SEATING FINISHING ACOUSTICS COMPONENTS

Transcription

1 SEATING FINISHING ACOUSTICS COMPONENTS INVESTOR PRESENTATION //// JUNE 2015

2 DISCLAIMER FORWARD LOOKING STATEMENTS This presentation includes forward looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of Forward-looking statements may be identified by the use of words such as anticipate, believe, expect, estimate, plan, outlook, and project and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward looking statements with respect to revenues, earnings, financial information, performance, strategies, prospects and other aspects of the businesses of Jason Industries, Inc. (the Company ) are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward looking statements. The forward looking statements contained in this presentation are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. The forward-looking statements are not guarantees of performance or results, as they involve risks, uncertainties (some of which are beyond our control) and assumptions. Although we believe that these forward looking statements are based on reasonable assumptions, many factors could affect our actual results and cause them to differ materially from those anticipated in the forward-looking statements. More information on potential factors that could affect the Company s financial condition and operating results is included in Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations in the Company s Annual Report on Form 10-K filed on March 11, 2015, and in the Company s other filings with the Securities and Exchange Commission. Any forward looking statement made by the Company in this presentation speaks only as of the date on which we make it. We undertake no obligation to publicly update any forward looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. NON-GAAP AND OTHER COMPANY INFORMATION Included in this presentation are certain non-gaap financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. Because the Company s calculations of these measures may differ from similar measures used by other companies, you should be careful when comparing the Company s non-gaap financial measures to those of other companies. A reconciliation of non-gaap financial measures to GAAP financial measures is included in an appendix to this presentation. JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 2

3 JASON BUSINESS OVERVIEW KEY COMPANY FACTS GEOGRAPHIC FOOTPRINT Employees ~4,000 Headquarters Milwaukee, WI 2014 Revenue $702.5 million 2014 Adjusted EBITDA $77.8 million Founded 1985 Listed on NASDAQ (JASN, JASNW) July 2014 Manufacturing 33 Sites in 12 Countries FINANCIAL PROFILE NET SALES ($ in Millions) ADJUSTED EBITDA ($ in Millions) $800 $700 $600 $500 $400 $600.6 $655.0 $680.8 $702.5 $708 - $723 ʼ11 ʼ12 ʼ13 ʼ14 ʼ15E $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 $ % $ % $ % $ % $87 - $ % ʼ11 ʼ12 ʼ13 ʼ14 ʼ15E JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 3

4 JASON PORTFOLIO ADJUSTED NET SALES EBITDA % SEATING 24% 15% 2014 JASON PORTFOLIO FINISHING 27% 14% ACOUSTICS 31% 9% COMPONENTS 18% 14% NET SALES U.S. 72% 2014 GEOGRAPHIC BUSINESS MIX EUROPE 19% MEXICO 7% ROW 2% JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 4

5 JASON BUSINESS SYSTEM THE JASON BUSINESS SYSTEM ( JBS ) PROVIDES A DISCIPLINED PROCESS THROUGH WHICH JASON: Identifies attractive opportunities for growth, investment and acquisitions TALENT DEVELOPMENT SHAREHOLDER VALUE CREATION ORGANIC GROWTH & ACQUISITIONS Focuses core competencies and manufacturing expertise to deploy bestin-class processes that leverage synergies across Jason while driving a lean culture Harnesses the voice of the customer to develop innovative new products and deliver solutions that drive organic growth Drives execution to deliver on commitments and success Invests in the development of talent from within to build a foundation for the future Delivers shareholder value REVENUE GROWTH OPERATIONAL EXCELLENCE PEOPLE IDENTIFYING ATTRACTIVE INDUSTRY POSITIONS PORTFOLIO MANAGEMENT & PRIORITIZATION ORGANIC GROWTH & ACQUISITIONS DEPLOY BEST-IN-CLASS BUSINESS PROCESSES EXECUTION TALENT DEVELOPMENT Multi-billion dollar markets Global opportunities Fragmented end-markets Macro-economic trends Allocation of capital and resources to attractive investments and shareholder returns Optimization of the portfolio to provide synergies and earnings growth Global sales organization Innovative product development Disciplined approach to acquisitions Sharing expertise across businesses Enterprise-wide Lean Culture Common processes Empowered employees Meeting commitments Pay for performance Attracting top talent Investing in people to achieve results Global deployment JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 5

