EX-99.2 3 dex992.htm PRESENTATION MATERIALS ISSUES OCTOBER 24, 2006 Presentation Materials issues October 24, 2006
October 24, 2006
to Acquire
Exhibit 99.2

2
Forward Looking Statements
Any statements set forth in the news release that are not entirely historical and factual in nature are forward-looking
statements. For instance, all statements of belief and all statements about plans or expectations are forward-looking
statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted
or
quantified.
Potential
risks
and
uncertainties
regarding
the
acquisition
of
PowerDsine
include, but are not limited to, the
inability to close the acquisition transaction referred to in this press release for failure to obtain Israeli court approval,
regulatory approval, shareholder approval, or any other reason, uncertainty as to the future profitability, if any, from the
acquisition
transaction
referred
to
in
this
press
release,
and
adverse
impacts
on
the
PoE
markets or the speed of growth of the
PoE
market.
The
potential
risks
and
uncertainties
also
include,
but
are not limited to, such factors as changes in generally
accepted accounting principles, the difficulties regarding the making of estimates and projections, the hiring and retention of
qualified personnel in a competitive labor market, acquiring, managing and integrating new operations, businesses or assets,
closing or disposing of operations or assets, or possible difficulties in transferring work from one plant to another, rapidly
changing technology and product obsolescence, difficulties predicting the timing and amount of plant closure costs, the
potential inability to realize cost savings or productivity gains and to improve capacity utilization, potential cost increases,
weakness or competitive pricing environment of the marketplace, uncertain demand for and acceptance of the company's
products, adverse impacts on analog / mixed-signal markets, results of in-process or planned development or marketing
and promotional campaigns, changes in demand for products, difficulties foreseeing future demand, effects of limited
visibility of future sales, potential non-realization of expected orders or non-realization of backlog, product returns, product
liability, and other potential unexpected business and economic conditions or adverse changes in current or expected
industry
conditions,
business
disruptions,
epidemics,
disasters,
wars or potential future effects of the tragic events of
September 11, 2001, variations in customer order preferences, fluctuations in market prices of the company's common stock
and potential unavailability of additional capital on favorable terms, difficulties in implementing company strategies, dealing
with
environmental
or
other
regulatory
matters
or
litigation,
or
any matters involving litigation, contingent liabilities or other
claims, difficulties and costs imposed by law, including under the Sarbanes-Oxley Act of 2002, difficulties in determining the
scope of, and procuring and maintaining, adequate insurance coverage, difficulties, and costs, of protecting patents and
other proprietary rights, work stoppages, labor issues, inventory obsolescence and, difficulties regarding customer
qualification of products, manufacturing facilities and processes, and other difficulties managing consolidation or growth,
including in the maintenance of internal controls, the implementation of information systems, and the training of personnel. In
addition to these factors and any other factors mentioned elsewhere in this news release, the reader should refer as well to
the factors, uncertainties or risks identified in the company's most recent Form 10-K and subsequent Form 10-Q reports filed
by
Microsemi
with
the
SEC.
Additional
risk
factors
shall
be
identified
from
time
to
time
in
Microsemi's
future filings. Microsemi
does not undertake to supplement or correct any information in this release that is or becomes incorrect.
If we use any non-GAAP financial measure (as defined by the SEC in Regulation G), you will find a presentation of the most directly
comparable GAAP financial measure and a reconciliation of the differences between each non-GAAP financial measure used and the
most directly comparable GAAP financial measure.

3
Agenda
•
Transaction Overview
•
Overview of Microsemi
•
Overview of PowerDsine
•
Transaction Rationale

4
Transaction Overview
Consideration per Share
•
$8.25 in cash and 0.1498 Microsemi shares
•
$11.00 per share as of October 23, 2006
•
18.5% premium over PowerDsine’s
closing price
•
79.0 million shares outstanding post-transaction
•
96% Microsemi shareholders
•
4% PowerDsine
shareholders
Pro Forma Ownership
Sources of Cash
•
Existing Microsemi cash on hand of $154 million
plus positive cash flow prior to closing
•
PowerDsine
cash on hand of $77 million
•
No external financing required or planned
Anticipated Close
•
Calendar Q1 2007 (Microsemi’s
Fiscal Q2 2007)
Transaction Value
•
$245 million
•
$168 million net of cash acquired

