Reddy Ice — Investor Presentation (March 2007)
27 slides from Reddy Ice's investor presentation, Mar 12, 2007
Slide 1: Investor Presentation March 12, 2007
Investor Presentation March 12, 2007
Slide 2: Safe Harbor Act
Safe Harbor Act Our Presentation includes, and our response to various questions may include, forward-looking statements about the Company’s revenues and earnings and about our future plans and objectives. Any such statements are subject to risks and uncertainties that could cause the actual results
Slide 3: Business Overview and Investment Highlights
Jim Weaver President and Chief Operating Officer Business Overview and Investment Highlights
Slide 4: Business Overview
Business Overview Largest manufacturer and distributor of packaged ice in the US $348.9 million of pro forma revenues and $89.3 million of pro forma Adjusted EBITDA as of 12/31/06(1) 80% of revenues are in states where we are the market leader Industry consolidator 17 Ice acquisitions post–IPO Our s
Slide 5: Broad and Diversified Distribution Mix
Supermarkets and Mass Merchants 45% Gas Stations/ Convenience Stores 28% Independent Distributors 13% Other 14% Broad and Diversified Distribution Mix Diversified Distribution Channels (% of packaged ice tons sold) Distribution Methods (% of packaged ice tons sold)(1) DSD/Pallet Delivery 48% Ice Fac
Slide 6: Strategic Multi-State Presence and Infrastructure in Attractive and Growing Ice Markets
Reddy Ice has significant scale and distribution advantages over its competitors. Strategic Multi-State Presence and Infrastructure in Attractive and Growing Ice Markets Arctic Glacier Rev: $225 million(2) (17% of Sales in Canada) Home City Ice Rev: $80 million(3) Reddy Ice Rev: $349 million(1) Map
Slide 7: Favorable Industry Dynamics
Favorable Industry Dynamics Packaged ice is a $1.8 billion industry in the US(1) Approximately $900 million produced by 3rd party manufacturers with the rest produced in-house Reddy Ice and two other regional players control approximately two thirds of 3rd party manufacturing The remaining 3rd party
Slide 8: Favorable Industry Dynamics (cont.)
Favorable Industry Dynamics (cont.) Ice is not brand dependent at the consumer level Only one packaged ice option per retail location Small ticket convenience purchase Ice is one of the highest in-store gross margin products Satisfying retailer demands is critical Manufacturing capacity must ensure
Slide 9: Strong Financial Performance Since IPO
Strong Financial Performance Since IPO Consistent revenue and EBITDA growth 12/31/06 revenue and pro forma adjusted EBITDA up 18.4% and 13.0%, respectively from LTM 6/30/05 Maintain low payout ratio and increase dividend Dividend increased from $1.53 to $1.60 Continue to delever Total HoldCo Debt/pr
Slide 10: Investment Highlights
Investment Highlights Industry Leader High Barriers to Entry Industry Consolidator Industry Consolidator High Quality, Long-Term Customers Attractive Organic Growth Opportunities Consistent and Growing Free Cash Flow
Slide 11: Industry Leader
Industry Leader Unrivaled presence, scale and size in our markets Competitors generally lack size and scale to effectively service regional and national chains If Wal-Mart were to replace us, we estimate it would need approximately 75 suppliers to fulfill the service that we currently provide Compet
Slide 12: Attractive Organic Growth Opportunities
Attractive Organic Growth Opportunities Consolidating Retail Vendor Base Food retailers continue to consolidate vendors to reduce costs Well positioned to grow with large national and regional customers as they consolidate the retail channel Uniquely positioned to serve 100% of the needs of national
Slide 13: Solid Demand and Pricing Environment
