Darren Southard, Jeff Roeser, Kari Singley and Kipley Pereles

Overview
 Stock Price EPS

Highlights: Stock price far

exceeded investor
expectations in most
years

Highlights: Outpaced
investor expectations in
most years
 Image Rating Net Revenues

Highlights: Consistently
surpassed investor
expectations

Highlights: Net revenues

grew at a reasonable
pace then maintained
pace
 ROE

Highlights: Return on
equity was greater than
investor expectations in
all but two years
Strategic Vision
 Digi ‘s aims to serve as the leader in
the entry level camera market by
offering a low cost solution to
consumer’s camera needs.

 Digi also offers a high quality feature rich camera at a moderate

price to address the needs of the other end of the consumer
spectrum.

 Exceed investor expectations year over year in the areas of

revenue, earning’s per share, return on equity, credit rating,
stock price and image rating.
Performance expectations for year 14

EPS: Maintain above investor expectations

$3.56 / share and deliver a higher EPS than year
13 of $1.92 / share. Goal: $4.75 / share.

ROE: Maintain above investor expectations

15.0% and deliver a higher ROE than year 13 of
7.5%. Goal: 22.0%.

Credit Rating: Maintain above investor

expectations B+ and deliver a higher credit rating
than year 13 of A. Goal: A+.

Stock Price: Maintain above investor expectations

$51.57 / share and deliver a higher Stock Price
than year 13 of $55.30 / share. Goal: $75.00 /
share.
Performance expectations for year 15

EPS: Maintain above investor expectations of

$3.70 per share. Goal: $5.25 per share.

ROE: Maintain above investor expectations of

15.0%. Goal: 25.0%.

Credit Rating: Maintain above investor

expectations B+. Goal: A+.

Stock Price: Maintain above investor expectations

$53.57 / share. Goal: $85.00 / share.
 Entry-Level Competitive Strategy

•Leader in the Entry-Level Camera Market.

•Adopt a low price strategy for a half-star rated

camera to attain the highest market share.

•Have an advertising budget that is sufficient to increase

demand from all retailers. Divide advertising budget
geographically and assign greater resources to those areas
of initial high sales penetration/demand.

•Order a higher level of unit production, especially to those

geographic regions of high retailer demand (Latin America,
North America).

•From year 8 our strategy had remained constant. As a

result we delivered similar results from that point on.
 Multi-Feature Competitive Strategy

•Deliver a high quality camera with advanced

features at the lowest price.

•Increase retailer demand by having a highly rated

Multi-featured camera.

•Have a warranty period that is highest in the industry across all

geographic regions for all manufactured Multi-Featured cameras.

•Have an advertising budget that allows us to increase demand from

all retailers. Divide advertising budget geographically and assign
greater resources to those areas of initial high sales
penetration/demand.

•Order a higher level of unit production, especially to those

geographic regions of high retailer demand (Latin America, North
America).
 Production Strategy

We preferred employing enough labor to

produce our product in house, and found
that paying our employees overtime was
more cost effective than outsourcing in most
instances.

However, the intent was to improve on the

productivity per quarter for the PATs that we
employed.
Productivity of PATs Year 13
 Labor & Outsourcing Costs Year 13

Entry-Level Labor Costs: $19.95 / unit

(Above average), average is $14.38 / unit.
Entry-Level Costs of Units Outsourced:
$57.57 / unit (Low), average is $59.50 / unit.

Multi-Feature Labor Costs: $19.95 / unit

(High), average is $15.99 / unit.
Multi-Feature Costs of Units Outsourced:
$266.32 / unit (High), average $259.71 / unit.
Total Cost per Unit Years 9 to 13
Entry level & Multi-feature Asia-Pacific
Competitors Year 13

Entry level Multi-Feature

Entry level & Multi-feature Europe-Africa
Competitors Year 13

Entry level Multi-Feature

Entry level & Multi-feature Latin America
Competitors Year 13

Entry level Multi-Feature

Entry level & Multi-feature North America
Competitors Year 13

Entry level Multi-Feature

Finance Strategy
•Creditworthiness:
Year 13
Debt-to Equity Ratio LT Total = .0049%
Debt: Equity:
$1,17 $240,63
9 9
Times-Interest 23.24
Earned Ratio
Debt Payback 2.9
Capability years
Percentage of 6%
Credit Line Used

•Credit Score: Maintained an “A” credit rating through year

13 and consistently payed down debt year-over-year
resulting in a manageable L-T debt ratio. .
Finance Strategy cont..
•Dividend Strategy: While we made generous dividend pay
outs to our shareholders and met EPS expectations we
did not maintain a consistent strategy as reflected in our
EPS results.
•Ending Year 13, the dividend payout ratio continued to be
well above industry average at an amount of $24,628M or
135% of EPS. The industry average is $18,516M and
65.1% of EPS.

•Digi reviewed its stock repurchase level annually,

repurchasing when deemed necessary to increase stock
price and EPS.

.
Dividend Payout
.
Looking Forward (Finance)

•Maintain a consistent dividend policy that positively

impacts the perceptions of the company in the
financial markets.

•The value of a firm is affected by its dividend policy.

• Consistency and predictabiliy is important to

stockholders.

.
 Competitive Action Moving Forward

Augment revenues and maximize profitability by shrinking expenses,

augment unit volume sold, augment consumer loyalty, reduce debt, reduce
labor dollars & price optimization
 Competitive Action Moving Forward

Augment EPS by buying back shares, reducing expenses,

& increasing revenues
 Competitive Action Moving Forward

Augment ROE by augmenting sales turnover, broader

operating margins on sales & additional competitive
leverage
 Competitive Action Moving Forward

Improve stock price with dividends, repurchase

shares and meet investor expectations
 Competitive Action Moving Forward

For image rating we plan on appearing at more trade shows to

promote our business, making sure our brand matches what we are
promoting to everyone, and come up with a marketing plan to
differentiate ourselves from competitors
Lessons Learned – (Glo-Bus)
•Placing more focus on gradually
increasing Market Share over time.

• Focused more on being efficient as a

company
•Direct correlation:
• Expenses = Profits

•We over thought and over analyzed

our competitors.
•Second guessed ourselves
Lessons Learned

• Realized that the biggest strengths

we had was in our team. We should
have used the strengths of our team
members more.
• More clearly defined roles
•strengths/weaknesses