Aersale Corporation · NASDAQ:ASLE
Aersale — SPAC Merger (December 2019)
43 slides from Aersale's SPAC merger presentation, Dec 9, 2019
Slide 1: Monocle Acquisition Corporation AerSale Corp. Investor Presentation
Monocle Acquisition Corporation AerSale Corp. Investor Presentation December 2019
Slide 2: Important Notices and Disclaimers
2 Important Notices and Disclaimers No Offer or Solicitation This investor presentation (“Investor Presentation”) is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instru
Slide 3: Important Notices and Disclaimers (Cont'd)
3 Important Notices and Disclaimers (Cont’d) Industry and Market Data In this Investor Presentation, we rely on and refer to information and statistics regarding market participants in the sectors in which AerSale competes and other industry data . We obtained this information and statistics from th
Slide 4: Table of Contents
4 Table of Contents I. Introduction & Situation Overview II. Business Overview III. Growth Strategy IV. Financial Detail V. Transaction Summary VI. Appendix
Slide 5: Section I Introduction & Situation Overview
Section I Introduction & Situation Overview
Slide 6: Presenters and Senior Leadership
6 Presenters and Senior Leadership ▪ 35 years of senior leadership and management experience ▪ Board Member at exactEarth Ltd. (TSX: XCT), Maxar Technology Inc. (NYSE: MAXR) and Sequa Corporation ▪ Previously held President & COO role at Loral Space & Communications (NASDAQ:LORL) ▪ Formerly was a Pa
Slide 7: Overview of Monocle Acquisition Corporation and Leonard Green & Partners
7 Overview of Monocle Acquisition Corporation and Leonard Green & Partners ▪ Monocle Acquisition Corporation (“Monocle”) (NASDAQ:MNCL) completed its IPO on February 11, 2019 for $172.5 million along with a private placement raise of $7.2 million at $10.00 per share ▪ Strong senior management team fe
Slide 8: Transaction Overview
8 Transaction Overview Note: This presentation includes forecasted 2019 and 2020 adjusted EBITDA for AerSale. This presentation does not provide a r eco nciliation of this forward - looking non - GAAP financial measure. (1) Represents the distribution of earnout shares to existing AerSale shareholde
Slide 9: AerSale Investment Thesis
9 7 Business combination at an attractive valuation relative to public commercial aerospace aftermarket peers 4 Multiple levers for sustained organic growth across existing and new business lines 6 Proven leadership team with deep industry expertise across multiple aviation business cycles 2 Maximiz
Slide 10: Section II Business Overview
Section II Business Overview
Slide 11: Global Leader in Aviation Aftermarket Products and Services
11 MROs / OEMs 23% Leasing Companies 22% Brokers 13% Gov’t Entities 2% Airlines 40% 2018A Revenue by Customer Type Global Leader in Aviation Aftermarket Products and Services ▪ Comprehensive services and products designed to efficiently manage, maintain, and monetize “mid - technology” (circa 10 to
Slide 12: Two 'Purpose Built' Segments Maximizing the Value of Mid-Technology Flight Equipment
12 Two ‘Purpose Built’ Segments Maximizing the Value of Mid - Technology Flight Equipment ▪ Mid - technology aircraft, engines, and USM parts (“Flight Equipment”) cost - efficiently sourced through aftermarket acquisition, third - party consignments, and lease portfolio retirements ▪ Offers opportun
Slide 13: Capitalizing on the Rapidly Expanding Mid-Technology Aircraft Aftermarket
13 B737NG Mid - Technology Flight Equipment Aircraft & Engine Platform Focus Ear l y mode l A 320 A330CEO M D - 9 0 CRJ 100/2 0 0 M D - 1 1 T rent B757 C F 6 - 80 C 2 V250 0 - A 1 CFM 5 6 - 3 / - 5 A B73 7 - 300/ 400/5 00 A 340 A330NEO PW 4000 A320CEO CFM 5 6 - 5 B / - 5 C / - 7 B V 250 0 - A 5 / -
Slide 14: Disciplined Acquisition of Targeted Flight Equipment Feedstock
14 Disciplined Acquisition of Targeted Flight Equipment Feedstock AerSale Feedstock Procurement Process ▪ AerSale assimilates real - time and historical data from its specialized sales, leasing, and MRO business units, including market demand and pricing, scrap rates, and return to service MRO cost,
Slide 15: Integrated Business Segments Identify Highest Demand and Markets
15 Integrated Business Segments Identify Highest Demand and Markets Aircraft Airframe Utilize Internally Utilize Internally AerSale Avborne AerSale Component Solutions (“ACS”) Third - Party MRO AerSale Goodyear / Roswell (MRO) Overhaul / Cargo Conv. Disassemble Engine Aux Power Unit Avionics Pneumat
