Board of Directors Presentation
Transcript: Financial Summary NPV = $24,148,000 Threats Market Share - 0% Units Sold - 12.92% Customer Awareness - 7.25% Customer Accessibility - 19.74% NPV CAPM: 2.16% + 1(10.3% - 2.16%) = 12.7 Cost of Equity = 12.7% Cash Flow 2019 R&D Costs: $471,456 Capacity does not increase this year Promotion Budget remains at $1,200,000 Year 2019 Total Cost: $1,671,456 R&D Costs for Dweeb 2018: $473,000 R&D Costs for Dixie: $498,000 Strategy Moving Forward Low End Units: 3,282,669 Revenue: $56,614,500 2018 Areas Needing Improvement: Highlights 2017 Continue being the automation leader in the segment Maintain slightly higher price than competition Continue improving our product to meet customer needs NPV: $14,944,000 2,631,000 units Opportunities Performance Sector: Dot Questions? 2019 Performance: 9.0 Size: 11.0 Strategy: Bid: On specs Cid: On R&D cycle time and number of products Astro: First to market, capacity 2019 Corporate Mission, Goals, Business Definition Dixie: 712,000 units Dweeb: 594,000 units Total: 1,306,000 units Goals: -Increase stock price -Contribution margin -Satisfy customers -Lower employee turnover -TQM Initiatives Dune: Forecasted revenue: $29,737,500 Capacity investment: $4,000,000 Django: Forecasted revenue: $39,216,450 Capacity investment: $7,000,000 *Promo Budget past $1.2 million has diminished returns; not justifiable. *Sales forecasts and revenues calculated from base demand; no TQM additions. Dot's Standing as of 2017 Dune Weaknesses Successes: Automation Level of 8.2 Customer awareness is number 1 in sector Customer accessibility is number 1 in sector Second highest market share Second Highest Contribution Margin Digby Company $25.61/unit in 2017, 3rd highest in segment Goals: Traditional 2,481,000 units Market Share - 19% Units Sold - 2,631,000 Customer Awareness - 74% Customer Accessibility - 91% Units: 2,938,827 Revenue: $50,694,765 Capacity Investment: $15,520,000 Increase capacity for Dot by 200,000 units Increase Promotion Budget to $1.2 million Reduce variable costs Keep age close to 1.0 Bead Change from 2016-2017 2018 Goals: Automatic Door Sensors R&D Costs High End Raise Capacity for Dweeb Improvements Moving Forward: Improvements: Lower price Increase automation Increase Capacity by 300,000 units Digby Company Future Plans for Dot Low End Segment Dune Strengths Dune Threats Dune: Forecasted revenue: $34,638,240 Django: Forecasted revenue: $46,393,060 Successes: Sales Forecast Dune Opportunities Strengths Second highest market share at 20% Second highest customer survey Revision date of 5/21/17 148% plant utilization Sufficient forecast Highest sales budget of $2,027,000 pricing growth rate adjustments Lower price Better plant utilization Improve performance and size High End Year 2019 Automatic Door Sensors R&D Costs: $415,000 Capacity Increase: $4,700,000 *Promotion Budget: $1,200,000 Year 2018 Total: $6,315,000 Highest Customer Accessibility at 91% Differentiation Introduce Django to the size segment Stay competitive in the size segment while maintaining a competitive position in the other four segments *Sales Forecast Year 2020 Market Share - 19% Units Sold - 2,330,000 Customer Awareness - 69% Customer Accessibility - 76% Successes: Second-highest Market Share in segment (21%) Second-highest Plant Utilization (141%) Third-highest Accessibility in segment market (82%) 2018: 2,244,000 units ($54,978,000 in revenue) Second highest price in segment at $25.00 2020 Financial Summary ROI: 5% Stock Price - $57.07 Cumulative Profit - $28.5 Million ROE - 10.8% Current Ratio: 1.51 Inventory Turnover: 68.83 Days Debt to Assets: 45% Plant assets to long term liabilities: .28 $0 2019: 2,450,000 units ($58,800,000 in revenue) Total R&D Costs to increase Daze to our strategic specs: $1.01M Dixie & Dweeb R&D Costs: $471,072 No capacity increase Maintain Promotion Budget of $1,200,000 Year 2020 Total Cost: $1,671,072 Unnecessary to invest in more capacity (118% plant utilization 2016) Highest Contribution Margin at 44% 2018 Forecasting Methodology Baker's automation Baker's Customer Survey Score Able's Pricing Assumptions and Constants NPV: $24,944,000 Units: 3,666,742 Revenue: $61,422,250 Size: Digital Cameras, Smartphones Performance: RFID tags Traditional: Automatic Doors Low End: Light Switches High End: Spacecraft Maintenance and Medical Robotics Opportunities Highest Combined Market Share 2017 Mission Statement: To maximize customer satisfaction while increasing value within our company NPV: $2,444,000 Performance 2,781,000 units Low Awareness (57%) Capacity is lacking, stocked out Highlights 2016 Invest in Quality Function Deployment Effort to reduce R&D cycle time Invest Concurrent Engineering and 6 Sigma Training to reduce labor and material costs Invest in promotions for Dweeb to boost awareness NPV: $6,807,000 NPV: Overall Business $2,466,000 Only using 118% of capacity Resources Dune: Forecasted revenue: $40,336,770 Django: Forecasted revenue: $54,882,990 Daze Dell Dixie Dot Dune Dweeb