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| 8-K - CURRENT REPORT - Swisher Hygiene Inc. | swsh_8k.htm |
1
SWISHER
Investor Presentation
June 2013
2
FORWARD LOOKING INFORMATION
This presentation includes financial forecasts, projections and other forward-
looking statements regarding Swisher Hygiene Inc., its business and prospects.
This forward-looking information is based on management assumptions and
expectations which, while considered reasonable by Swisher Hygiene and its
management as of the date of this presentation, are subject to risks, uncertainties,
and other factors that may cause actual results and performance to materially
differ from results or performance expressed or implied by the forward-looking
statements. A description of these factors can be found in our Annual Report on
Form 10-K for the year ended December 31, 2012, filed with the Securities and
Exchange Commission ("SEC") on May 1, 2013, and in our other filings with the
SEC, which are available at www.sec.gov. Swisher Hygiene undertakes no
obligation to publicly update the forward-looking statements presented, except as
required by law.
looking statements regarding Swisher Hygiene Inc., its business and prospects.
This forward-looking information is based on management assumptions and
expectations which, while considered reasonable by Swisher Hygiene and its
management as of the date of this presentation, are subject to risks, uncertainties,
and other factors that may cause actual results and performance to materially
differ from results or performance expressed or implied by the forward-looking
statements. A description of these factors can be found in our Annual Report on
Form 10-K for the year ended December 31, 2012, filed with the Securities and
Exchange Commission ("SEC") on May 1, 2013, and in our other filings with the
SEC, which are available at www.sec.gov. Swisher Hygiene undertakes no
obligation to publicly update the forward-looking statements presented, except as
required by law.
3
HOW WE GOT HERE
2004
Acquired
by Steve
Berrard
and Wayne
Huizenga
by Steve
Berrard
and Wayne
Huizenga
2011
Began
trading on
NASDAQ;
trading on
NASDAQ;
Acquired 63
businesses
businesses
2012 (Q4)
Sold waste
operations
operations
2010
Merged with
CoolBrands
and began
trading on
TSX
CoolBrands
and began
trading on
TSX
2013
Completed all
SEC filings
and regained
NASDAQ and
TSX
compliance
SEC filings
and regained
NASDAQ and
TSX
compliance
2006
Expanded
chemical
service
offering after
successful test
chemical
service
offering after
successful test
2012
(Q1)
(Q1)
1986
Founded as
franchised
restroom
hygiene
provider
franchised
restroom
hygiene
provider
2005
Began franchise
acquisitions
(completed all
but two through
2011)
acquisitions
(completed all
but two through
2011)
4
RESTATEMENT AND COMPLIANCE
Restatement had Significant Effect on 2012 Results
» Major investment of management time
» Significant accounting, legal and consulting costs, which
continued until we became a current filer in May 2013
and regained NASDAQ and TSX compliance in June
2013
continued until we became a current filer in May 2013
and regained NASDAQ and TSX compliance in June
2013
» Lost revenue and accounting costs offset benefits from
expense reductions
expense reductions
» Delayed implementation of some elements of four point
plan
plan
5
BUT WE DID NOT SIT STILL
Laid the Foundation for 2013 and Future Initiatives
» Key additions to management team
» Implementation of operation and financial initiatives
» Handheld route technology
» Consolidation of multiple databases
» Integration of tuck-in acquisitions
» Shift to internal manufacturing
» Initial expense reductions
» Sale of waste operations
» Ended 2012 with strong balance sheet
6
BUSINESS MODEL
7
SWISHER AT-A-GLANCE
Key Differentiators to Build Around
» Leading provider of essential hygiene and sanitizing
solutions
solutions
» National chemical service footprint
» 50,000 customers and 800 distributors
» Strategic manufacturing plant locations
» $230 million of 2012 revenue
» Leverageable route network
8
CORE SOLUTIONS
We Deliver Clean
CHEMICAL
»General Cleaning
»Warewashing
»Laundry
»Specialty
HYGIENE
»Restroom Care
»Hand Hygiene
»Paper Products
»Air Care
FACILITY SERVICES
»Water Filtration
»Drainline Treatment
»Bar Towels and Aprons
»Floor Mats and Mops
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BUSINESS MODEL
Leveraging Account Relationship and Delivery Options
10
» Products that are critical to our
customers
customers
» $35 billion market opportunity
» Scalable structure with significant
leverage from incremental revenue
leverage from incremental revenue
» Recurring revenue
» Key differentiators in place to generate
ongoing organic growth and profitability
ongoing organic growth and profitability
BUSINESS MODEL AND POSITION
Secured Strong Position in Core Chemical Market
Source: Kline Consulting, Textile Rental
Services Association and various other industry
publications and public competitor filings.
Services Association and various other industry
publications and public competitor filings.