Slide 16: Comprehensive Infrastructure To Monetize Mid-Technology Flight Equipment
16 X X X X X X X X Other Industry Participants 1 X X X X X X X 2 X X X X 3 X X X X X 4 X X 5 X X X X X 6 X X X X 7 X 8 X 9 X X X 10 X X X X 11 X X X 12 X X X X X 13 X X X 14 X X X 15 X X X Aircraft & Engine Management Aircraft Heavy Maintenance Aircraft & Engine Disassembly Surplus Parts Trading Com
Slide 17: Nose-to-Tail MRO Facilities Augment Inter-Business Unit Performance and Profits
17 Nose - to - Tail MRO Facilities Augment Inter - Business Unit Performance and Profits x Overhaul, Modification, and Repair of Airframe Structural and Mechanical Components x Structural Modifications, Interior Reconfiguration, Passenger - to - Freighter Conversion Airframe MRO Services Structural
Slide 18: Synergistic Business Model Generates Multi-Business Unit Transactions
18 Synergistic Business Model Generates Multi - Business Unit Transactions 36% of Top 100 Customers Generated Multi - Business Unit Sales (FY 2018) Asset Management Solutions Aircraft & Engine Acquisition Aircraft & Engine Management USM Sales Customers Airlines MROs & OEMs Lessors & Lessees Parts B
Slide 19: Deep Relationships Spanning Global Customer Base
19 Deep Relationships Spanning Global Customer Base Strong Base of Long - Term Customers, Recurring Transactions, and Multi - Business Unit Sales Penetration Airlines Representative Customers Government Entities Brokers Leasing Companies MROs / OEMs Representative Suppliers Modern Transporte Blade E
Slide 20: Integrated Offerings Provide Competitive Advantage
20 Integrated Offerings Provide Competitive Advantage in Addressing the Comprehensive Needs of Mid - Life Flight Equipment Stakeholders Aircraft Management Aircraft MRO Component MRO Surplus Parts (USM) Engine Management ▪ Competitive landscape comprised of an array of providers with diverse range o
Slide 21: Business Differentiation Provides Significant Advantages
21 Business Differentiation Provides Significant Advantages Market Intelligence & Proprietary Data Customer Relationships Differentiated Regulatory Position ▪ Holistic insights into the aviation afterma rket through continuous u pstream aircraft and engine transactions, and downstream USM component
Slide 22: Executive Management Team Features Unrivaled Aftermarket Expertise
22 Iso Nezaj Division President & CTO Engineered Solutions 25 Yrs Experience Executive Management Team Features Unrivaled Aftermarket Expertise ▪ Highly qualified executive leadership team with an average of 25 years of relevant industry experience , through multiple industry cycles, and wide - rang
Slide 23: Section III Growth Strategy
Section III Growth Strategy
Slide 24: Attractive Global Opportunities For Scalable Business Platform
24 Attractive Global Opportunities For Scalable Business Platform Growing Aviation Aftermarket With Positive Long - Term Tailwinds 1 Development of New MRO Capabilities 2 Increased Government Sales 3 Innovation of New Engineered Solutions Offerings 4 Geographic Expansion w / LATAM Market Penetration
Slide 25: Capitalize on Long-Term Expansion in the Aviation Aftermarket
25 323 288 295 325 360 377 489 474 504 223 141 161 120 145 157 145 192 188 181 217 (28) 155 199 198 194 179 177 727 646 428 600 704 732 828 845 869 2016 2017 2018 2019 2020 2021 2022 2023 2024 Narrow Body Wide Body Regional Jet 21,450 47,990 10,000 20,000 30,000 40,000 50,000 60,000 2018 2037 Number
Slide 26: Leverage Infrastructure to Develop New High-Margin MRO Capabilities
26 $100 $359 $454 $577 $606 Engine Accessories Flight Controls Avionics/Instruments Landing Gear Interiors Source: Oliver Wyman 2018 - 2028 Global Fleet MRO Market Forecast. Leverage Infrastructure to Develop New High - Margin MRO Capabilities ▪ Facilities and expertise in place to profitably expand
Slide 27: Expanded Sales to US Government Agencies
27 Expanded Sales to US Government Agencies $245 $269 $274 $280 $293 200 225 250 275 $300 GFY2016 GFY2017 GFY2018 GFY2019 GFY2020 DoD O&M Funding (USD in billions) Target Customers Stable & Growing DoD O&M Budget Creates Sustainable Opportunity Opportunity Overview P - 8 KC - 46 KC - 135 KC - 10 Tar
Slide 28: Development and Introduction of New Engineered Solutions Offerings
28 Development and Introduction of New Engineered Solutions Offerings Opportunity Overview ▪ Engineered Solutions is AerSale’s fastest growing business unit ▪ Rapidly increasing demand from Flight Equipment stakeholders seeking significant savings on alternative products and services needed to enhan
