Aerojet Rocketdyne Holdings Inc
Aerojet Rocketdyne — Proxy Contest (June 2022)
27 slides from Aerojet Rocketdyne's proxy contest presentation, Jun 21, 2022
Slide 1: Setting the Record Straight re: Mr. Lichtenstein's Many Misstatements and Mischaracterizations
Aerojet Rocketdyne Proxy Fight Initiated by Steel Partners in January 2022 Setting the Record Straight re: Mr. Lichtenstein’s Many Misstatements and Mischaracterizations June 20, 2022 Important: These materials are provided by Eileen P. Drake, General Kevin Chilton, USAF (Ret.), General Lance Lord,
Slide 2: Important Information, Forward Looking Statements and Non-GAAP Measures
Important Information, Forward Looking Statements and Non-GAAP Measures These materials are provided by Eileen P. Drake, General Kevin Chilton, USAF (Ret.), General Lance Lord, USAF (Ret.) and Thomas Corcoran (the “Non-Steel Directors”) on their own behalf, and not on behalf of Aerojet Rocketdyne Ho
Slide 3: Mr. Lichtenstein Continues to Mislead Shareholders with New False Claims and Mischaracterizations
Mr. Lichtenstein Continues to Mislead Shareholders with New False Claims and Mischaracterizations • Since Mr. Lichtenstein and Steel Partners launched a proxy fight in late January to take control of the Company, he has issued an ever-increasing litany of false statements and mischaracterizations •
Slide 4: Mr. Lichtenstein Has Completely Mischaracterized the Court's June 16 Opinion
Mr. Lichtenstein Has Completely Mischaracterized the Court’s June 16 Opinion • Delaware’s Court of Chancery did not grant Mr. Lichtenstein the key aspects of the relief he sought: – No finding of contempt Mr. Lichtenstein Claims He Won in Court – No finding that the Independent Slate violated the TR
Slide 5: ISS Similarly Challenged Mr. Lichtenstein's Credibility in its Recommendation
ISS Similarly Challenged Mr. Lichtenstein’s Credibility in its Recommendation to Support the Independent Slate ISS recommends shareholders vote for the entire Independent Slate’s highly qualified directors, led by CEO Eileen Drake, and rejects Warren Lichtenstein’s entire Steel Partners slate “[The
Slide 6: Mr. Lichtenstein's Positions on Running the Company Continue to Evolve
Mr. Lichtenstein’s Positions on Running the Company Continue to Evolve When He is Challenged on the Facts The creators of their own “plan” are seemingly confused on where they stand on it Selling the “Our slate would take steps to ensure the Company “And let me reiterate, I’m in no rush to make [a s
Slide 7: Mr. Lichtenstein Attacks the Business When Financial Performance Has Never Been Stronger
Mr. Lichtenstein Attacks the Business When Financial Performance Has Never Been Stronger Mr. Lichtenstein’s demands to disrupt the Fact: The Business Has Never Been Stronger business by pre-releasing interim financials Revenue ($mm) for May is impractical and unnecessary $2,188 $1,761 • Some account
Slide 8: Company's Performance Remained Strong Following the Lockheed Sale Announcement
Contrary to Lichtenstein’s Claims, the Company’s Performance Remained Strong Following the Lockheed Sale Announcement YoY 6.4% 4.2% 8.7% 3.3% 6.0% 3.0% Growth % $557 $557 $590 $545 $511 $496 Revenue ($mm) Q4 ‘20 Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 Q1 ‘22 YoY 14.8% (6.3%) 13.5% 32.0% 2.8% 18.5% Growth % $87
Slide 9: Claims of Suffering Operating Performance Contradicted by Significant Contract Wins
Claims that the Company’s Operating Performance is Suffering are Contradicted by Significant Contract Wins May 2022 - Q2/Q3 2021 - Lockheed Martin Q2 2019 - May 2020 - NASA Lockheed Martin selects AJRD to Lockheed Martin awards AJRD awards AJRD a build an advance awarded AJRD a $1.79B contract for t
Slide 10: His Fear-Mongering on Free Cash Flow is Unfounded
His Fear-Mongering on Free Cash Flow is Unfounded and Reflects a Fundamental Misunderstanding of the Business Average Free Cash Flow ($mm) Average Free Cash Flow as % of Sales 10.1% $199 5.1% $54 Under Mr. Lichtenstein Under Ms. Drake Under Mr. Lichtenstein Under Ms. Drake (2008—2015) (2016—2021) (2
Slide 11: Additional Lichtenstein False Statements & Mischaracterizations
Additional Lichtenstein False Statements & Mischaracterizations Underperformance Under Current • Under Ms. Drake’s tenure as CEO, the Company has significantly Management outperformed the S&P 500 and peers • The Company was recently awarded its largest contract in its history, and has Lacks Strategi
Slide 12: Other Ever-Evolving Positions on the Key Issues
Other Ever-Evolving Positions on the Key Issues • June 2022: After two of his original slate who are • January 2022: Mr. Lichtenstein nominates a slate of current directors on the Aerojet Rocketdyne Board 7 directors, including current Aerojet Rocketdyne testified at the recent trial, including one
Slide 13: Board Formally Reprimanded Mr. Lichtenstein for his Pattern of Misconduct
