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Investor Presentation
June 2015
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Disclaimer
This presentation contains statements that constitute “forward looking statements” under the Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical facts contained in this presentation, including statements regarding our short-term and long-term growth strategies, efforts
to develop and commercialize our products, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of
management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,”
“plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although
not all forward-looking statements contain these identifying words.
These forward looking statements are only predictions and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking
statements, so you should not rely on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make. We have based these forward-looking statements largely on our current expectations
and projections about future events and trends that we believe may affect our business, financial condition and operating results.
The information in this presentation is current as of May 2015 and speaks only as of such date. We expressly disclaim any obligation to release any updates
or revisions to any information presented herein, including any forward-looking statements, to reflect any change in our expectations or projections or any
changes in events, conditions or circumstances on which any such information or statements are based for any reason, except as required by law, even as
new information becomes available. All information and forward-looking statements in this presentation are qualified in their entirety by this cautionary
statement.
In addition to results presented in accordance with U.S. GAAP, this presentation and related tables include Adjusted EBIDTA, a non-GAAP financial
measure. We have provided a reconciliation of this measure to the most directly comparable GAAP measure, which is available in “Reconciliations” starting
on slide 20. We use Adjusted EBITDA as a measure of operating performance, because it does not include the impact of items that we do not consider
indicative of our core operating performance, for planning purposes, including the preparation of our annual operating budget, to allocate resources to
enhance the financial performance of our business and as a performance measure under our bonus plan. We also believe that the presentation of Adjusted
EBITDA provides useful information to investors with respect to our results of operations and in assessing the performance and value of our business.
Although we believe this non-GAAP financial measure enhances investors’ understanding of our business and performance, this non-GAAP financial
measure should not be considered an alternative to or substitute for accompanying GAAP financial measures.
The risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2014 and filed with the SEC on March 13, 2015 pursuant to
the Securities Exchange Act of 1934, as amended, are incorporated by reference into this presentation and should be read in their entirety alongside this
presentation.
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Disclaimer
This presentation contains market data and industry forecasts that were obtained from industry publications, third party market research and publicly
available information. These publications generally state that the information contained therein has been obtained from sources believed to be reliable, but
the accuracy and completeness of such information is not guaranteed. This presentation also contains estimates and other statistical data made by
independent parties and by us relating to market size and growth, size of insulation opportunity at various types of energy infrastructure facilities and other
data about our industry. We obtained the industry and market data in this presentation from our own research as well as from industry and general
publications, surveys and studies conducted by third parties, some of which may not be publicly available. For example, this presentation includes statistical
data extracted from an off-the-shelf market research report (World Insulation - #2956) by The Freedonia Group, an independent international market
research firm, and a separate custom market research report by Freedonia Custom Research, Inc., a wholly-owned subsidiary of The Freedonia Group, or
Freedonia, which was commissioned by us and was issued in February 2014. Such data may be outdated and involves a number of assumptions and
limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of
uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates.
The Freedonia Custom Research, Inc. Report, or the Freedonia Report, represents data, research opinion or viewpoints developed independently on our
behalf and does not constitute a specific guide to action. In preparing the Freedonia Report, Freedonia used various sources, including publicly available
third party financial statements; government statistical reports; press releases; industry magazines; and interviews with manufacturers of related products
(including us), manufacturers of competitive products, distributors of related products and government and trade associations. The Freedonia Report speaks
as of its final publication date (and not as of the date of this presentation).
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Experienced Leadership Team
Donald R. YoungPresident & CEO
John F. FairbanksVice President, CFO &
Treasurer
President, CEO and member of Board of Aspen Aerogels since 2001
Prior to 2001, worked in the U.S. and abroad in a range of senior operating
roles for Cabot Corporation
Graduate of Harvard College and earned an MBA from Harvard Business
School
Has served as CFO since 2006
More than 10 years of service as a SVP of New England Business Service, in
senior financial and operating roles
Earned a B.A. in Economics from Middlebury College and an MBA from the
Wharton School of the University of Pennsylvania
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Designs, develops and manufactures innovative, high-performance aerogel insulation primarily used in large-
scale energy infrastructure process facilities
Offers a superior combination of performance and long-term value
End users save money, reduce energy use, preserve operating assets and protect workers
Global network of energy-focused distributors, contractors and engineering firms
Proven market adoption
Used by 24 of the world’s 25 largest refining companies; 19 of 20 largest petrochemical companies
Initial installations in approximately 30% of the world’s 640 refineries
Installed base of >150 million sq. ft., >$375 million of product sales since 2008
Expanding capacity to meet demand
Aspen Aerogels: An Energy Technology Company
Targeted Energy End Markets
USA36%
Canada6%Latin
America9%
Asia Pacific35%
Europe14%
Geography
2014 Product Revenue by Region
REFINERIESPETROCHEMICAL
PLANTS
POWER GENERATION
LNG & GAS PRODUCTION
OFFSHOREOIL SANDS
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Unique Technological Advantages
What are Aerogels?
