Rimini Street, Inc. · NASDAQ:RMNI
Rimini Street — GP Investments Acquisition — SPAC Merger (June 2016)
57 slides from Rimini Street's SPAC merger presentation, Jun 6, 2016
Slide 1: Disclaimer
Disclaimer Investor Presentation This communication is for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to the proposed business combination between WKI Holding Company Inc. (“WKI”) and GP Investments Acquisition Corp. (“G
Slide 2: Disclaimer (Cont'd)
Disclaimer (Cont’d) activity; difficulties of managing growth profitably; the loss of one or more members of GPIAC’s or WKI’s management team; the inability of the parties to successfully or timely consummate the proposed transaction, including the risk that the required regulatory approvals are not
Slide 3: Today's Presenters
Today’s Presenters Antonio Bonchristiano CEO at GPIAC and GP Investments Danilo Gamboa Incoming Chief Executive Officer at World Kitchen; Managing Director at GP Investments Stephen Earhart SVP and Chief Financial Officer at World Kitchen Kris Malkoski President, Global Business & Chief Commercial O
Slide 4: Agenda
Agenda I. Introduction II. GP Investments Overview III. World Kitchen Overview IV. Investment Highlights V. Financial Summary Outlook VI. Wrap-up + Q&A VII. Appendix VIII. 5
Slide 5: Agenda
Vill. Introduction GP Investments Overview World Kitchen Overview Investment Highlights Financial Summary Outlook Wrap-up + Q&A Appendix
Slide 6: Transaction Overview
Transaction Overview On April 18, 2016, GP Investments Acquisition Corp. (NASDAQ: “GPIAU”; “GPIA”; GPIAW”) entered into a definitive agreement to acquire WKI Holding Company, Inc. (“WKI”) – World Kitchen manufactures and markets homeware products in the U.S. and internationally under well-recognized
Slide 7: Transaction Overview
Transaction Overview = OnApril 18, 2016, GP Investments Acquisition Corp. (NASDAQ: “GPIAU"; “GPIA”; GPIAW") entered into a definitive agreement to acquire WKI Holding Company, Inc. ("WKF") World Kitchen manufactures and markets homeware productsiin the U.S. and internationally under well-recognized
Slide 8: GP Investments History of Success
GP Investments History of Success Founded in 1993 with investments in over 50 companies, GP Investments is a leading alternative investments firm with over 20 equity capital market executions. Select Transaction Examples Initial Investment Date (Exit) Investment Overview Return Highlights Leading fu
Slide 9: GP's Investment Philosophy
GP’s Investment Philosophy Value creation through active management and operationally-oriented approach Significant ownership structures that ensure influence and implementation of strategic change Accelerated growth through revenue and margin expansion and M&A Core Principles Management Tools 1 1 A
Slide 10: Thesis for Investment in World Kitchen
Thesis for Investment in World Kitchen Multiple Value Creation Levers to Drive Growth Branded Consumer Products Company Compelling Consolidation Opportunity Industry-Leading Innovation Stable Organic Growth Profile Global Footprint Iconic Brands with Leading Market Share in Key Categories High Growt
Slide 11: Thesis for Investment in World Kitchen
Thesis for Investment in World Kitchen " Multiple Value Creation Levers to Drive Growth Branded Consumer , Industry-Leading Products Giatell astra Innovation Company ~ » 4 yy Iconic Brands with mish : Leading Market : Proprietary : Emerging Market Share in Key Technology ; Exposure Categories Stable
Slide 12: Snapshot of World Kitchen
