Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - OMEGA PROTEIN CORP | d230172d8k.htm |
| EX-99.1 - PRESS RELEASE - OMEGA PROTEIN CORP | d230172dex991.htm |
| EX-10.1 - EQUITY PURCHASE AGREEMENT - OMEGA PROTEIN CORP | d230172dex101.htm |
 Investor Presentation
Exhibit 99.2 |
 The
information presented herein may contain projections, predictions, estimates and other forward-
looking statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements will use words like “may,”
“may not,”
“believes,”
“do
not
believe,”
“expects,”
“do
not
expect,”
“anticipate,”
“does
not
anticipate,”
and other
similar expressions.
Although the Company believes that its expectations are based on reasonable
assumptions, we can give no assurance that these expectations will be realized.
Important factors that could cause actual results to differ materially from
those included in these forward looking statements include: (1) our ability
to meet our raw material requirements through our annual menhaden harvest,
which is subject to fluctuations due to natural conditions over which we have no
control, such as varying fish population, fish oil yields, adverse weather
conditions, oil spill impacts and disease; (2) the impact of laws and
regulations that may be enacted that may restrict our operations or the sale of products; (3) the
impact
of
worldwide
supply
and
demand
relationships
on
prices
for
our
products;
(4)
our expectations
regarding demand and pricing for our products proving to be incorrect; (5)
fluctuations in the Company’s quarterly operating results due to the
seasonality of our business and our deferral of inventory sales based
on
worldwide
prices
for
competing
products;
(6)
the effect of the Deepwater Horizon oil spill on our
business, operations and fish catch; and (7)
the business, operations, potential or prospects for our new
Cyvex subsidiary, the dietary supplement market or the human health and wellness
segment generally. Forward Looking Statements
2 |
 Agenda
3
Omega Protein: Pure Play on the Growth of High Quality
Protein Ingredients and Omega-3 fatty Acids
Favorable Supply Demand Outlook
Overview of What We Do
How We Plan to Grow
Review of our Business Divisions
Our Financial Performance |
 Omega
Protein Corporation (NYSE: OME) Pure play on high quality protein
ingredients and omega-3 fatty acids
Benefitting from increasing demand for
nutritional ingredients and limited supply
of fish meal and fish oil
Significant barriers to entry
Strong 2010 financial performance
$168M revenue
$18M net income
Strong balance sheet
4 |
 5
Global Demand for Meat
World Population
Standards of Living
Developing Countries* GDP per Capita (PPP)
5.60
5.80
6.00
6.20
6.40
6.60
6.80
7.00
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
* As defined by the World Bank-
2010-2011
300
250
200
150
100
50
0
+37%
+27%
+17%
1980
1990
2000
2010
Beef
Pork
Poultry
Other
Global Demand for Seafood
Growing Demand for Protein Around the World
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1994
1996
1998
2000
2002
2004
2006
Global Aquaculture Consumption
Wild Catch
Total
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 ; Global Demand for Meat- Hartog, L. “Global Perspective on Integrated Pork
Production”. Presented at the London Swine Conference, England.2006 |
 6
Global Fish Meal Production
Global Fish Oil Production
Source: IFFO, 2010
Average Fish Meal Prices (FOB from Peru )
Average Fish Oil Prices (FOB from Netherlands)
3,000
4,000
