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| 8-K - FORM 8-K - Affinia Group Intermediate Holdings Inc. | d662947d8k.htm |
 Affinia Group
Inc. Affinia Group Inc.
Lender Presentation
Lender Presentation
Amendment to Senior Secured Credit Facility
Amendment to Senior Secured Credit Facility
January 27
, 2014
th
Exhibit 99.1 |
 Pg.
2 This presentation may contain forward-looking statements reflecting
management's beliefs and assumptions regarding
future
events
based
on
the
best
available
information.
Readers
are
cautioned
not
to
put
undue
reliance
on forward-looking statements as they are not a guarantee of future
performance and remain subject to a number of uncertainties and other
factors that could cause actual results to differ materially from forecasts. A more detailed
description of these uncertainties and risk factors is provided in Affinia’s
regular filings with the SEC on Forms 10-Q and 10-K.
Disclosure
Disclosure |
 Pg. 3
Presenters
Presenters
Affinia Group Inc.
Steve Klueg
Senior Vice President and Chief Financial Officer
J.P. Morgan
Stathis Karanikolaidis
Managing Director |
 Pg. 4
Transaction Overview
Stathis Karanikolaidis
J.P. Morgan
–
Managing Director |
 Pg. 5
Affinia announced on January 22, 2014 the sale of its Global Chassis division to
Federal Mogul Global Chassis is a leading manufacturer of aftermarket
chassis components under the brand names Raybestos®
and McQuay-Norris®
Affinia will receive $150 million cash proceeds at close
Closing expected to occur shortly after satisfaction of closing conditions,
including HSR clearance
Global Chassis represented 12% of revenues and 11% of adjusted EBITDA in the last
twelve months ended 9/30/13
Affinia will continue to focus on growing its core business and eliminating
corporate costs through consolidation in 2014
Sale of Chassis Division –
Sale of Chassis Division –
Overview and
Overview and
Strategic Rationale
Strategic Rationale |
 Pg. 6
Summary of Proposed Amendments
Summary of Proposed Amendments
Affinia Group Inc. (the “Company”) is seeking certain amendments to its
Term Loan and ABL Permit the sale of
the Chassis business for $150 million In connection with the amendments, the
Company will Make a $75 million prepayment of the Term Loans (TLB-1 and
TLB-2 tranches on a pro rata basis); no Break Funding Payments will be
payable Repay outstanding amounts under the Dana Seller Note
Add a basket for Restricted Payments and a basket for Investments to permit
dividends, loans or advances to Affinia Group Holdings Inc. for the purpose
of repaying outstanding amounts under the Dana Seller Note
Aggregate amount of dividends, loans or advances is not to exceed $85
million Extend
the
period
during
which
the
Company
may
use
proceeds
from
the
sale
of
its
South
America
business to make loans and advances and to pay dividends from October 25th, 2014
to April 25th, 2015
Permit deferral of first Excess Cash Flow sweep payment, which will be based on
the LTM period ending June 30, 2014, for six months from the current due
date credit agreements |
 Pg. 7
Proposed Amendments –
Proposed Amendments –
Voting and Fees
Voting and Fees
Voting
Approval
of
the
proposed
amendments
is
subject
to
a
vote
by
Term
Loan
lenders
and
ABL
lenders
Approval
requires
a
majority
of
Term
Loan
lenders
and
a
majority
of
ABL
lenders
to consent
Fees
15 bps to consenting Term Loan lenders
7.5 bps to consenting ABL lenders |
 Sources
($mm)
Uses
($mm)
Proceeds from Chassis sale
$150
Repay existing Term Loan B tranches
$75
Cash on balance sheet
86
Repay Dana seller note
50
Cash remaining on balance sheet
108
Estimated fees and expenses
3
Total sources
$236
Total uses
$236
Sources, Uses and Pro Forma Capitalization
Sources, Uses and Pro Forma Capitalization
Sources and Uses
Pro Forma Capitalization Table
($ in millions)
($ in millions)
1
Based
on
LTM
9/30/13
Adj.