5
PowerDsine
Snapshot
•
Pioneer and market leader in Power-over-Ethernet (PoE) solutions
•
Leading
technology
contributor
to
current
and
next-gen
PoE
standards
•
Successful competitor versus large-cap incumbents
•
Talented team of analog / mixed signal engineers
•
System-level power management expertise
•
Leveraging design expertise to penetrate other high-growth markets
•
Top-tier, single-source customer relationships
•
Strong IP portfolio including 16 PoE
related patents and 91 patents pending
•
139 employees (94 engineers); Global presence; Headquartered in Israel

6
Strategic Rationale
•
Expand and further diversify commercial analog / mixed signal portfolio
•
Bolster
presence
in
communications
market
via
leading
PoE
supplier
•
Add mixed signal team in geography rich with silicon design talent
•
Leverage combined company’s high voltage process capabilities
•
Complement existing power management / handling expertise
•
Realize revenue and cost synergies to drive earnings upside
•
Neutral to slightly dilutive for the first twelve months after closing and accretive
thereafter

7
Key Figures
(1) Based on First Call Consensus calendar year estimates as of October 20, 2006.
($ in millions)
Microsemi
PowerDsine
Pro Forma
2007 First Call Consensus
(1)
Revenue
$450.0
$47.0
$497.0
06 - 07 Revenue Growth
15.5%
32.9%
17.0%

Microsemi Overview

9
Well Diversified Company
HIGH-RELIABILITY
PRODUCTS
HIGH PERFORMANCE
ANALOG/
MIXED SIGNAL
•
Displays
•
Wireless
•
Storage
•
Notebooks /
LCD TV
•
Displays
•
Wireless
•
Storage
•
Notebooks /
LCD TV
•
Implantable
Medical/MRI
•
Defense/Aero
•
Satellite
•
Operational
Efficiencies  
•
Profitable
•
Predictable
•
Operational
Efficiencies  
•
Profitable
•
Predictable
•
Fabless
•
High Margin
•
High Growth
•
System
Engineered
•
Fabless
•
High Margin
•
High Growth
•
System
Engineered

10
Diverse End Markets
Industrial /
Industrial /
Semi Cap
Semi Cap
Notebooks /
Notebooks /
LCD TV / Auto
LCD TV / Auto
Defense
Defense
Medical
Medical
14%
14%
Mobile/
Mobile/
Connectivity
Connectivity
8%
8%
10%
10%
14%
14%
Commercial Air /
Commercial Air /
Satellite
Satellite
22%
22%
32%
32%
*Represents approximate percent of sales for entire quarter ended 6/30/06, including PPG

11
Top 100 customers ~ 70% Sales, none > 10%
North America 71%, Europe 13%, Asia 16%
OEM 58%, Distributors 42%
*Represents approximate percent of sales for entire quarter ended 6/30/06, including PPG
Solid Customer Base
Industrial /
Industrial /
Semi Cap
Semi Cap
Notebooks /
Notebooks /
LCD TV / Auto
LCD TV / Auto
Defense
Defense
Medical
Medical
Mobile/
Mobile/
Connectivity
Connectivity
Commercial Air /
Commercial Air /
Satellite
Satellite

12
Fiscal Q4 Update (September 22, 2006)
•
On
September
22,
2006,
Microsemi
updated
its
guidance
for
fiscal
Q4
•
Microsemi has scheduled its earnings call for November 16, 2006 after the
market close
•
$0.25 -
$0.27 per share
Non-GAAP EPS
•
Flat to 2% q/q
growth
•
33% to 36% y/y growth
Revenue
Guidance (9/22/06)
Metric

PowerDsine
Overview

14
27.8
43.5
62.8
84.9
105.9
2005
2006
2007
2008
2009
PoE
Switch Market (millions of ports)
(1)
(1) Source: Gartner Dataquest, November 2005.
PowerDsine: Growing PoE
Opportunity
•
PoE
market is being driven by
emerging high growth applications
VoIP
WLAN
WiMAX
Advanced security
•
PowerDsine
first to sell PoE
ICs
commercially
•
PowerDsine
sells to nearly every
Ethernet switch vendor
•
New applications for PoE
using the
802.3at high power standard such
as laptops will drive future growth

