 Breeze-Eastern Shareholders Meeting
Brad Pedersen, President & CEO
September 16, 2014
Whippany, NJ
Exhibit 99.1
1
CONFIDENTIAL INFORMATION: Any and all information, specifications, manufacturing information,
schedules, marketing plans, prices or other data provided in this email to you is
proprietary information belonging to Breeze-Eastern Corporation, and is not to be used, revealed, copied, transmitted or discussed with any third party without the
prior written consent of Breeze-Eastern Corporation. This restriction does not limit your
right to use the above information if it is properly obtained from another source
without restriction. If you have received this E-mail in error, please delete it and
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EXPORT CONTROLLED - WARNING: This document may contain information that is subject to the
International Traffic in Arms Regulation (ITAR) or the Export Administration
Regulations (EAR), and may not be exported, released, or disclosed to foreign nationals,
either in the United States or overseas, without first complying with the export
requirements/regulations of the ITAR and/or the EAR. The recipient is responsible for
complying with all such export requirements/regulations. Include this notice with any
reproduced portions of this document
|
 INFORMATION
ABOUT FORWARD-LOOKING STATEMENTS This
presentation
contains
forward-looking
statements
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933
as
amended,
and
Section
21E
of
the
Securities
Exchange
Act
of
1934,
as
amended,
regarding
our
future
operating
performance,
financial
results,
events,
trends
and
plans.
All
statements
in
this
presentation
other
than
statements
of
historical
facts
are
forward-looking
statements.
Forward-looking
statements
involve
numerous
risks
and
uncertainties.
We
have
attempted
to
identify
any
forward-looking
statements
by
using
words
such
as
“anticipates,”
“believes,”
“could,”
“expects,”
“intends,”
“may,”
“should”
and
other
similar
expressions.
Although
we
believe
that
the
expectations
reflected
in
all
of
our
forward-looking
statements
are
reasonable,
we
can
give
no
assurance
that
such
expectations
will
prove
to
be
correct.
Such
statements
are
not
guarantees
of
future
performance
or
events
and
are
subject
to
known
and
unknown
risks
and
uncertainties
that
could
cause
our
actual
results,
events
or
financial
positions
to
differ
materially
from
those
included
within
the
forward-looking
statements.
Such
factors
include,
but
are
not
limited
to
competition
from
other
companies;
changes
in
applicable
laws,
rules,
and
regulations
affecting
the
Company
in
the
locations
in
which
it
conducts
its
business;
interest
rate
trends;
a
decline
or
redirection
of
the
United
States
government
defense
budget,
the
failure
of
Congress
to
approve
a
budget
or
continuing
resolution,
changes
in
spending
allocation
or
the
termination,
postponement,
or
failure
to
fund
one
or
more
significant
contracts
by
the
United
States
government
or
other
customers;
changes
in
our
sales
strategy
and
product
development
plans;
changes
in
the
executive
management
team;
status
of
labor
relations;
competitive
pricing
pressures;
market
acceptance
of
our
products
under
development;
delays
in
the
development
of
products;
determination
by
us
to
dispose
of
or
acquire
additional
assets;
general
industry
and
economic
conditions;
events
impacting
the
U.S.
and
world
financial
markets
and
economies;
and
those
specific
risks
disclosed
in
our
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
March
31,
2014,
Quarterly
Reports
on
Form
10-Q,
and
other
filings
with
the
Securities
and
Exchange
Commission.
We
undertake
no
obligation
to
update
publicly
any
forward-looking
statements,
whether
as
a
result
of
new
information
or
future
events.
2 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Sales and Operating Income
($ in Millions)
3
(a)
FY10 operating loss includes non-recurring adjustments of $13.7m ($12.2m adjustment to
estimated reserves and $1.5m for un-absorbed overhead due to Company relocation).
(b)
FY12 operating income includes non-recurring adjustments of $5.3m mainly for
engineering product development discontinuance and qualification unit obsolescence accruals.
(c)
FY14 operating income includes non-recurring adjustments of $0.2m ($1.2m
environmental benefit offset by a net $1.0m charge for a spare parts distribution change).
