Investor Presentation April 2015 Disclaimer Forward Looking - - PowerPoint PPT Presentation

investor presentation
SMART_READER_LITE
LIVE PREVIEW

Investor Presentation April 2015 Disclaimer Forward Looking - - PowerPoint PPT Presentation

Investor Presentation April 2015 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


slide-1
SLIDE 1

Investor Presentation

April 2015

slide-2
SLIDE 2

Disclaimer

2

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 1995. 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

  • utcomes 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.

slide-3
SLIDE 3

Jason Business Overview

3

Employees: ~4,000

Headquarters: Milwaukee, WI

2014 Revenue: $702.5 million

2014 Adjusted EBITDA: $77.8 million

Founded 1985

Listed on NASDAQ July 2014

Manufacturing: 33 Sites in 12 Countries

Financial Profile Geographic Business Mix (a) Key Company Facts Geographic Footprint

Acoustics Components Finishing Seating

U.S. 72% Europe 19% Mexico 7% ROW 2%

9.7% 10.8% 11.7% 11.1% $0 $200 $400 $600 $800 2011 2012 2013 2014

Revenue Adjusted EBITDA %

_____________________ (a) 2014 mix

slide-4
SLIDE 4

Jason Investment Highlights

4

Strong fundamental business…

Leader in target markets with twice the scale of the next direct competitor in many product lines Strong free cash flow generation and high revenue / EBITDA visibility 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 margin expansion and earnings growth Scalable and highly effective Jason Business System (“JBS”) platform Strategic initiatives positioned for organic sales and Adjusted EBITDA margin growth Geographic expansion opportunities Strong pipeline of targets with a renewed focus on M&A

slide-5
SLIDE 5

Segment Overview

5

Segment

 Leading commercial and industrial seat manufacturer  Designs and manufactures a broad spectrum of seating systems for multiple vehicle platforms  Differentiated patents and IP filings

Key Highlights Brands % of Jason 2014 Revenue

 World’s largest producer of customized industrial brushes, buffs and buffing compounds  85% consumable, high recurring revenue  Over 10,000 SKUs of industrial consumable products  Used for surface finishing, preparation, metal removal, sealing, shielding and polishing  Key provider of fiber-based acoustical products to the automotive industry  Have product on 70% of the light vehicle platforms in North America  Innovative solutions provider with brand recognition  Broad range of stamped, formed, expanded and perforated metal components and sub-assemblies  Products used in filter products, smart utility meters, railcars, generators and other industrial equipment

Seating Finishing Acoustics Components

27% 24% 31% 18%

2014 Adjusted EBITDA %

15% 14% 9% 14%

slide-6
SLIDE 6

Scalable and Highly Effective Jason Business System Platform

Unifying

Scalable

Consistent

Results-driven Rewards

Operational Excellence

Share expertise and best practices across businesses

Focus resources on key priorities through policy deployment

Prioritize enterprise-wide “Lean Culture” Revenue Growth

Streamline innovation and proactively address customer needs

Grow organically through cross-selling and new product development

Leverage acquisition opportunities that add synergies and open new paths to growth People

Be ethical – do the right thing, the right way

Deliver on commitments; consistently exceed customer expectations

Use company scale to attract top talent; reward well and fairly across all segments

REVENUE GROWTH PEOPLE OPERATIONAL EXCELLENCE The Jason Business System (“JBS”) links the Company’s business segments through a consistent strategy and focus.

6

slide-7
SLIDE 7

Organic Sales Growth

7

Segment  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 – commercial trucking, bus and train  Expand geographic footprint Drivers of Growth  Improve market position and grow market share in industrial power brushes and polishing  Increase penetration in specially formulated polishing compounds  Grow in underpenetrated markets – professional cleaning and energy (oil and gas, solar cleaning, and power generation)  Expand further into emerging markets  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 Seating Finishing Acoustics Components

Achieve sustainable 6% annual organic sales growth over the long term

 Capture market share through new product lines (wheel liners, underbody panels, trunk systems)  Grow market share with existing and new customers in Mexico  Establish additional direct OEM relationships  Capitalize on light-weight fiber products supporting industry fuel efficiency trends

slide-8
SLIDE 8

Adjusted EBITDA Margin Growth

8

Leverage JBS to achieve 15% Adjusted EBITDA Margin across Jason’s segments

Segment Drivers of Growth

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

Finishing Acoustics

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

slide-9
SLIDE 9

Geographic Expansion Opportunities

Mexico

Seeking strategic partnerships in Mexico to leverage

  • verhead

Brazil

Looking for

  • pportunities to

expand Seating business in Brazil to capitalize on attractive end-market trends

Eastern Europe

Executing a strategy to expand Seating

  • perations into Eastern

Europe in support of growth in heavy industry

Southeast Asia

Recently opened a sales office in Singapore to capitalize

  • n strong finishing

market in SE Asia

India

Substantially expanding capacity for both Seating and Finishing

  • perations to support

growth with key customers

Jason has identified attractive geographies to further expand its global footprint

