Power Solutions International, Inc. · NASDAQ:PSIX
Power Solutions International — Investor Presentation (November 2020)
45 slides from Power Solutions International's investor presentation, Nov 16, 2020
Slide 1: Corporate Overview
CORPORATE OVERVIEW November 16, 2020 Exhibit 99.1
Slide 2: Safe Harbor & Other Cautionary Notes
SAFE HARBOR & OTHER CAUTIONARY NOTES This presentation has been prepared by Power Solutions International, Inc. (PSI) for investors, solely for informational purposes. The information contained in this presentation does not purport to be all-inclusive or to contain all of the information a prospecti
Slide 3: About PSI
ABOUT PSI Jo
Slide 4: PSI's Mission
“ PSI’s MISSION: Solving Power Challenges of Global Equipment Manufacturers Through High-Quality, Innovative Products
Slide 5: Powering Leading Equipment Manufacturers Globally
POWERING LEADING EQUIPMENT MANUFACTURERS GLOBALLY
Slide 6: Overview
OVERVIEW Approximately 900 Employees Leading Worldwide Manufacturer of Engines Produced 1,000,000 engines historically Wide range of engines: 27 different displacements ranging from 1L to 53L Approximately 1,000,000 sq. ft. manufacturing footprint, with headquarters in Wood Dale, IL OTC Pink: PSIX F
Slide 7: Advanced Facilities
ADVANCED FACILITIES PSI Corp. HQ & Engine Dress Facility 201 Mittel Dr. Wood Dale, IL 261,000 sq. ft. Dedicated R&D & Engineering Facility Automotive Grade High-Volume Production Lines State-of-the-Art Machining Center In-house EPA & CARB certified test cell operation Approximately 1,000,000 sq. ft.
Slide 8: Technologies & Talent
TECHNOLOGIES & TALENT Leading Talent Advanced Engineering Disciplines Industry-Leading Application Knowledge Strategic Partnerships Approximately 900 Employees Innovative Technologies PSI Proprietary Controls Certified, Low-Emission Solutions (EPA, CARB Certifications) Fuel-Flexible Systems: Natural
Slide 9: Manufacturing & Engine Capabilities
MANUFACTURING & ENGINE CAPABILITIES Complete Range APPLICATION ENGINEERING & INTEGRATION TESTING & VALIDATION CALIBRATION & EMISSIONS ENGINE DESIGN & ENGINEERING MATERIAL OPTIMIZATION & SIMULATION SPECIALIZED MACHINING ADVANCED MANUFACTURING POWERTRAIN ASSEMBLY & KITTING COMPLETE ENGINE SIMULATION C
Slide 10: Expansive Product Line
TRANSPORTATION EXPANSIVE PRODUCT LINE Powering Global Transportation, Energy & Industrial OEMs Engine Displacements 6.0L, 8.8L Fuel Types Propane, Natural Gas, Gasoline Integration Transmissions & Tanks Horsepower Range 293 hp – 345 hp Torque Range 317 lb-ft – 565 lb-ft INDUSTRIAL Engine Displacemen
Slide 11: Weichai Collaboration
WEICHAI COLLABORATION A Global Partner
Slide 12: PSI/Weichai Relationship
PSI/WEICHAI RELATIONSHIP Weichai Power Background Based in China; Global footprint Leading automotive and equipment manufacturer specializing in the production of powertrains, automobiles, intelligent logistics, automotive parts and components Weichai Power Co., Ltd. is publicly listed on the Hong K
Slide 13: PSI & Weichai History & Milestones
PSI & WEICHAI HISTORY & MILESTONES Formation of Power Great Lakes, Inc. Power Solutions Inc. (PSI) established as global distributor of GM industrial engines – Gas Product scope Acquisition of 3PI Acquisition of Buck’s Engines, PowerTrain Integration and Bi-Phase PSI goes public. PSIX launched as an
Slide 14: Expanded Global Business Footprint
Major Facility Snapshot: Shanghai – Engine Machining and R&D Weifang – High-Speed Engine & Vehicle Machining and R&D Chongqing – Medium/ High-Speed Engine & MVP R&D Xi’an – HD Truck & HD Transmission Box R&D Wiesbaden, Germany – Forklift & Hydraulics R&D Forli, Italy – Luxury Yachts R&D Marseilles,
Slide 15: Product Synergies
