Power Solutions International, Inc. · NASDAQ:PSIX
Power Solutions International — Investor Presentation (May 2019)
46 slides from Power Solutions International's investor presentation, May 16, 2019
Slide 1: Corporate Overview May 16, 2019
CORPORATE OVERVIEW MAY 16, 2019 Exhibit 99.2
Slide 2: Safe Harbor & Other Cautionary Notes
SAFE HARBOR & OTHER CAUTIONARY NOTES This presentation has been prepared by Power Solutions International, Inc. (PSI) for investors, solely for informational purposes. The information contained in this presentation does not purport to be all-inclusive or to contain all of the information a prospecti
Slide 3: About PSI
ABOUT PSI Jo
Slide 4: Powering Forward
“ POWERING FORWARD Powering the future of energy, transportation and industrial applications
Slide 5: Powering Leading Equipment Manufacturers Globally
POWERING LEADING EQUIPMENT MANUFACTURERS GLOBALLY
Slide 6: Overview
OVERVIEW Approximately 1,000 Employees Leading Worldwide Manufacturer of Engines Produced 1,000,000 engines historically Wide range of engines: 27 different displacements ranging from .97L to 53L Approximately 1,000,000 sq. ft. manufacturing footprint, with headquarters in Wood Dale, IL OTC Pink: PS
Slide 7: Advanced Facilities
ADVANCED FACILITIES PSI Corp. HQ & Engine Dress Facility 201 Mittel Dr. Wood Dale, IL 261,000 sq. ft. Dedicated R&D & Engineering Facility Automotive Grade High-Volume Production Lines State-of-the-Art Machining Center Advanced Testing Laboratory Approximately 1,000,000 sq. ft. PSI Machining & Engin
Slide 8: New Engine Development Center
NEW ENGINE DEVELOPMENT CENTER Acquired in 2018 Located near Illinois headquarters Increase speed to market response Industry leading engine testing In-house EPA & CARB certified test cell operation
Slide 9: Technologies & Talent
TECHNOLOGIES & TALENT Leading Talent Advanced Engineering Disciplines Industry-Leading Application Knowledge Strategic Partnerships Approximately 1,000 Employees Innovative Technologies PSI Proprietary Engines & Controls Certified, Low-Emission Solutions (EPA, CARB Certifications) Fuel-Flexible Syst
Slide 10: Engine Capabilities
ENGINE CAPABILITIES APPLICATION ENGINEERING & INTEGRATION TESTING & VALIDATION CALIBRATION & EMISSIONS ENGINE DESIGN & ENGINEERING MATERIAL OPTIMIZATION & SIMULATION SPECIALIZED MACHINING ADVANCED MANUFACTURING POWERTRAIN ASSEMBLY & KITTING COMPLETE ENGINE SIMULATION COOLING PACKAGE DEVELOPMENT TURB
Slide 11: Expansive Product Line
TRANSPORTATION EXPANSIVE PRODUCT LINE Powering Global Transportation, Energy & Industrial OEMs 3 Engine Displacements 3.4L, 6.0L, 8.8L Fuel Types Propane, Natural Gas, Gasoline Integration Transmissions & Tanks Horsepower Range 208 hp – 345 hp Torque Range 295 lb-ft – 565 lb-ft INDUSTRIAL 21 Engine
Slide 12: Weichai Collaboration
WEICHAI COLLABORATION A Global Partner
Slide 13: PSI & Weichai History & Milestones
PSI & WEICHAI HISTORY & MILESTONES Formation of Power Great Lakes, Inc. Power Solutions Inc. (PSI) established as global distributor of GM industrial engines – Gas Product scope Acquisition of 3PI Acquisition of Buck’s Engines, PowerTrain Integration and Bi-Phase PSI goes public. PSIX launched as an
Slide 14: Weichai at a Glance
WEICHAI AT A GLANCE 77,000 Employees Worldwide $23 Billion* Revenue in 2018 670,000 Engines Sold in 2018 20,000+ Global R&D Personnel *Conversion in USD as of May 2019
Slide 15: Expanded Global Business Footprint
Major Facility Snapshot: Shanghai – Engine Matching R&D Weifang – High-Speed Engine & Vehicle Matching R&D Chongqing – Medium/ High-Speed Engine & MVP R&D Xi’an – HD Truck & HD Transmission Box R&D Wiesbaden, Germany – Forklift & Hydraulics R&D Forli, Italy – Luxury Yachts R&D Marseilles, France – M