9

slide-10
SLIDE 10

Future M&A Activity to Drive Significant Shareholder Returns

  • Opportunistically target

businesses that will leverage Jason’s core competencies

  • Focus on generating above-

market returns

  • Target businesses that are

accretive to EBITDA margin NEW PLATFORM

BOLT-ON

NEW PLATFORM

  • Strengthen core

businesses BOLT-ON

10

Targeting opportunities between $25 - $400M Targeting opportunities between $25 - $400M

slide-11
SLIDE 11

Overview of Financial Profile

 As of December 31, 2014, Jason’s financial profile includes:  Total liquidity of $107.5 million  $62.3 million – available cash  $45.2 million – global available borrowing capacity  Total outstanding indebtedness of $420.7 million  Net debt to Adjusted EBITDA of 4.72x  Acquisitions will be funded through available cash and existing borrowing capacity.

11

slide-12
SLIDE 12

Results Snapshot

$601 $655 $681 $702 2011 2012 2013 2014

$16 $18 $19 $26 2011 2012 2013 2014

Net Sales

($ in millions)

Adjusted EBITDA

($ in millions)

Capex

($ in millions)

12

$58 $71 $80 $78 2011 2012 2013 2014

slide-13
SLIDE 13

Results and Financial Highlights

 Strong organic revenue growth in our Seating, Finishing, and Acoustics segments of 4% to 7%  Margin expansion initiatives in the Finishing segment resulted in significant Adjusted EBITDA growth of 49.1%, with Adjusted EBITDA margins growing from 9.8% in 2013 to 14.0% in 2014  Acoustics segment successfully completed the transition of production from its Norwalk, Ohio facility to the expanded Battle Creek, Michigan facility and a new state-of-the-art facility in Warrensburg, Missouri

2014 Results 2014 Highlights

13

(millions) 4Q’13 4Q’14 Change 2013 2014 Change Net sales $165.1 $164.2 (0.6)% $680.8 $702.5 3.2% Seating 34.4 34.6 0.8% 165.2 171.9 4.0% Finishing 44.5 45.7 2.8% 180.4 187.6 4.0% Acoustics 53.4 54.8 2.5% 204.5 218.7 7.0% Components 32.8 29.0 (11.6)% 130.7 124.3 (4.9)% Adjusted EBITDA $17.0 $18.9 11.1% $79.8 $77.8 (2.4)% Seating 4.6 4.8 4.6% 25.6 26.0 1.6% Finishing 4.0 7.0 77.0% 17.6 26.3 49.1% Acoustics 5.2 4.6 (10.7)% 23.4 18.6 (20.7)% Components 5.3 5.2 (1.2)% 22.9 17.2 (24.7)%

slide-14
SLIDE 14

Outlook

14

  • Three year goals
  • 4%-6% organic revenue growth, with $1B in net sales by 2017
  • 15% consolidated EBITDA margin

Revenue (in millions): $710 - $725 Adjusted EBITDA (in millions): $84 - $90 Capital Expenditures: 4.5% - 5.0% of sales

Outlook Range

  • Fiscal 2015
slide-15
SLIDE 15

Jason Investment Highlights

15

Strong fundamental business…

Leader in target markets with twice the scale of the next direct competitor in many product lines Strong free cash flow generation and high revenue / EBITDA visibility 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 margin expansion and earnings growth Scalable and highly effective Jason Business System (“JBS”) platform Strategic initiatives positioned for organic sales and Adjusted EBITDA margin growth Geographic expansion opportunities Strong pipeline of targets with a renewed focus on M&A

slide-16
SLIDE 16

Appendix

16

slide-17
SLIDE 17

Seating Overview

17

Financial Overview

($ in millions) 

Milsco brand maintains the #1 position in the global static seating market

Primary product segments include heavyweight motorcycles, turf care, heavy industry and powersports

Next generation seating product development focus on turf care and industrial equipment seating products

Europe 5% United States 95%

United States 82%

_____________________ (1) Management estimates

Representative Products and Applications Overview Addressable Market (1) Revenue by Geography Revenue by End Product

___________________________ Note: Based on 2014 revenue

Market Size Global $1.5B

After several years of internal focus, Jason is now poised to turn on the acquisition machine

Turf Equipment 37% Motorcycle OEM 19%

  • Constr. & Ag.

