Presentation Transcript

1. Vehicle Safety Manufacturing, LLC Management Presentation January 2014
2. presentation outline Overview . . . . . . . . . . . . . . . 4 Sales & Marketing . . . . . . . . . . 12 Manufacturing . . . . . . . . . . . . 19 Growth Opportunities . . . . . . . . 25 Financial . . . . . . . . . . . . . . . 29 Summary . . . . . . . . . . . . . . . 35 Questions Plant Tour
3. presenters Ernie Scherler Founder, President & CEO; Vehicle Safety Manufacturing, LLC Ken Mack Partner;Kaplan & Mack, LLC (CPA firm)

4. section 1

   overview
5. Overview description Leading manufacturer and assembler of a vast array of electromechanical products: OEM Turn Signal Switches and Stalks Vehicle Human Machine Interface Controls Electronic Control Units Flashers / Relays LED Stop / Tail / Turn Signal Lamps LED Clearance Marker Lamps Auxiliary Fog / Driving Lights Back-Up / Dome Lights License Plate Lamps Lighting Wire Harness & Connectors Stainless Steel Lighting Panels Emergency Strobe lighting Reflex Reflectors Mirror Accessories Replacement Lenses Accessory & Decorative Product
6. Overview description (cont’d) Primarily serve the Heavy Duty vehicle market Class 7 and Class 8 trucks Certified manufacturer ISO 9001:2000 ISO/TS 16949:2009 ISO “Green” Certified DOT 108 and SAE Standards Necessary for sales in US
7. customer types Overview Heavy Duty OEMs (50% of total sales) truck tractor/trailer, construction and utility vehicle markets 70% installed on the factory assembly line 30% aftermarket replacement parts sold through OES channel to OEM dealers and field warehouses private label replacement parts Heavy Duty Aftermarket (43% of total sales) 2-step independent distributors who sell to fleets Slow Moving Vehicle OEMs (7% of total sales) golf carts, airport carts and neighborhood electric vehicles de facto control of this segment 7
8. Overview company history Ernie Scherler began industry career in 1962 Regional Sales Manager at Signal Stat Over next decade, worked his way to position of CEO held for six years Signal Stat sold three times (most recently to Truck Lite) 1979: founded Vehicle Safety Manufacturing in same niche selling turn signal switches, lighting and safety systems to niche markets focused on sales to heavy duty truck OEMs. competitors sold into a broad range of markets garnered business through improved pricing, service and marketing Additional products have been added e.g., LED lighting in 2005 Expanded distribution to include replacement market now ~40% of annual sales
9. organizational chart Overview 9
10. Overview personnel Non-union shop Current employment of 69: Management: 7 Manufacturing: 5 Sales OEM: 2 Aftermarket: 1 Engineering: 3 Factory Employees: 40 Purchasing: 2 Shipping/Receiving: 4 Maintenance: 1 Quality Assurance: 2 Finance: 2 10
11. Overview facilities Two proximate facilities: 22,000 square foot building headquarters warehouse and administrative offices 50,000 square foot building major manufacturing and assembly plant engineering, R&D and a test center Shifts currently 1 shift (8-hour/5-day)

12. section 2

    sales and marketing
13. customers Sales & Marketing Heavy Duty OEMs (50% of sales) Volvo (Mack Truck) Daimler Trucks North America (Freightliner, Western Star) Paccar (Peterbilt, Kenworth) Ottawa Truck Corp./Kalmar Industries AutoCar Crane Carrier Company Bobcat Company Pierce Manufacturing Komatsu International 13
14. customers (cont’d) Sales & Marketing Heavy Duty Aftermarket (43% of total sales) 2-step distributors who sell to fleets, e.g.: Long Island Truck Parts HDA Truck Pride 700 distribution locations 400 service facilities Competitors rely on 3-step distributors e.g., NAPA and CARQUEST higher sales volume but significantly lower margins 14
15. customers (cont’d) Sales & Marketing Slow Moving Vehicle OEMs (7% of sales) company has 100% of market in golf carts and other SMVs fastest-growing customer segment Textron (E-Z-GO golf carts, airport carts, NEVs) Ingersoll Rand (Club Car golf carts airport carts, NEVs) increased use of these vehicles in many private communities must now pass all state laws to become street legal require many new products on these vehicles e.g., horns, windshield wipers, headlights, turn signals, stop lamps and tail lamps 15
16. sales Sales & Marketing 27 sales rep organizations service primarily heavy duty aftermarket accounts based on geography one calls on accounts in Central and South America, Mexico and Caribbean. 3 in-house direct sales and service representatives for aftermarket and small OEMs includes National Sales Manager work with the sales reps service house accounts 16
17. sales and gross margin by top customers Sales & Marketing 2012 and ~2013
18. marketing Sales & Marketing Sales promotions and in-store displays OES and aftermarket customers Website identifies company capabilities catalogs online Trade Shows HDA Show Louisville Truck Show Mack, PACCAR 18

