Standard Diversified Opportunities Inc
Standard Diversified Opportunities — Investor Presentation (March 2018)
25 slides from Standard Diversified Opportunities's investor presentation, Mar 13, 2018
Slide 1: Investor Presentation March 2018
March 2018 • Investor Presentation S TANDARD D IVERSIFIED O PPORTUNITIES I NC . Standard Diversified Opportunities Inc. owns and operates subsidiaries in a variety of industries, including other tobacco products, outdoor advertising and insurance.
Slide 2: Forward-looking statements
This presentation contains “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . Certain statements contained in this
Slide 3: At a Glance
Selected Financial Information as of December 31, 2017 Cash and cash equivalents $18.2 Million Total Assets $298.7 Million Ticker SDOIA Shares Outstanding 16,591,950* Market Cap $190.8 Million Standard Diversified Opportunities Inc. (“SDOI” or the “Company”) • A publicly - listed, diversified holdin
Slide 4: Organizational Structure
All ownership percentages are 100% unless otherwise noted Non - Standard General Shareholders (~ 11.0% ownership - includes directors/officers ownership) Standard General Entity Shareholders (~ 89.0% ownership) Maidstone Insurance Company (New York State domiciled insurance company) AIM Insurance Ag
Slide 5: Investment Thesis
Value to the Company Value to the SDOI Investor Established operating business in the expanding Other Tobacco Products market with a strong executive management team Current size and scale facilitates substantial growth The Company owns approximately 51% of Turning Point Brands, Inc. a NYSE - listed
Slide 6: Long Term View
• Develop a platform to facilitate long - term value creation • Focus on acquisitions of sustainable cash flow generating businesses with top - quality management teams • Drive growth across the portfolio with appropriate capital allocation Cash Flow Generating Businesses with Strong Management Team
Slide 7: Unique Value Proposition
Objective Offer solutions to companies with management teams that : ▪ Have successfully implemented their business plan ▪ Want to continue building upon their historical profits and growth ▪ Have identifiable, untapped business potential ▪ Seek the flexibility and liquidity of public markets Approac
Slide 8: Corporate Timeline
2013 2016 2018 2017 2017 2015 Management exits operating businesses and company converts to a publicly - traded shell In February, Greg Baxter named Chairman and Ian Estus nominated to Board of Directors; largest shareholder proposes the contribution and exchange of a controlling interest in Turning
Slide 9: Management and Board
Ian Estus, President and Chief Executive Officer Mr . Estus has served as a director on the Board of the Company since August 2016 and as President and Chief Executive Officer since June 2017 , and has over 19 years of investment and asset management experience . Prior to joining the Board, Mr . Est
Slide 10: Operating Businesses
O PERATING B USINESSES
Slide 11: Pillar General, Standard Outdoor and Turning Point Brands
P ILLAR G ENERAL The Company owns approximately 51 % of the outstanding common stock of TPB Pillar General is a wholly - owned subsidiary of the Company Standard Outdoor is a wholly - owned subsidiary of the Company Turning Point Brands, Inc. is a leading U.S. provider of Other Tobacco Products Thro
Slide 12: Turning Point Brands
Turning Point Brands • $ 124 . 9 million of gross profit in 2017 (up 24 . 4 % from prior year) • $ 285 . 8 million of net sales in 2017 (up 38 . 6 % from prior year) • $ 60 . 0 million of Adjusted EBITDA* (up 14 . 4 % from prior year) T URNING P OINT B RANDS * This is a non - GAAP figure. Reconcilia
Slide 13: Turning Point Brands at a Glance
Turning Point Brands, Inc . (NYSE : TPB) is a leading provider of ‘Other Tobacco Products’ in the United States with some of the most widely recognized names in the industry A T A G LANCE 13
Slide 14: Financial Performance
* This is a non - GAAP figure. Reconciliation to the most comparable GAAP measure, as well as related disclosure, can be found i n the Appendix ** Income tax expense for the full year was $7.3 million compared to an income tax benefit of $12.0 million in the prior yea r. The full year effective inco
Slide 15: Post-IPO Market Performance
$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 IPO $10.00 May 11, 2016 $ 21.56 March 9, 2018 P OST - IPO M ARKET P ERFORMANCE 15
Slide 16: Positioned for Future Growth
• Improved capital structure and fl exibility • Innovative management team • Strong market position with organic growth opportunities • Integration potential for acquired operations • Attractive landscape for accretive acquisitions Recent Acquisitions “Plug and Play” Strong Regional Brands • Wind Riv
Slide 17: Standard Outdoor
S TANDARD O UTDOOR A wholly - owned subsidiary of the Company Standard Outdoor is committed to expansion in the out - of - home advertising space through acquisition and organic growth in local markets across the country 17
Slide 18: Standard Outdoor at a Glance
• With technological advances driving demand, the out - of - home advertising space continues to expand • The Company believes there is an attractive opportunity in this industry, which consists of three large nationwide players, a few medium - sized regional companies and hundreds of independent si
Slide 19: Growth Strategy
Market Approach • Acquire high - quality outdoor advertising assets with upside potential from strategic sales efforts • Aggressively pursue growth through “tuck - in” acquisitions, new site development and digital conversion • Establish regional operation hubs for managing assets • Focus on markets
Slide 20: Pillar General at a Glance
P ILLAR G ENERAL • Pillar General is SDOI’s insurance holding company subsidiary • On January 2 , 2018 , the Company acquired Interboro Holdings, Inc . , the parent of Maidstone Insurance Company, an automobile and personal property and casualty insurance company P ILLAR G ENERAL • Maidstone is lice
Slide 21: Pillar General Growth Strategy
Market Approach ▪ Focus on four primary lines of business : homeowners, automobile, workers compensation and general liability ▪ Utilize local independent agents that control substantial small to mid - sized insurance markets ▪ Develop niche residential and commercial programs to target small - size
Slide 22: Appendix
APPENDIX
Slide 23: Inputs for Sum of the Parts Analysis
2 Inputs for Sum of the Parts Analysis as of December 31, 2017, unless otherwise noted Turning Point Brands (TPB) Shares Owned by SDOI 9,842,373 TPB Per Share Price $21.13 SDOI Shares Outstanding (as of March 1, 2018)** 16,591,950 SDOI Class A Common Stock Per Share Price $11.50 SDOI Market Cap (in
Slide 24: Turning Point Brands Income Statement and Reconciliation
tim “Tarmng Point Brads In Consolidated Statement of income Deeemiersi, December 207 26 Netses TST Se ‘Gross profit TEs Ts Sling scl ad administrative expenses 15369 sem Openting inom 350 aa Inte exense 16399 2621 (Guin sveinent (838) (68) Toss on extingishent of 66 2s nce fos incr es TE Ta Ica tcep
Slide 25: Contact Information
C ONTACT I NFORMATION Investor Relations: The Equity Group Inc. Adam Prior Senior Vice President APrior@equityny.com 212 - 836 - 9606
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