1 AirBoss of America Corp. Integrated Growth

Transcription

1 1 AirBoss of America Corp. Integrated Growth

2 Forward Looking Statement Disclaimer Certain statements contained or incorporated by reference herein, including those that express management s expectations or estimates of future developments or AirBoss future performance, constitute forward-looking statements within the meaning of applicable securities laws, and can generally be identified by words such as will, may, could expects, believes, anticipates, forecasts, plans, intends or similar expressions. These statements are not historical facts but instead represent management s expectations, estimates and projections regarding future events and performance. Forward-looking statements are necessarily based upon a number of opinions, estimates and assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies. AirBoss cautions that such forward-looking statements involve known and unknown contingencies, uncertainties and other risks that may cause AirBoss actual financial results, performance or achievements to be materially different from its estimated future results, performance or achievements expressed or implied by those forward-looking statements. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including without limitation: impact of general economic conditions; its dependence on key customers; cyclical trends in the tire and automotive, construction, mining and retail industries; sufficient availability of raw materials at economical costs; weather conditions affecting raw materials, production and sales; AirBoss ability to maintain existing customers or develop new customers in light of increased competition; changes in accounting policies and methods, including uncertainties associated with critical accounting assumptions and estimates; changes in the value of the Canadian dollar relative to the US dollar; changes in tax laws and potential litigation; ability to obtain financing on acceptable terms; environmental damage caused by it and non-compliance with environmental laws and regulations; potential product liability and warranty claims and equipment malfunction. This list is not exhaustive of the factors that may affect any of AirBoss forward-looking statements. All of the forward-looking information in this press release is expressly qualified by these cautionary statements. Investors are cautioned not to put undue reliance on forward-looking statements. All subsequent written and oral forward-looking statements attributable to AirBoss or persons acting on its behalf are expressly qualified in their entirety by this notice. Forward-looking information contained herein is made as of the date of this press release and, whether as a result of new information, future events or otherwise, AirBoss disclaims any intent or obligation to update publicly these forward-looking statements except as required by applicable laws. Risks and uncertainties about AirBoss s business are more fully discussed in the Management s Discussion and Analysis of Financial Condition and Results of Operations in the 2014 Annual Report to Shareholders under the heading Risk Factors. 2 AirBoss of America Corp.

3 Transaction Overview On June 17, 2015, AirBoss entered into an agreement to acquire all the shares of Immediate Response Technologies ( IRT ), a privately-owned U.S. company Leading provider of personal protection and safety products for CBRN hazards, as well as communicable diseases and respiratory threats for the individual, First Responder, Medical, Military, Law Enforcement, Fire and Industrial communities. AirBoss will acquire IRT through an initial all cash transaction valued at approximately US$37 million, subject to working capital adjustments, with additional payments of up to US$25, subject to achievement of performance objectives over the 60 month period following the close of the transaction Represents an acquisition multiple of ~5x trailing twelve months EBITDA Trailing EBITDA of ~US$7.4MM on Trailing Revenue of ~US$25.4MM The acquisition will be funded with AirBoss existing debt facilities The acquisition is expected to be immediately accretive to the Company's earnings and cash flows Strategic acquisition providing product diversification and a new growth platform 3 AirBoss of America Corp.

4 Transaction Overview IRT is expected to generate sales of approximately US$30 million and Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") of between US$8 and US$9 million for the year ended December 31, 2015 Going forward, senior management of IRT will continue run the business, operating within AirBoss Defense division Tom Ripley, Managing Member of IRT s parent company will become President, AirBoss Engineered Products Closing expected during Q3-15 following CFIUS regulatory approval and customary closing conditions Strategic acquisition providing product diversification and a new growth platform 4 AirBoss of America Corp.

5 Transaction Rationale Strengthen AirBoss Defense Product Portfolio Creation of a new product platform within AirBoss Defense Introduces a set of highly complementary products Better positions AirBoss with OEM s and supply chain to win additional defense contracts Ability to Leverage IRT s Expertise Excellent relationships with numerous government, military and commercial customers Management has deep industry expertise Attractive Financial Attributes Immediately accretive to earnings and cash flows Attractive purchase price with an earnout structure that fully aligns IRT and AirBoss Strong platform to continue to grow in North America and abroad Accretive transaction while providing product, revenue and cash flow diversification 5 AirBoss of America Corp.

