Symmetry Medical — Merger or Acquisition (August 2014)
36 slides from Symmetry Medical's merger presentation, Aug 4, 2014
Slide 1: 2Q '14 Investor Presentation and Proposed Acquisition of Symmetry Medical OEM Solutions
Farm Design, Inc. Prepared for Symmetry Medical 2Q ‘14 Investor Presentation a nd Proposed Acquisition of Symmetry Medical OEM Solutions and Creation of a Standalone Symmetry Surgical August 4, 2014
Slide 2: Disclaimer / Forward Looking Statements
Farm Design, Inc. Prepared for Symmetry Medical Disclaimer / Forward Looking Statements Statements in this presentation regarding Symmetry Medical Inc.'s business and the planned separation of the Symmetry Surgical business, which are not historical facts may be "forward - looking statements" that i
Slide 3: Disclaimer / Additional Information and Where To Find It
Farm Design, Inc. Prepared for Symmetry Medical Disclaimer / Forward Looking Statements Additional Information and Where To Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitati on of any vote or approval. The proposed m
Slide 4: Disclaimer / No Offer or Solicitation
Farm Design, Inc. Prepared for Symmetry Medical Disclaimer / Forward Looking Statements No Offer or Solicitation This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any se
Slide 5: As Adjusted Non-GAAP Measures
Farm Design, Inc. Prepared for Symmetry Medical As Adjusted Non - GAAP Measures Page 5 The as adjusted* measures, including adjusted operating income, net income and EPS, shown in this release exclude the impact of amortization of intangible assets and debt issuance costs, asset impairment charges,
Slide 6: Presenters & Agenda
Farm Design, Inc. Prepared for Symmetry Medical Presenters & Agenda Thomas J. Sulliva n President & Chief Executive Officer of Symmetry Medical, Inc. Chief Executive Officer Designate of Symmetry Surgical, Inc. Fred L. Hite Senior Vice President & Chief Financial Officer of Symmetry Medical, Inc . C
Slide 7: Second Quarter 2014 Financial Results
Farm Design, Inc. Prepared for Symmetry Medical Second Quarter 2014 Financial Results
Slide 8: Financial Performance – Q2 '14 vs. Prior Year
Farm Design, Inc. Prepared for Symmetry Medical Financial Performance – Q2 ’14 vs. Prior Year 1 Q2 ’14 Q2 ’13 Growth Revenue $101.3 $99.0 2% Gross Profit 28.2 26.6 6% Gross Margin 27.8% 26.9% +0.9% pts Asset Impairment $10.5 $0.0 Unfav Operating Income ($2.6) $7.1 Unfav Net Income, from continuing o
Slide 9: Financial Performance – Q2 '14 vs. Q1 '14
Farm Design, Inc. Prepared for Symmetry Medical Q2 ’14 Q1 ’14 Growth Revenue $101.3 $96.9 5% Gross Profit 28.2 23.7 19% Gross Margin 27.8% 24.5% +3.3% pts Asset Impairment $10.5 $0.0 Unfav Operating Income ($2.6) $5.0 Unfav Net Income, from continuing operations ($2.6) $1.4 Unfav Loss from discontin
Slide 10: Financial Performance – As Adjusted
Farm Design, Inc. Prepared for Symmetry Medical Financial Performance – As Adjusted 1 Notes: 1 Financials updated for Clamonta Discontinued Ops 2 See GAAP to Non GAAP Reconciliation Slide 15 *Operating income excludes charges for amortization of intangible assets, stock compensation expense, acquisi
Slide 11: OEM Solutions Segment Results
Farm Design, Inc. Prepared for Symmetry Medical OEM Solutions Segment Results • Instruments – relatively stable capital spending environment from OEM customers • Implants – in - line with the procedural growth rate • Cases – on track for full - year outlook of flat performance y/y • Other – aerospac
Slide 12: Symmetry Surgical Segment Results
Farm Design, Inc. Prepared for Symmetry Medical Symmetry Surgical Segment Results Page 12 • Excluding the New Wave Surgical product line, revenue was down 5% y/y and up 5% sequentially • U.S . sales down 3% y/y and up 3% sequentially • International sales down 2% y/y and up 5% sequentially • Results
Slide 13: Summary Capitalization