15
PowerDsine: Strong Technical Foundation
Analog / Mixed Signal
SoC
Integration
Power Management
Software /
Embedded
Controller
Comms / Networking
Systems Expertise

16
PowerDsine: Top-Tier Customers
•
Unique single-source provider of mission critical function for customers

17
PowerDsine: Global Fabless Operation
PowerDsine
Locations
Hod
Hasharon, Israel
(Headquarters, R&D and sales)
China (Sales and tech support)
India (Sales)
Japan (Sales and tech support)
Taiwan (Marketing, sales, and tech support)
United Kingdom (Sales)
United States (Marketing, R&D, sales, and tech support)
PowerDsine
Foundry Partners

18
$7.2
$7.4
$8.3
$9.6
52.5%
52.0%
51.9%
50.6%
Q405
Q106
Q206
Q306
Revenue
Gross Margin
PowerDsine: Positive Financial Momentum
Quarterly Revenue and Gross Margins
(1)
(unaudited, in millions)
Three Months ended 9/30/06
(2)
(unaudited, in millions, except per share data)
(1) Unaudited
gross margins are pro forma to exclude non-cash stock-based compensation expenses.
(2)
Unaudited
pro
forma
financial
data
excludes
non-cash
stock-based
compensation
expenses
totaling
$1.1
million.
Revenue
$9.6
Gross Profit
$5.0
Gross Margin
52.5%
Operating Expenses
$5.6
Operating Profit
($0.3)
Non-GAAP Net Income
$0.6
Non-GAAP EPS
$0.03
Balance Sheet Data as of 9/30/06
(unaudited, in millions)
Cash & Equivalents
$76.7
Debt
$0.0

Transaction Rationale

20
Strengthen Microsemi Offerings
New Technologies
New Customer Opportunities
New End Markets
•Networking / comms
•VoIP
phones / networked security / WLAN APs
•3COM
•Alcatel
•Avaya
•D-Link
•Extreme
•Fujitsu
•HP
•Huawei
•Linksys
•PoE
•Power management
•Power SoCs
•NetGear
•Nortel
•Samsung
•Software
•High voltage process
•Multi-disciplinary analog /
mixed signal capabilities
•138 engineers / 10,000 population ~ 2x U.S.
•Semiconductors are major focus for the area
•2,700 technology companies
New Talent Pool: Israel

21
Drive EPS Accretion Through Synergies
•
Cross-sell
existing
Microsemi
and
PowerDsine
customers
•
Improve PowerDsine
ability to drive sales penetration of large accounts
•
Accelerate commercialization of “new market”
power management SoCs
•
Leverage combined power management capabilities / expertise
•
Extend system controller capabilities to new applications and markets
•
Increase PowerDsine
volume buying power with suppliers
•
Eliminate duplicate public company costs
•
Improve operating margins

Appendix

23
Non-GAAP to GAAP Reconciliation –
Page 18
Quarter Ended
Reconciliation to GAAP
12/31/05
3/31/06
6/30/06
9/30/06
Non-GAAP Gross Profit
3.8
3.7
4.3
5.0
Stock-Based Compensation - COGS
(0.0)
(0.1)
(0.1)
(0.1)
GAAP Gross Profit
3.7
3.7
4.2
4.9
Non-GAAP Operating Expenses
5.6
Stock-Based Compensation - R&D
0.3
Stock-Based Compensation - S&M
0.2
Stock-Based Compensation - G&A
0.5
GAAP Operating Expenses
6.6
Non-GAAP Income from Operations
(0.3)
Stock-Based Compensation - COGS
(0.1)
Stock-Based Compensation - R&D
(0.3)
Stock-Based Compensation - S&M
(0.2)
Stock-Based Compensation - G&A
(0.5)
GAAP Income from Operations
(1.4)
Non-GAAP Net Income
0.6
Stock-Based Compensation - COGS
(0.1)
Stock-Based Compensation - R&D
(0.3)
Stock-Based Compensation - S&M
(0.2)
Stock-Based Compensation - G&A
(0.5)
GAAP Net-Income
(0.6)
GAAP Net Income per Share
($0.03)