Aerogels are an amorphous
silica solid
Characterized by impressive
material properties
Lowest density solid -- ~97%
air
Lowest thermal conductivity
Best thermal performance of any
widely used insulation product
Reduced corrosion under
insulation
Compact design and faster
installation
High durability and fire protection
Advantages vs. Traditional
InsulationOur Breakthrough Technology
Industrially robust
Unique product form
Proprietary manufacturing
process
Patent-protected – 77 issued
and 50 pending patents owned
or co-owned worldwide
Proven Manufacturing Process
Pyrogel XT / XT-E / XTF(hot insulat ion)
Cryogel Z(cold insulat ion )
Our Aerogel Products
Step 1:
Fill fibrous batting with a liquid-solid solution
Step 2:
Extract solvents with supercritical carbon
dioxide
Step 3:
Resulting dry,fiber-reinforced aerogel
blanket
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Disruptive Products with Compelling Value Proposition
Best Thermal
Performance
Two to five times better thermal performance
Broad range of applications from -200°C to 650°C
Compact Design
& Faster
Installation
High Durability
and Fire
Protection
Reduced
Corrosion Under
Insulation
Th
erm
al
Co
nd
ucti
vit
y
Temperature Range
Pyrogel XT
Traditional Insulation
Enhances plant safety
Improves reliability
Reduces a major maintenance expense
50% to 80% reduced volume
Space savings
Faster installation time with improved safety and logistics
Excellent compression resistance, tensile strength, and vibration resiliency
Fire protection
Traditional
Insulation
Vapor Permeable
Traditional Insulation;
Installed on site
Transport-ready;
Supports modular construction
Hydrophobic
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415 470 553
73 86104198
226278
512541
603
903
1,089
1,485342
402
523
$2,443
$2,814
$3,546
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2010 2013 2018
$ Millions
USA CanadaLatin America EuropeAsia Pacific Middle East Africa
Overview of The Energy Insulation Market
1,0871,248
1,600
418
484
619
176
199
239
69
81
102
366
418
494
327
384
492
$2,443
$2,814
$3,546
$0
$1,000
$2,000
$3,000
$4,000
2010 2013 2018
$ Millions
Power Generation PetrochemicalOnshore Oil Production Offshore Oil ProductionGas Production Refinery
Energy Insulation End Markets – by Sector Energy Insulation End Markets – by Region
Source: Freedonia Custom Research Report - February 2014.
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Global Distribution Network and Installed Base
Source: Company Management.
Distributor
Contractor
OEM
Installed Base
Installed in more than 40 countries worldwide
28 direct sales employees and 45 distributors
10
Industry-Leading End Users
11
$28.6
$43.2$46.0
$63.5
$86.1
2009 2010 2011 2012 2013 2014
Revenue Growth
Revenue Growth 2009 to 2014
($ in millions)
$102.4
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Financial Overview
13
Financial Highlights
History of top-line growth
Sufficient scale for positive cash flow from operations
IPO proceeds are funding capacity expansions
Expansions expected to offer attractive return on capital
Modest ongoing maintenance capital expenditure requirements
Technology company with significant market adoption
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2014 Financial Performance
Strong top and bottom line growth
Year Ended Change
12/31/14 12/31/13 $ %
See slide 20 herein for a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.
($ in thousands)
102,399$ 86,094$ 16,305$ 19%
85,319 75,363 9,956 13%
17,081 10,731 6,350 59%
Operating Expenses 33,123 30,703 2,420 8%
(16,042) (19,972) 3,930 20%
EBITDA Add-backs:
10,183 10,061 122 1%
Stock-based Compensation 8,781 4,426 4,355 98%
Other Items 119 3,670 (3,551) -97%
3,041$ (1,815)$ 4,856$ N.M.