Farm Design, Inc. Prepared for Symmetry Medical Summary Capitalization 1 Q2’14 Q1’14 Cash and Cash Equivalents $17 $15 $200M Revolving Credit Facility $171 $178 $50M Term Loan ---- ---- $65M Mez ---- ---- Capital Lease Obligations $1 $1 Total Term Debt $172 $179 Shareholder’s Equity $281 $287 Total
Slide 14: Free Cash Flow
Farm Design, Inc. Prepared for Symmetry Medical Q2’14 Q1’14 Net Income ($6.6) $1.3 Depreciation 4.0 4.1 Amortization of intangibles 1.9 1.9 Amortization of debt issuance costs 0.2 0.3 Deferred Income Tax Provision (3.5) (0.1) Loss on sale of business 4.1 ----- Asset Impairment 10.5 ----- Accounts re
Slide 15: GAAP to Non-GAAP Reconciliation
Farm Design, Inc. Prepared for Symmetry Medical GAAP to Non - GAAP Reconciliation 1 Page 15 Notes: 1 Financials updated for Clamonta Discontinued Ops June 28, March 29, June 29, 2014 2014 2013 Operating income (loss), as reported (2,576)$ 4,974$ 7,142$ Adjustments: Amortization of intangible assets
Slide 16: Transaction Overview
Farm Design, Inc. Prepared for Symmetry Medical Transaction Overview
Slide 17: Two Distinct Business Segments Looking to Grow
Farm Design, Inc. Prepared for Symmetry Medical Two Distinct Business Segments Looking to Grow Industry leading (1) o rthopedic OEM supplier positioned to gain share in long - term growth segment • Global quality and regulatory systems • Customer innovation offered through Total Solutions™ collabora
Slide 18: Two Channels with Distinct Value and Growth Drivers
Farm Design, Inc. Prepared for Symmetry Medical Hospital Direct Medical Device Customers • Surgery Centers • Academic Medical Centers • Community Hospitals Two Channels with Distinct Value and Growth Drivers OEM Solutions • Surgical Instruments • Orthopaedic Implants • Sterilization Cases & Trays •
Slide 19: Strategic Rationale
Farm Design, Inc. Prepared for Symmetry Medical Strategic Rationale • Recent transactions imply a risk of consolidation in OEM Solutions competitive market, increasing the need for Symmetry Medical to explore acquisitions - both in orthopedic implants and adjacent medical device categories - to main
Slide 20: Overview of Transaction
Farm Design, Inc. Prepared for Symmetry Medical Overview of Transaction • Symmetry Medical Inc. will separate its Symmetry Surgical Business into a new holding company and transfer pro rata the shares in that new holding company to Symmetry Medical Inc.’s shareholders. Simultaneously, Tecomet , a Ge
Slide 21: Benefits to Shareholders
Farm Design, Inc. Prepared for Symmetry Medical Benefits to Shareholders • Sale of Symmetry Medical / OEM Solutions and “spin - off” of Symmetry Surgical in a tax efficient manner allows shareholders to capture a premium value for the OEM Solutions business and immediate liquidity while retaining up
Slide 22: Benefits to OEM Solutions Customers
Farm Design, Inc. Prepared for Symmetry Medical Benefits to OEM Solutions Customers • A > $400 MM strategic supplier serving more than 450 customers world wide offering greater “one stop” capabilities in implants, instruments, and cases with more robust business continuity resources across Orthopedi
Slide 23: Benefits to Symmetry Surgical Customers
Farm Design, Inc. Prepared for Symmetry Medical Benefits to Symmetry Surgical Customers • A nimble, customer - centric company whose only focus is the surgical instrument market • A strategic focus on the clinical and economic value proposition of the day - to - day instruments found in Operating Ro
Slide 24: Potential Timeline
Farm Design, Inc. Prepared for Symmetry Medical Potential Timeline Event Timing Announcement August 4 th , 2014 File Preliminary Proxy Statement August, 2014 Shareholder Meeting to Vote 4Q 2014 Close 4Q 2014 Page 24
Slide 25: Symmetry Surgical Standalone Business Overview