EBITDA
of
$185
million,
including
the
Chassis
business
2
Based on Pro Forma LTM 9/30/13 Adj. EBITDA of $164 million, excluding the Chassis
business 3
Debt of Affinia Group Holdings, Inc.; a subordinated 12.5% payment in kind note which matures
on November 30, 2019. Actual amount of Dana Seller Note paydown could differ based on capacity
for Restricted Payments as of 12/31/13 in the 7.75% senior notes
Existing
Pro forma
Capitalization
9/30/2013
x EBITDA¹
Adjustments
9/30/2013
xEBITDA²
Cash
$86
$22
$108
$175mm ABL R/C
0
0
Term loan B-1
200
(22)
177
Term loan B-2
469
(53)
416
Total senior secured debt
$668
3.6x
$593
3.6x
7.75% senior notes
250
250
Other
22
22
Total debt through the OpCo
$941
5.1x
$866
5.3x
Total net debt through the OpCo
$855
4.6x
$758
4.6x
Dana seller note³
77
(50)
27
Total debt through the HoldCo
$1,018
5.5x
$893
5.4x
Total net debt through the HoldCo
$932
5.0x
$785
4.8x
Cash interest coverage
3.6x
3.4x
1
Actual
amount
of
Dana
Seller
Note
paydown
could
differ
based
on
capacity
for
Restricted
Payments
as
of
12/31/13
in
the
7.75%
senior
notes
Pg. 8
1 |
 Pg. 9
Key Date
Amendment Timeline
Amendment Timeline
S
M
T
W
T
F
S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
January 2014
S
M
T
W
T
F
S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
February 2014
Key Events
Date
Lender Conference Call
January 27
Lender consents due
February 3
th
rd |
 Pg. 10
Business update
Steve Klueg
Senior Vice President and Chief Financial Officer
|
 Global low-cost manufacturing and distribution footprint
Key Investment Highlights
Key Investment Highlights
Leading market positions and highly regarded aftermarket brands
Long-standing customer relationships
Strong operating efficiency and cash flow generation:
Exposure to favorable aftermarket trends
12.4% LTM Adj. EBITDA margin
$141 million LTM Adj. EBITDA less CapEx
Pg. 11 |
 Affinia Group
- Affinia Group -
Business Update
Business Update
Global Filtration Update
9/30/13 Pro Forma LTM Revenue by Division
9/30/13 Pro Forma LTM Adj. EBITDA by Division
Filtration
66%
South
America
34%
Affinia South America (“ASA”) Update
Affinia announced in October 2013 plans to relocate its Ann Arbor, MI
corporate headquarters to Gastonia, NC, where its Global Filtration Group is
headquartered
Transition to occur in phases during 2014
Company Headquarters
Total: $1.3 billion
Global
Filtration
sales
grew
6.6%
to
$877
million
in
the
LTM
period
ending
9/30/2013 in comparison to the corresponding period in 2012
Increased sales from European operations
Increased sales in Venezuela
ASA sales grew 2.5% to $447 million
in the LTM period ending 9/30/2013 in
comparison to the corresponding period in 2012
Driven
by
Pellegrino,
the
Brazilian
distribution
arm,
which
grew
at
5.1%
in the LTM period ending 9/30/2013
Pellegrino has grown 132% since 2005 and holds the #2 market
position in Brazilian aftermarket parts distribution
Filtration
80%
South
America
20%
Total: $164 million
Note: % of total excludes unallocated corporate expenses
Pg. 12 |
 Pg. 13
Financial Overview
Steve Klueg
Senior Vice President and Chief Financial Officer
|
 Pg. 14
Pro Forma Financial Performance
Pro Forma Financial Performance
NET SALES
GROSS PROFIT & MARGIN
ADJUSTED EBITDA & MARGIN
($ in millions)
($ in millions)
($ in millions)
$1,259
$1,323
2012A
LTM 9/30/13
$157
$164
12.4%
12.4%
2012A
LTM 9/30/13