69.0
78.2
84.9
80.0
85.9
(6.7)
9.5
7.0
8.2
9.1
FY10 (a)
FY11
FY12 (b)
FY13
FY14 (c)
Sales
Operating Income |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. 4
(a)
FY10 Adjusted EBITDA includes non-recurring adjustments of $13.7m, or 19.9% of
sales , ($12.2m adjustment to estimated reserves and $1.5m for un-absorbed overhead due to Company relocation).
(b)
FY12 Adjusted EBITDA includes non-recurring adjustments of $5.3m, or 6.2% of
sales, mainly for engineering product development discontinuance and qualification unit obsolescence accruals.
(c)
FY14 Adjusted EBITDA includes non-recurring adjustments of $0.2m, or 0.2% of
sales, ($1.2m environmental benefit offset by a net $1.0m charge for a spare parts distribution change).
-4.3
11.9
8.7
9.7
10.8
FY10 (a)
FY11
FY12 (b)
FY13
FY14 (c)
Adjusted EBITDA $
-6.3%
15.3%
10.3%
12.1%
12.6%
FY10
FY11
FY12
FY13
FY14
Adjusted EBITDA %
Adjusted EBITDA* $ and % of Sales
($ in Millions)
*Adjusted EBITDA is a non-GAAP financial measure and we refer you to the appendix to
this presentation for reconciliations to the most directly comparable GAAP financial
measures and related information.
|
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Net Debt
($ in Millions)
FY08
FY09
FY10
FY11
FY12
FY13
FY14
5
FY15 1Q
(23.9)
(18.7)
(14.7)
(5.1)
2.0
6.7
6.0
8.9 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. FY2014: Key Accomplishments
•
Achieved Record Sales of $85.9 million
•
Began Full Rate Production to Airbus for the 400M
program
•
Initiated Development of Unique and Innovative
Products to Expand our Product Lines
•
Implemented an Improved Spare Parts Distribution
Strategy to Improve Customer Service
•
Closed 3 Environmental Sites
6 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Breeze-Eastern Products and
Services •
“Heroes use our equipment to save lives every day”
•
Military and commercial helicopters:
•
Rescue hoists, cargo hooks, cargo winches
•
Military cargo aircraft:
•
Cargo winches and parachute line retrieval winches
•
Full-service supplier including:
•
Overhaul and repair
•
Spare parts
•
Training
7 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Breeze-Eastern Customers
•
Global Original Equipment Manufacturers (OEM) and Helicopter
Operators
•
Mission critical operations
•
Search and rescue
•
Shipboard operators
•
Global Manufacturers and Operators of Military Cargo Aircraft
•
U.S. Government and Military:
•
Army, Navy, Air Force, USMC, USCG, National Guard, Border Patrol
•
International military organizations
•
State/county police, fire, and rescue departments
•
Other global aerospace/defense companies
8 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Current Market Conditions
•
U.S. Department of Defense Budget Uncertainty
•
Future impact not predictable
•
Less vulnerable are mature programs with high-value rescue and
special ops missions
•
Our platform diversity and aftermarket service and parts should help
mitigate any impact
•
European and International Market Demand Forecasted to be
Stable and Consistent
9
–
Offshore oil exploration and commercial search and rescue operations
•
OEM’s continue to develop new aircraft platforms |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Major Military Platforms
Service
OEM
Platform
Rescue Hoist
Cargo Hook
Cargo/Retrieval
Winch
US Army
Sikorsky
UH-60M
Boeing
CH/MH-47
US Air Force
Alenia
C-27J
Boeing
C-17
Sikorsky
HH-60
US Navy
Sikorsky
MH-60R/S
USMC
Sikorsky
CH-53E/K
Bell/Boeing
V-22
Airbus Military
A400M
10 |
 Product
Development Cargo Winch
Retrieval Winch
Cargo Hook & Rescue Hoist
Advanced Products
•
Sensors and safety improvement
•
Next generation hoist
•
Weight reduction and reliability improvements |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Environmental Site Status
•
Number of Sites at the end of FY10:
14
•
Number of sites closed between FY11 and FY13:
(3)
•
Achieved closures during FY14:
(3)
•
Closed in Q1 FY15:
(1)
•
Current number of sites left to close:
7
12 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Environmental Liability Overview
•
Breeze-Eastern is performing environmental
assessments and remediation work at seven locations,
this is down from eleven locations as of March 31,
2013.
