Aersale Corporation · NASDAQ:ASLE
Aersale — Monocle Acquisition — SPAC Merger (January 2020)
34 slides from Aersale's SPAC merger presentation, Jan 27, 2020
Slide 1: Monocle Acquisition Corporation AerSale Corp. Investor Presentation
Monocle Acquisition Corporation AerSale Corp. Investor Presentation January 2020
Slide 2: No Offer or Solicitation
2 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 instruments of Monocle Acquisition Corpo
Slide 3: Industry and Market Data; Non-GAAP Financial Measures
3 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 third - party sources, including reports by m
Slide 4: Table of Contents
4 Table of Contents I. Introduction & Situation Overview II. Business Overview & Growth Opportunities III. Financial Detail & Transaction Summary IV. 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 Part
Slide 7: Overview of Monocle, Leonard Green & Partners and Veritas Capital
7 Overview of Monocle, Leonard Green & Partners and Veritas Capital 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 unit Background Sources: Company websites. (1) In
Slide 8: Global Leader in Aviation Aftermarket Products and Services
8 Global Leader in Aviation Aftermarket Products and Services Source: AerSale Management. Note: Pro forma adjusted figures include the run - rate contribution of recent acquisitions and public company cost assumptions. (1) Please refer to slide 33 for a reconciliation of non - GAAP financials measur
Slide 9: Transaction Overview
9 Transaction Overview Note: This presentation includes forecasted 2019 and 2020 adjusted EBITDA for AerSale. This presentation does not provide a reco nciliation of this forward - looking non - GAAP financial measure. (1) Represents the distribution of earnout shares to existing AerSale shareholder
Slide 10: AerSale Investment Highlights
10 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 Differ
Slide 11: Section II: Business Overview & Growth Opportunities
Section II Business Overview & Growth Opportunities
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 ▪ Cost - efficient sourcing ▪ Opportunistic early monetizing of portfolio aircraft ▪ ‘One stop’ aircraft, engine, and USM spare parts support options Source:
Slide 13: Dramatic Long-Term Growth in Aviation Aftermarket Has Proven Resilient
13 323 288 295 325 360 377 489 474 504 223 141 161 120 145 157 145 192 188 181 217 (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 14: Mid-Technology Flight Equipment Aircraft & Engine Platform Focus
14 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 15: Disciplined Acquisition of Targeted Flight Equipment Feedstock
15 Disciplined Acquisition of Targeted Flight Equipment Feedstock AerSale’s Formal Feedstock Procurement Process Efficiently Manages Capital Optimal Business Unit Assignment Rolling 500 – 600 Aircraft and Engines Tracked Weekly Feedstock Procurement Review Meeting Final Review Execution AerSale assi
Slide 16: Integrated Business Segments Identify Highest Demand and Markets
16 Integrated Business Segments Identify Highest Demand and Markets Business Segment Alternatives Realizes the highest value of mid - technology flight equipment by ensuring each aircraft, engine, and sub - component is returned to service in it s highest profitability capacity: ▪ Out - right retail
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 Select Capabilities Comprehensive MRO Capabilities Reduce Cost of Parts for Internal Utilization, While Providing Profitable End User Revenue Str eam MRO Service Offerings Source: AerSale Management. Goodyear, A
Slide 18: Deep Customer Relationships Supported by Diversified Service Offering
18 Deep Customer Relationships Supported by Diversified Service Offering 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 Bro
Slide 19: Business Differentiation Provides Significant Advantages
19 Business Differentiation Provides Significant Advantages Market Intelligence & Proprietary Data ▪ Holistic insights into the aviation afterma rket ▪ Data - driven investment decision - making – 10+ years of transactional data – L ine - of - sight into retiring fleets & predictive pricing dynamics