6 2014 REVENUE BY GEOGRAPHY U.S. 95% EUROPE 5% 31% 2014 REVENUE BY END PRODUCT SEATING OVERVIEW SEATING S LONG-STANDING OEM CUSTOMERS REPRESENT SOME OF THE WORLD S BEST-KNOWN BRANDS, INCLUDING HARLEY-DAVIDSON MOTOR COMPANY, JOHN DEERE, MTD, POLARIS AND HUSQVARNA OVERVIEW Milsco brand maintains the #1 position in the global static seating market Primary product segments include heavyweight motorcycles, turf care, heavy industry and powersports Positioned for future growth opportunities in global heavy construction and agriculture markets ADDRESSABLE MARKET (1) $1.5 BILLION WORLDWIDE United States 95% $200 FINANCIAL PROFILE $165 $163 $165 $172 TURF EQUIPMENT 37% MOTORCYCLE OEM 19% MOTORCYCLE AFTERMARKET 10% CONSTRUCTION & AGRICULTURE 17% MATERIAL HANDLING 11% UTILITY VEHICLES 4% MARINE 2% $150 $100 $50 $0 15% 15% 15% 14% ʼ11 ʼ12 ʼ13 ʼ14 Adjusted EBITDA % Revenue ($ in millions) (1) Management estimates JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 6

7 SEATING GROWTH DRIVERS OF ORGANIC GROWTH Enhance market-leading positions in motorcycle and turf equipment Penetrate into adjacent markets, including medium construction and agriculture Leverage existing capabilities in suspension systems and technology into new products Expand geographic footprint JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 7

8 ACOUSTICS OVERVIEW 2014 REVENUE BY GEOGRAPHY U.S. 64% MEXICO 22% EUROPE 14% 2014 REVENUE BY END PRODUCT DIE CUT INSULATION 24% MOLDED INSULATION 18% TRUNK SYSTEMS 21% IP CLOSEOUTS 10% CARPET SYSTEMS 10% OTHER 12% ACOUSTICS HAS DEVELOPED EXTENSIVE DESIGN AND MANUFACTURING EXPERTISE TO PROVIDE CUSTOM ACOUSTICAL SOLUTIONS FOR EACH VEHICLE PLATFORM IT SERVES OVERVIEW Jason s Acoustics segment is North America s largest producer of acoustical fiber insulation and a leading producer of automotive fiber-based molded and die-cut products Products are used in approximately 70% of light vehicles in North America today, including the majority of top platforms Jason s Acoustics segment product content per vehicle has increased by 48% since 2010 Future organic growth will be driven by innovative new products, including lightweightfiber automotive underbodies ADDRESSABLE MARKET (1) $2.5 BILLION IN NORTH AMERICA Wheelhouse/ Cowl Under Bonnet Dashboard Insulators (Interior & Exterior) Hush Panels // $12 BILLION WORLDWIDE Door Panel Insulation Underbody Floor/Carpet Underlayment Luggage Compartment $250 $200 $150 $100 $50 FINANCIAL PROFILE $145 6% $172 8% $204 11% $219 9% ENGINE 3% WHEEL LINERS 2% $0 ʼ11 ʼ12 ʼ13 ʼ14 Adjusted EBITDA % Revenue ($ in millions) (1) Management estimates JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 8

9 ACOUSTICS GROWTH DRIVERS OF ORGANIC GROWTH Capture market share through new product lines (wheel liners, underbody panels, trunk systems) Capitalize on light-weight fiber products supporting industry fuel efficiency trends Grow market share with existing and new customers in Mexico Establish additional direct OEM relationships ADJUSTED EBITDA MARGIN EXPANSION Refresh product portfolio, focusing on high-value add product lines (wheel liners, underbody panels, trunk systems) Optimize customer pricing Rationalize footprint and improve operational efficiencies JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 9

10 COMPONENTS OVERVIEW 2014 REVENUE BY GEOGRAPHY U.S. 100% JASON COMPONENTS INNOVATIVE DESIGN AND MANUFACTURING CAPABILITIES HAVE ALLOWED IT TO SUSTAIN SUCCESSFUL, LONG-TERM CUSTOMER RELATIONSHIPS OVERVIEW North America s top independent manufacturer of rail safety products, expanded and perforated metal products and electric meter bases Components offers customized metal components and individualized engineered solutions Product categories are united by a common culture of maintaining industry-leading engineering capabilities 2014 REVENUE BY END PRODUCT ADDRESSABLE MARKET (1) $750 MILLION IN NORTH AMERICA // $2 BILLION WORLDWIDE $150 FINANCIAL PROFILE $136 $131 $124 $120 $100 ELECTRIC METERS 22% $90 19% 18% 17% FILTRATION 24% RAIL 21% INDUSTRIAL 15% $60 $30 14% SMALL ENGINES 9% OTHER 9% $0 ʼ11 ʼ12 ʼ13 ʼ14 (1) Management estimates Note: 2011 revenue and Adjusted EBITDA % is pro forma for acquisition of Morton Manufacturing Adjusted EBITDA % Revenue ($ in millions) JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 10