Farm Design, Inc. Prepared for Symmetry Medical Symmetry Surgical Standalone Business Overview Page 25
Slide 26: Introducing Symmetry Surgical
Farm Design, Inc. Prepared for Symmetry Medical i ntroducing . . . Symmetry Surgical aspires to be the medical device company that is recognized for being customer centric and developing high - quality surgical instruments that respond to the needs of clinicians – making a real difference in the liv
Slide 27: Symmetry Surgical Corporate Profile
Farm Design, Inc. Prepared for Symmetry Medical • Symmetry Surgical, Inc., a Delaware Corporation headquartered in Nashville, TN with operations in Louisville, Kentucky; Tuttlingen , Germany ;and Schaffhausen, Switzerland • A global manufacturer, marketer, and distributor of medical devices in the r
Slide 28: Symmetry Surgical Financial Snapshot
Farm Design, Inc. Prepared for Symmetry Medical s ymmetry s urgical f inancial s napshot • Revenue - $89M • Operating Income - $5.6M (2) • Depreciation & Amortization - $6.1M • EBITDA - $11.7M (2) • Capital Expenditures – $0.9M Page 28 2013 Financial Information Other Commentary • Some of the 2013 $
Slide 29: Actions Taken to Improve Performance
Farm Design, Inc. Prepared for Symmetry Medical • 2012 was the first year where all three businesses were operated as one • Actions have been taken throughout 2013 and 2014 to address transition issues domestically and abroad: − Established Symmetry Surgical brand − Engaged U.S. customers to conduct
Slide 30: Current Market: Re-usable Surgical Instruments
Farm Design, Inc. Prepared for Symmetry Medical c urrent market: re - usable surgical instruments • The estimated $1 billion (1) re - usuable Surgical Instruments market in which we compete today is a small piece of the $18 billion (2) General Surgery Devices segment • Our current focus is in the Op
Slide 31: A Larger Future Market: Surgical Instruments
Farm Design, Inc. Prepared for Symmetry Medical a larger future market: surgical instruments • The broader surgical market includes the Minimally Invasive Surgical segment as well as surgical instruments found in other surgical interventions including Neuro, Robotics, Aesthetics, Uro - Gyno , Audiol
Slide 32: Our Portfolio & Capabilities
Farm Design, Inc. Prepared for Symmetry Medical • Surgical Specialties Arthroscopy Bariatric Colorectal Neurosurgery OB/ Gyn Orthopedic Pediatrics Spine Thoracic Urology • Product Categories Open Surgery Minimally Invasive Surgery Energy Devices Retraction Central Sterile Containers Re - usable Sing
Slide 33: Our Competitive Aspirations
Farm Design, Inc. Prepared for Symmetry Medical o ur competitive aspirations • A leading Global Medical Device Company recognized as customer - centric and brand - driven with a unique clinical and health economic focus on surgical instruments needed day - to - day in operating rooms, surgery center
Slide 34: Symmetry Surgical Investment Summary
Farm Design, Inc. Prepared for Symmetry Medical s ymmetry s urgical investment summary • A global medical device company with a unique clinical and health economic focus on surgical instruments needed day - to - day in operating rooms, surgery centers, and future sites of care that are not reimburse
Slide 35: Key Takeaways
Farm Design, Inc. Prepared for Symmetry Medical Key Takeaways Acquisition of SMA by Tecomet for $ 7.50 / share and separation of Symmetry Surgical, Inc. as an independent public company • Expected close 4Q14 The Strategic Benefit • Tax efficient sale of Symmetry Medical / OEM Solutions and separatio
Slide 36: 2Q '14 and Proposed Acquisition of Symmetry Medical OEM Solutions
Farm Design, Inc. Prepared for Symmetry Medical 2Q ‘14 Investor Presentation a nd Proposed Acquisition of Symmetry Medical OEM Solutions and Creation of a Standalone Symmetry Surgical August 4, 2014
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