Snapshot of World Kitchen Diverse Portfolio of Key Leading Brands Key Financials FY 2015 Net Sales by Geography Net Sales (US$ in millions) 3% $680 $672 $630 28% North America Asia Pacific FY 2013 FY 2014 FY 2015 FY 2016E Latin America/EMEA Adj. EBITDA (US$ in millions) 68% $78 $77 $75 $71 Total Net
Slide 13: U.S. Homewares – Stable and Large Category
U.S. Homewares – Stable and Large Category U.S. Homewares Market (1) (US$ in billions) 11.8 11.6 11.1 11.0 2012 2013 2014 2015 2016 2017 2018 Highly Fragmented U.S. Homewares Market Cookware Food Storage Private Label Private Label Bakeware Cutlery / Kitchen Utensils Private Label Private Label Sour
Slide 14: Key Brand Highlights
Key Brand Highlights Brands Brand Highlights Net Sales Representative Products (US$ in millions) Launch:1970 Sold in over 50 countries #1 brand in Dinnerware market in U.S., Korea, Canada and Singapore Corelle ® is estimated to be in 1/3rd of all American homes Proprietary manufacturing process; Vit
Slide 15: Key Brand Highlights
Key Brand Highlights Brands Brand Highlights Launch: 1982 Pioneer in glass cookware with claim to launching the first see-through cooking vessel for stovetop use Maintains a loyal following and remains the leading see-through cookware product in APAC Commands a 30% price premium over its top competi
Slide 16: Diversified Distribution Strategy
Diversified Distribution Strategy North America Sales by Channel Asia Pacific Sales by Channel (2015) Online(1) 5% Hardware 2% Mom & Pop 4% Specialty Channel 5% Online (1) 5% Premium 6% Other 8% Mass 31% TVHS 32% Grocery 8% Outlets/Stores 7% OLFA 9% Department 17% Department 10% Outlet/Stores 17% Ma
Slide 17: Leading Approach to Integrated Marketing
Leading Approach to Integrated Marketing Redefining how the consumer interacts with the World Kitchen Brand, with a shifting focus from “talking at” the consumer to establishing a more contemporary relationship–better understanding their interests. Branded Websites Change +8.2 million +36 million +2
Slide 18: Track Record of Innovation
Track Record of Innovation Latam / EMEA North America Asia Corelle Tumblers Gen 1 +2 Corelle; Coordinates; Footed Rice Bowl Collection 11 New Pattern Designs Market Street Gadgets; 4-Lock Glass Storage; Sculptured Glass; Leak-proof 4-latch line; Soon to Launch Breakthrough Color Pyrex Measuring Cup
Slide 19: Proprietary Manufacturing Facilities
Proprietary Manufacturing Facilities Corning, NY Charleroi, PA Mira Loma, CA Corning, NY Charleroi, PA Mira Loma, CA Johor Bahru, Malaysia Fully-owned 12 acre plant site, 361,000 square foot facility purchased in 1998 Only facility in the world capable of manufacturing Vitrelle® glass feedstock for
Slide 20: Optimized Sourcing Model
Optimized Sourcing Model Manufactured vs. Sourced Product Mix 2015 Mix Target Mix Sourced Product Sourced Product 38% 50% 50% 62% Manufactured Product Manufactured Product Benefits of Strategic Sourcing Model Initiatives to Achieve Strategic relationships with sourcing partners Joint manufacturing e
Slide 21: Optimized Sourcing Model
Optimized Sourcing Model ‘Manufactured vs. Sourced Product Mix Sourced Product, Sourced Product Manufactured Manufactured Product Product Benefits of Strategic Sourcing Model Initiatives to Achieve 6 Peed Strategie relationships with sourcing partners st proader source forinnovetion Y Joint manutact
Slide 22: Key Investment Highlights
