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8-K - FORM 8-K - OMEGA PROTEIN CORP | d8k.htm |
Investor Presentation
Bret Scholtes
Executive Vice President and Chief Financial Officer
January 10, 2011
Exhibit 99.1 |
Forward Looking Statements
2
The information presented herein may contain 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. Although the Company believes that its expectations
are based on reasonable assumptions, it can give no assurance that its goals will be achieved.
Important factors that could cause actual results to differ materially from those included in the
forward looking statements include: (1) the Companys ability to meet its raw
material requirements through its annual menhaden harvest, which is subject to fluctuations due
to natural conditions over which the Company has no control, such as varying fish population, fish oil yields,
adverse weather conditions, oil spill impacts and disease; (2) the impact of worldwide supply and
demand relationships on prices for the Companys products;
(4) fluctuations in the Companys quarterly operating results due to the seasonality of the
Companys business and its deferral of inventory sales based on worldwide prices for
competing products. These and other factors are described in further detail in Omega
Proteins filings with the Securities and Exchange Commission, including its 2009 Annual Report on Form 10K under the
headings, Managements Discussion and Analysis of Financial Condition and Risk
Factors. Omega Protein cautions you not to place undue reliance on these
forward-looking statements, which speak only as of the date of this presentation, and Omega
Protein undertakes no obligation to update this information. Omega Protein urges you to
carefully review and consider the disclosures made in this presentation and its filings with
the Securities and Exchange Commission that attempt to advise interested parties of the
risks and factors that may affect its business. Some of the information presented is derived from third-
party sources and, while the Company believes the data to be reliable, the Company has made no
independent investigation of these third-party sources or attempted to verify the veracity
of the third-party data in any way. (3)
Omega
Proteins
expectations
regarding
demand
for
OmegaPure
®
proving
to
be
incorrect; and |
Omega
Protein
Corporation
(NYSE:OME)
3
Founded in 1913
Leading producer of omega-3 fish oil,
specialty fish meal, and other nutrition
ingredients
Serves the human, animal and plant
nutrition markets
Strategically positioned to capitalize on
long-term growth opportunities
Vertically integrated, highly efficient
operation
Investing in research and development
to expand market position
Blue chip customer base
Global distribution network
Strong balance sheet |
OME Historical Timeline
4
Hurricanes impact all 3
Gulf plants
Zapata owns ~58% of OME until Nov 2006
OME pays off
balance of bank loan
OME levers up to
purchase Zapata shares |
Omega Protein Business Model
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
5 |
Vertically Integrated Business
Harvest from a sustainable fishery
Over 1,000 employees
35 fishing vessels and 35 spotter planes
Four meal and oil processing plants and
dedicated fish oil refinery |
7
Human Nutrition
Nutraceutical Ingredients
Global Nutrition Industry
Source: Nutrition Business Journal; March 2010
Diverse product set of
nutritional ingredients
Supply the dietary supplement
and functional food markets
Support good health and well-
being (i.e. cardiovascular
health, cognitive function and
anti-aging) |
Omega-3 Ingredient Market
Source: Frost & Sullivan
8
End Use Applications of EPA and DHA Oils (Metric Tons)
Global Omega-3 Dietary Supplement Sales
The dietary supplement industry
is the largest market segment
for omega-3 ingredients.
The omega-3 supplement
industry has grown rapidly for
the past 15 years.
Globally, 49,671 metric tons and
$2.8 billion in sales
U.S. Omega-3 Dietary Supplement Sales
Supplements
49,671
Functional
Foods
19,090
Infant/Clinical
4,531
Animal
Feed
5,243
Pharma
1,970 |
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
2010 sales ~ $12M
Provides established distribution network
for omega-3
9
Cyvex Acquisition
Background
Transaction Rationale
Increase presence in human nutrition
Access to the top supplement
retailers
Existing line of non-marine products
Combination fits with shifting
customer demand
B2B ingredient supplier |
10
Animal Nutrition
2009 End Usage of OME Fish Meal
2009 End Usage of OME Fish Oil
Market Segments
Aquaculture
Companion Animals
Swine
Dairy
Beef
Poultry/Layers
Feed Ingredients
Fish meal
High-quality protein source with superior
amino acid profile and omega-3
Fish oil
Contains 35% omega-3 fatty acids with a
balanced concentration of EPA and DHA
Higher Value
Lower Value |
World Supply/Demand Imbalance
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) |
12
Plant Nutrition
Nutritive Products
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
(market ~$594 million)
®
®
® |
Strong Customer Relationships
13 |
Research and Development
The OmegaPure Technology and Innovation Center (OPTIC)
for research and development of new and innovative ways to
formulate omega-3 fatty acids and protein.
Staff of scientists and food technologists:
Partner with food manufacturers to create successful
formulations
Oil refinery pilot plant
Certified by the American Oil Chemists Society for analysis of
marine oils and AOCS/GOED analysis for EPA and DHA.
Resources
Analytical Laboratory
Delivery Systems Laboratory
Professional Kitchen
Bakery
Dairy and Beverages Lab
Oil Refinery Pilot Plant
14 |
Research and Development Alliances
Source: OME internal analysis
15 |
Global Distribution Network
16 |
17
Growth Strategy
Focus on Nutritional
Products and Applications
Products
Expand
Nutritional
Product Line
Develop
higher margin
applications
Seek obligate
users to
maximize
margins
Stable Growth
Markets |
18
Key Initiatives in 2011
Continue to drive operational efficiency
Expand the number of obligate users
Develop higher margin applications
Develop or acquire additional product lines |
Financials
19 |
Financial Performance
Gross Margin 2006-2010 (Million U.S. Dollar)
Revenue 2006-2010 (Million U.S. Dollar)
20
EBITDA 2006-2010 (Million U.S. Dollar)
Diluted Earnings Per Share 2006-2010
(Million U.S. Dollar) |
Summary
Leading producer of omega-3 fish oil, specialty fishmeal, and other
nutrition ingredients
Broad product offering targeting multiple end-markets
Vertically integrated, highly efficient operation
Strategically positioned to capitalize on long-term growth
opportunities
Investing in research and development to expand market position
Blue chip customer base focused on human, animal and plant
nutrition
Global distribution network
Strong balance sheet
21 |