Solid Demand and Pricing Environment Between 2000 and 2006, volume sold to the regional and national chain customers increased at approximately a 4% CAGR As a % of total packaged ice volume sold, the portion attributed to these customers increased from 54% in 2002 to 58% in 2006 During the same time
Slide 14: High Barriers to Entry
High Barriers to Entry Approximately $300 million in PP&E at cost, over an estimated $400 million replacement value Multi-million start up costs to serve major markets including: Ice Plant and Equipment Trucks Corporate and Regional Infrastructure Limited overlap with two regional players Installed
Slide 15: High Quality, Long-Term Customer Relationships
High Quality, Long-Term Customer Relationships
Slide 16: Top 20 Ice Customers
Wal Mart/Sam’s Club Mass Merch 10 + Albertsons Stores Supermarket 10 + Bashas Supermarket 10 + Bi-Lo/Brunos Supermarket 10 + Food Lion/Kash n Karry Supermarket 10 + H E B Supermarket 9 + Ingles Supermarket 10 + Kroger Supermarket 10 + Publix Supermarket 10 + Safeway Supermarket 10 + Winn Dixie Super
Slide 17: Industry Consolidator
Industry Consolidator The packaged ice industry is highly fragmented Over the last 41 months, we have completed 29 “tuck-in” acquisitions and 1 platform acquisition of Ice companies Total “tuck-in” acquisitions purchase price of $44 million Purchase price range of $0.1 million to $7.5 million per “t
Slide 18: Steve Janusek, Chief Financial Officer
Steve Janusek Chief Financial Officer
Slide 19: Financial Goals
Financial Goals Focus on total return through dividend as well as share price appreciation driven by delevering and dividend growth Pursue strategic add-on acquisitions that are accretive to cash flow Drive free cash flow growth Maintain margins Moderate CapEx Low working capital requirement Maintai
Slide 20: Historical Operating Performance
Adjusted EBITDA Revenue Historical Operating Performance CAGR = 8.5% CAGR = 11.8% Our market leading platform and disciplined operating strategy have allowed us to grow EBITDA substantially faster than revenue. Ice Non-Ice ICE CAGR = 9.8% (1) Pro forma for the sale of California manufacturing operat
Slide 21: FYE Year-Over-Year Comparison
FYE Year-Over-Year Comparison (1) Excludes 17 acquisitions since the IPO. (2) Excludes acquisitions made in 2006 and thus far in 2007 that would contribute $4.3 million to pro forma Adjusted EBITDA. (3) Reference Form 8-K dated February 22, 2007 for reconciliation of pro forma Adjusted EBITDA to Net
Slide 22: 2006–2007 Summary of Guidance
FYE FYE 2006–2007 Summary of Guidance (1) Middle of range for Summary of Guidance per Company press release dated February 22, 2007. (2) Excludes acquisitions made thus far in 2007 that would contribute $2.0 million to pro forma Adjusted EBITDA. (3) Reference Form 8-K dated February 22, 2007 for rec
Slide 23: Controllable Cost Structure
Controllable Cost Structure FYE Revenue 100% 100% 100% COGS Labor (including benefits)(1) 25 24 23 Bag Expense 6 7 7 Electricity 6 5 6 Drayage 5 6 6 Fuel Costs 3 3 4 Other 15 16 15 Total 60% 61% 61% SG&A Labor (including benefits)(1) 7% 7% 8% Other(2) 6 6 5 Total 13% 13% 13% Adjusted EBITDA 27% 26%
Slide 24: Capitalization
Capitalization ($ in millions) (1) As of February 28, 2007. (2) Based on 12/31/06 pro forma Adjusted EBITDA of $89.3 million, net capital expenditures of $16.6 million and pro forma cash interest of $15.5 million. 3.6 Total Net HoldCo Debt/PF Adjusted EBITDA(2) 4.7 (PF Adj. EBITDA - CapEx)/Cash Inte
Slide 25: Investment Highlights
Jim Weaver President and Chief Operating Officer Investment Highlights
Slide 26: Investment Highlights
Investment Highlights Industry Leader High Barriers to Entry Industry Consolidator High Quality, Long-Term Customers Attractive Organic Growth Opportunities Consistent and Growing Free Cash Flow
Slide 27: Investor Presentation March 12, 2007
Investor Presentation March 12, 2007
Reddy ICE Holdings — Investor Presentation (March 2007) on 6ix