•
In FY 2015, we expect to spend approximately $1.67
million on environmental assessments and
remediation work at the remaining seven locations.
•
The current environmental reserve at June 30, 2014 of
$9.73
million is appropriate for our estimated
environmental liability.
•
Since March 2013, our environmental reserve has been
reduced by approximately $2.95 million, due to the
progress we have made.
13 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Breeze-Eastern Strengths
•
Respected Global Leader in Hoists, Winches, Cargo
Hooks, and Weapons Handling
•
Highly-reliable Products
•
Full-service Provider –
Design, Build, Repair, and
Maintain
•
Established and Growing Product Base for
Aftermarket Spare Parts and Overhaul & Repair
•
Strong Cash Flow and Healthy Balance Sheet
14 |
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Strategic Focus
•
New Product Development Through the New Virginia
Innovation Center
•
Improvement of Legacy Products
•
Continuous Improvement in Global Customer Service &
Support
•
Speed and Responsiveness to Customer Needs
•
Global Support Network
•
Continue to Leverage Balance Sheet Strength
15 |
 Questions
? 16
CONFIDENTIAL INFORMATION: Any and all information, specifications, manufacturing information,
schedules, marketing plans, prices or other data provided in this email to you is
proprietary information belonging to Breeze-Eastern Corporation, and is not to be used, revealed, copied, transmitted or discussed with any third party without the
prior written consent of Breeze-Eastern Corporation. This restriction does not limit your
right to use the above information if it is properly obtained from another source
without restriction. If you have received this E-mail in error, please delete it and
all its contents from your message systems and notify the sender of the erroneous receipt
EXPORT CONTROLLED - WARNING: This document may contain information that is subject to the
International Traffic in Arms Regulation (ITAR) or the Export Administration
Regulations (EAR), and may not be exported, released, or disclosed to foreign nationals,
either in the United States or overseas, without first complying with the export
requirements/regulations of the ITAR and/or the EAR. The recipient is responsible for
complying with all such export requirements/regulations. Include this notice with any
reproduced portions of this document
|
 Use or disclosure of data contained on this sheet or subsequent sheets
is subject to the restriction on the title page. Appendix: Adjusted EBITDA
Reconciliation ($ in Thousands)
Adjusted EBITDA*
FY10
FY11
FY12
FY13
FY14
Net income (loss)
$
(6,043)
$
5,026
$
3,776
$
4,076
$
5,641
Provision (benefit) for income taxes
(2,029)
3,524
2,741
3,794
3,310
Depreciation and amortization
1,587
2,271
1,709
1,475
1,699
Relocation expense
817
211
-
-
-
Interest expense
891
694
396
227
49
Other expense-net
458
213
109
93
89
Adjusted EBITDA
$
(4,319)
$
11,939
$
8,731
$
9,665
$
10,788
17
Non–GAAP
Financial
Measures
In addition to disclosing financial results that are determined in accordance with Generally
Accepted Accounting Principles generally accepted in the United States of America (“GAAP”), the Company also
discloses Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization,
other income/expense, loss on debt extinguishment, and relocation expense). The Company presents Adjusted
EBITDA because it considers it an important supplemental measure of performance.
Measures similar to Adjusted EBITDA are widely used by the Company and by others in the Company's industry to
evaluate performance and valuation. The Company believes Adjusted EBITDA facilitates
operating performance comparisons from period to period and company to company by backing out potential
differences caused by variations in capital structure (affecting relative interest expense),
tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses)
and the age and book depreciation of facilities and equipment (affecting relative depreciation
expense). The Company also presents Adjusted EBITDA because it believes it is frequently used by investors and
other interested parties as a basis for evaluating performance.
Adjusted EBITDA has limitations as an analytical tool, and should not be considered in
isolation or as a substitute for analysis of the Company's results as reported under GAAP. Some of the limitations of
Adjusted EBITDA are that (i) it does not reflect the Company's cash expenditures for capital
assets, (ii) it does not reflect the significant interest expense or cash requirements necessary to service interest or
principal payments on the Company's debt, and (iii) it does not reflect changes in, or cash
requirements for, the Company's working capital. Furthermore, other companies in the aerospace and defense
industry may calculate these measures differently than the manner presented above.
Accordingly, the Company focuses primarily on its GAAP results and uses Adjusted EBITDA only supplementally.
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