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