Roadshow Presentation September 2019
DISCLOSURES Forward-Looking Statements This presentation contains “forward - looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward- looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or wo rds or phrases with similar meaning. Forward-looking statements contained in this presentation relate to, among other things, the Company's projected financial performance and operating results, including projected net sales, gross margin, capital expenditures, adjusted EBITDA, net debt leverage, free cash flow, adjusted EBITDA margin and adjusted earnings per share, as well as statements regarding the Company's business and its strategic objectives, including the performance of current greenfield branches, the opening of additional greenfield branches, the Company's acquisition pipeline and the successful integration and performance of the Company's acquisitions. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its An nual Reports on Form 10-K and Quarterly Reports on Form 10-Q, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement. Non-GAAP Financial Measures In addition to presenting financial results prepared in accordance with generally accepted accounting principles ("GAAP"), this presentation contains certain non-GAAP financial measures, including adjusted net income (loss), adjusted earnings per share, adjusted net loss per share, net debt leverage and adjusted EBITDA, which are provided as supplemental measures of financial performance. These measures are presented because they are important metrics used by management as one of the means by which it assesses financial performance. These measures are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. These measures, when used in conjunction with the most directly comparable GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing our company and its results of operations. Adjusted net income (loss), adjusted earnings per share, net debt leverage and adjusted EBITDA have certain limitations, which are discussed in greater detail in the Company’s filing s with the Securities and Exchange Commission and its earnings releases, and should not be considered as alternatives to measures of financial performance prepared in accordance with GAAP. Other companies, including other companies in our industry, may not use such measures or may calculate one or more of the measures differently than we do, limiting their usefulness as a comparative measure. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is set forth in the appendix to this presentation. 1
SUMMARY OF OFFERING Issuer – Foundation Building Materials, Inc. Ticker / Exchange – FBM / NYSE Offering Size – 4,750,000 shares Offering Composition – 100% Secondary – LSF9 Cypress Parent 2 LLC (“Lone Star Funds”) Selling Stockholder Greenshoe – 15% (100% Secondary); 712,500 shares Expected Pricing Date – September 19, 2019 – 90 days Lock-up – Bank of America Merrill Lynch, RBC Capital Markets Active Bookrunners – Barclays Passive Bookrunners 2
FBM MANAGEMENT Founded FBM in 2011 Ruben Mendoza* President & Chief Over 25 years of experience in specialty building products distribution Executive Officer Served as CEO of Acoustical Material Services (“AMS”), which was sold to Allied Building Products in 2007 John Gorey* Founded FBM in 2011 Chief Financial Over 30 years of experience in specialty building products distribution Officer Joined AMS in 1986 and assumed the CFO role in 2001 Pete Welly Joined FBM in 2013 Chief Operating Over 35 years of experience in specialty building products distribution Officer Served as Head of U.S. Operations for 12 years at Winroc Kirby Thompson Joined FBM in 2013 Senior Vice Over 35 years of experience in specialty building products distribution President – Sales Served as Vice President of Sales for Home Acres Building Supply & Marketing John Moten* Joined FBM in 2017 Vice President – Over 30 years of finance and capital markets experience Investor Relations Served as President and Chief Investment Officer of BYW Investment Advisors MANAGEMENT’S EXTENSIVE EXPERIENCE IN SPECIALTY BUILDING PRODUCTS DISTRIBUTION * Today’s presenters 3
AGENDA Introduction I Investment Highlights II Strategic Priorities and Growth Strategy III Financial Performance IV Q&A V 4
Introduction
FBM AT A GLANCE (NYSE: FBM) MARKET CAP (1) FOUNDED HOME OFFICE LTM 2Q19 SALES 2011 Santa Ana, CA $2.1B $812M Net Sales (2) ($M) LTM 2Q19 FY2018 Business Mix (4) Product Mix 20.0% $2,500 18.0% $2,133 $2,044 16.0% $2,000 18% 21% $1,790 14.0% 38% 43% $1,393 12.0% $1,500 19% 10.0% 36% 8.0% $1,000 8.1% 25% 7.6% 7.6% 6.0% Wallboard 5.7% New Non-Residential 4.0% $500 Complementary and Other Products Repair and Remodel 2.0% Metal Framing New Residential 0.0% $0 2016 2017 2018 LTM 2Q19 Suspended Ceilings Adjusted EBITDA margin (5) A LEADING SPECIALTY BUILDING PRODUCTS DISTRIBUTOR (1) Market capitalization as of September 17, 2019 at closing price of $18.89 and 42.990 mm basic shares outstanding. (2) Financials for 2016 are as reported including Mechanical Insulation and Specialty Building Products. Financials for 2017 and beyond are as reported including only Specialty Building Products. (3) FY2016 financial information was compared to FY2018 net sales for calculation of the CAGR. (4) Business mix is a management estimate. (5) Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales. For a reconciliation of net income (loss) to adjusted 5 EBITDA, see the Appendix.
FULL SOLUTIONS PROVIDER FOR COMMERCIAL AND RESIDENTIAL CONTRACTORS Complementary and Wallboard Suspended Ceilings Metal Framing Other Products Current Position in the #2 #2 #3 N/A U.S. and Canada (1) LTM 2Q19 38% 19% 25% 18% Product Mix Interior walls and Suspended ceiling Wallboard Stucco/exterior ceilings systems structural support, insulation and typically sold as finishing systems, part of a package building insulation, Applications with wallboard, tools, safety insulation, or accessories, and suspended ceiling fasteners systems Selected Products (1) Management estimates based on supplier-provided data and publicly available information. 6
GEOGRAPHIC FOOTPRINT MB BC AB SK ON QC WA OR ME VT NH MI MA NY CT NV RI PA CA NJ OH IN IL MD DE WV VA KY NC TN SC GA MS AL FL 178 Branches Total 28 US States 5 Canadian Provinces FBM HAS OPPORTUNITIES TO EXPAND IN UNDERSERVED AND ADJACENT MARKETS *As of September 17, 2019 7
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