11 COMPONENTS GROWTH DRIVERS OF ORGANIC GROWTH Expand footprint in Mexico to consolidate position with local rail customers Diversify rails product portfolio to broader types of rail cars Grow industrial OEM sales JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 11

12 FINISHING OVERVIEW 2014 REVENUE BY GEOGRAPHY EUROPE 49% U.S. 40% SOUTH AMERICA 7% MEXICO 4% FINISHING S WELL-RECOGNIZED BRANDS MAINTAIN EXCEPTIONAL WORLDWIDE REPUTATIONS FOR QUALITY AND MARKET LEADERSHIP OVERVIEW Products used for finishing, preparation, metal removal, sealing, shielding and polishing Manufacturing, distribution and sales facilities in 14 countries 85% of revenue from consumables #1 manufacturer of industrial brushes, buffs and compounds in the world More than 30,000 customers worldwide; only business supplying global marketplace 2014 REVENUE BY END PRODUCT ADDRESSABLE MARKET (1) $8 BILLION WORLDWIDE $200 $150 FINANCIAL PROFILE $191 $184 $180 $188 14% $100 10% 10% INDUSTRIAL BRUSHES 58% INDUSTRIAL BUFFS & COMPOUNDS 26% ABRASIVES 4% OTHER 12% $50 $0 8% ʼ11 ʼ12 ʼ13 ʼ14 Europe Adjusted EBITDA % 55% Revenue ($ in millions) (1) Management estimates JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 12

13 FINISHING GROWTH DRIVERS OF ORGANIC GROWTH Leverage global sales and logistics network to expand distribution of abrasives products Improve market position and grow market share in industrial power brushes and polishing Increase penetration in specially formulated polishing compounds Expand further into emerging markets ADJUSTED EBITDA MARGIN EXPANSION Expand product lines into differentiated high-margin, high value-add niches Optimize customer pricing Rationalize operational footprint, focusing on low-cost manufacturing markets Implement general and administrative process improvements and efficiencies Leverage global material procurement and economies of scale ACQUISITIONS Attractive acquisition targets in the adjacent abrasives space Acquired DRONCO on May 29, 2015 JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 13

14 ACQUISITION GROWTH ACQUISITION APPROACH Focused on strategic acquisitions with significant synergies Attractive targets within finishing Opportunistic in other segments Disciplined approach ACQUISITION OBJECTIVES Accretive To Margins After Synergies Expand Global Presence Target Higher Growth Adjacent Markets JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 14

15 JASON FINISHING END PRODUCT 2014 REVENUE ADDRESSABLE MARKET OVERALL MARKET GROWTH Industrial Brushes $109 Million (58%) $1.5 Billion GDP Industrial Buffs & Compounds $49 Million (26%) $0.5 Billion GDP Abrasives $7 Million (4%) $6.0 Billion 6% 1 Other $23 Million (12%) GDP Total $188 Million $8.0 Billion 1 - Per Freedonia March 2014 World Abrasives study OVERALL ABRASIVES MARKET FORECASTED AT 6% CAGR JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 15

16 DRONCO OVERVIEW European Market Leader In Bonded Abrasives, Specifically Cutting And Grinding Discs, With Approximately 40 Million in Revenue Excellent Product Performance And High Quality Standards Significant Opportunities When Combined With Jason Finishing Operational Synergies Expect $2.5M of Annual Cost Synergies Within 18 Months Sales Synergies From Global Distribution And One Stop Shop Estimated 35% Of Jason Finishing Customers Buy Abrasives Buyers Spend 3 4x More On Abrasives Than On Brushes JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 16

17 GLOBAL FINISHING SALES & DISTRIBUTION NETWORK Karlstad Huskvarna Nogales Richmond Cleveland Hamilton Richmond Manchester Haan Chepstow Burgwald Roissy Wunsiedel Sélestat Gura Humorului Brito Valencia Jiangmen Beijing Shanghai Taiwan Mexico City Aurangabad Singapore Sao Bernando do Campo DRONCO Jason Finishing UNIQUELY POSITIONED TO GLOBALIZE DRONCO JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 17

