Srx Health Solutions, Inc. · AMEX:SRXH
Srx Health Solutions — Better Choice — Investor Presentation (August 2020)
26 slides from Srx Health Solutions's investor presentation, Aug 4, 2020
Slide 1: Investor Presentation August 4, 2020
Investor Presentation August 4, 2020
Slide 2: Safe Harbor
Safe Harbor This presentation contains information, statements, beliefs and opinions which are forward-looking, and which reflect current estimates, expectations and projections about future events, referred to herein and which constitute “forward-looking statements” or “forward-looking information”
Slide 3: BTTR Investment Highlights
BTTR Investment Highlights 2 International sales account for ~17% of BTTR net sales, or ~$8mm of annual salesRevenue has been doubling annually and target BTTR international revenue at ~25% of total within 3 years FreshPet (FRPT) is the only publicly traded competitor to BTTR.FRPT trades at ~15x 201
Slide 4: Business Profile & Key Growth Areas
Business Profile & Key Growth Areas 3 E-Commerce International Other Growth Areas 36% of net sales in 1Q20BTTR well positioned to capitalize on the rapidly accelerating trend of online purchasing by pet parents 17% of net sales in 1Q20 primarily in Asia-PacificCountries include: China, South Korea,
Slide 5: Attractive Category Dynamics
Attractive Category Dynamics (2) Source: Morgan Stanley Equity Research ($ in billions) 2013 – 2017 CAGR of 4.1% 2018 – 2022E CAGR of 3.3% Least Recession Resistant Premium Pet Food is Driving the Overall Pet Food Industry Growth(2) The U.S. Pet Food & Treat Market Enjoys Consistent Growth(1) Dog Fo
Slide 6: Pet Care Industry During the Great Recession (2008-2009)
Pet Care Industry During the “Great Recession” (2008-2009) Source: Euromonitor International (Passport Industries) Halo (’08-’09): 20.4% 5 Affordable luxury
Slide 7: Public Market Scarcity – Equity Value Creation
Public Market Scarcity – Equity Value Creation Source: Company Management, Public Company Filings (OTCQB: BTTR) (NASDAQ: FRPT) (000’s) (000’s) 6 Key Channels E-Commerce, Direct-to-Consumer, Pet Specialty, International, Grocery & Mass Grocery & Mass Product Attributes Premium Natural Whole Meat Supe
Slide 8: Comparable Pet Industry Transaction Multiples
Comparable Pet Industry Transaction Multiples ($ Millions) Source: S&P Capital IQ M&A transactions in the space have averaged ~3x EV/ LTM revenue and ~15x EV/ LTM EBITDA 7
Slide 9: Brand Overview
Brand Overview a) TRUDSCG
Slide 10: Halo at a Glance
Halo is a 30-year-old, premium, natural pet food brand based in Tampa, FL that is uniquely differentiated from its competitorsUses natural whole meat and no rendered meat mealHighly digestible due to use of real whole proteinHistory of top line growth driven by continued premiumization of the pet fo
Slide 11: TruPet at a Glance
Founded in 2013 by Lori Taylor and based in Tampa, FL, TruPet produces and markets raw freeze-dried and dehydrated food, treats, and supplements for dogs and cats Well positioned as industry shifts toward products that create longer, better, lives for pets and helping pet owners understand the benef
Slide 12: Differentiated Product Offering
(WHOLE) Chicken Ground Turkey Deboned Chicken Deboned Chicken Chicken Deboned Chicken (WHOLE) Chicken Liver Turkey Heart Chicken Meal Chicken Meal Chicken Meal Chicken Meal Dried Egg Product Turkey Liver Brown Rice Peas Peas Oatmeal Oatmeal Herring Oil Barley Turkey Meal Potatoes Ground Barley Pearl
Slide 13: Strong Co-Packer Relationships & Certifications
Strong Co-Packer Relationships & Certifications 12 Primary co-packer for Kibbles Primary co-packer for Canned Food Smaller co-packers for Supplements & Treats High Quality Ingredient Certifications Primary co-packer for Freeze-Dried Raw