Slide 20: Executive Management Team Features Unrivaled Aftermarket Expertise
20 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 - ranging business conditions ▪ Deep industry relationships through years of bus
Slide 21: Scalable Platform With Proven and Accretive M&A Strategy
21 Scalable Platform With Proven and Accretive M&A Strategy • Well - positioned for future acquisitions within highly fragmented aviation aftermarket industry • Focus on expanding core capabilities & solutions, expansion into adjacent categories, and penetrating new customers & markets • Long track
Slide 22: Section III: Financial Detail & Transaction Summary
Section III Financial Detail & Transaction Summary
Slide 23: AerSale Historical and Projected Financial Performance
23 AerSale Historical and Projected Financial Performance Source: AerSale Management. Note: Pro forma adjusted 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, numbers presented may
Slide 24: PF2019F – 2020F Adjusted EBITDA Bridge
24 PF2019F – 2020F Adjusted EBITDA Bridge Source: AerSale Management. Note: Pro forma adjusted 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 A
Slide 25: Projected Free Cash Flow Summary
25 ($ in millions) Forecasted 2019F 2020F 2021F 2022F 2023F Pro Forma Adjusted EBITDA $55 $68 $80 $90 $105 (-) CapEx (4) (4) (4) (4) (4) (-) Change in Net Working Capital (15) 3 1 1 (3) (-) Acquisition of Aircraft & Engines, Net (2) (28) (52) (44) (50) (59) Free Cash Flow (1) $7 $15 $34 $36 $39 Free
Slide 26: Monocle and AerSale Joining Forces to Accelerate Growth and Profitability
26 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 27: AerSale Initial Valuation at Discount to Public Aerospace Peers
27 14.8x 14.0x 13.5x 13.3x 11.8x 10.2x 9.7x 7.9x 6.3x Median 12.6x Mean 11.9x AerSale Initial Valuation at Discount to Public Aerospace Peers 27 Source: Wall Street research, Company filings, Capital IQ, Bloomberg and AerSale Management. Note: Market data as of January 15, 2020. (1) Assumes ~$21 mil
Slide 28: Revenue Growth, Margin Improvement & Asset Efficiency Translates to Superior Earnings Progression
28 28.0x 24.4x 22.1x 19.9x 18.9x 16.8x 16.7x 16.2x 16.1x Median 19.4x Mean 20.4x 25.7x 21.8x 19.4x 18.2x 17.4x 14.8x 14.7x 13.1x 12.2x Median 17.8x Mean 18.1x AerSale Revenue Growth, Margin Improvement & Asset Efficiency Translates to Superior Earnings Progression 28 Source: Wall Street research, Co
Slide 29: Operational Benchmarking
29 Operational Benchmarking 2018A - 2020F Revenue Growth CAGR 2020F EBITDA Margin 2018A - 2020F EBITDA Growth CAGR (2) (3) (3) (3) (1) (1) (2) (1) (2) Source: Wall Street research, Company filings, Capital IQ, Bloomberg and AerSale Management. Note: Market data as of January 15, 2020. (1) Pro forma
Slide 30: Compelling Valuation Relative to Peers
30 6.3x 6.8x 7.5x 12.6x $10.00 Share Price $11.00 Share Price $12.00 Share Price Peer Median Compelling Valuation Relative to Peers 30 Source: Wall Street research, Company filings, Capital IQ, Bloomberg and AerSale Management. Note: Market data as of January 15, 2020. (1) Assumes Treasury Stock Met
Slide 31: Transaction Capitalization and Ownership
31 Transaction Capitalization and Ownership Note: The sources and uses of funds presented herein are forward - looking statements and reflect the Company’s current plans and expectations regarding financing for the business combination. Pro forma adjusted figures include the run - rate contribution
Slide 32: Section IV: Appendix
Section IV Appendix
Slide 33: Non-GAAP Consolidated Financial Reconciliation
33 FY Ending December 31st, ($ in millions) 2017A 2018A Revenue, Net $174.7 $290.7 AerLine Divestiture Adjustment -- (53.7) Adjusted Revenue $174.7 $237.0 Normalized Full-Year Avborne Revenue 18.7 15.6 Normalized Full-Year Qwest Revenue 18.4 19.0 Pro Forma Adjusted Revenue $211.8 $271.6 Reported Net
Slide 34: Disciplined, Accretive Acquisitions
34 34 Disciplined, Accretive Acquisitions Business Description Established supplier of USM to Commercial Operators & Government Agencies MRO operation focused on: composite flight control surfaces, nacelle & fan / thrust reversers Date of Acquisition January 2020 May 2019 Headquarters Miami, FL Memp