Despite Claims to the Contrary, the Board Formally Reprimanded Mr. Lichtenstein for his Pattern of Misconduct • Results of independent counsel’s investigation were delivered in March 2022, and released publicly more than two months later • The report concluded that Mr. Lichtenstein engaged in multip
Slide 14: Additional Observations Regarding Mr. Lichtenstein's False Claims and Mischaracterizations
Additional Observations Regarding Mr. Lichtenstein’s False Claims and Mischaracterizations Throughout the Proxy Contest
Slide 15: Aerojet's Value Creation Has Been Driven Mainly by Ms. Drake
Aerojet’s Value Creation Has Been Driven Mainly by Ms. Drake, Not Mr. Lichtenstein Mr. Lichtenstein’s presentation included a slide touting value creation during his tenure… When in fact… • More than two-thirds of the value generated during Mr. Lichtenstein’s tenure was created after Ms. Drake becam
Slide 16: After Serving on the Board for Years, Mr. Lichtenstein Now Has a Plan
After Serving on the Board for 16 Years, Mr. Lichtenstein Now Has a “Plan” for Aerojet Rocketdyne Mr. Lichtenstein’s presentation included a slide touting his “plan” to create value… When in fact… • Mr. Lichtenstein has never presented a strategic plan to the Board during his time as a director, and
Slide 17: Mr. Lichtenstein's Stewardship of the Pension Fund Has Been Disastrous
Mr. Lichtenstein’s Stewardship of the Company’s Pension Fund Has Been Disastrous Mr. Lichtenstein’s presentation attempts to blame Ms. Drake for deterioration in the pension… When in fact… • Since Mr. Lichtenstein began overseeing the Company’s pension fund in 2008 on the Benefits Management Committ
Slide 18: Mr. Lichtenstein Does Not Understand AJRD's Business
In His Presentation, Mr. Lichtenstein Confirms That He Does Not Understand AJRD’s Business Why are they using a picture of a Russian rocket? Do Mr. Lichtenstein and Mr. Tucker want to “save Aerojet” with Russian rockets rather than Aerojet Rocketdyne products? Should someone that out of touch with t
Slide 19: Mr. Lichtenstein's Slate Consists of Selected Friends Who Lack Experience
Mr. Lichtenstein’s Slate Consists of Selected “Friends” Who Lack Relevant Experience and/or Independence • No prior experience serving on a public company board • No prior CEO experience and since 2020 has been a paid consultant for Steel Partners • Lacks any relevant A&D sector experience or public
Slide 20: Mr. Tucker Does Not Have the Experience or Expertise to Serve as CEO
Mr. Tucker Does Not Have the Experience or Expertise to Serve as Aerojet’s CEO Mr. Lichtenstein’s presentation included a slide touting Mr. Tucker as a great CEO candidate… When in fact… • Mr. Tucker spent the last two years since he left Aerojet Rocketdyne working as a consultant to a Steel Partner
Slide 21: Credible Third Parties Take the Opposite View on Ms. Drake's Leadership
Mr. Lichtenstein Attempts to Criticize Ms. Drake’s Leadership, But Credible Third Parties Take the Opposite View • “Eileen Drake and the AJRD management team have delivered an incredible corporate turnaround since they were installed by the Chairman who is currently saying they did a terrible job. T
Slide 22: Appendix: Reconciliation of Unaudited Non-GAAP Financial Measures
Appendix: Reconciliation of Unaudited Non-GAAP Financial Measures
Slide 23: Reconciliation of Unaudited Non-GAAP Financial Measures
Reconciliation of Unaudited Non-GAAP Financial Measures amount s) Net income $ 27.8 $ 18.1 Interest expense 3.9 5.1 Interest income and other 0.2 (0.6) Income tax provision 10.5 5.6 Depreciation and amortization 14.4 15.2 GAAP retirement benefits expense 0.3 8.5 CAS recoverable retirement benefits e
Slide 24: Reconciliation of Unaudited Non-GAAP Financial Measures
Reconciliation of Unaudited Non-GAAP Financial Measures Three months ended December 31, Year ended December 31, 2021 2020 2021 2020 (ln millio ns, except per share an d pe rcen·tage amounts) Net income $ 38.0 $ 35.4 $ 143.7 $ 137.7 Interest expense 5.0 7 .1 20.1 30.1 Interest income ( 1.0) ( 1.6) (2
Slide 25: Reconciliation of Unaudited Non-GAAP Financial Measures
Reconciliation of Unaudited Non-GAAP Financial Measures (In millions, except per share and percentage amounts) Net income $ 42.6 $ 31.7 $ 105.7 s 102.3 Interest expense 4.9 7.2 15.1 23.0 Interest inoome (0.2) (0.5) (1.5) (4.7) Income tax provision 14.7 9.0 36.3 34.6 Depreciation and amortization 13.
Slide 26: Reconciliation of Unaudited Non-GAAP Financial Measures
Reconciliation of Unaudited Non-GAAP Financial Measures Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 {In minions, except per &hare and percentage amounts} Net income $ 45.0 $ 39.2 $ 63.1 s 70.6 Interest expense 5.1 7.4 10.2 15.8 Interest income (0.7) (1.0) (1.3) (4.2) In
Slide 27: Reconciliation of Unaudited Non-GAAP Financial Measures
Reconciliation of Unaudited Non-GAAP Financial Measures Three months ended March 31, 2021 2020 (In minions, except per share and percentage amount s) Net income $ 18.1 $ 31.4 Interest expense 5.1 8.4 Interest income (0.6) (3.2) Income tax provision 5.6 11.3 Depreciation and amortization 15.2 17.2 GA
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