SEATING FINISHING ACOUSTICS COMPONENTS FOURTH QUARTER 2016 EARNINGS CALL //// MARCH 2, 2017 Brian “ Koby ” Kobylinski, Chief Executive Officer Sarah Lauber, Senior Vice President & Chief Financial Officer Chad Paris, Vice President, Investor Relations
DISCLAIMER FORWARD LOOKING STATEMENTS This presentation includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United Stat es 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 hi storical 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 f actors 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 2, 2017, 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 co mparing 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 FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 2
AGENDA FOURTH QUARTER RESULTS BUSINESS UPDATE FINANCIAL OUTLOOK CLOSING COMMENTS Q&A JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 3
FOURTH QUARTER AND FULL YEAR 2016 FINANCIAL RESULTS
FOURTH QUARTER RESULTS FINANCIAL RESULTS SUMMARY (in millions) 4Q 2016 4Q 2015 4Q YoY Net sales $158.8 $173.8 (8.6)% Adjusted EBITDA $10.5 $16.7 $(6.2) Margin 6.6% 9.6% (300) bps NET SALES OF $158.8 MILLION, DECREASED 8.6% • Organic Sales Decreased 5.8% • Non-Core Business Exit Negative Impact 2.0% • Foreign Currency Translation Negatively Impacted Sales 0.8% ADJUSTED EBITDA MARGINS OF 6.6%, DECREASED 300 BPS • Lower Volumes In Components, Seating And Finishing • Unfavorable Product Mix In Finishing And Seating • Realized $2.4M Cost Reduction Savings JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 5
FOURTH QUARTER SALES RESULTS • Seating Organic Sales Decline Of 11.8% SALES − Significant Volume Decline In Heavyweight Motorcycles 4 th Quarter Y-O-Y FX (in millions) 2016 2015 Change Impact • Finishing Organic Sales Decline Of 7.3% − Softer Global Industrial Demand Seating $32.1 $36.7 $(4.6) $(0.2) − Negative 1.9% Impact Due To Foreign Currency Translation Finishing 44.3 49.6 (5.3) (0.9) − Exit From Non-core Market In Brazil 1.4% Acoustics 61.0 59.3 1.7 (0.1) • Acoustics Organic Sales Growth Of 3.1% − New Platform Launches Drove Growth Components 21.3 28.2 (6.9) - Total $158.8 $173.8 $(15.1) $(1.2) • Components Organic Sales Decline Of 14.2% − Further, But Expected, Declines In Railcar Products − Softer Industrial Metals Demand − Smart Meter Volume Growth − Exit Of Non-Core Product Lines 10.1% JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 6
FOURTH QUARTER ADJUSTED EBITDA RESULTS • Seating Adjusted EBITDA Margin Of 4.3% ADJUSTED EBITDA − Unfavorable Mix Due To Reduced Motorcycle Volumes (in millions) 4 th Quarter − $1.0M Charge in PY For Inventory Adjustment % of % of Y-O-Y Bps 2016 Sales 2015 Sales Change Change • Finishing Adjusted EBITDA Margin Of 9.7% Seating $1.4 4.3% $(0.4) (1.1)% $1.8 +540 − Lower Volumes And Unabsorbed Labor Finishing 4.3 9.7 5.5 11.2 (1.2) -150 • Acoustics Adjusted EBITDA Margin Of 10.5% Acoustics 6.4 10.5 8.3 14.0 (1.9) -350 − Higher Operational Expenses Related To Labor And Scrap − Increased Overhead Costs Components 2.6 12.4 5.0 17.9 (2.4) -550 • Components Adjusted EBITDA Margin Of 12.4% Corporate (4.2) (1.8) (2.4) - − Lower EBITDA On Rail And Industrial Metal Volume Total $10.5 6.6% $16.7 9.6% $(6.2) -300 Decreases • Corporate Expenses Increase $2.4M − Includes $1.0M Of Supply Chain Consulting Costs − Timing Of Bonus Accrual Reversal And Higher Healthcare Costs JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 7
