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| 8-K - WINLAND ELECTRONICS INC 8-K 2-7-2013 - WINLAND ELECTRONICS INC | form8k.htm |
Exhibit 99.1
Winland: The Way Forward
David Gagne, Chief Executive Officer
February 7, 2013
February 7, 2013
Certain statements in this presentation relate to future results that are forward-
looking statements as defined in the Private Securities Litigation Reform Act of
1995. This presentation contains statements involving risks and uncertainties,
including statements relating to Winland Electronics’ market opportunity and
future business prospects. Actual results may differ materially and reported
results should not be considered as an indication of future performance. Factors
that could cause actual results to differ are included in Winland Electronics'
Annual Report on Form10K and Quarterly Reports on Form 10Q.
looking statements as defined in the Private Securities Litigation Reform Act of
1995. This presentation contains statements involving risks and uncertainties,
including statements relating to Winland Electronics’ market opportunity and
future business prospects. Actual results may differ materially and reported
results should not be considered as an indication of future performance. Factors
that could cause actual results to differ are included in Winland Electronics'
Annual Report on Form10K and Quarterly Reports on Form 10Q.
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SAFE HARBOR STATEMENT
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WINLAND ELECTRONICS, INC. (AMEX:WEX)
An industry leader in critical environmental monitoring solutions
Temp°Alert®
WaterBug Alert®
Humid-Alert™
Vehicle-Alert™
EnviroAlert®
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STRATEGY OPTIONS
1. Maintain company at status quo as hardware-centric provider of
top-of-the-line critical environmental monitoring solutions
top-of-the-line critical environmental monitoring solutions
2. Sell or liquidate the business
3. Execute on a growth strategy to become the leading provider
of real-time cloud-based, environmental monitoring
of real-time cloud-based, environmental monitoring
• Leverage existing products to our loyal existing customer base
through an established distribution network
through an established distribution network
• Create a promising new SaaS-based technology platform using
our EnviroAlert800-ip product (an established and proven
solution) to create a highly-profitable business model with a
recurring revenue stream
our EnviroAlert800-ip product (an established and proven
solution) to create a highly-profitable business model with a
recurring revenue stream
RECOMMENDATION:
Why?
• A strong serviceable obtainable market (SOM) of $400MM exists
• Fragmented market currently with small “leaders” (no gorilla)
• 100% of prospects believe they need environmental monitoring
• Low current adoption in the SOM exists
• Winland has the right technology direction and unique relationships to leverage
• Winland already has ~60,000 “EnviroAlert” units as an installed base
What?
• Focus on and penetrate key retail drug and food market segments (SOM’s)
How?
• Leverage the explosion in M2M, mobile and cloud services to transform to a SaaS company
• Invest in software/product development to work with our EnviroAlert800IP
• Rebrand the company: Be a world-class, digitally savvy sales/marketing/support company
• Expand direct sales, security integrator partnerships and marketing efforts
• Minimize impact of SaaS business growth on our legacy business during transition
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Execute on a growth strategy to become the leading provider
of real-time, cloud-based, environmental monitoring
of real-time, cloud-based, environmental monitoring
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THE INTELLIGENT DEVICE HIERARCHY
Mobile Phones, Smart Phones
Notebooks, Mobile Terminals
Tablets, Media Players
Desktop PCs
Servers/Storage
Routers/Switches/Gateways
Printers/Imaging
Game/Media Equipment and Players
Consumer/Commercial Vehicle
Off-Highway Vehicles
Air/Rail/Transit/Marine
Navigation Systems
Mobile Healthcare Devices
Building Equipment
Retail/Vending/POS/ATMs
Industrial Machinery
Healthcare Equipment
Power Distribution/Infrastructure
Controllers, Sensors
Instruments, Meters
Microprocessors
Microcontrollers
Source: Harbor Research, Inc.
WINLAND’S SERVICEABLE OBTAINABLE MARKETS (SOM)
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Target market size: ~$400 million
• Clinics/Labs/Nursing Homes $125 million
• Commercial Kitchens $70 million
• Convenience Stores $70 million
• Healthcare (e.g., hospitals) $48 million
• Independent Pharmacies $11 million
• National Retail Pharmacies $15 million
• Quick Serve Restaurants $64 million
Food / Healthcare / Drug
Source: Winland Market Research Study 2012, Cicso 2012
Worldwide M2M Sales in 2012 (est.): $328 billion
Total U.S. market Food / Healthcare / Drug: $900 million
MARKET RESEARCH STUDY
Results prove positive outlook for New SaaS Platform
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• Close to 90 governmental, industry association, industry publication and
analyst organizations contacted with intelligence and guidance collected
analyst organizations contacted with intelligence and guidance collected
• More than 25 market segments and correlated studies analyzed
• Close to 5,000 calls made into key partners, customers and prospects
• Strategy meetings with key solution integrators, current distributors and
manufacturer’s reps.
manufacturer’s reps.
