 1
Exhibit 99.1
Investor Presentation
May 2012 |
 Forward Looking Statements
2
The statements contained in this presentation that are not historical facts are
forward-looking statements that involve a number
of
risks
and
uncertainties.
Forward-looking
information
may
be
based
on
projections,
predictions
and
estimates.
Some
statements
in
this
presentation
may
be
forward-looking
and
use
words
like
“may,”
“may
not,”
“believes,”
“do
not
believe,”
“expects,”
“do not expect,”
“anticipates,”
“do not anticipate,”
“see,”
“do not see,”
or other similar expressions.
The actual results of future events described in any of these forward-looking statements
could differ materially from those stated in the forward-looking statements.
Important factors that could cause actual results to be materially different from those
forward-looking statements include, among others: (1) the Company’s ability to meet its raw material requirements
through its annual menhaden harvest, which is subject to fluctuations due to natural
conditions over which the Company has no control, such as varying fish population, fish
oil yields, adverse weather conditions, natural and other disasters and disease; (2)
the impact of laws and regulations that may be enacted that may restrict the Company’s operations or the sale
of the Company’s products; (3) the impact of worldwide supply and demand relationships on
prices for the Company’s products; (4) the Company’s expectations regarding
demand and pricing for its products proving to be incorrect; (5) fluctuations in the
Company’s quarterly operating results due to the seasonality of the Company’s business and its deferral
of inventory sales based on worldwide prices for competing products; (6) the long-term
effect of the Deepwater Horizon oil spill on the Company’s business, operations
and fish catch; (7) the business, operations, potential or prospects for the
Company’s
subsidiaries,
Cyvex
Nutrition,
Inc.
and
InCon
Processing,
LLC,
the
dietary
supplement
market
or
the
human
health and wellness segment generally; and (8) the cost of compliance with existing and future
government regulations. Other factors are described in further detail in the
Company’s filings with the Securities and Exchange Commission, including its
reports on Form 10-K, Form 10-Q and Form 8-K. Some of the information presented is derived from third-party
sources. While we believe this information to be reliable, we have made no independent
investigation of these third-party sources or attempted to verify the veracity of
the third-party data in any way. |
 3
Nutritional Ingredient Company
USA’s leading vertically integrated producer
of Omega-3 and fish meal products
5 manufacturing facilities & 40+ vessels
$235mm Revenues (‘11)
23.2% Gross Margin (‘11)
NYSE: OME; Russell 3000 member
Key Facts
Animal
Human
Plant
Nutritional Market Segments
Dietary
Supplement
Ingredients
2011 Revenues
Fish Oil
Fish Oil
Fish Meal
Fish
Solubles
Products
Protein
Lipids
Other
Protein
71%
Lipids
23%
Other
6%
Company Overview |
 Blue
Chip Customer Base 4 |
 Global Distribution Network
5
Source: Omega Protein
Canada = 6%
U.S. = 34%
Latin America = 2%
Europe = 12%
Asia = 46%
2011 exports= 66% of sales
Percent of Sales |
 Animal
Nutrition |
 7
Growing Demand for Animal Nutrition
5.3
6.1
6.8
3.0
4.0
5.0
6.0
7.0
1990
2000
2010
World Population
$1,500
$2,000
$6,200
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
1990
2000
2010
40
50
60
70
80
90
100
110
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
World Pigmeat Production
0
50
100
150
1990
2000
2010
2020e
Fish Consumption & Sourcing
Wild
Aquaculture
Increasing Populations &
Standards of Living
Increasing Demand for
Pork and Aquaculture
Source: World Population- World Bank, 2011.
http://search.worldbank.org/data?qterm=population&language=EN&format=html;
Standards of Living- World Bank, 2011
http://data.worldbank.org/indicator/NY.GDP.PCAP.CD ; World Pigmeat and Fish Consumption- OECD-FAO Agricultural Outlook 2011-2020,
http://stats.oecd.org/OECDStat_Metadata/ShowMetadata.ashx?Dataset=HIGH_AGLINK_2011&ShowOnWeb=true&Lang=en
Developing Countries GDP per
Capita |
 8
Supply not Keeping Pace with Demand
Global Fish Meal Production
Supply is Flat
$324
$373
$462
$488
$536
$559
$648
$778
$943
$801
$1,027
$979
$0
$200
$400
$600
$800
$1,000
$1,200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Omega Protein Revenue per Ton* (U.S. Dollars) Source:
“Yearbook of Statistics 2011”, IFFO * Excludes human revenues.
Rising Demand + Flat
Supply = Rising Prices
6,226
5,868
5,092
5,052
4,972
4,775
4,134
5,207
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2004
2005
2006
2007
2008
2009
2010
2011
1,129
988
983
1,061
1,056
1,031
889
1,072
0
200
400
600
800
1,000
1,200
2004
2005
2006
2007
2008
2009
2010
2011
Global Fish Oil Production |
 9
Animal Nutrition: Fish Meal
2011 End Use Of Fish Meal
Description
Protein ingredient for
animal feed
Considered a premium
protein source due to
digestibility and amino
acid profile
Customers
Aquaculture
Livestock
(primarily pigs)
Drivers
Aquaculture
43%
Dairy
6%
Pet
13%
Swine
37%
Other
1%
Growing demand for
seafood and pork
Global supply of fish meal
Price of alternate
proteins |
 10
Animal Nutrition: Fish Oil
Description
Fat components of an
animal’s diet
Source of Omega-3s
Customers
Aquaculture is the
largest market
(primarily for salmon feed)
Drivers
Increasing demand for
seafood
Global supply of fish oil &
other cost-effective
Omega-3s
2011 End Usage of OME Fish Oil
Aquaculture
75%
Beef
6%
Industrial
1%
Pet
16%
Other
2% |
 Human
Nutrition |
 Source: U.S. Census
Bureau, Robert W. Baird & Co.. 12
Growing Demand for Human Nutrition
Growing populations
Increasing standards of living
Aging
Rising health care costs
Key Trends |
 13
Human Nutrition: Nutraceuticals
Diverse set of dietary
supplement ingredients
Categories include
antioxidants, anti-aging,
cognitive health
Supplement
Manufacturers
Contract Manufacturers
Functional Food Markets
Interest in preventative
health
Focus on diet & nutrition
Awareness of nutritional
product benefits
Source: Nutrition Business Journal
Description
Customers
Drivers
U.S. Supplement Sales |
 14
Human Nutrition: Fish Oil
Fish oil for dietary
supplements &
functional foods
Available in a variety of
specifications
Supplement
Manufacturers
Contract Manufacturers
Interest in preventative
health
Focus on diet & nutrition
Awareness of nutritional
product benefits
Source: “2010
Strategic
Analysis
of
the
Global
EPA
&
DHA
Omega-3
Ingredients
Market.”