6 Attractive Market Fundamentals Recent global events have led to an increased awareness and demand for CBRN equipment o o o o o Current MERS outbreaks in Korea and China Ebola epidemic in West Africa Sarin artillery attacks in Syria Ricin threats in Los Angeles and Mississippi Threat of various pandemic influenza outbreaks H1N1 in 2009, H3N2v in 2012, H7N9 in 2013 The U.S. Government spending in the CBRN defense market is expected to continue to grow o The Biomedical Advanced Research & Development Authority has budgeted approximately $2 billion for medical countermeasures and medical devices (masks and PAPRs) o The Chemical, Biological Defense Program (CBDP) Fund and Army Fund have collectively budgeted $3.5 billion through 2018 Includes allocations for Emerging Infectious Diseases, Weapons of Mass Destruction Civil Support Teams, Chemical Biological Equipment, and the Joint Service General Purpose Mask 6 AirBoss of America Corp. Source: Joint Program Executive Office Chemical and Biological Defense Strategic opportunity in the growing CBRN equipment sector

7 Complementary Product Offering Decontamination Shelters & Tents Powered Air Purifying Respirators Filters & Cartridges 2015E Revenue: ~29% 2015E Revenue: ~43% 2015E Revenue: ~28% 7 AirBoss of America Corp.

8 Facility, Operations and Manufacturing Operates out of a 78,000 sq. ft facility located in Landover, Maryland IRT benefits from an experienced non-union and non-cba workforce All required manufacturing processes are in place: design and engineering, purchasing, receiving, quality inspection and assurance, production, and packaging and shipping Key Manufacturing Competencies ISO 9001:2008 certified and compliant Repeatable process control and minimal human interfacing Carbon and media filling designed to address key parameters Ultrasonic welding capabilities Government and OEM specialized packaging 40+ years of experience using Computer Aided Design software 8 AirBoss of America Corp.

9 Our Revenue Streams The acquisition of IRT will broaden AirBoss end-market exposure in the Defense segment AirBoss Revenue Pro Forma Revenue (1) Rubber Compounding Industrial Defense Automotive 42% 43% 42% 43% 38% 40% 7% 8% 7% 8% 14% 8% LTM Revenue: US$309 million LTM Pro Forma Revenue: US$334 million (1) Note: Based on LTM revenue figures for the quarter ended March 31, 2015 (1) Does not account for any synergies arising from this transaction 9 AirBoss of America Corp.

10 EBITDA by Segment The acquisition of will bring strong growth and diversification of EBITDA AirBoss EBITDA (1) Pro Forma EBITDA (1) (2) Rubber Rubber Compounding Compounding Industrial Engineered Industrial Defense Products Defense Automotive Automotive 38% 42% 42% 42% 43% 43% 43% 31% 44% 37% 18% (2) 7% 7% 7% 8% 8% 8% 32% (2) LTM EBITDA: US$30 million (4) Margin: 9.6% LTM Pro Forma USEBITDA: $37 million (3)(4) Margin: 11.1% Note: Based on LTM EBITDA figures for the quarter ended March 31, 2015 (1) Percentage breakdown does not account for unallocated corporate costs (2) Represents Industrial and Defense operations (3) Does not account for any synergies arising from this transaction (4) Includes unallocated corporate costs 10 AirBoss of America Corp.

11 Key Highlights Acquisition creates a new and highly complementary product portfolio within AirBoss Defense IRT is a leader in its market and has deep industry expertise Executing on AirBoss strategy to improve the diversification within AirBoss Defense Proven business model with strong sales visibility on several programs Company with strong recognition amongst key government, military and commercial customers Strong potential to grow the business outside of the North American market Attractive financial returns for AirBoss shareholders Aligned corporate strategy, with IRT representing a strong cultural fit with AirBoss 11 AirBoss of America Corp.

12 12 AirBoss of America Corp. Thank you