19. section 3

    manufacturing
20. overview Manufacturing ISO 9001:2000 / ISO/TS-16949:2009 / “Green” OSHA compliant Six Sigma Black Belt (bilingual) All products manufactured in-house approximately 90% require only assembly bar code being implemented Owns all tooling Once a product is designed, contract for component manufacturing components manufactured in US and Asia castings bought in New Jersey LEDs sourced from Asia Final product assembled from sourced parts and others produced in-house then assembled, quality tested, and packaged 20
21. research and development Manufacturing Performed in-house Necessary for product design to be certified Software Design Tools Auto-CAD Solid Works Pro-E Geomagic Rhino Optical Analysis Software Illumination, Breault Research ASAP Photometric, Mechanical & Environmental Verification Rapid Proto-Typing Submission Approval New Product Tooling 3D Laser Scanning 21
22. production capabilities Manufacturing Plastic Injection Molding Insert Molding UV Stabilization Coating Manual, semi-automatic degating Manual and semi-automatic painting soldering Injection Molding Ultrasonic Welding Vibration Welding 5-axis robotic adhesive application Plastic Annealing Hot Stamping Vacuum Metalizing Automated Wire Processing Spot Welding Pad Printing Automatic functional testing Hot Stacking Potting & Encapsulation Dual Liquid Epoxy Stamping Riveting Chrome Plating on Plastic & Metal Auto Screwing 22
23. partial equipment list Manufacturing Branson Vibration welding Injection molding machines Ultrasonic welding machines Riveting Machines Automated production systems Surface Mount Technology 23
24. inspection equipment Manufacturing Photometric Verification Color Measurement Temperature Humidity Chamber Vibration Fatigue Analysis Salt Spray Chamber Moisture Test Chamber Dust Test Chamber Water Submersion Chamber Extreme Cold Temp Chamber Extreme Heat Temp Chamber 24

25. section 4

    growth opportunities
26. short term growth Growth Opportunities Turn signal switches continued growth in this segment new switch manufactured with increase in margins inherent with most new items that replace other products newer, more sophisticated components Aftermarket suppliers established quarterly programs for many aftermarket suppliers feature different products for seasons and markets, e.g.,: Lucky Friday the 13th Program Vest Pocket deals broaden product offering to cover all makes and models rolled out to all customers via sales reps and managers New product lines e.g.,12 new products VSM is currently developing
27. long term growth Growth Opportunities New Markets Autonomous Vehicles Truck Body Builders Auxiliary Lighting (e.g., industrial lights) Trailer Market (vans and cargo) Wire harness and lighting for tow trucks prototypes for 150 NYC trucks New SKUs for OEMs based upon the introduction of new truck models e.g., self-cancelling switch sold to Mack for Waste Management 2 switches per vehicle (one for each side) ideas for new products e.g., the new Peterbilt/Kenworth backlit illuminated nameplates
28. long term growth (cont’d) Growth Opportunities Slow Moving Vehicles controls 100% of the market for its products in this vehicle category significant growth opportunities in this burgeoning segment golf cart stop, tail and turn signal lens estimated annual volume of 75,000 – 100,000 units golf cart headlight estimated annual volume of 75,000 – 100,000 units Neighborhood Electric Vehicles lamp, bezel, horn, windshield wiper motor and blade turn signal switch with horn, headlight hi-lo beam, park and turn switch with harness, stop tail and turn, self-cancelling, hazard, flasher and connector (approximately 50,000 units new business)

29. section 5

    financial
30. pricing and product margins Financial Aftermarket products generally carry higher margins than OEM items Gross margins of 48-50% on OEM sales and 49-51% on aftermarket sales
31. pricing and product margins (cont’d) Financial Top 20 Product Sales and Margins (for 2012 and ~2013)
32. balance sheet Financial – Balance Sheet 32
33. income statement Financial – Income Statement 33
34. EBITDA Adjustments Financial – Income StatementCont’d 34

35. section 6

    summary
36. value offered Summary Nimble entrepreneurial company competing against lumbering giants in huge industry Distinct growth opportunities in old and new markets More than 35 years of manufacturing and customer experience Extensive technical and fabrication capabilities A reputation for quality and customer service
37. questions