Slide 14: Established Premium Brands Positioned for Long Term Growth
BTTR is in a $100+ Billion Global Pet Food Market ... …with Leading Premium Brands… ... that are InvestedTo Scale ... …with Avenues Of Growth in Innovative Products & New Channels Premiumization of Pet FoodsMillennials Driving Better IngredientsWhole Meat vs. Meat MealChanging Demographics Well Esta
Slide 15: Actionable Near-Term Growth Opportunities
Actionable Near-Term Growth Opportunities 14 Fastest growing channel in pet food, especially due to Covid-19Prioritizing with Amazon and ChewyRecent advertising using Amazon Media Group has cross-channel impact Strong reception to launch of Garden of Vegan® dog food Second Product (Ocean of Vegan®)
Slide 16: Financials
Financials 15
Slide 17: BTTR Financial Highlights
BTTR Financial Highlights 16 BTTR is cashflow positive. Please see 1Q20 Adjusted EBITDA reconciliation on Page 19 for details Cash flow Positive BTTR intends to uplist to either the Nasdaq or NYSE in ~mid-2021 post filing its 2020 10-K. BTTR expects this to be a material catalyst for the company fro
Slide 18: 2019 Consolidated Financials Pro Forma Statement of Operations
Source: Public Company Filings 2019 Consolidated Financials Unaudited Pro Forma Combine Statement of Operations and Comprehensive Loss For the Twelve Months Ended December 31, 2019 (Dollars in thousands) Consolidated Historical Halo Adjustments Combined Pro Forma Net sales $ 15,577 $ 32,576 $ (3,657
Slide 19: 1Q20 vs 1Q19 Statements of Operations
Note that 1Q 2019 financials exclude any impact from the Halo acquisition (completed Dec 2019) Source: Public Company Filings 1Q20 vs 1Q19 Better Choice Company Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (dollars in thousands except share and per share am
Slide 20: Adjusted EBITDA Reconciliation
BTTR reported positive Adjusted EBITDA of +$307k in 1Q20 Source: Public Company Filings Adjusted EBITDA Reconciliation Better Choice Company Inc. Reconciliation of Net Loss to EBITDA and Adjusted EBITDA Three Months Ended March 31, 2020 2019 (dollars in thousands) Net loss $ (9,488) $ (2,776) Deprec
Slide 21: 1Q20 Balance Sheet
1Q20 Balance Sheet Source: Public Company Filings Condensed Consolidated Balance Sheets - USD ($) in Thousands Three Months Ended March 31, 2020 2019 Current Assets Cash and cash equivalents $ 1,842 $ 2,361 Restricted cash 25 173 Accounts receivable, net 6,121 5,824 Inventories, net 4,762 6,580 Prep
Slide 22: Capital Structure
Capital Structure Source: Public Company Filings 21
Slide 23: Equity Capitalization
Equity Capitalization Source: Public Company Filings 1,387,378 shares of Series E preferred stock are issued and outstanding, with an aggregate stated value of $1,373,504, convertible into 1,760,903 shares of common stock at $0.78 per share, subject to adjustment under certain conditions 22
Slide 24: Appendix – BTTR Team
Appendix – BTTR Team 23
Slide 25: Management Team
Management Team Werner von PeinChief Executive Officer Corporate growth professional, formally at Three Dog Bakery, Nutrivet, Rexall, Lavazza, Quaker OatsBegan his career with Procter & Gamble over 37 years ago, and has extensive experience in the Pet food spaceAs president of Three Dog Bakery, he i
Slide 26: Board of Directors
Board of Directors Mike YoungChairman Former Co-Head of Trading and Managing Director at GMP Securities in Toronto and New YorkBoard Member of ICC Labs (acquired by Aurora) and Founding Shareholder and Board Member of Nuverra (acquired by Aphria)Extensive management and trading experience in the US