Transcript of InterviewWSR: Define for our audience the...

Transcript of Interview

WSR: Define for our audience the company’s business model and core product offering.

TZL: TZ Limited’s core product offerings are intelligent fasteners, branded Intevia®, or smart nuts and bolts for the new economy. They are fasteners that can be loosened and tightened electronically using computer technology. This is made possible by employing Smart Materials in our fastener designs which change their physical properties and generate small, but powerful amounts of movement, when exposed to an external stimuli controlled by software; the technology greatly reduces labor costs associated with assembly and maintenance for our customers. It also redefines design parameters for many products by eliminating the need for access with screwdrivers, wrenches, and so on, and then we add sensors into the fasteners that can monitor and report their performance, sense what is happening in the environment around them, predict when maintenance is required plus other functions such as switching secondary electrical circuits. The primary sectors we sell into are aerospace and defense, general industrial and electronics, and transportation.

WSR: What are some of the drivers leading to demand within those sectors you just mentioned?

TZL: It depends on the segment; for example, in the aerospace segment, the biggest drivers for Intevia® are enhanced and more secure access to reduce maintenance time Another driver is the desire for rapid reconfiguration of interiors so the operator can derive greater utility from their aircraft, we believe our technology will enable seat reconfiguration on an aircraft to occur in a matter of several hours as opposed to several weeks, allowing them to optimally balance their aircraft for the load factors they see locked in their commercial trade operations. In other areas such as general industrial or automotive, our product replaces the general solenoid with lighter weight, better packaging, and intelligence, allowing our users to insert electronic switching and latching into many locations previously not possible before or doing so with a lighter weight, more efficient solution with intelligence. Our SMA actuators that power the fasteners are many times more power efficient than traditional solenoids and based on the relative weight of the SMA actuator versus a solenoid, about 1000 times more energy dense.

WSR: In other words, this is a disruptive technology?

TZL: That’s correct. Intevia® is a very disruptive technology. We have some unique intellectual property that has been developed over the last several years by our company. We believe this will replace the way traditional fasteners and solenoids are used. It will enable rapid assembly and disassembly, authorized servicing, predictive maintenance, and electronic and security-enabled access in ways never before thought possible.

WSR: What are some of the other facets that give you a distinct advantage over your competition?

TZL: Intellectual property, software and engineering. In addition to a very broad patent portfolio on intelligent fastening and actuation, we have also developed proprietary software to run the fasteners. We have a world-class industrial engineering design arm called PDT. PDT has incredibly strong industrial, mechanical and electrical engineering capabilities and brings a world-class design and application skill set to our offering, which enables the design of intelligent fastening into our customers’ applications. PDT also has significant experience in getting products manufactured.

WSR: What is the projected global size of this market?

TZL: The global fastener market we are selling into is measured by Source Freedonia, an industry-accepted standard in the AUS$55 billion-plus range globally growing to $75 billion before the 2014 timeframe. We believe that several percentage points of that market share is possible for this technology in the future, given the applications and our targeted customer set. This will take some time, though. A lot of these products need to be integrated into the advanced engineering stage of our customers’ design cycle, so our customers can capture the full benefits of our Intevia® products within their product design. With these end markets, the product design cycle is anywhere from one (1) year in the electronic space to over ten (10) years in the aerospace and defense market.

WSR: How important are partnerships and strategic alliances for TZ Limited?

TZL: Partnerships are very important. We have many key customer partnerships with some of the most influential and leading customers in those industry sectors. We are about to announce a program that will allow us to be more transparent with early adopters of our technology.

WSR: Tell us about the background and experience of your Boards and executive team.

TZL: The executive team comes from a mix of different arenas – all with strong manufacturing, electronic, or software backgrounds from companies such as Motorola, Textron and Microsoft. The inventor of the technology is a member of the executive team as well and our board has an established track record in nurturing and growing early stage companies.

WSR: The company, as mentioned earlier, is listed on the Australian Stock Exchange. Do you think the broader investment community has yet to learn about the company’s potential?

TZL: We are in the early stages of U.S. investors fully understanding our company’s potential. We plan to re-list the company on NASDAQ within the short term. We’ve engaged Credit Suisse as our advisors to help us do that, and we believe that will give us a lot more exposure to the U.S. investor base and provide a platform for more to better understand the company and its potential.

WSR: What are the company’s strategic objectives, in addition to the upcoming NASDAQ listing?

TZL: They stem from very clear commercialization opportunities we are working on with some key customers in the aerospace, defense, electronics, and automotive markets. As well as launching our initial three product families which are presently available in an evaluation kit.

WSR: Are there any specific geographic regions where you see a lot of potential?

TZL: It’s really all. Asia is going to be key, especially early on in the electronic industry; the U.S. and Europe will be key in the aerospace industry as well. The fastener market is evenly split one-third, one-third, and one-third each between the U.S., Europe, and Asia. Over time, we see our products naturally coming into a relative balance with the market. Early on, the growth is going to be driven by some of the faster-cycle industry segments, such as electronics and general industrial.

WSR: In closing, tell us why TZ Limited represents a good long-term investment opportunity?

TZL: TZ Limited has a strong IP portfolio, proprietary software and significant engineering skills focused on commercializing a disruptive technology, in a large AUS$55 billion market segment that’s growing. We have solid manufacturing channels in Asia, strong sales channels, and have an impressive set of early adopter customers across all segments. Right now, our market cap is over AUS$100 million, and our revenues are about AUS$25 million. We see that scaling up over the next several years with the potential to reach the several hundred million level, and then to exceed a significant share of the fastener market.

END