North America Market
11
OPERATIONAL PLAN
12
» Enhance customer service and satisfaction
» Strengthen the team
» Simplify and standardize the business model
» Operational simplification
» Supply chain rationalization
» Financial process improvement
» Brand and product enhancement
» Balanced sales strategy
FOUR POINT PLAN
Keys to Maximizing Customer Satisfaction, Growth and Profitability
13
IMPACT OF THE PLAN
2012 Initiatives Provided Basis for Continued Progress
» Sustainable organic revenue growth
» $10 million of 2013 annualized expense savings, starting primarily
in 2nd half of the year
in 2nd half of the year
» $5 million of additional annualized expense savings starting
in 1st half 2014
Brand
Consolidation
Internal
Manufacturing
Manufacturing
Acquisition
Integration
Database
Consolidation
Handheld
Deployment
14
OPERATIONAL SIMPLIFICATION
Consolidating Service and Support Infrastructure
PREVIOUS DELIVERY METHOD
Swisher Plant to Branches to Customer
Swisher Plant to Branches to Customer
NEW & SIMPLE
Delivery Method
OPERATING MODELS
OPERATING
MODEL
» 35% reduction in square footage in 2013 and 2014
» SG&A reduction in Q3 2013 through Q1 2014
15
» 20-30% reduction in
miles driven
miles driven
» 10-20% increase in
revenue per service
employee
revenue per service
employee
» Improved inventory
control
control
» Route expense
reduction in Q3’13
through Q2’14
reduction in Q3’13
through Q2’14
SUPPLY CHAIN RATIONALIZATION
Route Consolidations Reduce Costs and Increase Customer Contact
Before
After
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SUPPLY CHAIN RATIONALIZATION
Plant Consolidations Reduce Multiple Costs
» Improves speed and flexibility
» 20-30% reduction in plant
inventories
inventories
» 50+% reduction in chemical SKUs
» 70% current plant capacity
available
available
» Cost of Sales reduction in Q3’13
through Q1’14
through Q1’14
Transition from 8 to 5 plants
Transition from 50+ to 3 brands
17
BRAND & PRODUCT ENHANCEMENT
Elevating our Brand and Product Offering
» Increases awareness
» Strengthens price flexibility
» Reduces costs through brand consolidation
» Streamlines product offering
Brand Enhancement
Product Innovation
Sales Support
18
BALANCED SALES STRATEGY
Finding the Best Mix of Upsells, Field Sales and Multi-unit Sales
Focus All products & services to key market segments
Target Distributor relationships, corporate sourced
agreements and large independents
Focus All products & services to key market segments
Target Corporate relationships within all GPOs and
multi-unit chains
Account
Manager
Focus All products and service offering
Target Current Swisher customer
Focus Hygiene and facility service offering
Target Current Swisher customer
Hygiene
Specialist
Field
Sales
Corporate
Accounts
19
Upselling a Wide Range of Needed Products and Services
BALANCED SALES STRATEGY
Food Safety Treatment
Water Filtration
Aprons & Chef Wear
Floor Care
Restroom Sanitation
Bathroom Cleaners
Floor Mats & Mops
Dish Machine Products
Pot & Pan Detergents
Warewash Equipment
Specialty Products
Drainline Treatment
All-Purpose Cleaners
Carpet Care Products
Paper Products
Hand Hygiene
On-Premise Laundry
Food Safety Labeling
Food Safety
Odor Control & Misting
Degreasers
Deep Cleaning
20
GPOs and Distributors to Accelerate New Account Sales
BALANCED SALES STRATEGY
$ MILLIONS
FOODSERVICE
HEALTHCARE
HOSPITALITY
RETAIL
Penetration of Current Relationships
Opportunities Cross Multiple Verticals
Current Revenue
Potential Revenue
21
LOOKING AHEAD
22
2013 STRATEGY AND TACTICS
Focus on Chemicals and Hygiene
» Focus on core chemical and hygiene operations
» Continue to aggressively implement four point plan
» Increase sales through combination of customer upsell and
balanced mix of new sales
balanced mix of new sales
» Reduce expenses through standardization, simplification and cost
eliminations
eliminations
» Partner with leading providers to offer additional critical
services
services
» Measured expansion into other chemical segments
23
IMPACT OF PLAN ON FUTURE RESULTS
Recap of Previously Disclosed Outlook
» Sequential revenue growth beginning in 2013
» Reduction in investigation and review-related expenses
and other professional fees in 2nd quarter of 2013
and other professional fees in 2nd quarter of 2013
» Significant expense reductions beginning in 3rd quarter
of 2013
of 2013
» Annualized $10 million starting primarily in 2nd half of 2013 and
an additional $5 million starting in 1st half of 2014
an additional $5 million starting in 1st half of 2014
» Management goal to achieve positive operating cash flow
beginning in 3rd quarter of 2013
24
Q1 RESULTS AND FUTURE TARGETS
Recap of Previously Disclosed Outlook
» Most Gross Margin
and Route Margin
improvements
beginning in 3rd
quarter of 2013
and Route Margin
improvements
beginning in 3rd
quarter of 2013
» Plans for continued
reduction in SG&A as
a percentage of
revenue
reduction in SG&A as
a percentage of
revenue
» 2013 PP&E
purchases expected
to be in $12-$15
million range, tied to
new sales
purchases expected
to be in $12-$15
million range, tied to
new sales
25
BALANCE SHEET AND EQUITY
Strong Balance Sheet
» 175 million shares outstanding
» Traded on NASDAQ: SWSH and TSX: SWI
» Balance sheet at March 31, 2013
» $56 million of cash and $12 million of debt
» $68 million of total working capital
» $48 million of PP&E
» Capitalization (@$.85/share)
» Market capitalization: ~$149 million
26
CONCLUSION
The Opportunity is Bigger Today Than Originally Envisioned
» Large industry with attractive business characteristics
and demand still exists for an alternative chemical
provider
and demand still exists for an alternative chemical
provider
» Focus will be on leveraging unique position within the
hygiene and chemical portion of our $35 billion market
hygiene and chemical portion of our $35 billion market
» Team is executing on four point game plan to enhance
service, increase revenue and decrease expenses
service, increase revenue and decrease expenses
» Investors will begin to see the results of our efforts in the
coming months
coming months
27
CONTACT INFORMATION:
SWISHER INVESTOR SERVICES
(704) 602-7116
INVESTORRELATIONS@SWSH.COM
SWISHER INVESTOR SERVICES
(704) 602-7116
INVESTORRELATIONS@SWSH.COM