PRODUCT SYNERGIES Our collective product portfolio offers the most competitive and complete engine and power range available across all applications 32L 40L 53L 65L Transportation Weichai has a large market share in Asia, for which it develops and manufactures thousands of commercial vehicle engines
Slide 16: Energy: Powering the Future
ENERGY Powering the Future
Slide 17: Energy Markets & Customers
ENERGY MARKETS & CUSTOMERS Our Customers/End Users Markets Oil & Gas Telecommunications Data Centers Medical Office & Commercial Utility & Water Treatment Growth opportunities across various markets driven by several factors (e.g., aged electric grid, power outage activity, growth of intermittent so
Slide 18: Application/Market Growth Opportunities
APPLICATION/MARKET GROWTH OPPORTUNITIES The growth of intermittent sources of energy, such as wind and solar, is driving increased demand for generators, microgrids and demand response equipment Sources: MarketsandMarkets™ INC.,Grand View Research, Navigant Research, technavio Diesel Generator Marke
Slide 19: Natural Gas Energy Market
NATURAL GAS ENERGY MARKET Sources: Diesel Progress September 2020; Forbes – December 6, 2019; Research Nester; GE Reports (12/5/18); EIA.gov (4/5/2019) Natural Gas Energy Market Dynamics Cleaner than diesel; Not subject to the transportation limitations that diesel has during times of extreme weathe
Slide 20: Energy Engine Portfolio – Gas
2.4L 3.0L 4.3L 5.7L 8.1L 8.8L 11.1L 14.6L 18.3L 21.9L FUTURE 65L 53L 40L 32L 6.7L 4.5L ENERGY ENGINE PORTFOLIO – GAS NEW 10L NEW 13L NEW 17L 20L
Slide 21: Energy Engine Portfolio – Diesel
ENERGY ENGINE PORTFOLIO – DIESEL FUTURE 65L DIESEL NEW 53L DIESEL NEW 40L DIESEL PLANNED 10L DIESEL NEW 20L DIESEL PLANNED 17L DIESEL PLANNED 13L DIESEL
Slide 22: Power Generation Opportunity Today & Future
POWER GENERATION OPPORTUNITY TODAY & FUTURE Weichai Gas & Diesel Engine Platforms Open Power Generation Market Significantly * Power generation market opportunity projections are based on internal estimates and data from Power Systems Research 2018 PSI POWER GEN ADDRESSABLE MARKET NG Engines 2.4L-22
Slide 23: Transportation: Powering the Road Ahead
TRANSPORTATION Powering the Road Ahead
Slide 24: PSI Transportation Markets & Customers
PSI TRANSPORTATION MARKETS & CUSTOMERS Propane & Gasoline EUROVAN & TRANSIT CHASSIS & OEM UTILITY RV RECENT EXPERIENCE FUTURE OPPORTUNITIES
Slide 25: Transportation Market
TRANSPORTATION MARKET China Market U.S./North America Market Source: School Bus Fleet (School Bus Sales Report - 2019), CAAM/PiperJaffray (9/24/19), KeyBank Research, (10/5/20), carsalesbase.com, trailer-bodybuilders.com; Internal estimates SCHOOL BUS CLASS 5-7 TRUCK CLASS 2-4 TRUCK/VAN (Class 3-4:
Slide 26: School Bus Market
SCHOOL BUS MARKET Recent History of Gasoline & Propane Growth, Industry-Leading Customers, Significant Engine Market Opportunity Sources: School Bus Fleet (School Bus Sales Report - 2019); Blue Bird investor presentation January 2019; School Bus Fleet (7/25/16), Icbus.com; Blue Bird press release on
Slide 27: Automotive OEM Shift to Electrification
Major Automotive OEMs including General Motors, Ford, Mitsubishi and others are moving into electrification and hybridization, which eliminates completely, or utilizes, smaller combustion engines Emission regulations like the current standard, the Corporate Average Fuel (CAFÉ) standard, for passenge
Slide 28: Industrial: Powering Productivity
INDUSTRIAL Powering Productivity
Slide 29: Industrial Markets & Customers
INDUSTRIAL MARKETS & CUSTOMERS OIL & GAS COMPRESSION/ OIL LIFTS FORKLIFT AERIAL WORK PLATFORM ARBOR CARE UTILITY VEHICLE SWEEPERS /SCRUBBER ICE RESURFACING OTHER INDUSTRIAL
Slide 30: Industrial Engine Portfolio
2.0L/2.4L 3.0L 4.3L 5.7L 8.1L 8.8L 11.1L 14.6L 18.3L 21.9L PLANNED 65L 53L 40L 32L 6.7L 4.5L INDUSTRIAL ENGINE PORTFOLIO NEW 10L NEW 13L NEW 17L 20L 0.998L
Slide 31: Financial Update, Business Objectives
