017• Purchaseprice:$55M
• Canada-basedDataManagementandAnalyticscompany
• Augmentedscale,expandedglobaldeliverycapability,anddeeperleadershipstrength• Globalheadcountnowexceeding1,500
• Economiesofscalethroughsharedsupportservices
• FortifiedMastechDigital’scapabilitiesinconsultingandproject-baseddeliveryofDigitalTransformationServices
www.mastechdigital.com 11CONFIDENTIALRESTRICTED
FINANCIAL HIGHLIGHTS (2016):MASTECH DIGITAL AND INFOTRELLIS
Revenue:$132M
EBITDA:$5.5M
Revenue:$25.1M
EBITDA:$7.6M
INFOTRELLIS
OurPerformanceFor2012- 2016
www.mastechdigital.com 13CONFIDENTIALRESTRICTED
REVENUE &EPSGROWTH
$90.8M $106.9M $113.5M $123.5M $132M
$0.54
$0.83 $0.81$0.85
$0.84
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0
20
40
60
80
100
120
140
2012 2013 2014 2015 2016
Non
-GAA
PDilutedEPS
Revenu
es(inUS
Dmillions)
Revenues Non-GAAPDilutedEPS
Duringthesameperiod,theindustryCAGRwasat4.7%
www.mastechdigital.com 14CONFIDENTIALRESTRICTED
SHARE PRICE GROWTH
2-yeargrowthfromSept.19,2015toSept.19,2017
$8.10
$10.56
www.mastechdigital.com 15CONFIDENTIALRESTRICTED
BILLABLE ASSOCIATE HEADCOUNT
632
742 731
846881
968
0
100
200
300
400
500
600
700
800
900
1000
2012 2013 2014 2015 2016 Q2,2017
www.mastechdigital.com 16CONFIDENTIALRESTRICTED
HIGHLIGHTS OF THE LAST FIVE QUARTERS
• Achievedthroughacombinationof:
• Strengthenedleadershipinthecompany
• Increasedoperationalefficienciesdrivenbyaglobaldeliverymodel,withafocuson
sharedsupportservices
• Refreshedandclearpositioningofthecompany,withnewandrecastserviceofferings
• AcquisitionofInfoTrellis
DoubledtheDigital-ledrevenuesfrom18%tonearly35%(pro-formabasis)
Totalheadcountgrew37%from1,115to1,523associates(pro-formabasis)
Expandedglobalfootprintwiththeadditionofthreenewlocations(Toronto,Austin,andChennaiinIndia)
OurKeyClientsSignificantAccountsForMastechDigitalandMastechInfoTrellis
www.mastechdigital.com 18CONFIDENTIALRESTRICTED
MASTECH DIGITAL CLIENTS
www.mastechdigital.com 19CONFIDENTIALRESTRICTED
MASTECH INFOTRELLIS CLIENTS
OurIndustryTheWayWeSeeIt
www.mastechdigital.com 21CONFIDENTIALRESTRICTED
POSITIVE INDICATORS
• BigdataandDataAnalyticswillgrowfrom$130.1billion
in2016tomorethan$203billionin2020,atacompound
annualgrowthrate(CAGR)of11.7%
• ITstaffingindustryprojectedtoreach$31.8billionby
2018;2017growthprojectedat6%
• DigitalTechnologystaffingwillbethesweetspot –
especiallycloudcomputing,datascienceandanalytics,
cybersecurity,andomni-channelapplicationdevelopment
• 52.4% ofNorthAmericancorporationswillincreasetheir
investmentinthisspaceoverthenext2to3years
ThankYou
CONFIDENTIALRESTRICTEDCONFIDENTIALRESTRICTED
CORPORATEHEADQUARTERS1305CherringtonParkwayBuilding210,Suite400MoonTownship,PA15108
LETSGETINTOUCHDonnaKijowski – Manager, InvestorRelationsPhone:E-mail:
NorthAmerica:Pittsburgh|Chicago|Boston|Dallas|Austin|Fremont|Tampa|Orlando|Denver|TorontoIndia:NOIDA | Chennai