Key Investment Highlights 6B 6C 23 Sector Consolidation Opportunity Platform Optimization 6AContinued Organic Growth 6Three Pillar Strategy for Growth and Value Creation 5Track Record of Consistent and Stable Financial Performance 4Proprietary Technology and Track Record of Innovation 3Significant P
Slide 23: Leading Market Share and Iconic Global Brands
Leading Market Share and Iconic Global Brands 1 Brands % 2015 Net Sales Product Category Current Market Share No.1 in Korea No.1 in U.S. No.1 in Canada No.1 in Singapore Dinnerware 35% Glass Bakeware Glass Food Storage Glass Prepware No.1 in U.S. No.1 in Canada in Glass Bakeware No.2 in Canada in Gl
Slide 24: Diverse, Global Footprint Across Products and Channels
Diverse, Global Footprint Across Products and Channels 2 North American Channel Mix (2015) Net Sales by Geography (2015) Latin America/EMEA 3% Online (1) Hardware 5% 2% Other 8% Mass 31% Asia Pacific 28% Grocery 8% OLFA 9% North America 68% Department 10% Outlet/Stores 17% Club 10% Total US$672MM Ne
Slide 25: Significant Presence in High Growth Emerging Markets
Significant Presence in High Growth Emerging Markets 3 Emerging Markets Platform Highlights Large Untapped Opportunity in Other High-Growth Markets China Net Sales (US$ in millions) Underlying Demographics Support Untapped High Growth Opportunities through Continued Geographic and Product Expansion
Slide 26: Outsized Momentum in APAC and China
Outsized Momentum in APAC and China 3 Projected Market Size (US$ in millions), 2019 CAGR (2010–2014) CAGR (2015–2019) Region Markets with WKI Presence Source: Euromonitor, IBIS World Kitchenware and Cookware Market Research. 27 APAC (Excluding China) China 17,437 4.9%5.8% 23,100 13.5%12.7% Western E
Slide 27: Proprietary Technology
Proprietary Technology 4 Proprietary Technology Vitrelle® Glass Process World Kitchen houses proprietary glass-making know-how and processes – Only manufacturer of unique 3-layer Vitrelle® glass used in Corelle – Vitrelle® is a lightweight yet stronger and more durable glass product relative to comp
Slide 28: Track Record of Innovation
Track Record of Innovation 4 Track Record of Innovation Development History (Since 2011) Pyrex’s Leak-Corelle Case Studies on Innovation Products Brands Features Premium price point and positioning 2012 2011 Interchangeable lid fit on glass and plastic Breakthrough color infusion technology (1) Refl
Slide 29: Stable Financial Performance
Stable Financial Performance 5 Revenue and Revenue Growth (US$ in millions) 28.0% $700 $650 $600 $550 $500 $450 $400 $350 $300 $672 $644 $630 $617 23.0% %Growth 18.0% 13.0% $497 8.0% 3.0% (2.0% (7.0% 2008 2009 2010 2011 2012 2013 2014 2015 Adj. EBITDA and EBITDA Margin 17 16 15 14 13 12 11 10 $80 (U
Slide 30: Three Pillar Strategy for Growth in Sales and Profitability
Three Pillar Strategy for Growth in Sales and Profitability 6 Online New Channels, Categories Revitalize Brands Optimized Store Network OEE: Lean Manufacturing / Improved Select Rates Lean G&A Sector Consolidation Opportunity Complementary Sales Cost Synergies Advanced Capabilities 31
Slide 31: Continued Organic Growth
Continued Organic Growth 6A 1 E-Commerce Net Sales (US$ in millions) 42 37 33 30 Online 2012A 2013A 2014A 2015A Pursue omni channel opportunities 2 New Product Development 3 Enhance presence in underrepresented channels such as foodservice and high-end specialty stores (> US$2 billion market) Expand
Slide 32: Platform Optimization
Platform Optimization 6B Identified specific areas of improvement and developed initiatives that will yield $10+ million in EBITDA improvement – majority of which will be achieved in the next 12 – 18 months with remainder achieved within 2 – 3 years. Implement OEE/Select Rate Improvement: From ~68%
