Company Andrews C61400

Company AndrewsC61400Quarterly MeetingApril 30th, 2014

Executives:Randi Camhi, Greg Haller, Liz Rotiroti, Brittany Manski, Asiana GilchristCurrent Stock Price:-$169 second highest in the industry-9.6 P/E Ratio second highest-2Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders

Strong financials lead to secured profitability

Company strengths provide for a promising future3Strategic appraoch using porters and swotResults of companys operations relative to competitors using dupont and key ratios and performance measuresCurrent and future profitability reliative to your competitors 3Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders- Strategy- Mission Statement- SWOT- Porters Five Forces

4Strategic approach using porters and SWOTResults of companys operations relative to competitors using DuPont and key ratios and performance measuresCurrent and future profitability relative to your competitors 4Broad Differentiator StrategyMaintain a presence in all segments of the sensor market

Competitive advantage gained by distinguishing products with excellent design, high awareness, and easy accessibility

R&D capability to keep designs fresh and exciting

Improved size and performance

Prices are above average

www.capsim.com

5Our broad differentiator approach helps us to achieve success and maintain a low risk profile. Having a market share in every segment allows us to diversify our sales out over all 5 segments. This will help minimize our losses in case demand for a certain segment changes unexpectedly or if another company capitalizes and takes a large market share on one specific segment. We are not the market leaders in any of our segments, but maintain a significant share in each one.

One issue with our strategy is that since we distinguish our products with excellent design and put a lot of money into marketing, we are able to sell our products at a slight premium above our competitors. However, in the recent years, our competition has been drastically dropping their prices, so we will discuss our future plan to stay competitive later in our presentation.

5Our MissionPremium products for the industry.Our brands withstand the test of timewww.capsim.com

6Porters Five Forces7

7SWOT AnalysisStrengths (Internal factors)Weaknesses (Internal factors)- High contribution margin - Low age of product - High performance of product- High product accessibility-Among current market leaders-Strong financial position-High cost to produce- R&D funds (expensive to modify product) - Cost of constant marketing fundsOpportunities (External factors)Threats (External factors)-High industry growth rate-Market is available for capture-Customers are willing to pay for quality

-Potential market share of competitors-Competitors price cutting unexpectedly

www.capsim.com

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Weaknesses (Internal factors)-High cost to produce- R&D funds (expensive to modify product) - Cost of constant marketing fundswww.capsim.com

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www.capsim.com

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Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders

Strong financials lead to secured profitability

Company strengths provide for a promising future13Strategic approach using porters and SWOTResults of companys operations relative to competitors using DuPont and key ratios and performance measuresCurrent and future profitability relative to your competitors

13Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders

Strong financials lead to secured profitability-Profit Margin-Return on Equity-Cash on Hand14Strategic approach using porters and SWOTResults of companys operations relative to competitors using DuPont and key ratios and performance measuresCurrent and future profitability relative to your competitors 14Profit Margin15Profit/Sales15Return on Equity16Easy and Accessible Financing$Companies in Industry$96,626Bond Rating: AAACCDDD A AAwww.capsim.com

17As you can see, in comparison with our 4 main competitors, we have a relative high amount of cash on hand. This will help us in the future, specifically by allowing us to invest in future company improvements (R&D, marketing, as well as TQM) without taking out additional loans or issuing new stock, which will drive down our EPS. It also reduces our risk by giving us a safety net if we incur any unexpected expenses.

In addition to our supply of cash, we are also the only company out of our competitors with a AAA bond rating given by S&P. This shows that we have an extremely strong capacity to meet financial commitments. This is important because banks will be willing to give us loans if needed in the future and also proves that we have a strong financial history.

17Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders

Strong financials lead to secured profitability

Company strengths provide for a promising future18Strategic approach using porters and SWOTResults of companys operations relative to competitors using DuPont and key ratios and performance measuresCurrent and future profitability relative to your competitors 18Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders

Strong financials lead to secured profitability

Company strengths provide for a promising futureSales GrowthContribution MarginProduction CapacityFuture Plans

19Strategic approach using porters and SWOTResults of companys operations relative to competitors using DuPont and key ratios and performance measuresCurrent and future profitability relative to your competitors 19Annual Sales2015% average growthwww.capsim.com

20 Contribution MarginYearCM %TQM Cost Reductions: Direct Labor: 13.94 % Direct Materials: 11.35%31%www.capsim.com

21Source: Capsim

As you can see, we have maintained a steady contribution margin around 30% over the past 8 years. Although some competitors have had higher than us in the past, they have been less consistent. We are focused on maintaining a steady margin.

As we stated before, our broad differentiator strategy usually sells at prices slightly above competition. However, with our competitors continually dropping their prices, in the future, we will need to slightly adjust our strategy.

We plan on slightly lowering our prices, but still keeping a premium above our competitors. In order to maintain our steady contribution margin, our investments in TQM should help us to keep reducing our costs such as for direct materials and labor.

21Value for YOU22Many users of financial statements, including investors, want to know what is the value of the firm?

Value for shareholders is the income from operating and financing activitiesAndrewsBaldwinDigbyOperating$79,651$51,523$70,552Financing0(48,495)0Value$79,651$3,028$70,552www.highered.mcgraw-hill.comValue for shareholders is the income from operating and financing activities

Free cash flow (C - I) does not add value to shareholders. Free cash flow is a dividend from the operating activities to the financing activitiesMany users of nancial statements, including managers and investors, want to know the value of the rm, not its cost22Year 8 Production Capacity23Future PlansCompetitive PricingCapture additional market share

TQM InvestmentsAdministration Expenses

Improve Forecast AccuracyReduce inventory

24Company Andrews is a Low Risk, Strong Buy for InvestorsLow risk factors provide confidence to management, consumers, and shareholders

Strong financials lead to secured profitability

Company strengths provide for a promising future25Strategic approach using porters and SWOTResults of companys operations relative to competitors using DuPont and key ratios and performance measuresCurrent and future profitability relative to your competitors 25Questions?26