• Competitive assessment completed on environmental monitoring companies
• Full product and technology assessment completed
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WINLAND MARKET RESEARCH STUDY
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STRONG POTENTIAL DEMAND
78% Verticals indicating environmental
monitoring is critical, very
important or important
monitoring is critical, very
important or important
Critical or Very Important
92% Clinics
80% Refrigerated food warehouses
63% Independent pharmacies
42% Convenience stores
22% Verticals indicating
monitoring is not important
monitoring is not important
Importance of
Environmental Monitoring
by Verticals
Environmental Monitoring
by Verticals
Source: Winland Market Research Study 2012
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LOGS ARE IMPORTANT
Sample logging requirements:
Clinics
• State medical board
• FDA
• Internal departments/Parent
organization
organization
• CLIA certification
(HHS/Medicare/Medicaid)
(HHS/Medicare/Medicaid)
Refrigerated food warehouses
• FDA
• AIB/HACCP accreditation
• Local health departments
• USDA
Independent pharmacies
• PCCA - Professional Compounding
Centers of America certification
Centers of America certification
• CLIA certification
(HHS/Medicare/Medicaid)
(HHS/Medicare/Medicaid)
• State Pharmaceutical Association
Convenience stores
• State health department
• Local health department
• Internal departments
Logging required by Vertical
Source: Winland Market Research Study 2012
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EARLY POSITIVE FEEDBACK ON WINLAND EA800-IP
EA800-ip user word frequency
% of EA800IP users
Source: Winland Market Research Study 2012
92% of brand attributes are positive
Other notable words: Supportive, Useful/Functional,
Quality, Conscientious, Progressive
Quality, Conscientious, Progressive
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USERS LIKE THE EA800-IP’S CLOUD FUNCTIONALITY
100% Users aware of EA800-ip’s
cloud capability
cloud capability
83% Currently using cloud
functionality (100% like it!)
functionality (100% like it!)
Customer comments:
“I love the cloud - it’s great. Everything
I need is on there.”
I need is on there.”
“I’m logged into the website all
the time.”
the time.”
“The cloud has been 100% useful
for me.”
for me.”
% of
EA800IP users
EA800IP users
Source: Winland Market Research Study 2012
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MEDICAL EA800-IP USERS SEE GREAT PRICE-TO-VALUE
“The competition is at least 10 times the
price and even then it doesn’t do what
Winland does.”
price and even then it doesn’t do what
Winland does.”
“I have so much at stake here, spending this
small amount was a total no-brainer.”
small amount was a total no-brainer.”
“Losing our certification is not an option …
Spending just a little bit on Winland was easy
to do.”
Spending just a little bit on Winland was easy
to do.”
Overall, EA800-ip users see great
value in the product, with medical
users (device manufacturers/lab,
clinics, pharmacies) seeing
excellent price-to-value.
value in the product, with medical
users (device manufacturers/lab,
clinics, pharmacies) seeing
excellent price-to-value.
Source: Winland Market Research Study 2012
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KEY FEATURES USERS LIKE
ABOUT THE EA800-IP
ABOUT THE EA800-IP
“Getting a text if the fridge is getting
warm is so key to me.”
warm is so key to me.”
“I can watch the temperatures from home
now. No more driving in just for a false
alarm if the defrost cycle is a bit longer
than usual.”
now. No more driving in just for a false
alarm if the defrost cycle is a bit longer
than usual.”
“The logging is perfect.”