Frost
&
Sullivan.
January
2011
Global Omega-3 Ingredient Sales
Description
Customers
Drivers |
 Uniquely Positioned in Omega-3 Supplements
15
Sustainable Fishery
49 vessels &
34 spotter planes
4 Manufacturing
Facilities
Refinery and
Molecular Distillation
Sales and Distribution:
Top Manufacturers
•
Traceable
supply
provides
additional
quality
assurance
–
USA’s only
vertically integrated supplier, and one of only a few in the world
•
Well-positioned to provide long-term supply arrangements
•
Ability to make “Made in the USA”
marketing claims
Omega Protein’s Value Proposition
Vertically Integrated: From Catch to Market
Acquired 2011
Acquired 2010
Legacy Business |
 Growth & Financial
Growth & Financial |
 17
Growth Initiatives
Strategic growth around existing core platform
Additional
Product
Lines
for existing
products
New customers
in existing
markets
Leverage
Customer
Relationships
Research &
Development
Production process
innovation &
efficiencies
•
Improve
benefits of
end products
•
Develop novel
new products
OME CORE
Knowledge of animal
and human nutrition
Expertise in proteins
& lipids
Distribution channels
& customer
relationships
New markets |
 Income Statement Financial Highlights
18
Source: Omega Protein
* See Appendix 1 for a reconciliation for EBITDA to net income
# Excludes $26mm settlement related to Gulf of Mexico oil spill.
•
Strong industry fundamentals yield
healthy margins over time
•
Seasonal factors can create short-
term volatility
•
Strong cash flow generation
Gross Margin 2007-2011
Revenue 2007-2011
EBITDA 2007-2011* |
 Balance Sheet Highlights
19
Source: Omega Protein
•
Strong balance sheet and ample
liquidity provide financial flexibility
•
Solid free cash flows generate
rising cash balances
Debt Balance 2007-2011
Cash Balance 2007-2011 |
 OME
Investment Summary 20
Pure play on omega-3 fatty acids and high quality protein
ingredients
Benefits from increasing demand for nutritional ingredients
and stable global supply of fish meal and fish oil
Vertically integrated operations with significant barriers to
entry
Human nutrition-driven growth from expanded product
offerings and prudent acquisitions
Strong balance sheet with focus on creating shareholder
value |
 Appendix I
21
2007
2008
2009
2010
2011
Net Income (loss)
12
13
(6)
18
34
Reconciling items:
Interest expense
5
4
4
2
2
Income tax provision (benefit)
7
7
(3)
10
18
Depreciation and amortization
13
13
13
15
16
Debt refinancing costs
3
-
-
-
-
Net loss on disposal of assets
-
1
1
1
2
GCCF, 2008 and 2005
hurricane settlements
(10)
-
(2)
-
(27)
Adjusted EBITDA
30
38
7
46
45
The following table provides a reconciliation of Adjusted EBITDA*, a non-GAAP (Generally
Accepted Accounting Principles) financial measure, to net income, the most directly
comparable financial measure calculated and presented in accordance with GAAP, for
fiscal years ended December 31, 2007, 2008, 2009, 2010 and 2011: |
 Appendix I
22
*Adjusted EBITDA represents net income before interest expense, income tax, depreciation and
amortization, debt financing costs, net loss on disposal of assets, and the GCCF and
2008 and 2005 hurricane litigation settlements. The Company has reported Adjusted EBITDA because it
believes Adjusted EBITDA is a measure commonly reported and widely used by investors as an
indicator of a company's operating performance. The Company believes Adjusted EBITDA
assists such investors in comparing a company's performance on a consistent basis. Adjusted EBITDA is
not a calculation based on GAAP and should not be considered an alternative to net income in
measuring our performance or used as an exclusive measure of cash flow because it does
not consider the impact of working capital growth, capital expenditures, debt principal
reductions and other sources and uses of cash which are disclosed in our consolidated
statements of cash flows. Investors should carefully consider the specific items
included in our computation of Adjusted EBITDA. While Adjusted EBITDA has been disclosed herein to permit a more
complete comparative analysis of our operating performance relative to other companies,
investors should be cautioned that Adjusted EBITDA as reported by us may not be
comparable in all instances to Adjusted EBITDA as reported by other companies. Adjusted EBITDA amounts may
not be fully available for management's discretionary use, due to certain requirements to
conserve funds for capital expenditures, debt service and other commitments, and
therefore management relies primarily on our GAAP results. Adjusted EBITDA is not intended to represent net
income as defined by GAAP and such information should not be considered as an alternative to
net income, cash flow from operations or any other measure of performance prescribed by
GAAP in the United States. |