FINANCIAL POSITION LIQUIDITY & DEBT FREE CASH FLOW (in millions) (in millions) 2016 2015 $100 $450 Adjusted EBITDA $ 64.2 $ 81.2 $90 Cash Interest/Taxes (36.6) (33.3) $445 $80 Cash Restructuring (11.4) (9.6) L $70 i Changes In Working Capital 18.9 0.7 $440 q $60 D Operating Cash Flow $ 35.1 $ 39.0 u e $50 $435 i b d $40 t Less: Capital Expenditures $ (19.8) $ (32.8) i $430 $30 Less: Preferred Stock Dividends (3.6) (3.6) t y $20 Free Cash Flow After Dividends $ 11.7 $ 2.6 $425 $10 $0 $420 4Q15 1Q16 2Q16 3Q16 4Q16 • Higher Free Cash Flow On Improvements In Cash Revolver Availability Debt Working Capital And Lower Capex Offset Lower EBITDA • Net Debt To Adj. EBITDA 6.2X As Of 4Q16 CONTINUED FOCUS ON DEBT REDUCTION & FREE CASH FLOW GENERATION *See Appendix for calculation of Net Debt to Adjusted EBITDA. JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 8
FULL YEAR 2016 RESULTS FINANCIAL RESULTS SUMMARY (in millions) FY 2016 FY 2015 YoY 2016 Guidance Net sales $705.5 $708.4 (0.4)% $695 - $705 Adjusted EBITDA $64.2 $81.2 $(17.0) $62 - $65 Adj EBITDA Margin 9.1% 11.5% (240) bps Cap Ex As % of Sales 2.8% 4.6% (180) bps ~ 3.0% Free Cash Flow $11.7 $2.6 $8.9 $2 - $7 NET SALES OF $705.5 MILLION, DECREASED 0.4% • Acquisition Growth From DRONCO Of $17.0 Million Or 2.4% • Foreign Currency Translation Negatively Impacted Sales 0.6% • Organic Sales Decline Of 1.7% • Non-Core Business Exit Negative Impact 0.5% ADJUSTED EBITDA MARGINS OF 9.1%, DECREASED 240 BPS FREE CASH FLOW OF $11.7 MILLION, INCREASED $8.9 MILLION JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 9
BUSINESS UPDATE JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE
PROGRESS UPDATE • Fourth Quarter Significant Volume Declines In Motorcycle & Rail Markets Soft General Industrial Demand Steady Operational Improvement • Full Year 2016 Significant End Market Challenges Global Cost Reduction Initiatives Partially Mitigate Top Line Decline • SG&A Headcount Reductions • Facility Closure And Consolidation • Investments In Supply Chain Driving Future Savings FOCUS ON EXECUTION JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 11 11
END MARKET DEMAND & ORGANIC GROWTH Oil Heavy Motorcycle Key End General Heavy & Industry & Markets Industrial Fabrication Gas Construction Auto Equipment Rail Turfcare Powersports Finishing Components Seating Acoustics Organic Growth 2015 2016 FY % Q1 Q2 Q3 Q4 2015 Q1 Q2 Q3 Q4 YTD Finishing 2.1% (2.1)% 1.2% (3.9)% (0.7)% (1.8)% (1.5)% (5.1)% (7.3)% (4.1)% Components (10.2) 6.4 1.1 (2.9) (1.7) (13.7) (25.3) (16.8) (14.2) (17.7) Seating (1.9) (0.6) 15.7 6.5 3.5 2.1 (13.7) (12.5) (11.8) (8.5) Acoustics (1.1) 1.2 (1.9) 10.0 2.1 21.9 12.5 23.2 3.1 14.7 Jason (2.2)% 0.7% 3.0% 3.1% 1.0% 4.1% (4.9)% (0.2)% (5.8)% (1.7)% *Organic sales refers to year over year change in net sales from existing operations excluding acquisitions, divestitures and exited non-core businesses, and the impact of foreign currency translation. JASON INDUSTRIES FOURTH QUARTER 2016 EARNINGS CALL //// PAGE 12
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