% of
EA800IP users
EA800IP users
Source: Winland Market Research Study 2012
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NEW MARKETS VALUE THE SAME FUNCTIONALITY
• ~ 50% of users and verticals cite
alerts as a top feature
alerts as a top feature
• Approximately one-third of users
and almost 50% of surveyed
verticals said that reporting and
logging was a key feature
and almost 50% of surveyed
verticals said that reporting and
logging was a key feature
• 25% of users and 30% of verticals
said that alarm panel integration
was a key feature
said that alarm panel integration
was a key feature
% Indicating
key feature
key feature
Source: Winland Market Research Study 2012
WHERE EA800-IP USERS FIND WINLAND
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Need to improve marketing and distribution:
“It was hard to find Winland on the Internet. We
bought a different product first, then when that fell
apart, we searched again and found Winland.”
bought a different product first, then when that fell
apart, we searched again and found Winland.”
“I did extensive research on the Internet but did not
hear about Winland until my security company brought
them to my attention.”
hear about Winland until my security company brought
them to my attention.”
Common reasons for starting a product search:
• Recent product loss
“We had two refrigerators die on us recently and we
lost more than $100,000 of drugs.”
lost more than $100,000 of drugs.”
• Quality/Logging requirements
“We have a quality department, they came to us and
asked if we could log our temperatures.”
asked if we could log our temperatures.”
• Looking for “peace of mind”
“Look - we’re closed over the weekend. We’ve lost
product over the weekend before and I just didn’t
product over the weekend before and I just didn’t
want to worry about it any more.”
Source: Winland Market Research Study 2012
GO-TO-MARKET STRATEGY
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NEW GO-TO-MARKET STRATEGY
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Implement new pricing options:
1) Ongoing monthly subscription fee covering both hardware and services
2) Up-front hardware fee plus an ongoing monthly subscription fee for services
1) Ongoing monthly subscription fee covering both hardware and services
2) Up-front hardware fee plus an ongoing monthly subscription fee for services
Greater account control, predictive revenues, better margins,
improved visibility and brand awareness
improved visibility and brand awareness
Integrated Product, Support and
Go-to-Market Strategies
Customers
Manufacturer’s Reps
Winland
Website
Website
SOLUTION ARCHITECTURE
Web Server
Application
Server
Server
Data
Repository
Internet
Report Server
• Modularized Architecture
• Scalable
• High-Availability
• Layered Security
• Web-based monitoring, alerting and reporting solution
• Robust data reporting and compliance
• Enterprise wide administration and security
EnviroAlert 800IP’s
Installed in
monitoring locations
monitoring locations
Hosted Environment
Customer Environment
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BRANDING AND MARKETING STRATEGY
• Build a strong brand across all verticals
• Brand will extend itself as the company grows
• Opportunity to differentiate from the competition
• Tactics:
• Execute on a rebranding initiative (looking at name, logo, colors, etc.)
• Become “the” thought leader in environmental monitoring
• New website
• Aggressive messaging program into target verticals
• Targeted advertising
• Lead generation and list management
• Monthly communications (e.g., email newsletter, blog on website)
• New vertical trade shows
• Partner enablement (e.g., training, partner portal reference)
• Key Alliances & SaaS White Label program
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ACCOMPLISHED TO DATE
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PRODUCT DEVELOPMENT
• Key resources and partners identified
• Product release plan developed
• Product development underway
SALES & MARKETING
• New website and e-commerce
platform planning underway
platform planning underway
• Rebranding initiative underway
KEY FOCUS AREAS
• Add strong sales, marketing and
channel management resources
channel management resources
• Create value-based relationships with
key solution integrators
key solution integrators
• Implement new pricing model
to focus on recurring software
revenue
to focus on recurring software
revenue
• Aggressively market new offering
through new direct and channel
programs
through new direct and channel
programs
GOAL: Significant revenue growth and
dramatically improved gross margins
dramatically improved gross margins
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A SOLID, WELL-DEFINED STRATEGY
Strong market potential
• A strong serviceable obtainable market (SOM) of $400MM exists
• Current “leaders” are small (no gorilla) and market is fragmented
• 100% of prospects surveyed believe they need environmental monitoring
• Low current adoption in the SOM exists
• Winland has the right technology direction and unique relationships to leverage
• Winland already has ~60,000 “EA” units as an installed base
Target SOMs defined
• Focus on and penetrate key retail drug and food market segments (SOM’s)
Well-Defined Strategy
• Leverage the explosion in M2M, mobile and cloud services to transform to a SaaS company
• Invest in software/product development for the 800IP
• Rebrand the company: Be a world-class, digitally savvy sales/marketing/support company
• Expand product, direct sales, security integrator partnerships and marketing efforts
• Minimize legacy business decline while growing SaaS business
QUESTIONS?
Thank you.
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