5,000
6,000
7,000
8,000
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
600
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1994
1996
1998
2000
2002
2004
2006
2008
1994
1996
1998
2000
2002
2004
2006
2008
World Supply/Demand Imbalance |
 Our
Business Fuels Healthy Living 7
Omega Protein
Corporation
Human Nutrition
Ingredients
Animal Nutrition
Ingredients
Plant Nutrition
Ingredients
Nutraceuticals
Functional Foods
Aquaculture Feed
Pet Food
Livestock Feed
Organic
Fruits and Vegetables |
 Vertically Integrated: From Catch to Market
A sustainable
fishery
49 vessels and
34 spotter planes
4 meal and oil
processing plants
Fish oil refinery
and concentrating
capability
Sales and distribution
network into top
manufacturers
8
Vertically
Vertically
Integrated
Integrated
8 |
 9
Focus on research and development
enhance production
improve health benefits of end
products
develop novel new products
Leverage customer relationships
Allocate funds based on return on capital
Additional product lines
Increase presence in human nutrition
Access opportunities in new markets
Add new customers in existing markets
Organic Growth
Organic Growth
Acquisitions
Acquisitions
How We Plan to Grow
Leverage existing protein and fatty acid platform to
expand line of nutritional ingredients
Leverage existing protein and fatty acid platform to
expand line of nutritional ingredients |
 10
2010 End Usage of OME Fish Meal
2010 End Usage of OME Fish Oil
•
Aquaculture
•
Companion Animals
•
Swine
•
Dairy
•
Beef
•
Poultry/Layers
•
Fish meal
•
Fish oil
Feed Ingredients
High-quality protein source with superior
amino acid profile and omega-3s
Contains 35% omega-3 fatty acids with a
balanced concentration of EPA and
DHA, plus additional DPA
Animal Nutrition: Our Core Business
Species |
 11
Animal Nutrition: Market is Growing
Global Swine Production by Volume
Global Aquaculture Production by Volume
Global Pet food Market by Retail Sales
Source:
Aquaculture-
FAO,
2011.
http://www.fao.org/figis/servlet/SQServlet?file=/usr/local/tomcat/FI/5.5.23/figis/webapps/figis/temp/hqp_5836.xml&outtype=html
Swine-
USDA.
Foreign
Agriculture
Services.
http://www.fas.usda.gov/dlp2/circular/1997/97-03/porkprod.htm
Petfood-
http://www.graintec.com/fileadmin/templates/PDF/25thPres/OUTLOOK_PET_FOOD_Euromonitor_Lee_Linthicum.pdf
OME Revenue per Ton (U.S. Dollar)
$325
$374
$465
$489
$539
$563
$654
$784
$947
$806
$1,036
$0
$200
$400
$600
$800
$1,000
$1,200
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
20,000
40,000
60,000
80,000
2000
2001
2002
2003
2004
2005
2006
2007
2008 |
 Nutraceutical Ingredients
Global Nutrition Industry
•
Diverse product set of
nutritional ingredients
•
Supply the dietary
supplement
and functional
food
markets
•
Supports good health and
well-being
•
Sales today represent a
fraction of the market
Source: “Global Nutrition Industry.”
Nutrition Business Journal. March, 2010.
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
$50,000
$0
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
*2009-2014 are projections
12
Human Nutrition: Greatest Growth Potential |
 13
Source:
“Global
Omega-3
Industry
Report.”
Frost & Sullivan. September 2009.; “Top 5 Supplements”.
Consumer Lab.com. Survey, 2011 Animal
Feed
5,243
End Use Applications of EPA and DHA Oils (Metric Tons)
Global Omega-3 Dietary Supplement Sales
U.S. Omega-3 Dietary Supplement Sales
Fish Oil Usage Surpasses Multi-Vitamin
1.
Fish Oil
2.
Multi-Vitamin
3.
Vitamin D
4.
Calcium
5.
