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Overview of Emtec
Dinesh Desai: CEOGreg Chandler: CFO
March 2, 2010
AGC’s West Coast Growth Conference
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Forward-Looking StatementsThis presentation contains forward-looking statements concerning the Company’s current expectations as to future Growth.
These statements are based upon a review of industry reports, current business conditions in areas where the Company does business, the availability of qualified professionals and product availability from vendors and other factors that involve risk and uncertainty.
As such, actual results may differ materially in response to a change in such factors.
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Emtec Corporate Profile$230MM Systems
Integrator
Publically Traded – OTC: ETEC
Locations Coast to Coast U.S.,
Canada, & India
Growing and Profitable
Focus on Public Sector, Education &
selected Commercial sectors
600 Employees -450 Technical
Staff
Management Team: Growth
Oriented, Successful Track
Record
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Experienced, Growth Oriented Management
Team
• 171% growth in services revenue, and 33% growth in EPS – in a tough economic climate
• $223M+ profitable and growing revenue platform
• Company has added significant management talent to enable it to run a much larger organization
Track Record of Smart Acquisitions & Integrations which have been accretive
to the bottom line
• Two $100 million acquisitions merged and successfully integrated
• Five smaller acquisitions integrated
• Actively looking for opportunities for consolidation
Track Record
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Strong Vertical Approach
BUSINESS STRATEGY & PROCESS
MANAGED SERVICES
Solu
tions
Vertical Industry Segments With Unique Value-Propositions
Secu
rity
Serv
ices
Util
itySe
rvic
es
App
Serv
ices
Info
rmat
ion
& D
ata
Security Application
ITO
pera
tions
Operations
IT STRATEGY & PLANNINGN
etw
orks
Plat
form
s
Infrastructure
AD
VISO
RYPR
OJE
CTS
/ ST
AFF
ING
SUST
AIN
/ M
AN
AG
E
PartnerBIG 4
TIER 1 SI
BOUTIQUE
On-
Site
/Off-
Shor
eO
ff-Sh
ore
IT PROCESS OPTIMIZATION (VBM)
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Significant Industry Consolidation has created a bifurcated model of competitors• IBM/PwC• HP/EDS• Oracle/Sun• DELL/Perot
Offshore, especially Indian players changing cost/price expectations
Technology Change Continues Unabated
Economy has impacted every market segment, with the exception of U.S. Federal, Education and Healthcare• “Cost take out” is the primary driver
for most CIOs – leading to infrastructure and process optimization requirements
Changing Landscape
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Market Positioning
NichePerficient, Adea, Acuity
Collebra, DarwinBlueFin
Global SIIBM, HP,
ACN, CSC,CG
Size
Port
folio
Flexible, value based, full life-cycle Systems Integrator Appropriate mix of on-shore, off-shore delivery Flexible, full-lifecycle, application and infrastructure services provider
Access to large managed services multi-year clients with recurring revenuePresence in high growth market verticals
US Federal Government, Education and Healthcare
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Major TrendsStudent Information SystemsSecurityVirtual/Remote Learning systemsElimination of Textbooks
Growth Drivers“No Child Left Behind”“One teacher, one subject, one classroom” will not be the normReducing the total number of faculty while improving the quality of education through technologyStudents use of technology accelerates more quickly than schools can keep up with it
Market: K-12 Education
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Major TrendsPrivate CloudGovernment ERPITSM/ITILRole of CIO in agencies increasingly important
Growth DriversRetiring Baby Boomers – Outsourcing TrendMove toward “Government 2.0” – citizen-driven, employee-centric, transformational. Cyber Security ThreatsIntelligence
Market: Federal
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Industries
Life SciencesCommercialFederal State & Local
Education Federal
Business Strategy & Process Consulting
IT Planning & Consulting Services
Application Services
Business Process Outsourcing
IT Infrastructure Services
On-shore, Near-shore, Off-shore, Application Services
Emtec Acquisition Targets
Solu
tions
Growth Through Synergistic Acquisitions
Growth Drivers – Highly Diversified Industry & Vendor Consolidation
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$20.5 $55.8 $56.4
$190.5
$167.2 $170.6
$-
$50.0
$100.0
$150.0
$200.0
$250.0
2008 2009 LTM (Nov 2009)
Revenue
Consulting Services Procurement Services
LTM data is unaudited
Scale with Shifting Revenue Mix
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$-
$2.0
$4.0
$6.0
$8.0
2008 2009 LTM (Nov 2009)
$4.7 $6.4
$7.3
Reported EBITDA*(FYE Aug 31)
$-
$0.03
$0.06
$0.09
$0.12
$0.15
2008 2009 LTM (Nov 2009)
$0.09 $0.12
$0.14
Fully Diluted EPS (FYE Aug 31)
*LTM Adjusted EBITDA per the Company’s earning releases was $8.9M
LTM data is unaudited
Leading to Greater Profitability
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LTM data is unaudited
Vertical Breakdown
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Balance Sheet as of Nov 30, 2009 (Unaudited)
Tangible Assets of over $67M• Over $43M in receivables
Net debt of $11.4M
Debt/EBITDA 1.5x
Debt to adjusted EBITDA 1.3x
Cash flows
Nearly $9M in Adjusted EBITDA and Positive Cash flows from
operations
Low Capex (approximately $1M in 2009)
Balance Sheet & Cash Flow Highlights
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Appendix
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Clients
CommercialStrong Vertical Approach in Federal and State & Education SectorsDiverse Set of Long-Term Client RelationshipsNot leveraged, except for GwinnettOpportunity to Leverage Across a Broad Solution SetRight-Shore Approach to Service DeliveryAccelerating Financial Profile
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Government Clients
Federal ClientsCivilian AgenciesDepartment of Justice, CDC, VADOD ClientsArmy, Air Force
State & Local ClientsState of NJCity of NY
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Education Clients
EducationGwinnett County Schools (outside Atlanta)Duval County Schools (Jacksonville)Patterson NJ
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Commercial Clients
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Questions?
Dinesh Desai: CEOGreg Chandler: CFO
March 2, 2010