Slide 16: Product Synergies
PRODUCT SYNERGIES Our collective product portfolio offers the most competitive and complete engine and power range available across all applications Transportation 3.4L, 4.3L, 6.0L and 8.8L gas engines being introduced into the Chinese and Asian transportation markets Weichai has a large market shar
Slide 17: A Stronger Foundation
A STRONGER FOUNDATION Expanded China Service Network (On‐Highway/Industrial) Weichai service network consists of 5,000 special maintenance service centers in Asia 243 overseas service stations Weichai Can Assist with Certification of Engines in China Weichai testing and certification laboratory (1 o
Slide 18: Market Indicators
} MARKET INDICATORS
Slide 19: Detailed End Market Indicators & Projections
DETAILED END MARKET INDICATORS & PROJECTIONS Worldwide North America Sources: Hyster-Yale investor presentation (Q4 2018); MD Truck (class 5-7): Baird research, ACT/Baird projections (4/11/19); U.S. genset production: Power Systems Research via Diesel Progress – April 2018; WTI Crude prices: EIA.gov
Slide 20: Energy: Powering the Future
ENERGY Powering the Future
Slide 21: Energy Markets & Customers
ENERGY MARKETS & CUSTOMERS Our Customers/End Users Markets Oil & Gas Telecommunications Data Centers Medical Office & Commercial Utility & Water Treatment
Slide 22: Data Centers, Telecommunications, Commercial
Data Centers In 2017, U.S. data centers used 90,000 GW of electricity. This will double by 2021 and every four years. The number of hyperscale (large) data centers will increase from 338 (2016) to 628 in 2021, and represent 55 percent of total traffic. Market drivers include streaming video, artific
Slide 23: Application/Market Growth Opportunities
APPLICATION/MARKET GROWTH OPPORTUNITIES The growth of intermittent sources of energy, such as wind and solar, is driving increased demand for generators, microgrids and demand response equipment Sources: Grandview Research (July 2018), Global Market Insights (5/8/17), Navigant Research (6/22/16), im
Slide 24: Natural Gas Energy Growth
NATURAL GAS ENERGY GROWTH “The market is also evolving as natural gas gensets are gaining market share" - Navigant Consulting Sources: GE Power (12/5/18), Frost and Sullivan (Sept. 2018), EIA.gov (4/10/2019), Power Systems Research, Annual Energy Outlook 2019 Natural Gas Energy Market Size As of 201
Slide 25: Energy Engine Portfolio
ENERGY ENGINE PORTFOLIO 2.4L 3.0L 4.3L 5.7L 8.1L 8.8L 11.1L 14.6L 18.3L 21.9L PLANNED 65L PLANNED 53L NEW 40L NEW 32L NEW 6.7L PLANNED 10L DIESEL NEW 20L DIESEL PLANNED 17L DIESEL PLANNED 13L DIESEL NEW 4.5L
Slide 26: Gas Product Expansion <150kWe
GAS PRODUCT EXPANSION <150kWe 8.8L
Slide 27: Gas Product Expansion >500kWe
GAS PRODUCT EXPANSION >500kWe
Slide 28: Diesel Products Addition
DIESEL PRODUCTS ADDITION Displacement ° 500 kWe 1000 kWe 1500 kWe 2000 kWe
Slide 29: Power Generation Opportunity Today & Future
POWER GENERATION OPPORTUNITY TODAY & FUTURE Weichai Gas & Diesel Engine Platforms Open Power Generation Market Significantly * Power generation market opportunity projections are based on internal estimates and data from Power Systems Research 2018 PSI POWER GEN ADDRESSABLE MARKET NG Engines 2.4L-22
Slide 30: Transportation: Powering the Road Ahead
TRANSPORTATION Powering the Road Ahead
Slide 31: PSI Transportation Markets & Customers
PSI TRANSPORTATION MARKETS & CUSTOMERS Propane & Gasoline EUROVAN & TRANSIT CHASSIS & OEM UTILITY RV CURRENT EXPERIENCE FUTURE OPPORTUNITIES
Slide 32: Transportation Class 2-7 Engine Portfolio
8.8L 6.0L TRANSPORTATION CLASS 2-7 ENGINE PORTFOLIO 3.4L
Slide 33: Transportation Market
