Twinlab Consolidated Holdings, Inc. · OTC:TLCC
Twinlab Consolidated — Investor Presentation (January 2016)
33 slides from Twinlab Consolidated's investor presentation, Jan 19, 2016
Slide 1: Forward-looking statements and presentation notice
The Presentation was prepared by the Company for delivery to a limited number of sophisticated prospective investors to assist such investors in deciding whether to proceed with a further investigation and diligence of the Company, and should not be relied upon otherwise. It contained numerous assum
Slide 2: Forward-looking statements (continued)
- - dependence on third - party manufacturers, suppliers, distributors and other potential commercial partners; the size and growth of the potential markets for our products, and the rate and degree of market acceptance of any of our products; competition in our industry; - - regulatory developments
Slide 3: Forward-looking statements (continued)
- interruption of business or negative impact on sales and earnings due to acts of God, acts of war, sabotage, terrorism, bio - terrorism, civil unrest or disruption of delivery service; - - - - work stoppages at our facilities; increased raw material, utility and fuel costs; fluctuations in foreign
Slide 4: Twinlab Consolidated Holdings: Consolidating the Nutrition Industry
Twinlab Consolidated Holdings, Inc. Consolidating the Nutrition Industry… Presentation November 2015
Slide 5: Purpose
P u rpo se… 1 The following information was prepared by the Company for delivery to a limited number of sophisticated prospective investors to assist such investors in deciding whether to proceed with a further investigation and diligence of the Company, and should not be relied upon otherwise . It
Slide 6: Legal Notices
Legal Notices THIS CONFIDENTIAL PRESENTATION PRESENTS SELECTED INFORMATION WITH RESPECT TO TWINLAB CONSOLIDATION CORPORATION (“TCC”) AND OF TCC’S PARENT COMPANY, TWINLAB CONSOLIDATED HOLDINGS, INC. (“TCH” AND TOGETHER WITH ITS AFFILIATES, THE “COMPANY”) AND DOES NOT PURPORT TO BE ALL INCLUSIVE. THIS
Slide 7: Premise
Twinlab Consolidation Corporation has been established to consolidate the fragmented nutrition industry . It has been built through the acquisition of Twinlab Corporation, Organic Holdings, LLC and assets of Nutricap Labs, LLC, setting a strong foundation for future growth . P r e mis e … 3 3
Slide 8: Contents
1 History Ongoing Development and Strategy for Acquisitions 5 Co n t e n ts 2 Business Plan 3 Potential Results and Synergies 4 Illustrative Consolidated Companies Five Year 4 4
Slide 9: History…Foundation…
History…Foundation… Management identified Twinlab as the foundation for a branded and contract manufacturing consolidation due to its broad market base, brand strength, reputation for quality and significant manufacturing capacity. • 48 year history – one of the original creators of the industry • S
Slide 10: History…Timeline…
Hi s t o r y…T i me l in e … Trusted leader for innovative high performance products for over 47 years. 1968 F o und ing 1969 – 2000 Expansion and Growth 2000 – 2010 Lost Years TCC Strategic Renewal 1 2 3 4 2011 – Present • Founded by the a Long Island family and named for their two sets of twin son
Slide 11: History…New Leadership…
History…New Leadership… The company is driven by a new but experienced team that has been built around the needs of the business plan and the strengths of the existing business TOM T O L W O RTH Y CEO RICHARD NEU W IRTH CLO 2003 GREG GROCHOSKI CSO 2003 PETER B R EC H TER EVP M&A 2011 GLENN W OLFSON
Slide 12: History…Turnaround…
After almost a decade of losses, the new team turned Twinlab around in 2012 and started preparing it for a new future in 2013. Histo 9 ry…Turnaround… 8
Slide 13: History…Strategic Direction…
History…Strategic Direction… 9 TCC is consolidating the nutrition industry. • $34 billion dollar industry • Growing even through economic downturns • Thousands of successful middle market companies • Only two US companies with revenue over $3 billion • NBTY, Inc. (acquired by Carlyle Group) • Perrig
Slide 14: Contents
1 Our History 2 Business Plan Potential Results and Synergies 3 Ongoing Development and Strategy for Acquisitions 5 4 Illustrative Consolidated Companies Five Year 10 10
Slide 15: Business Plan…Objective…
Clear Objective Create a $1 billion highly regarded market - leading seller, marketer, distributor and manufacturer of branded nutraceutical products in the Health and Wellness industry. 11 Busin 1 e 2 ss Plan…Objective…
Slide 16: Vertical and horizontal integration strategy
Leverage coherent vertical and horizontal integration strategy to generate superior returns from synergies with pre - existing capabilities: Distribution – Advertising – Manufacturing - Marketing ▪ Increase utilization of UT facility to reduce costs • Optimize manufacturing to increase through - put
Slide 17: Business Plan…Execution to date…
For med Acquired Reverse Merger Into TCH P e n t a JL - BBNC M id c ap Acquired 2014 2015 Business Plan…Execution to date… Initial Recapitalization Stock Begins T r a d ing Acquired 13 13
Slide 18: Business Plan…NutraScience…
