AIRI Investor Presentation Spring 2015
Transcription
AIRI Investor Presentation Spring 2015
Spring 2015 Air Industries Group (NYSE: AIRI) 360 Motor Pkwy Suite 100 Hauppauge, NY 11788 USA 1 Except for the historical information contained herein, the matters discussed in this presentation contain forward-looking statements. The accuracy of these statements is subject to significant risks and uncertainties. Actual results could differ materially from those contained in the forward-looking statements. See the Company’s SEC filings on Forms 10-K and 10-Q for important information about the Company and related risks. EBITDA is used as a supplemental liquidity measure because management finds it useful to understand and evaluate results, excluding the impact of non-cash depreciation and amortization charges, stock based compensation expenses, and nonrecurring expenses and outlays, prior to consideration of the impact of other potential sources and uses of cash, such as working capital items. This calculation may differ in method of calculation from similarly titled measures used by other companies. 2 Air Industries has been transformed from a single location $35M machine shop to a multi-divisional, multi-state, NYSE listed manufacturer of: Flight Controls and Landing Gear Aerostructures and Electronic components Turbine & Engine products and processes. *Decimal Industries and Woodbine Products were merged with the Welding Metallurgy subsidiary 3 Complex Machining Landing Gear Foreign Military Spares MRO Flight Controls Axles Large Machining, Turning Aerostructures Welded, structural and precision sheet metal assemblies Tube bending Dip-brazed Chassis Wires, cables, harnesses Turbines and Engine Electron beam welding VTL Milling/Turning GTAW/PAW welding Vacuum treatment, NDT 4 Propulsion Engines, Auxiliary Propulsion and Accessories: 20-25% Airframe Control and Structures, Landing Gear: 10-15% Cockpit, Engine and Airframe Electronics: 25-30% 5 E2D NLG Strut, MLG Strut, NLG Brace, MLG Brace F-16 MLG F-35 Retract Fitting BlackHawk Mixer Assy F-18 NLG 6 Blackhawk Auxiliary Beam Assy Blackhawk Main Engine Inlet E-2D Oil Tank CH-47 Door Panel E2D Inconel Bleed Lines, with Bellows 7 8 New CEO: Daniel Godin – 25 year veteran of United Technologies, (Pratt & Whitney). ◦ Extensive experience in landing gear manufacture, and; ◦ MRO: Maintenance, Repair, Overhaul. New Business – Sales Development Officer – WMI veteran New “Site Leaders” at Subsidiaries ◦ Welding Metallurgy – UTC veteran, operational & lean expert ◦ Nassau Tool Works – Circor Aerospace veteran, operational expert Intensely focused on Organic Growth & Improved Operational Efficiency… 9 Air Industries Group Business Development Initiatives Established BD organization: Coordinate individual site marketing efforts Re-branded corporation: New Logo, new marketing materials Increased exposure within aerospace industry: ◦ AIA - Aerospace Industries Association ◦ ADDAPT – Long Island ◦ ACM - Connecticut ◦ Paris Air Show – Chalet on the Runway 10 Commercial & Defense: Defense Aerospace: Cuts & Sequestration have already occurred. Defense Aerospace remains a $120B a year business. Foreign Military exports - $50+B trade surplus Focus on aircraft platforms – not budgets. Commercial Aerospace: 35,280 new airplanes – $4T – over the next 20 years Next Gen engines are game changers - $ 1T projected AIRI’s largest contract win in 2013, the largest ever for a single product, was commercial – engine product 11 Sequestration Response: Major customers - Prime Contractors - merged to reduce costs by outsourcing & risk sharing Buying more from fewer, and larger, more capable suppliers. Buying more complete ready-to-install product. Spreading development risk down the supply chain. Opportunity: Smaller suppliers are at a Tipping Point, and need to become bigger and more capable or…grow or close or sell. Attractive acquisition purchase multiples. Businesses with less than $5MM in Ebitda are not prime targets of Private Equity firms, cannot afford to hire an Investment Banker to run an auction process. Fewer buyers, less competition …lower sale multiples. 12 Platforms are more important than budgets… E-2D Advanced Hawkeye Primary airspace control over Carrier Battle Groups Only replacement for Carter era F16, F-15 and F-18 fighters International consortium supports production Supports the Aftermarket both Domestic & Foreign Installed base of 1,100 aircraft 40% Foreign air forces US Army, with installed base of 3,000 aircraft National Guard – to be upgraded to Black Hawk from 1960’s Huey’s’ F-16 Falcon F-18 Hornet BlackHawk F-35 Joint Strike Fighter Supports the Aftermarket both Domestic & Foreign Installed base of 3,500 aircraft 60% Foreign air forces 13 F-35 Joint Strike Fighter Program Revenue increase estimated at $10M in 2017, and then $15M by 2019; 2,363 Aircraft projected; only replacement for existing fighters 11 International customers committed – UK, Turkey, Italy, Netherlands, Canada, Australia, Norway, Denmark, South Korea, Israel and Japan. E-2D Hawkeye In-Flight Refueling System, awarded 2014: 75 US Navy Aircraft and Approximately 45 Foreign; Projected production revenues of $30M – life of program Geared Turbo Fan Engine Thrust Struts: Initial Contract awarded 10/2013 for $39M over 5 years First product shipped January 2014 Potential for Airbus 320 Neo could triple program; Significant Commercial Aerospace contract. CH-53K Air Industries Proprietary Engine Exhaust Ducts: Projected production revenues at $32M – life of program; Aftermarket opportunities. 14 Air Industries Group is an Aerospace & Defense Manufacturing Company well positioned in a growth industry: Blue Chip customers , long-term contracts, on long-lived aircraft programs $95mm, 18-Month Firm Backlog Positioned for growth through increased penetration of the commercial aerospace market Substantial marketing / quoting in 2014 /bearing fruit in 2015 . Aggressively executing a thoughtful acquisition strategy: Profiting from inefficiencies in the M&A market for smaller companies Expertly selected by experienced management Managed by an experienced M&A team including Michael Taglich 2009 Revenue 2010 Revenue 2011 Revenue 2012 Revenue 2013 Revenue 2014 – Pro-forma $48.5 M $48.60M $54.75 M $64.22M $62.83M $70M-$80 M Ebitda $4.7M Ebitda $5.2M Ebitda $6.6M Ebitda $8.7M Ebitda $8.0M Ebitda $7.0M 15 Revenue Growth: $ 40+ M in 2009 to nearly $ 70-80M in 2014 (pro-forma for acquisitions) Estimate of 2015: $ 85-95M in Revenue, $ 10 – 13M in Ebitda Balance Sheet: $ 30M in Stockholders Equity Backlog – 18 mo: $ 95M NYSE Listed June 2013. Dividend: Increased to $ .60 per share in Q4 – 2013 Acquisitions: Completed 8 since June 2012. Average multiple of less than 5X Ebitda Strong pipeline of acquisition opportunities: 16 Estimated revenue of $85 to $95 million and Ebitda of $10 to $15 Million for 2015 Calendar 2014 As Reported 2014 Acquistions: Pro-forma for full year $ Pro-forma Revenue - 2014 72,800 March 2015 Acquisition (2014 Revenue) US Navy electonics contract US Navy F-18 landing gear contract Base Line Estimate of 2015 64,300 8,500 9,100 3,750 2,500 $ 88,150 17 Our strategy is not unique and not new. It has been done before: • • • • • DRS, Triumph, Transdigm, PCC, Curtis Wright and others. 18