17% Motorcycle Aftermarket 10% Lifts 11% Utility Vehicles 4% Marine 2% $165 $163 $165 $172 15% 14% 15% 15% 2011 2012 2013 2014 Revenue Adjusted EBITDA %

slide-18
SLIDE 18

Finishing Overview

18

Manufacturing, distribution and sales facilities in 14 countries

85% of revenue from consumables

#1 manufacturer of industrial and maintenance brushes, buffs and compounds in the world

More than 30,000 customers world-wide; only business supplying global marketplace

Europe 55%

Industrial Brushes 58% Industrial Buffs and Compounds 26% Abrasives 4% Other 12%

Representative Products and Applications Overview Addressable Market (1) Revenue by Geography Revenue by End Product

_____________________ Note: Based on 2014 revenue

Market Size Global $8B

Europe 49% U.S. 40% South America 7% Mexico 4%

Financial Overview

($ in millions)

Finishing’s well-recognized brands maintain exceptional world-wide reputations for quality

$191 $184 $180 $188 8% 10% 10% 14% 2011 2012 2013 2014 Revenue Adjusted EBITDA % _____________________ (1) Management estimates

slide-19
SLIDE 19

Acoustics Overview

Mexico 22% Europe 14% U.S. 64%

_____________________ Note: Based on 2014 revenue

Die Cut Insulation 24% Molded Insulation 18% Trunk Systems 21% IP Panels 10% Carpet Systems 10% Other 12% Engine 3% Wheel Liners 2%

Products are used in approximately 70% of light vehicles in North America today, including the majority of top platforms

Acoustic products also sold to a wide range of other vehicles, including sport utility vehicles and light trucks

Jason’s Acoustics segment product content per vehicle increased by 48% since 2010

Growth opportunity in Asia and Latin America

Luggage Compartment Door Panel Insulation Dash Insulators (Interior & Exterior) Under Bonnet Floor / Carpet Underlayment Hush Panels Wheelhouse / Cowl

_____________________ (1) Management estimates

Representative Products and Applications Overview Addressable Market (1) Revenue by Geography Revenue by End Product Market Size North America $2.5B Global $12B Financial Overview

($ in millions)

Acoustics has developed extensive design and manufacturing expertise that allows it to provide custom acoustical solutions for each vehicle platform it serves

19

$145 $172 $204 $219 6% 8% 11% 9% 2011 2012 2013 2014 Revenue Adjusted EBITDA %

Underbody

slide-20
SLIDE 20

Components Overview

Leading manufacturer of individual engineered solutions and expanded / perforated metal components

#1 independent manufacturer of electric meter bases, rail safety products (anti-slip surface) and expanded metal products in North America

Product categories are united by a common culture of maintaining industry-leading engineering capabilities

Electric Meters 22% Filtration 24% Rail 21% Industrial 15% Small Engines 9% Other 9% North America 100%

_________________________________________________________________________ (1) Management estimates Note: 2011 revenue and EBITDA margin is pro forma for acquisition of Morton Manufacturing

Representative Products and Applications Overview Addressable Market (1) Revenue by Geography Revenue by End Product

_____________________ Note: Based on 2014 revenue

Market Size North America $750M Global $2B Financial Overview

($ in millions)

Jason Components has great long-term customer partnerships due to its innovative design and manufacturing capabilities

20

$100 $136 $131 $124 19% 18% 17% 14% 2011 2012 2013 2014 Revenue Adjusted EBITDA %

slide-21
SLIDE 21

Adjusted EBITDA Reconciliation

2011 2012 2013 2014

($ in millions)

Net Income (Loss) $9.3 $14.7 $24.1 ($18.9) Tax provision 4.1 4.8 18.2 (8.5) Interest expense 17.0 18.6 20.7 23.5 Depreciation and amortization 20.2 24.2 27.0 33.2 Loss on disposals of fixed assets - net 0.1 0.5

  • 0.4

EBITDA 50.7 62.8 90.0 29.7 Adjustments: Impairment of long-lived assets 1.3 0.5

  • Restructuring

0.7 1.6 3.0 3.7 Transaction-related expenses 0.9

  • 1.3

30.3 Integration and other restructuring costs 0.4 1.0 1.0 12.9 2013 Refinancing Transactions - Advisory, legal, professional fees and special bonuses

  • 4.7
  • Newcomerstown net fire costs (income) and related items

3.0 (1.3) (18.8)

  • Adjustment for non-discrete fire costs
  • 1.4

(1.4)

  • Multiemployer pension plan withdrawal expense (gain)
  • 3.4

(0.7)

  • Gain on claim settlement
  • (0.4)
  • Sponsor fees

1.0 1.1 1.1 0.6 Gain from sale of joint ventures

  • (3.5)

Share-based compensation

  • 4.1

Total adjustments 7.3 7.7 (10.2) 48.1 Adjusted EBITDA $58.0 $70.5 $79.8 $77.8

21

slide-22
SLIDE 22