Slide 29: Increased Geographic Focus: Prioritized Latin America Regional Opportunity
29 Increased Geographic Focus: Prioritized Latin America Regional Opportunity $3.9 $6.2 2018 2028 MRO Spend – Latin America Opportunity Overview ▪ Strong growth in Latin American low - cost carrier operations is driving attractive aftermarket opportunities to support their aging fleets with Flight E
Slide 30: Target Acquisition Opportunities Accretive to AerSale's Platform
30 Target Acquisition Opportunities Accretive to AerSale’s Platform 6 A Expand Core Capabilities & Solutions Expand into Adjacent Categories Penetrate New Customers & Markets M&A Strategy & Target Criteria ▪ Expand existing suite of capabilities and solutions with complementary products and services
Slide 31: Scalable Business Platform With Proven M&A Performance
31 $1.3 $5.3 Acquired 2018A $2.6 $9.2 Acquired 2018A $10.0 $28.2 Acquired 2018A Scalable Business Platform With Proven M&A Performance Monocle and AerSale Together Bring Proven Ability to Identify, Acquire, and Integrate Accretive Companies Unique Acquisition Platform Strong balance sheet and cash f
Slide 32: Monocle and AerSale Joining Forces to Accelerate Growth and Profitability
32 Current Status Margin Expansion Organic Growth Accretive Acquisitions Multiple Expansion Shareholder Value Creation Monocle and AerSale Joining Forces to Accelerate Growth and Profitability Margin Expansion Strong Organic Revenue Growth Disciplined Value - Add Acquisitions ▪ Increasing contributi
Slide 33: Section IV Financial Detail
Section IV Financial Detail
Slide 34: AerSale Historical and Projected Financial Performance
34 $212 $272 $310 $336 $361 $393 $439 PF2017A PF2018A PF 2019F 2020F 2021F 2022F 2023F AerSale Historical and Projected Financial Performance Source: AerSale Management. Note: Pro forma figures include the run - rate contribution of recent acquisitions and public company cost assumptions . Financial
Slide 35: PF2019F – 2020F EBITDA Bridge
35 PF2019F – 2020F EBITDA Bridge Source: AerSale Management. Note: Pro forma figures include the run - rate contribution of recent acquisitions and public company cost assumptions. Due to rounding, numbers presented may not add up precisely to the total indicated. PF2019F – 2020F EBITDA Bridge $54.6
Slide 36: Projected Free Cash Flow Summary
36 $7 $15 $34 $36 $39 2019F 2020F 2021F 2022F 2023F Projected Free Cash Flow Summary Source: AerSale Management. Note: Pro forma figures include the run - rate contribution of recent acquisitions and public company cost assumptions . Financial forecast excludes the impact of M&A . Due to rounding, n
Slide 37: Section V Transaction Summary
Section V Transaction Summary
Slide 38: Illustrative Sources and Uses
38 Illustrative Sources and Uses ($ in millions, except per share data) Sources Cash Held in Monocle Trust Account (1) $175.0 New ABL Debt Facility (2) 72.0 New FILO / Junior Debt Facility (3) -- New Equity Issued to Existing AerSale Shareholders 150.0 Convertible Preferred Equity (4) -- Cash on Bal
Slide 39: AerSale Initial Valuation at Discount to Public Aerospace Peers
39 13.9x 13.7x 13.3x 12.8x 10.0x 9.7x 9.5x 9.3x 9.0x 8.9x 6.3x Median 9.8x AerSale Initial Valuation at Discount to Public Aerospace Peers 39 Source: Wall Street research, Company filings, Capital IQ, and AerSale Management. Note: Market data as of 12/06/19 . (1) Last day prior to media speculation
Slide 40: Compelling Valuation Relative to Peers
40 Compelling Valuation Relative to Peers 40 Source: Wall Street research, Company filings, Capital IQ, and AerSale Management. Note: Market data as of 12/06/19. (1) Assumes Treasury Stock Method for 17.25 million in - the - money public warrants outstanding, exercisable at $11.50 per share. (2) Ple
Slide 41: Operational Benchmarking
41 12.6% 11.6% 11.2% 7.4% 7.1% 7.1% 5.8% 5.2% 1.1% (1.8%) Median 7.1% Operational Benchmarking Source: Wall Street research, Company filings, Capital IQ, and AerSale Management. Note: Market data as of 12/06/19. (1) Pro forma figures include the run - rate contribution of recent acquisitions and pub
Slide 42: Section VI Appendix
Section VI Appendix
Slide 43: Non-GAAP Consolidated Financial Reconciliation
43 43 Non - GAAP Consolidated Financial Reconciliation Source: AerSale Management . Note: Due to rounding, numbers presented may not add up precisely to the totals indicated . A B C D E F G H I Commentary Reflects discontinued operations of charter airline business sold in 2018 Includes pre - acquis