2017 SHAREHOLDER MEETING
Annual meeting of Annual meeting of SHAREHOLDERS - Introductions and call to order Introductions and call to order - Report of the Secretary of the Corporation Report of the Secretary of the Corporation - Procedure for conducting the meeting Procedure for conducting the meeting - Matters to be acted upon Matters to be acted upon Proposal 1— Nomination and Election of Directors Proposal 2—Rati fi cation of the Appointment of the Company’s Independent Auditors - Inspector report regarding voting results Inspector report regarding voting results - Adjournment Adjournment - Management report Management report 1
MANAGEMENT REPORT
Forward looking Forward looking INFORMATION INFORMATION This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward- looking statements may generally be identi fi ed by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, actual events may di ff er materially from those expressed in or suggested by the forward-looking statements. Factors that could cause these di ff erences include, but are not limited to, the factors set forth in “Risk Factors” included in TPB’s annual report on Form 10-K and other reports fi led with the Securities and Exchange Commission from time to time. Any forward-looking statement made by TPB in this presentation speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these events or how they may a ff ect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. This presentation includes industry and market data derived from internal analyses based upon publicly available data or proprietary research and analysis, surveys or studies conducted by third parties and industry and general publications, including those by the Management Science Associates, Inc. (“MSAi”) and Nielsen Holdings, N.V. (“Nielsen”). Third-party industry and general publications, research, surveys and studies generally state that the information contained therein has been obtained from sources believed to be reliable. Although there can be no assurance as to the accuracy or completeness of the included information, we believe that this information is reliable. While we believe our internal analyses are reliable, they have not been veri fi ed by any independent sources. Any such data and analysis involve risks and uncertainties and are subject to change based on various factors, including those set forth in “Risk Factors” included in TPB’s annual report on Form 10-K and other reports fi led with the Securities and Exchange Commission from time to time. 3
Non-GAAP Non-GAAP RECONCILIATION RECONCILIATION This presentation includes certain non-U.S. generally accepted accounting principles (“GAAP") fi nancial measures, including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. Such non-GAAP fi nancial measures are not in accordance with, or an alternative to, fi nancial measures prepared in accordance with GAAP. Please refer to the Appendix of this presentation for a reconciliation of EBITDA and Adjusted EBITDA to net income. To supplement TPB’s and Smoke Free Technologies Inc. d/b/a Vapor Beast’s fi nancial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, TPB uses non-U.S. GAAP fi nancial measures, including EBITDA and Adjusted EBITDA. TPB believes EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain fi nancial and business trends relating to fi nancial condition and results of operations. EBITDA and Adjusted EBITDA is used by management to compare performance to that of prior periods for trend analyses and planning purposes and is presented to TPB’s board of directors. TPB believes that EBITDA and Adjusted EBITDA are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, fi nancial measures calculated in accordance with U.S. GAAP. Adjusted EBITDA excludes signi fi cant expenses that are required by U.S. GAAP to be recorded in our fi nancial statements and is subject to inherent limitations. In addition, other companies in TPB’s industry may calculate this non-U.S. GAAP measure di ff erently than TPB does or may not calculate it at all, limiting its usefulness as a comparative measure. 4