Slide 33: Disciplined Approach to Growth in a Fragmented Industry
Disciplined Approach to Growth in a Fragmented Industry 6C WKI Has Category White Space in a Highly Fragmented Industry Housewares Market by Category Kitchen Utensils & Gadgets 14% Dinnerware 20% Underpenetrated categories for WKI; WKI is currently pursuing organic expansion to capitalize within the
Slide 34: Disciplined Approach to Growth in a Fragmented Industry
© Disciplined Approach to Growth in a Fragmented Industry e WKI Has Category White Space in a Highly Fragmented Industry Housewares Market by Category eon ont & Onmereee Saget Underpenetrated tegories in whic! featecories fo) ereoree nace Food storage Stove Top Wklis currently Wt competes ee see Arm
Slide 35: Historical Financial Summary
Historical Financial Summary Working SG&A (1) Net Sales and Gross Margin (US$ in millions) (US$ in millions) $110 $700 $100 $650 $90 $60$080 $55$070 25.0% .0% .0% .0% .0% .0% .0% .0% .0% .0% .0% .0% $672 $94 20.0% $91 $91 $89 15.0% 10.0% 5.0% $50$060 $50 $450 0.0% 2012 2013 2014 2015 2012 2013 2014
Slide 36: Q1 2016 Update
Q1 2016 Update Observations Net Sales: Decreased due to timing of new product pipeline fill at Costco ($4.7mm), FX (CAD, AUD, KRW, CNY - $3.4mm), and non-repeating loyalty program in Mexico Gross Profit: Decreased due to lower sales volume ($2.3mm), FX ($2.6mm), and non-repeat capacity utilization d
Slide 37: Track Record of Modest Leverage
Track Record of Modest Leverage Net Debt / Adj. EBITDA 3.3x 3.2x 2015A(1) 2010A 2011A 2012A 2013A 2014A PF LTM 04/03/2016 (1) PF 2015 net leverage is calculated based on $236mm net debt at transaction close and $77mm 2015 adj. EBITDA. 38 2.3x 3.1x3.0x 2.7x 2.7x Plant Capacity Increase / Snapware Acq
Slide 38: Net Working Capital Seasonality
Net Working Capital Seasonality Net Working Capital Seasonality(1) – WC usage typically within $40mm 200 180 160 140 120 100 80 60 40 20 0 (1)NWC calculated as Accounts Receivable + Inventory—Accounts Payable. 39 1Q132Q133Q134Q13 1Q142Q143Q144Q14 1Q152Q153Q154Q15
Slide 39: Historical Capital Expenditures
Historical Capital (US$ in millions) Expenditures $31 2012A 2013A 2014A Growth 2015A Tank Builds Maintenance 40 $14 $25 $25 $19 $3 $3 $14 $14 $10 $9 $9 $9 $8 $8
Slide 40: Transaction Structure
Transaction Structure Sources & Uses (1) PF Capitalization Source s $ LTM 4/3/2016 PF LTM 4/3/2016 Term Loan B Cash f rom Trust Account GP Investments (BS) Rollover Equity Cash f rom WKI $275 173 50 65 16 ($ in millions) Cash & Cash Equivalents (1) $27(6) $43 Debt Term Loan B Existing Revolver New A
Slide 41: Valuation Benchmarking
Benchmarking(1) Valuation FV / 2016E EBITDA 14.7x 10.4x 8.7x 6.7x WKI HELE-US SPB-US DLG-IT NWL SK-FR TUP-US NOBI-SE LBY (2) Source: Factset and management presentation. Market data as of June 3, 2016. (1) (2) World Kitchen’s estimates are calculated based on $566 million of enterprise value. Pro fo
Slide 42: Valuation Benchmarking
Valuation Benchmarking” FV / 2016E EBITDA 11.3% a re 9.0% om : : sth” qd Broseme nobia Busey B sen oy 22
Slide 43: Looking Forward – The Global Housewares Market
Looking Forward – The Global Housewares Market North America Category Outlook Category Growth Growth in housewares tracks GDP and the industry should benefit from positive tailwinds from trends such as urbanization, economic growth and increased disposable income Market CAGR ( ’ 15 -’ 18E ) 12.6 12.