Cost of Revenue
Adjusted EBITDA
Operating Loss
Depreciation & Amortization
Gross Profit
Total Revenue
15
Q1 2015 Financial Performance
Revenue constrained, but solid bottom line growth
Three Months Ended Change
3/31/14 3/31/13 $ %($ in thousands)
23,500$ 22,363$ 1,137$ 5%
18,986 19,017 (31) 0%
4,514 3,346 1,168 35%
Operating Expenses 7,259 6,244 1,015 16%
(2,745) (2,898) 153 5%
EBITDA Add-backs:
2,184 2,631 (447) -17%
Stock-based Compensation 1,295 339 956 282%
Other Items - 15 (15) -100%
734$ 87$ 647$ 744%
Total Revenue
Adjusted EBITDA
Operating Loss
Depreciation & Amortization
Cost of Revenue
Gross Profit
See slide 21 herein for a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.
16
Quarterly Adjusted EBITDA
History of Positive Adjusted EBITDA
For the Three Months Ended LTM
($ in thousands) 12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 3/31/15 3/31/15
24,232$ 22,363$ 26,615$ 25,437$ 27,984$ 23,500$ 103,536$
20,649 19,017 23,190 20,365 22,748 18,986 85,289
3,583 3,346 3,425 5,072 5,236 4,514 18,247
Operating Expenses 10,226 6,244 11,546 7,437 7,895 7,259 34,137
(6,644) (2,898) (8,121) (2,365) (2,659) (2,745) (15,890)
EBITDA Add-backs:
2,630 2,631 2,547 2,513 2,492 2,184 9,736
505 339 6,006 1,054 1,382 1,295 9,737
Other Items 3,670 15 - - 104 - 104
161$ 87$ 432$ 1,202$ 1,319$ 734$ 3,687$
Operating Loss
Cost of Revenue
Gross Profit
Total Revenue
Depreciation & Amortization
Stock-based Compensation
Adjusted EBITDA
See slide 22 herein for a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.
17
0
20
40
60
80
100
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Annual Capacity(MM ft2 / year)
Capacity Expansion Plan
East Providence
Line 1
Line 2
Line 3
Line 1
Expansion
Plant 2 - Line 1
Nameplate Capacity(1), Year-End Effective Capacity(2), Annual Actual Production, Annual
Historical Projected
1. Nameplate capacity represents our projected maximum sustainable annual output2. Effective capacity is the capacity at which we can operate while maintaining the quality of our products and efficiency of our operations in a given period. Actual effective capacity is also impacted
by the date within a given year on which we add the capacity.The projected nameplate and effective capacity for the years 2015 through 2018 are based on certain assumptions that the Company’s management believes are reasonable, but these assumptions could prove to be incorrect, which could result in actual capacity differing materially from the projections above.
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Key Business Highlights
1) Disruptive insulation products offering superior value and performance
2) Attractive and growing energy infrastructure end markets
3) Substantial installed base with industry-leading end users
4) Significant growth opportunities: expanded market penetration and new projects
5) 29% 5-year revenue CAGR, EBITDA positive, growing profitability
6) Protected technology platform and proprietary manufacturing capability
7) Proven, scalable business model with attractive returns
8) Experienced management team with a demonstrated track record
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Appendices
20
Reconciliation
Note: The table above presents a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.
Year Ended
12/31/14 12/31/13($ in thousands)
Net loss (66,324)$ (47,611)$
Interest expense 50,281 30,599
Depreciation and amortization 10,183 10,061
Stock-based compensation 8,781 4,426
Loss on disposal of assets 119 230
Gain on extinguishment of convertible notes - (8,898)
Loss on exchange of convertible notes - 5,697
Costs associated with postponed public offering - 241
Write-off of construction in progress - 3,440
Adjusted EBITDA 3,040$ (1,815)$
21
Reconciliation
Note: The table above presents a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.
Three Months Ended
3/31/15 3/31/14($ in thousands)
Net loss (2,790)$ (19,049)$
Interest expense 45 16,151
Depreciation and amortization 2,184 2,631
Stock-based compensation 1,295 339
Loss on disposal of assets - 15
Adjusted EBITDA 734$ 87$
22
Reconciliation
Note: The table above presents a reconciliation of net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.
Three Months Ended ($ in thousands)
12/31/13 3/31/14 6/30/14 9/30/14 12/31/14 3/31/15
Net loss (16,950)$ (19,049)$ (42,148)$ (2,412)$ (2,715)$ (2,790)$
Interest expense 10,306 16,151 34,027 47 56 45
Depreciation and amortization 2,630 2,631 2,547 2,513 2,492 2,184
Stock-based compensation 505 339 6,006 1,054 1,382 1,295
Loss on disposal of assets 230 15 - - 104 -
Write-off of construction in progress 3,440 - - - - -
Adjusted EBITDA 161$ 87$ 432$ 1,202$ 1,319$ 734$
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Investor Presentation
June 2015
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