Ascent Industries Co. · NASDAQ:ACNT
Ascent Industries — Synalloy — Investor Presentation (June 2022)
36 slides from Ascent Industries's investor presentation, June 2022
Slide 1: Investor Presentation
Investor Presentation June 2022
Slide 2: Forward Looking Statement Safe Harbor and Non-GAAP Information
Forward Looking Statement Safe Harbor and Non-GAAP Information Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable federal securities laws. All statements that are not histo
Slide 3: Synalloy Corporation Overview
Synalloy Corporation Overview Synalloy Snapshot ✓ Nasdaq: SYNL ✓ Founded in 1945 ✓ Based in Oak Brook, IL ✓ ~640 employees ✓ 9 manufacturing and distribution facilities ✓ Proprietary capabilities providing wide range of industrial and mission critical infrastructure solutions ✓ LTM[1] consolidated n
Slide 4: Who We Are
Who We Are Growth oriented manufacturer and distributor of stainless steel, seamless carbon, and galvanized pipe and tube, and specialty chemicals Headquarters Oak Brook, IL of total net sales of total net sales Metals Businesses Chemicals Businesses Munhall, PA Danville, VA Bristol, TN Fountain Inn
Slide 5: Transformation Well Underway…
Transformation Well Underway… Foundational changes implemented since new leadership team took control in November 2020 What We Inherited What We’ve Done Path Forward ↘ Portfolio of diverse and leading ✓ Recruited experienced operational ↗ Continued efficiencies in production businesses that had not
Slide 6: …With Results Dramatically Improved Under New Leadership
…With Results Dramatically Improved Under New Leadership Strategic and operational changes leading to record results $ in millions [1] LTM Net Sales LTM Adj. EBITDA $381.2 $334.7 $56.4 $294.9 $44.3 $268.0 $256.0 $251.1 $32.5 $19.3 $11.5 $9.2 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 [1] See appendix for n
Slide 7: Synalloy Metals
Synalloy Synalloy Metals
Slide 8: Synalloy Metals Portfolio Brands
Synalloy Metals Portfolio Brands ✓ Largest domestic manufacturer of ✓ The standard in the production of ✓ Leading master distributor for welded stainless steel, duplex, and premium ornamental stainless large diameter, hot finish seamless nickel alloy pipe and tube, as well steel tubing carbon steel
Slide 9: Synalloy Metals Opportunity
Synalloy Metals Opportunity World Market for Stainless Steel Welded Tube & Pipe Tube and Pipe Market Structure (2026E) 000s of tons Others 4,800 Mechanical 5.4% 1.7% 4,600 HEX 4.7% 4,400 Ornamental Food 4,200 35.5% 8.7% 4,000 3,800 Structural 9.9% 3,600 3,400 3,200 3,000 Process 2019A 2020A 2021E 20
Slide 10: Bristol Metals (“BRISMET”)
Bristol Metals (“BRISMET”) ▪ Founded in 1941 and acquired by Synalloy in 1964 ▪ Located in Bristol, TN and Munhall, PA ▪ One of the largest producers of welded stainless steel, duplex, nickel alloy, and galvanized pipe and tube in North America ▪ Extensive ranges of sizes, materials, and in-house ca
Slide 11: American Stainless Tubing (“ASTI”)
American Stainless Tubing (“ASTI”) ▪ Founded in 1994 and acquired by Synalloy in 2019 ▪ Located in Troutman and Statesville, NC ▪ Leading manufacturer of premium ornamental stainless steel tubing ▪ Differentiated capabilities: − Slitting and welding − Proprietary finishing processes Representative M
Slide 12: Specialty Pipe and Tube (“Specialty”)
Specialty Pipe and Tube (“Specialty”) ▪ Founded in 1964 and acquired by Synalloy in 2014 ▪ Located in Houston, TX and Mineral Ridge, OH ▪ Nation’s leading distributor of large diameter, heavy wall, hot finish, and seamless carbon steel pipe & tube ▪ Immediate availability of long-lead time items − F
Slide 13: Synalloy Metals Financial Overview
Synalloy Metals Financial Overview Execution of transformation strategy and strong commodity pricing environment delivering profitable growth $ in millions [1] Net Sales Adj. EBITDA Adj. EBITDA Margin $100.0 25.0% $88.5 20.2% $80.0 $73.8 18.5% 20.0% $68.1 $70.1 18.7% $60.7 $60.0 $55.2 15.0% $52.0 14
Slide 14: Why Synalloy Metals is Positioned to Win
Why Synalloy Metals is Positioned to Win Manufacturing capabilities include the ability to produce the most PREMIUM extensive range and finishes of domestic stainless pipe and tubular PRODUCTS products with a focus on mission critical infrastructure, marine, and consumer applications Dramatically im
Slide 15: Synalloy Chemicals
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Slide 16: Synalloy Chemicals Investment Highlights
Synalloy Chemicals Investment Highlights Synalloy Chemicals operates three manufacturing sites in the Southeastern US 1▪ Flexible and nimble production capacity across three New Product 60+ Year Track sites with one of the largest fleets of horizontal Record of Development Team reactors in the indus
Slide 17: Synalloy Chemicals Opportunity
Synalloy Chemicals Opportunity [1] ▪ U.S. chemical production volume to grow 4.3% in 2022 driven Total U.S. Chemical Industry Volume Growth by strong end-user demand and shoring up of supply chains 6.0% 4.3% 3.0% 2.1% 2.0% 2.0% − Mid-to-long term growth to stabilize near 2% 1.4% 0.0% ▪ Increased out
Slide 18: Wide-Ranging Capabilities Providing Solutions for Blue-Chip Customers