• Contract manufacturer • Extensive manufacturing capabilities • Broad product assortment • Innovation • Formulation, supply chain, & pricing • CPG consumer and retail expertise • Contract manufacturing sales organization • One - stop - shop for contract manufacturing services • Strong sales experti
Slide 19: Business Plan…Organic Holdings…
• Branded product lines • Twinlab • T rigosamine • Metabolife • Alvita • Distribution in major retail channels • Distribution in 70 countries • Low cost manufacturing capabilities SECOND STRATEGIC ACQUISITION – October 2015 + Business Plan…Organic Holdings… SOLID BRANDED DISTRIBUTION STRONG BRANDS I
Slide 20: Business Plan…Achieve Accretive Synergies…Year Two
Original Twinlab NutraScience Organic Holdings = Combined TCC REVENUE $80 mm $36 mm $40 mm $156 mm STAND ALONE EBITDA $ 2.8 mm $ 4.1 mm $ 5.9 mm $12.8 mm YEAR TWO OPERATING AND MANUFACTURING SYNERGIES $6.8 mm EBITDA WITH SYNERGIES $19.6 mm Business Plan…Achieve Accretive Synergies…Year Two With All
Slide 21: Contents
1 Our History Business Plan 2 3 Potential Results and Synergies Ongoing Development and Strategy for Acquisitions 5 4 Illustrative Consolidated Companies Five Year 17 17
Slide 22: Results…Twinlab…
Results…Twinlab… Following the turnaround in 2013, management went to work transforming Twinlab into a strong foundation for continued expansion. It did this by conducting a series of transactions including the elimination of debt, a management buyout, a reverse merger into a public shell and two ac
Slide 23: Results and Potential Synergies…Twinlab…P&L…
Results and Potential Synergies…Twinlab…P&L… Twinlab absorbed heavy transaction - related costs in 2014 and 2015. At the same time capital constraints drove declining sales in 2015, due primarily to inability to maintain fill rates. The company is in the process of seeking additional working capital
Slide 24: Results and Potential Synergies…NutraScience Labs…P&L…
Results and Potential Synergies…NutraScience Labs…P&L… Created to hold the Nutricap Labs assets acquired in February 2015, NutraScience Labs, Inc. has already achieved certain SG&A savings. In this analysis, synergies from in - house production are assumed to be achieved in 2017. NutraScience Labs (
Slide 25: Results and Potential Synergies…NutraScience Labs
Results and Potential Synergies…NutraScience Labs TCC worked with outside consultants in 2014 to develop a projected synergy analysis for the integration of the acquisition of the Nutricap book of business into NSL, including significant integration of manufacturing into TCC. The company already ach
Slide 26: Results and Potential Synergies…Organic Holdings…P&L…
Results and Potential Synergies Analysis…Organic Holdings…P&L… Acquired in October 2015, the integration of Organic Holdings has just begun. SG&A synergies are assumed in both 2016 and 2017, while in - house production gains are assumed to be executed in 2017. Organic Holdings (OH) 2013 thru 2017 Po
Slide 27: Synergy Due Diligence Model
Synergy Due Diligence Model 1) Management analysis with outside consultants in 2014 indicated that Cost of Sales would decline $3,418k in Year 1 based on savings from in - house production move to the Utah factory (9 months of assumed savings); In Year 2 COGS savings increase to $4,549k. 2) The syne
Slide 28: Contents
1 History 2 Business Plan 3 Potential Results and Synergies 5 Ongoing Development and Strategy for Acquisitions 4 Illustrative Consolidated Companies Five Year 24 24
Slide 29: Consolidated Company…Potential Revenue Characteristics…
Consolidated Company…Potential Revenue Characteristics… TCC’s enjoys diverse revenue sources across brands, product categories, distribution channels and product dose - forms . Subject to all the risks and uncertainties discussed in detial above, the table includes pro forma figures from 2013 - 15 ,
Slide 30: Consolidated Company…Pro Forma and Projected P&L…
Consolidated Company…Pro Forma and Projected P&L … TWINLAB CONSOLIDATED HOLDINGS, INC (TCH) Summary Annual Actuals and Five Year Forecast 2013 2014 2015 2016 2017 2018 2019 2020 Actual Actual Act/Fcst Fcst Fcst Fcst Fcst Fcst Gross Sales $167 . 7 $143 . 2 $125 . 0 $136 . 2 $155 . 3 $179 . 0 $205 . 8
Slide 31: Consolidated Company…Potential Balance Sheet…
Consolidated Company…Potential Balance Sheet… 27 Subject to all the risks and uncertainties discussed above, the table includes projections based on numerous assumptions, including adequate capitalization before the end of 2015, timely execution of internal initiatives, and numerous other assumed fa
Slide 32: Contents
1 History 2 Business Plan 3 Potential Results and Synergies 4 28 Illustrative Consolidated Companies Five Year 28 5 Ongoing Development and Strategy for Acquisitions
Slide 33: Ongoing Development and Strategy of Acquisitions…
TCC Management has an extensive portfolio of acquisition targets that meet its primary criteria for accretive consolidation . Over the coming five years, management will continue building internally and growing through acquisition – with the goal of building a business with $ 1 billion in revenue an
Twinlab Consolidated Holdings — Investor Presentation (January 2016) on 6ix