2016 – A Year of 2016 – A Year of ACCOMPLISHMENT - Improved our capital position - Built our focus brands - Closed two accretive acquisitions 5
2016 – A Year of 2016 – A Year of ACCOMPLISHMENT - Improved our capital position - Improved our capital position - Built our focus brands - Closed two accretive acquisitions 6
Improved our Improved our CAPITAL POSITION CAPITAL POSITION - Completed IPO - Reduced leverage 33% - Lowered pro forma interest expense Reduced Leverage Reduced Leverage Reduced Interest Expense (millions) Reduced Interest Expense (millions) 8.0x $43.0 $44.1 6.1x $40 5.7x $34.3 $34.3 6.0x 5.2x 5.2x $26.6 $26.6 $30 4.1x 4.1x 3.8x (a) 3.8x 4.0x $18.0 ² (b) $20 2.0x $10 0.0x $0 2012 2013 2014 2015 2016 1Q 2017 2012 2013 2014 2015 2016 2017 Pro Forma [a] Leverage calculated using net debt of $225.2 MM / pro forma adjusted EBITDA of $58.9 MM. (b) Pro forma annual interest expense is based on 3/31/17 debt balance and rates 7
Free cash Free cash fl fl ow ow USES USES Debt Repayment Debt Repayment Innovate & Innovate & Invest in Sales Invest in Sales 2.5x – 3.5x Target 2.5x – 3.5x Reinvest in the Reinvest in the Force Expansion & Force Expansion & Leverage Business Business Brands Brands Pursue Attractive, Pursue Attractive, Accretive Accretive Acquisitions Acquisitions 8
2016 – A Year of 2016 – A Year of ACCOMPLISHMENT - Improved our capital position - Built our focus brands Built our focus brands - Closed two accretive acquisitions 9
Continued to build Continued to build FOCUS BRANDS MST TUBS MST TUBS CHEW CHEW MST CANS MST CANS Purchased Purchase d Stoker’s Extended Extended Stoker's to to Extended Extended Stoker's to to “chew” ( “chew” (2003 2003) moist snu fff category moist snu category traditional 1.2 oz. traditional 1.2 oz. with 12 oz. tub (2009) with 12 oz. tub (2009) can (2015) & can (2015) & — Built to #2 Chew brand continuing rollout continuing rollout (17% share) — Market leader in tub format (>50% share) — Targets >145,000 — Among fastest growing convenience stores brands selling 75% of all MST volumes 2016 - Purchased Tennessee facility 10
Continued to build Continued to build FOCUS BRANDS PAPERS PAPERS WRAPS WRAPS Acquired Acquired Zig-Zag rights in US rights in US Extended brand into MYO Extended brand into MYO & Canada (1997) & Canada (1997) cigar wraps cigar wraps — #1 premium cigarette paper — Achieved 50% share within brand two years — Current market leader for MYO cigar wraps (81% share) 11
2016 – A Year of 2016 – A Year of ACCOMPLISHMENT - - Improved our capital position - Built our focus brands - Closed two accretive acquisitions Closed two accretive acquisitions 12
Acquisition Acquisition CRITERIA CRITERIA Over 300 OTP companies High - Plug-and-play NewGen - Bolt-on infrastructure Low - Leverage our existing EBITDA Margin (%) EBITDA Margin (%) High regulatory and Smoking Completed sales/distribution Low capabilities Smokeless High - Accretive to earnings Select M&A Targets (1) Select M&A Targets Low (1) EBITDA ($) EBITDA ($) Low High $50 - $100 Up to $50 million million (1) The Company regularly evaluates acquisition opportunities across the OTP landscape and has identi fi ed attractive opportunities that it believes represent more than $250 million of combined 13 net sales. The Company cannot assure you that any acquisitions will be completed.
Closed two accretive ACQUISITIONS Closed two accretive “Plug and Play” “Plug and Play” “Bolt-on Infrastructure” “Bolt-on Infrastructure” - Purchased Wind River chew brands - Acquired E-Commerce leader in November 2016 November 2016 - Adds 2% to TPB chew market share - FY16 Revenue: $54.1M - Opportunity to expand beyond - 4,500+ non-traditional retailers current 25% of U.S. market and direct consumers - Immediate access to new channel opportunities 14
2016 FINANCIAL HIGHLIGHTS
16
2016 Segment sales 2016 Segment sales GROWTH Smokeless Products $77.9 million $77.9 million up 4.9% to a RECORD Smoking Products $111.0 million $111.0 million grew 4.8% to $17.3 million $17.3 million NewGen increased to 17
Recommend
More recommend
