Standard Diversified Opportunities Inc
Standard Diversified Opportunities — Investor Presentation (February 2018)
26 slides from Standard Diversified Opportunities's investor presentation, Feb 5, 2018
Slide 1: Investor Presentation
February 2018 • Investor Presentation S TANDARD D IVERSIFIED O PPORTUNITIES I NC . Standard Diversified Opportunities Inc. owns and operates subsidiaries in a variety of industries, including other tobacco products, outdoor advertising and insurance.
Slide 2: Forward-looking statements
This presentation contains “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended . Certain statements contained in this
Slide 3: At a Glance
3 Selected Financial Information a s of September 30, 2017 Cash and cash equivalents $20.5 Million Total Assets $304.4 Million Ticker SDOIA Shares Outstanding 16,569,223* Market Cap $188.7 Million** Standard Diversified Opportunities Inc. (“SDOI” or the “Company”) • A publicly - listed, diversified
Slide 4: Organizational Structure
4 All ownership percentages are 100% unless otherwise noted Non - Standard General Shareholders (~ 11.0% ownership - includes directors/officers ownership) Standard General Entity Shareholders (~ 89.0% ownership) Maidstone Insurance Company (New York State domiciled insurance company) AIM Insurance
Slide 5: Investment Thesis
5 Value to the Company Value to the SDOI Investor Established operating business in the expanding Other Tobacco Products market with a strong executive management team Current size and scale facilitates substantial growth The Company owns approximately 51% of Turning Point Brands, Inc. a NYSE - list
Slide 6: Long Term View
6 • Develop a platform to facilitate long - term value creation • Focus on acquisitions of sustainable cash flow generating businesses with top - quality management teams • Drive growth across the portfolio with appropriate capital allocation Sustainable Cash Flow Generating Businesses with Strong M
Slide 7: Unique Value Proposition
7 Objective Offer solutions to companies with management teams that : ▪ Have successfully implemented their business plan ▪ Want to continue building upon their historical profits and growth ▪ Have identifiable, untapped business potential ▪ Seek the flexibility and liquidity of public markets Acqui
Slide 8: Corporate Timeline
8 2013 2016 2018 2017 2017 2015 Management exits operating businesses and company converts to a publicly - traded shell In February, Greg Baxter named Chairman and Ian Estus nominated to Board of Directors; largest shareholder proposes the contribution and exchange of a controlling interest in Turni
Slide 9: Management and Board
9 Ian Estus, President and Chief Executive Officer Mr . Estus has served as a director on the Board of the Company since August 2016 and as President and Chief Executive Officer since June 2017 , and has over 19 years of investment and asset management experience . Prior to joining the Board, Mr . E
Slide 10: Operating Businesses
O PERATING B USINESSES
Slide 11: Pillar General
11 P ILLAR G ENERAL The Company owns approximately 51 % of the outstanding common stock of TPB Pillar General is a wholly - owned subsidiary of the Company Standard Outdoor is a wholly - owned subsidiary of the Company Turning Point Brands, Inc. is a leading U.S. provider of Other Tobacco Products T
Slide 12: Turning Point Brands
Turning Point Brands 12 • $ 424 . 1 million market capitalization as of 1 / 31 / 2018 • $ 212 . 2 million of revenue ( 9 months ended 9 / 30 / 2017 ) • $ 45 . 3 million of Adjusted EBITDA* ( 9 months ended 9 / 30 / 2017 ) T URNING P OINT B RANDS * This is a non - GAAP figure. Reconciliation to the m
Slide 13: Turning Point Brands At a Glance
13 Turning Point Brands, Inc . (NYSE : TPB) is a leading provider of ‘Other Tobacco Products’ in the United States with some of the most widely recognized names in the industry A T A G LANCE
Slide 14: Financial Performance
14 $52.4 $26.9 $50.6 $9.1 FY 2016 FY 2015 $206.2 $197.3 Net Sales Net Income Adjusted EBITDA* $45.3 $ 16.7** $39.0 $ 9.8*** $ 212.2 $ 152.4 9 Mos 2017 9 Mos 2016 +39% +16% * This is a non - GAAP figure. Reconciliation to the most comparable GAAP measure, as well as related disclosure, can be found i
Slide 15: Post-IPO Market Performance
$0.00 $5.00 $10.00 $15.00 $20.00 $25.00 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 15 IPO $10.00 May 11, 2016 $ 22.00 January 31, 2018 P OST - IPO M ARKET P ERFORMANCE
Slide 16: Positioned for Future Growth
16 • Improved capital structure and fl exibility • Innovative management team • Strong market position with organic growth opportunities • Integration potential for acquired operations • Attractive landscape for accretive acquisitions Recent Acquisitions “Plug and Play” Strong Regional Brands • Wind
Slide 17: Standard Outdoor
S TANDARD O UTDOOR 17 A wholly - owned subsidiary of the Company Standard Outdoor is committed to expansion in the out - of - home advertising space through acquisition and organic growth in local markets across the country
Slide 18: Standard Outdoor At a Glance
18 • With technological advances driving demand, the out - of - home advertising space continues to expand • The Company believes there is an attractive opportunity in this industry, which consists of three large nationwide players, a few medium - sized regional companies and hundreds of independent
Slide 19: Growth Strategy
19 Market Approach • Acquire high - quality outdoor advertising assets with upside potential from strategic sales efforts • Aggressively pursue growth through “tuck - in” acquisitions, new site development and digital conversion • Establish regional operation hubs for managing assets • Focus on mark
Slide 20: Pillar General At a Glance
P ILLAR G ENERAL 20 • Pillar General is SDOI’s insurance holding company subsidiary • On January 2 , 2018 , the Company acquired Interboro Holdings, Inc . , the parent of Maidstone Insurance Company, an automobile and personal property and casualty insurance company P ILLAR G ENERAL • Maidstone is l
Slide 21: Pillar General Growth Strategy
21 Market Approach ▪ Focus on four primary lines of business : homeowners, automobile, workers compensation and general liability ▪ Utilize local independent agents that control substantial small to mid - sized insurance markets ▪ Develop niche residential and commercial programs to target small - s
Slide 22: Appendix
APPENDIX
Slide 23: Sum of the Parts Analysis
23 2 Inputs for Sum of the Parts Analysis as of September 30, 2017, unless otherwise noted Turning Point Brands (TPB) Shares Owned by SDOI 9,842,373 TPB Per Share Price $16.96 SDOI Shares Outstanding (as of October 31, 2017)** 16,387,398 SDOI Class A Common Stock Per Share Price $10.80 SDOI Market C
Slide 24: TPB Summary Historical Consolidated Financial and Other Data
TPB Summary Historical Consolidated Financial and Other Data 24 (1) EBITDA is defined as net income before interest expense, loss on extinguishment of debt, provision for income taxes, depreci ation and amortization (2) Adjusted EBITDA is calculated as EBITDA adjusted for non - cash expense related
Slide 25: TPB Adjusted EBITDA Reconciliation Tables
TPB Adjusted EBITDA Reconciliation Tables 25 (1) Represents expense related to an inventory valuation allowance for last - in, first - out ("LIFO") reporting (2) Represents our pension and postretirement expense (3) Represents non - cash stock option, restricted stock and incentive expenses (4) Repr
Slide 26: Contact Information
C ONTACT I NFORMATION Investor Relations: The Equity Group Inc. Adam Prior Senior Vice President APrior@equityny.com 212 - 836 - 9606
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