Wide-Ranging Capabilities Providing Solutions for Blue-Chip Customers Value Proposition Process Capabilities ✓ Unique capabilities and process ingenuity Key Chemical Reactions involving industry-leading fleet of horizontal and vertical reactors ✓ Acetylation ✓ Methylation ✓ Multitude of equipment th
Slide 19: Specialty Chemicals Financial Overview
Specialty Chemicals Financial Overview Steady top-line growth accompanied by historical margin volatility that should continue to improve with integration of DanChem and efficiency enhancements $ in millions Net Sales Adj. EBITDA[1] Adj. EBITDA Margin $30.0 20.0% $27.7 17.4% $24.0 $21.9 15.0% 12.3%
Slide 20: DanChem Acquisition Case Study
DanChem Acquisition Case Study Overview Strategic Rationale ▪ Synalloy purchased DanChem for $33.0 million Acceleration of Product Development Capabilities – Acquired for approximately 6x adjusted EBITDA ▪ DanChem possesses unique capabilities and Larger Presence in Target End-Markets ingenuity of p
Slide 21: Why Synalloy Chemicals is Positioned to Win
Why Synalloy Chemicals is Positioned to Win DIVERSIFIED Highly diversified capabilities for complex chemical synthesis. Diverse set of equipment and processes provides customers CAPABILITIES unmatched flexibility, capabilities, and responsiveness Evolving full-service model of product development, t
Slide 22: Driving Long-Term Shareholder Value
Driving Long-Term Shareholder Value
Slide 23: Consolidated Financial Performance
Consolidated Financial Performance $ in millions [1] Net Sales Adj. EBITDA Adj. EBITDA Margin $125.0 20.0% $116.2 17.2% $95.7 $100.0 16.0% $86.2 15.5% 14.6% $83.1 $74.7 $75.0 $69.8 11.8% 12.0% $66.1 $59.3 $55.9 $50.0 8.0% 7.0% 3.5% 5.4% $25.0 2.9% 4.0% $14.8 $14.9 $17.0 2.8% $9.8 $2.6 $3.0 $4.9 $1.9
Slide 24: Financial Performance - LTM as of 03/31/22
Financial Performance - LTM as of 03/31/22 [1] Net Sales Segment Adjusted EBITDA $8.4 M $80.6 M $300.5 M $54.5 M Metals Chemicals Metals Chemicals [1] See appendix for non-GAAP reconciliation 24
Slide 25: “One Team” - Corporate ESG Initiatives
“One Team” - Corporate ESG Initiatives ENVIRONMENTAL SOCIAL GOVERNANCE FOUNDATIONAL Synalloy strives to reduce its Synalloy is committed to diversity, Synalloy has been enhancing and PILLAR environmental impact daily, and inclusion and respect. We seek to expanding ESG policies to ensure believes th
Slide 26: Strong Liquidity Position to Support Capital Allocation Priorities
Strong Liquidity Position to Support Capital Allocation Priorities Stable Balance Sheet Capital Allocation Priorities ▪ $1.2 million in cash as of 03/31/22 ▪ Investments aligned with core strengths ▪ $38.6 million available borrowing capacity driving high returns − $40 million in additional borrowin
Slide 27: Strategic and Disciplined Approach to M&A
Strategic and Disciplined Approach to M&A Our goal is to increase free cash flow through sustainable organic growth, accretive acquisitions, and continuous operational efficiencies Thoughtful Acquisition Strategy Target Strategic & Financial Criteria ▪ Leverage our go-to-market strategy and customer
Slide 28: Experienced Leadership Team
Experienced Leadership Team Company leadership is directly aligned with stockholders – insider ownership of ~30% of outstanding shares[1] Ben Rosenzweig Chris Hutter Aaron Tam Executive Chairman CEO & President CFO ▪ Partner at Privet Fund Management ▪ Co-founder and manager of UPG Enterprises ▪ 20+
Slide 29: Synalloy Highlights
Synalloy Highlights Currently in the middle innings of a transformation and growth strategy, with proven results since 1 new management was put in place Two business segments well-positioned to capture market share and better serve their respective 2 customers through both organic and inorganic grow
Slide 30: Contact Us
Contact Us Aaron Tam Chief Financial Officer 1-804-822-3260 Cody Slach or Cody Cree Gateway Group 1-949-574-3860 SYNL@gatewayir.com 30
Slide 31: Appendix
Synalloy Appendix
Slide 32: Non-GAAP Reconciliations – Consolidated LTM Adjusted EBITDA
Non-GAAP Reconciliations – Consolidated LTM Adjusted EBITDA 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended (in 000s) December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 Net Income (Loss) (27,266) (24,994)
Slide 33: Non-GAAP Reconciliations – Consolidated Quarterly Adjusted EBITDA
Non-GAAP Reconciliations – Consolidated Quarterly Adjusted EBITDA 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended ($ in 000s) March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 3
Slide 34: Non-GAAP Reconciliations – Metals Quarterly Adjusted EBITDA
Non-GAAP Reconciliations – Metals Quarterly Adjusted EBITDA 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended ($ in 000s) March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 202
Slide 35: Non-GAAP Reconciliations – Chemicals Quarterly Adjusted EBITDA
Non-GAAP Reconciliations – Chemicals Quarterly Adjusted EBITDA 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended ($ in 000s) March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30,
Slide 36: Non-GAAP Reconciliations – Net Leverage Ratio
Non-GAAP Reconciliations – Net Leverage Ratio (in 000s) September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 Total Debt 71,343 61,370 63,767 59,500 48,963 70,392 71,074 Less: Cash & Cash Equivalents 163 236 398 761 1,174 2,021 1,241 Ne