$292
$310
23.2%
23.4%
2012A
LTM 9/30/13
CAPITAL EXPENDITURES
ADJUSTED EBITDA LESS CAPEX
($ in millions)
($ in millions)
$17
$23
2012A
LTM 9/30/13
$140
$141
2012A
LTM 9/30/13
Note: All figures exclude results from Chassis segment
|
 Pro Forma LTM
EBITDA Bridge Pro Forma LTM EBITDA Bridge
LTM Adjusted EBITDA Bridge
($ in millions)
Note: All figures exclude results from Chassis segment
$124.5
$4.7
$19.0
$14.5
$164.0
$1.3
LTM 9/30/13 Reported
EBITDA
Venezuela Devaluation
Non-Recurring Costs
Call Premium
Restructuring
LTM 9/30/13 Adj.EBITDA
Pg. 15
Venezuela
Devaluation:
This
comprises
the
devaluation
impact
of
adopting
hyper-inflationary
accounting
principles
by
the
Company’s
Venezuelan
subsidiary in 2012, followed by the devaluation of the currency in 2013
Non-Recurring Costs:
Transaction costs, strategic consulting costs, executive compensation costs
related to transition, environmental costs and establishment of legal
reserves Call Premium:
Call premium paid to retire bonds in the April 2013 recapitalization
transaction Restructuring:
Business restructuring expenses, excluding charges related to Global Chassis
|
 Credit
Metrics and Liquidity Profile Credit Metrics and Liquidity Profile
INTEREST COVERAGE (LTM ADJ. EBITDA / CASH INTEREST)
($ in millions)
($ in millions)
OPCO NET LEVERAGE (TOTAL OPCO NET DEBT / LTM ADJ. EBITDA)
Note: LTM EBITDA divided by annualized cash interest on ending debt
balance. Cash interest excludes amortization of OID and financing fees
Pro Forma for April 2013 recapitalization transaction
Pro
Forma
for
sale
of
Global
Chassis
division
and
proposed
debt
paydown
Note:
Ending
debt
balance
divided
by
LTM
EBITDA. Net
leverage
is
net
of
all
cash and cash equivalents
Pro Forma for April 2013 recapitalization transaction
Pro
Forma
for
sale
of
Global
Chassis
division
and
proposed
debt
paydown
($ in millions)
LTM Liquidity
$103
$121
$125
$124
$70
$51
$60
$55
$86
$108
Dec-2012
Mar-2013
Jun-2013
Sep-2013
Sep-2013PF
$181
$180
$210
ABL R/C
Outstanding:
$0
$0
$0
$0
$154
$0
$178
Note: All figures exclude results from Chassis segment; ABL availability is based on
Inventory and Accounts Receivable levels 5.0x
4.7x
4.6x
4.6x
3.5x
3.7x
3.6x
3.4x
6/30/2013
9/30/2013
3/31/13 PF¹
6/30/2013
9/30/2013
2
Pg. 16
9/30/13 PF
2
9/30/13 PF
3/31/13 PF¹
ABL availability
Cash
1
2
1
2 |
 Pg. 17
Questions & Answers |
 Pg. 18
Appendix |
 Organizational Structure
Organizational Structure
Note: Debt balances reflect amounts outstanding as of 9/30/2013
OMERS Administration Corporation (“OMERS”), formerly known as Ontario Municipal
Employees Retirement Board 2
Affinia Group Organizational Structure
Cypress
OMERS
,
Co-investors
&
Management/
Directors²
Affinia Group Holdings Inc.
(Non-guarantor)
Affinia Group
Intermediate Holdings Inc.
(Guarantor)
Affinia Group Inc.
(Borrower)
$175 million ABL Revolver
$200 million Term Loan B-1
$469 million Term Loan B-2
$250 million Unsecured Notes
60.9%
39.1%
Guarantor subsidiary
Various Foreign Subsidiaries
(Non-guarantors)
US Wholly-Owned Subsidiaries
(Guarantors)
Affinia Canada GP Corp
Affinia Products Corp LLC
Wix Filtration Corp LLC
$20 million Revolver in Poland
$2 million China Operations
Affinia International Inc.
Automotive Brake Company
Inc.
Affinia International Holdings
Corp.
$77 Dana Seller Note
Includes current and former management and directors
Pg. 19
1
1 |