Slide 44: Summary of Key Drivers For WKI
Summary of Key Drivers For WKI 1 Growth in e-commerce New product launches (e.g. Corelle Market Street line) Distribution gains Product, channel and geographic expansion in China Growing beyond Corelle in Korea Growth in emerging markets Revenue 2 Corning plant improvements Product assortment (NPD,
Slide 45: Seasonality
Seasonality 46 ( US$ in millions)F Y 2 0 15Q1Q2 N e t S a le s $ 6 7 2 21.5% 21.9% A dj. E B IT D A $ 7 7 17.8% 20.5% 1H 4 3 .4 % 3 8 .3 % Q3Q4 25.2% 31.3% 23.9% 37.8% 2H 5 6 .6 % 6 1.7 % ( US$ in millions)F Y 2 0 14Q1Q2 N e t S a le s $ 6 4 4 19.4% 21.5% A dj. E B IT D A $ 7 5 8.4% 14.3% 1H 4 0 .9
Slide 46: Top Line and Gross Margin Outlook
Top Line and Gross Margin Outlook Sales $460m 2-4% Growth 25-75bps improvement Gross Margin 29% Sales $198m 5-7% Growth 25-75bps improvement Gross Margin 36% Sales $22m 4-6% Growth 25-75bps improvement Gross Margin 29% Note: Regional gross margin excludes $10m of unallocated Global Product Supply ov
Slide 47: A&P and SG&A
A&P and SG&A Advertising & Product Development $22m (3.2% of Net Sales) 3.0% – 3.5% of Net Sales SG&A (including 1x adjustments) $146m (21.5% of Net Sales) Decreasing to 20.0% of Net Sales 48 2016E 2017E
Slide 48: Balance Sheet
Balance Sheet 37-40 days 37-40 days Receivables Inventory 2.8-3.0 month turns 2.8-3.0 month turns Payables 37-40 days 37-40 days $10m (1.4% of Net Sales) $9m (1.3% of Net Sales) Tank $16m (2.3% of Net Sales) $16m (2.2% of Net Sales) Maintenance $6m (0.9% of Net Sales) $6m (0.8% of Net Sales) Growth
Slide 49: Guidance for FY 2016 and FY 2017
Guidance for FY 2016 and FY 2017 Net Sales Gross Profit Adjusted EBITDA Adjusted Net Income 50 $13-18m$18-24m $78m$84m $201m$215m $680m$715m 2016E 2017E
Slide 50: FY 2018 and Beyond
FY 2018 and Beyond Top line growth of 2-3%... In line with GDP Gross margin leveraged with fixed cost and geographic mix A&P at 3.5% - 3.75% of net sales SG&A improving as % of net sales 51
Slide 51: FY 2018 and Beyond
FY 2018 and Beyond 1 Top line growth of 2-3%... In line with GDP 1 Gross margin leveraged with fixed cost and geographic mix @ A&P at 3.5% - 3.75% of net sales ™ SG&A improving as % of net sales
Slide 52: Key Investment Highlights
Key Investment Highlights 6B 6C 53 Sector Consolidation Opportunity Platform Optimization 6AContinued Organic Growth 6Three Pillar Strategy for Growth and Value Creation 5Track Record of Consistent and Stable Financial Performance 4Proprietary Technology and Track Record of Innovation 3Significant P
Slide 53: Key Investment Highlights
Key Investment Highlights WORLD KITCHEN 4) (ca) Continued Organic Growth (6s) Platform Optimization (6c) en 3 i
Slide 54: Financial Policy
Financial Policy 1 Sustained leverage of 3 – 4x Preserve adequate liquidity with sufficiently sized ABL Target Leverage 2 Will make acquisitions selectively to add capabilities / products / categories Will finance acquisitions responsibly with cash flow and appropriate mix of debt and equity Acquisi
Slide 55: Company Timeline
Company Timeline 2016 2015 Celebrate Pyrex 100th Year 2010 OXO sold to Helen of Troy for $275m 2006 WKI filed Chapter 11 2004 2003 3 layer, 2 glass technology (Vitrelle) launches as Corelle Emerged from Chapter 11 2002 1998 KKR acquired Corningware 1970 1915 56 Corning launches consumer products div
Slide 56: Non-GAAP Reconciliation
Non-GAAP Reconciliation (US$ in millions) FY 2013 FY 2014 FY 2015 TTM Q1 2016 Net Income (Loss) ($12.2) ($75.5) $11.6 $6.0 Interest Expense - Net 18.2 20.7 19.6 19.0 Income Tax Expense (Benef it) (0.6) 80.0 3.6 5.1 D&A 41.9 41.8 37.3 36.5 M a na gement Adj ustments Stock-Based Compensation $1.5 $0.8
Slide 57: Non-GAAP Reconciliation
Non-GAAP Reconciliation (SS in mitions) FY 2013 Fy 2014 FY 2015 TIM at 2016 [Net heome (Loss) (8122) (9755) st16 $60 Interest Expense - Net 182 207 196 190 Income Tax Expense (Benefit) (08) 200 36 64 Dea, 419 48 73 365 EBITDA $47.3 $67.0 S724 $06.7 ‘Management Adjustments ‘Stock: Based Compensation