FINANCIAL UPDATE CORPORATE UPDATE BUSINESS OBJECTIVES
Slide 32: Capital Structure Overview
CAPITAL STRUCTURE OVERVIEW *Based on 22,891,345 shares outstanding as of 11/2/20 and information contained in the Company’s Proxy Statement filed on 11/5/20 Debt & Cash Highlights $130 Million Senior Secured Revolving Credit Facility with Standard Chartered closed on April 2, 2020 Maturity of 3/26/2
Slide 33: Financial Results (Sales/Gross Margin)
FINANCIAL RESULTS (SALES/GROSS MARGIN) GROSS MARGIN 1st 9 mos. 2020 sales reflects declines across energy (-$48.7m) and industrial (-$44.8m) end markets, partly offset by higher transportation end market sales (+$13.1m) Overall reduction in demand, in large part due to COVID-19 pandemic and related
Slide 34: Contingency Actions
CORPORATE UPDATE – CONTINGENCY ACTIONS Contingency actions taken during 2020 to mitigate the negative impact of COVID-19 pandemic Implementation of temporary cost reduction measures designed to mitigate the operating and financial impact of COVID-19 pandemic on the business, including reduced pay fo
Slide 35: PSI is Current with its Filings
CORPORATE UPDATE (CONTINUED) PSI is current with its filings Filed Form 10-K on 5/16/19: Covers restated financials for the full years of 2014 and 2015, and Q1 of 2016, in addition to the audited financial statements for 2016 and 2017; Form 10-K’s covering full year 2018 and 2019 financials filed on
Slide 36: Business Objectives
Streamlining of Business Processes Review and identify cost reductions throughout the organization Enhanced controls and monitors across major spend areas Warranty Expense Mitigation Efforts Developing reimbursement/commercial remedies from key suppliers, where applicable Continued evaluation and im
Slide 37: Business Objectives Continued
Strengthen Business through Optimization of Business Systems and Technology Reimplementation of ERP system Supports efforts to remediate internal controls, improve processes, drive greater operational efficiencies and provide better and timelier decision making across the organization Capitalize on
Slide 38: Appendix
APPENDIX
Slide 39: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Financial Results for Three and Nine Months Ended September 30, 2020 and 2019 * See Non-GAAP Reconciliation on following slides
Slide 40: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES In addition to the results provided in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) above, this Corporate Overview also includes non-GAAP (adjusted) financial measures. Non-GAAP financial measures provide insight into selecte
Slide 41: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION The following table presents a reconciliation from Net (loss) income to Adjusted net income (loss) for the three and nine months ended September 30, 2020 and 2019:
Slide 42: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION The following table presents a reconciliation from (Loss) earnings per common share – diluted to Adjusted earnings (loss) per share for the three and nine months ended September 30, 2020 and 2019:
Slide 43: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION The following table presents a reconciliation from Net (loss) income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2020 and 2019:
Slide 44: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Amount consists of the change in the value of the Weichai Warrant, including the impact of the exercise in April 2019. Amounts reflect non-cash stock-based compensation expense (amounts exclude $0.3 million for the nine months ended September 30, 2019 associated with employee
Slide 45: Thank You
THANK YOU. 201 Mittel Drive, Wood Dale, IL 60191 630.350.9400 • www.psiengines.com
Power Solutions International — Investor Presentation (November 2020) on 6ix