TRANSPORTATION MARKET China Market U.S./North America Market Source: Wards Intelligence (Jan. 2019), carsalesbase.com (2018), School Bus Fleet North America (2018), China Association of Automobile Manufacturers (Jan. 2019), PiperJaffray (1/24/19), Baird Auto Book (4/11/19), internal estimate SCHOOL
Slide 34: School Bus Market
SCHOOL BUS MARKET Strong Gasoline & Propane Growth, Industry-Leading Customers, Significant Engine Market Opportunity Sources: School Bus Fleet (2018), Internal estimates, WHO; DOE/Clean Cities; U.S. Energy Information Administration, Clean Fuel USA, Market Share Data based on registrations from RL
Slide 35: Bus & Medium Duty Truck – China
BUS & MEDIUM DUTY TRUCK – CHINA Gasoline is a New Alternative Representing a Shift Away from Diesel Increasingly stringent standards = higher costs and complexities for diesel Experience with 4 top gasoline bus and truck OEMs First non-automotive engine manufacturer from outside China to be listed a
Slide 36: Automotive OEM electrification and engine market gap
Major Automotive OEMs including General Motors, Ford, Mitsubishi and others are moving into electrification and hybridization which eliminates completely or utilizes smaller combustion engines Emission regulations like the current standard, the Corporate Average Fuel (CAFÉ) standard, for passenger c
Slide 37: Industrial: Powering Productivity
INDUSTRIAL Powering Productivity
Slide 38: Industrial Markets & Customers
INDUSTRIAL MARKETS & CUSTOMERS OIL & GAS COMPRESSION/ OIL LIFTS GROUND SUPPORT FORKLIFT AERIAL WORK PLATFORM ARBOR CARE UTILITY VEHICLE SWEEPERS /SCRUBBER ICE RESURFACING
Slide 39: Industrial Engine Portfolio
0.97L 2.0L/ 2.4L 4.3L 21.9L PLANNED 53L NEW 40L NEW 32L NEW 20L DIESEL 3.0L 3.4L NEW 6.7L NEW 4.5L 8.1L 8.8L PLANNED 10L DIESEL 14.6L 18.3L PLANNED 17L DIESEL PLANNED 13L DIESEL 11.1L INDUSTRIAL ENGINE PORTFOLIO
Slide 40: Financial Update, Next Steps, Business Objectives
FINANCIAL UPDATE NEXT STEPS BUSINESS OBJECTIVES
Slide 41: Capital Structure Overview
CAPITAL STRUCTURE OVERVIEW *Based on 22,807,623 shares outstanding as of 5/3/19 and information contained in the Company’s Form 10-K. Weichai America Investment Investment of $60 million of equity in PSI on 3/31/17 Warrant exercise on 4/23/19 for approximate proceeds of $1.6 million Debt Overview PS
Slide 42: Update - Next Steps
UPDATE - NEXT STEPS Filed Form 10-K on 5/16/19: Covers restated financials for the full years of 2014 and 2015, and Q1 of 2016, in addition to the audited financial statements for 2016 and 2017 Numerous changes and improvements have been made across the organization during the restatement process Ne
Slide 43: Update - Financial Results
UPDATE - FINANCIAL RESULTS GROSS MARGIN Preliminary sales for 2018 reflects growth across all end markets Transportation and Energy end markets comprise a majority of the increase 2018 gross profit and gross margin anticipated to improve; however, the positive impact of the increased gross profit on
Slide 44: Business Objectives
Streamlining of Business Processes Review and identify cost reductions throughout the organization Enhanced controls and monitors across major spend areas Improve Profitability Plan focused on review of customer and product portfolio (multi-year effort) Strategic price increases Product redesign Re-
Slide 45: Business Objectives Cont.
Strengthen Business through Optimization of Business Systems and Technology Reimplementation of ERP system Supports efforts to remediate internal controls, improve processes, drive greater operational efficiencies and provide better and timelier decision making across the organization BUSINESS OBJEC
Slide 46: Thank You
THANK YOU. 201 Mittel Drive, Wood Dale, IL 60191 630.350.9400 • www.psiengines.com
Power Solutions International — Investor Presentation (May 2019) on 6ix