Q-10 (cOq10)
Top 5 Supplements (Consumption Order)
Human Nutrition: Booming Supplement Market
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2007
2009
$1.9B
$2.9B
$-
$200
$400
$600
$800
$1,000
1995
1997
1999
2001
2003
2005
2007
2009
Functional
Foods
24%
Infant/Clinical
6%
Animal Feed
6%
Pharma
2%
Supplements
62% |
 Founded in 1984
Located in Irvine, California
Selling focus: health and well-being
Strong customer relationships in the
dietary supplements industry
Focused on high-value, higher margin
products
14
Human Nutrition: Acquisitive Growth
Background
Transaction Rationale
Increase offering to the in human nutrition
industry
Provides access to the top dietary supplement
manufacturers
Adds established distribution network for
omega-3 fatty acids (fish oil)
Adds line of non-marine products
Supports shifting customer demand
B2B ingredient supplier |
 Privately held company founded in 1993
Located near Chicago
Strong technology base in molecular
distillation and purification of nutritional
compounds
Existing producer of high purity omega-3’s
Customer base includes numerous Fortune
500 companies
15
Human Nutrition: Acquisitive Growth
Transaction Rationale
Vertical
Integration: Fills gap in OME’s fish oil
value chain
Proven Assets: Unique opportunity to acquire
molecular distillation capacity accompanied with
processing and product development expertise
Strengthens
Distribution
Channel: Broadens
product offerings, expands current customer
relationships and improves access to prospective
customers
Timing: Acquisition provides immediate access;
avoids Greenfield construction delay
Background |
 16
Value Chain-Fish Oil for Human Nutrition
Refine
Process
Harvest
Market &
Sell
(Cyvex)
Retail
Concen-
trate
(InCon)
Vertical integration allows Omega Protein to capture
additional value and further differentiate our fish oil
|
 Plant Nutrition: Niche Opportunity
17
Nutritive Products
Source: Omega Protein
OmegaGrow®
Organic fertilizer produces healthier, faster
growing plants
OmegaGrow®
Plus
Provides the same benefits as OmegaGrow ®
but with 25% oil to enhance plant health and
fortification
Seacide®
Currently in process of bio-pesticide registration
|
 18
Comprehensive In-House Research and Development Effort
OmegaPure Technology and Innovation Center completed in 2008
-
Analytical Laboratory
-
Pilot Plant from Oil Refinery
-
AOCS/GOED certified for the analysis of marine oils
-
Beverage and Emulsions Laboratory
-
Commercial Kitchen and Bakery Laboratory
Supports Process Innovation
Enhances Menhaden Utilization
Provides for Novel Product Development
Benefits from Partnerships and Contracts with Universities
R&D Initiatives Support Growth |
 Global Distribution Network
19
Source: Omega Protein
Optimize
International
Sales
Maximize Pricing
Enhance Margins |
 20
2010 exports represent over 50% of sales
2010 Sales Breakdown by Geography
Asia 24.0%
US
49.5%
Latin
America
6.8%
Canada
8.0%
Europe
11.7% |
 Blue
Chip Customers 21 |
 Financial Performance
Gross Margin 2006-2010
(Million U.S. Dollar)
Revenue 2006-2010
(Million U.S. Dollar)
22
EBITDA 2006-2010
(Million U.S. Dollar)
Net Income 2006-2010
(Million U.S. Dollar)
Source: Omega Protein
$0
$50
$100
$150
$200
2006
2007
2008
2009
2010
$140
$157
$177
$165
$168
$0
$20
$40
$60
2006
2007
2008
2009
2010
$21
$40
$37
$8
$45
0%
10%
20%
30%
EBITDA
EBITDA Margin
15%
26%
21%
5%
27%
0%
10%
20%
30%
40%
2006
2007
2008
2009
2010
$0
$20
$40
$60
Gross Profit
Gross Margin
-$10
-$5
$0
$5
$10
$15
$20
-$6
2006
2007
2008
2009
2010
$5
$12
$13
$18
17%
22%
24%
5%
29% |
 Financial Performance
Capital
Expenditures
(Million
U.S.
Dollar)
Cash
Balance
(Million
U.S.
Dollar)
23
Debt
Balance
(Million
U.S.
Dollar)
Source: Omega Protein
Debt
Debt/EBITDA
$8
$19
$14
$2
$20
$0
$5
$10
$15
$20
$25
2006
2007
2008
2009
2010
$20
$8
$23
$18
$16
$0
$5
$10
$15
$20
$25
2006
2007
2008
2009
2010
$75
$65
$61
$28
$35
3.6X
1.6X
1.7X
3.0X
0.8X
0.00
1.00
2.00
3.00
4.00
$0
$20
$40
$60
$80
2006
2007
2008
2009
2010 |
 Why
OME? Compelling fundamentals
Growing populations and standards of living
Increased demand for high quality protein
Supply/demand imbalance for fish meal and fish oil
Opportunities for organic growth
Expand products for human nutrition
R&D-driven new product development / enhancements
Production improvements
Focus on acquisitions
Potential to add new product lines
Target new products or markets
Strong balance sheet
24 |