18 RESULTS SNAPSHOT AND OUTLOOK NET SALES ($ In Millions) ADJUSTED EBITDA ($ In Millions) $800 $700 $600 $500 $400 $708 - $723 $702.5 $680.8 $655.0 $600.6 ʼ11 ʼ12 ʼ13 ʼ14 ʼ15E $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 $87 - $91 $79.8 $77.8 $70.5 $ % 11.7% 10.8% 11.1% 9.7% ʼ11 ʼ12 ʼ13 ʼ14 ʼ15E 2015 OUTLOOK RANGE Revenue (in millions): - Organic Growth* - Acquisitions $708 - $723 2% to 4% ~3% Adjusted EBITDA (in millions): $87 - $91 ADJUSTED EBITDA UP ~14% OVER 2014 *Organic growth is presented on a constant currency basis JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 18

19 CAPITAL ALLOCATION INVEST IN GROWTH CAPITAL EXPENDITURES Target 3.0% - 3.5% of Sales 2015 Estimate 4.5% - 5.0% of Sales Investing in Acoustics Platform Awards ACQUISITIONS Strategic Acquisitions High Growth Adjacent Markets Expand Global Presence Accretive to Margins After Synergies DRONCO Acquisition Into Attractive Abrasives Space STRENGTHEN THE BALANCE SHEET Target Net Debt to LTM Adjusted EBITDA of <3.0x Q Pro Forma*: Liquidity of $64.1M Net Debt to LTM Adjusted EBITDA of 5.15x Expect Net Debt to LTM Adjusted EBITDA to be 4.5x by Year End *Q Results Incorporating DRONCO Acquisition JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 19

20 JASON INVESTMENT HIGHLIGHTS STRONG FUNDAMENTAL BUSINESS Leader in target markets with significant scale over direct competitors Attractive free cash flow generation Global manufacturing footprint serving longstanding customer base Experienced management team with a track record of success Highly diversified end-market exposure POSITIONED FOR GROWTH Pricing and operational improvement opportunities leading to revenue growth, margin expansion and earnings growth Scalable and highly effective Jason Business System platform Geographic expansion opportunities Disciplined approach to strategic acquisitions in attractive markets JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 20

21 APPENDIX JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE

22 ADJUSTED EBITDA RECONCILIATION ($ in millions) Net Income (Loss) $9.3 $14.7 $24.1 ($18.9) Tax provision (8.5) Interest expense Depreciation and amortization Loss on disposals of fixed assets - net EBITDA Adjustments: Impairment of long-lived assets Restructuring Transaction-related expenses Integration and other restructuring costs Refinancing Transactions - Advisory, legal, professional fees and special bonuses Newcomerstown net fire costs (income) and related items 3.0 (1.3) (18.8) - Adjustment for non-discrete fire costs (1.4) - Multiemployer pension plan withdrawal expense (gain) (0.7) - Gain on claim settlement - - (0.4) - Sponsor fees Gain from sale of joint ventures (3.5) Share-based compensation Total adjustments (10.2) 48.1 Adjusted EBITDA $58.0 $70.5 $79.8 $77.8 JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 22

23 DRONCO FINANCIAL SUMMARY Purchase Price 32 Million (US$34.5 Million) Of Cash And 10 Million (US$11.2 Million) Of Assumed Liabilities 2015E Adjusted EBITDA Multiple Of 9.2x 6.1x With Cost Synergies Synergies Funding Expect $2.5 Million Of Annual Cost Synergies Within 18 Months Through Facility Consolidation, Manufacturing And Logistics Optimization Incremental Cross-Selling Opportunities Funded Through Existing Cash And Assumption Of $11.2 Million Of Liabilities Leverage 1Q15 Pro Forma Net Debt To LTM Adjusted EBITDA of 5.15x Net Debt To LTM Adjusted EBITDA Estimated at 4.5x By Year End Liquidity Margin Impact 1Q15 Pro Forma Liquidity of $64.1 Million, with $19.1 Million of Cash and $45.0 Million of Available Revolving Borrowing Capacity Expect Free Cash Flow Generation From Operations and Working Capital Improvement in Remainder of 2015 Expected To Be Accretive To Jason And Finishing Adjusted EBITDA Margin In 2016 JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 23

24 SURFACE TECHNOLOGY APPLICATIONS Polish Finish Deburr Blend Grind Cut Technical Abrasives approx. $6 B world market Buff & Compounds approx. $0.5 B world market Industrial Brushes approx. $1.5 B world market (Scale increases) Buffs Non Woven Brushes Coated Abrasive Bonded Abrasive TARGETING $6 BILLION OF THE TECHNICAL ABRASIVES MARKET JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE 24

25 JASON INDUSTRIES 2015 INVESTOR PRESENTATION //// PAGE