Schmitt Industries, Inc. · OTC:SMIT
Schmitt Industries — Shareholder Meeting (December 2019)
22 slides from Schmitt Industries's shareholder meeting presentation, Dec 5, 2019
Slide 1: Annual Shareholders' Meeting December 5, 2019
ANNUAL SHAREHOLDERS’ MEETING DECEMBER 5, 2019 Exhibit 99.1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements made in this presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements relate to, with
Slide 3: Financial Presentations
Financial Presentations This presentation includes Adj. Gross Margin and Adj. EBIT Margin as non-GAAP financial measures. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating
Slide 4: Agenda
Agenda Schmitt 1.0 – Year in Review SBS Transaction Schmitt 2.0 Plan of Action
Slide 5: Schmitt 1.0 Portfolio
Schmitt 1.0 Portfolio Owned Real Estate Business Lines
Slide 6: Schmitt Year in Review
Schmitt Year in Review Board Refresh OCT ‘18 NOV Strategic Re-Org 3Q 2019 APR Fiscal 2019 JUL 1Q2019 Positive EPS(i) OCT Annual Meeting DEC 2Q 2019 JAN ‘19 Operational Turnaround Operational Turnaround Management Change Supply Chain Analysis Product Pricing Inventory Adjustments Expense Review Cultu
Slide 7: Turnaround Results
Turnaround Results Adj. Gross Margin: up ~7% from Q1 FY19 to Q1 FY20(i)(ii) Adj. EBIT Margin: up ~7% from Q1 FY19 to Q1 FY20(iii) Inventory: down ~8% year-over-year Cash: increased ~$400k last 2 quarters(iv) Cash and Cash Equivalents ($ in millions) Notes: FY19 and FY20 refer to the fiscal years end
Slide 8: Agenda
Agenda Schmitt 1.0 – Year in Review SBS Transaction Schmitt 2.0 Plan of Action
Slide 9: Schmitt Year in Review (Cont'd)
Schmitt Year in Review (Cont’d) Board Refresh OCT ‘18 NOV Strategic Re-Org 3Q 2019 APR Fiscal 2019 JUL 1Q2019 Positive EPS(i) OCT Annual Meeting DEC 2Q 2019 JAN ‘19 Operational Turnaround Operational Turnaround Management Change Supply Chain Analysis Product Pricing Inventory Adjustments Expense Rev
Slide 10: Tosei Transaction is Win-Win for All Stakeholders
Tosei Transaction is Win-Win for All Stakeholders Deal Summary Purchase Price $10.5m $10.5m Type of Sale Asset and Stock Asset / Stock NOLs Utilized ~$9m net cash ~$4m Net Cash Estimate ~$9.5m Valuation Multiples Price/Sales 1.2x 1.1x Lease Agreement Term 10 Years Annual Rent ~$280k Shareholders: ~$
Slide 11: Agenda
Agenda Schmitt 1.0 – Year in Review SBS Transaction Schmitt 2.0 Plan of Action
Slide 12: Schmitt 2.0 Portfolio
Schmitt 2.0 Portfolio Owned Real Estate Business Lines Cash ~$10.5 million Note: Cash represents Schmitt’s approximate cash and cash equivalents as of December 3, 2019.
Slide 13: Sum Of The Parts Market Valuation of Acuity and XACT
Sum Of The Parts Market Valuation of Acuity and XACT SMIT Share Price @ $3.70(i) (x) 4.09m Shares Outstanding(ii) = Market Capitalization $15.1 Cash(iii) $10.5 Estimated Real Estate Value(iv) $6.5 Xact TBD Acuity TBD = Estimated Value $17.0 + Notes: End-of-day share price retrieved from finance.goog
Slide 14: XACT Tank Monitoring Systems Overview
XACT Tank Monitoring Systems Overview Manufactures satellite-connected monitors that measure fuel tank fill levels Gauge Readers for affordable monitoring Ultrasonic for increased accuracy and special cases 1 of 2 main satellite providers in the industry Used in remote locations with unreliable cell
Slide 15: Acuity Lasers Overview
Acuity Lasers Overview Manufactures lasers for dimensional and distance measurement Used in a wide variety of industrial and commercial applications Product sold through a network of distributors and representatives ~$2.2m sales for the twelve months ended August 31, 2019 Acuity Sales ($ in 000’s)
Slide 16: Agenda
Schmitt 1.0 – Year in Review SBS Transaction Schmitt 2.0 Plan of Action Agenda
Slide 17: Key Considerations Post SBS Sale
Key Considerations Post SBS sale Schmitt EBITDA estimated to be break-even Must support staff on ~$4.6m of sales Sales growth key to clearing fixed expenses and increasing cash flow Invest portion of SBS sales proceeds in organic investments Focus shifting to XACT and Acuity Focused on core SBS busi
Slide 18: Schmitt 2.0 Plan of Action
Schmitt 2.0 Plan of Action Operate and Grow Xact and Acuity Deploy Capital Based on Return on Investment Organic Investment Mergers and Acquisitions Share Repurchases Dividend
Slide 19: XACT Strategic Plan
XACT Strategic Plan Provide cell monitoring companies with our satellite options Satellite is a small % of the tank monitoring market Customers use cellular technologies for most of their tanks However, gap still exists in low cell coverage areas Fill the gap: Provide cell monitoring companies with
Slide 20: Acuity Strategic Plan
Acuity Strategic Plan Move up value chain towards solutions-based business Customers use Acuity lasers as part of a “solution” for a specific need Ex: Customer needs accurate dimensions for quality control Acuity lasers provide measurement, but software plays key role “Integrators” design solutions
Slide 21: Schmitt Board and Executives
Schmitt Board and Executives Michael R. Zapata Chairman, CEO 2018 Charles Davidson Audit Chair 2016 Andrew Hines Compensation Chair 2018 Steven Strom Nominating Chair 2019 Regina “Gina” Walker CFO 2019 Corporate Governance Changes Declassified Board Minimum Share Ownership Performance Based Pay * Ad
Slide 22: Questions
Questions
Schmitt Industries — Shareholder Meeting (December 2019) on 6ix