Presentation on theme: "Lenders’ Presentation June 28, 2006. Disclaimer The following information contains forward-looking statements within the meaning of the Private Securities."— Presentation transcript:
Lenders’ Presentation June 28, 2006
Disclaimer The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These forward-looking statements are based on Management’s current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which are outside Management’s control, that could cause actual results to differ materially from the results discussed in the forward- looking statements. You are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. All forward-looking statements are based on information available to Management on this date and Alliance Laundry assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Agenda nTransaction Overview nAlliance Financial Update nLSG / CLD Overview nAmendment Request nPublic Lenders’ Q&A nPro Forma Financial Projections nPrivate Lenders’ Q&A Presenters Bruce Rounds, CFO Alliance Laundry Systems LLC Bruce Rounds, CFO Alliance Laundry Systems LLC Tom L’Esperance, CEO Alliance Laundry Systems LLC Diane Albanese, Vice President Lehman Brothers Bruce Rounds, CFO Alliance Laundry Systems LLC
1 nAlliance Laundry Systems reached an agreement to purchase the Commercial Laundry Division (“CLD”) from Laundry Systems Group (“LSG”) on May 23, 2006 Acquisition strategically enhances geographic scope, expands product offering and provides control of soft-mount technology nTotal transaction value of $85 million includes capital lease obligations assumed nAlliance expects to finance the acquisition with a combination of debt and equity in order to maintain existing leverage levels $60 million add-on to the existing Term Loan Facility, along with a $5 million increase to the Revolving Credit Facility to maintain adequate liquidity —Maturity and amortization schedules will remain the same as existing $23 million in equity from Teachers’ and management (1)(2)(3) Sources and Uses 1.The remaining $1.4 million of the total purchase price reflects the capital lease assumed. 2.Management includes both Alliance and CLD. 3.Teachers’ equity will initially be funded through $20.0 mm bridge facility held at a new limited liability Holding Company, parent to Alliance Laundry Holdings LLC; remaining equity will be provided by Alliance and CLD management. 4.Alliance will fund the full €59.0 mm purchase price, which includes the assumption of $1.4 mm capital lease, at close. Through post-closing purchase price adjustments, the value of the capital lease will be returned to Alliance approximately 60 days post-close.
2 Pro Forma Capitalization nThe financing of the transaction has been structured to be leverage neutral 1.Total availability under Revolver is increasing from $50 million to $55 million. 2.Reflects market value of equity of Alliance at January 27, 2005 and CLD in conjunction with acquisition. 3.Alliance LTM Adjusted EBITDA as of March 31, 2006; CLD LTM EBITDA as of December 31, 2005 and is subject to E&Y diligence adjustments. See the Company’s filings with the Securities and Exchange Commission for a reconciliation of Adjusted EBITDA to Net Loss.
Alliance Financial Update
Alliance Performance Summary nNet revenues for the year ended December 31, 2005 increased $36.3 million, or 12.9%, to $317.3 million from $281.0 million Revenue growth was primarily driven by price and volume increases nGross profit for the year ended December 31, 2005 decreased $6.0 million, or 7.2%, to $76.0 million from $82.0 million Decrease in gross profit attributed to higher cost of sales from asset step-ups and higher- than expected steel prices n$25 million of debt reduction since Facility closing date nLeverage of 5.4x well below the maximum 6.50x Total Debt / EBITDA covenant as of March 31, 2006 (steps down to 6.25x at June 30, 2006) 3 Income Statement Financial Performance Update
LSG / CLD Overview
Commercial Laundry Division of LSG nManaged out of Belgium, CLD is one of LSG’s two operating divisions, with approximately 400 employees CLD has been a significant strategic partner of Alliance since 2002 nCLD focuses on two geographic regions: Europe (Ipso) & the U.S. (Cissell & Ipso) nFocused on the laundromat and on-premise laundry (“OPL”) segments Offers a full range of commercial washer extractors, tumbler dryers and ironers Strong position in washer extractor soft-mount technology Strong market position in Europe nProducts distributed worldwide through local distributors nStand-alone 2005 revenue and EBITDA of approximately $98.1 million and $11.2 million (1), respectively CLD is a leading manufacturer and marketer of commercial washing and drying machines and finishing equipment 4 1.CLD financials subject to E&Y diligence adjustments.
CLD Unit Overview nFocuses on laundromat and OPL segments (European Operations)(U.S. Operations) nFacilities: 2 in Belgium (Wevelgem and Deinze) nEmployees: 240 nProduction: 14,000 units per year (primarily washer- extractors, as well as ironers and tumbler dryers) nUnaudited 2005 Financials (1) : Net Revenue: €53.7 million Adj. EBITDA: €7.2 million nPrimary Competitors: Electrolux, Girbau, Primus nFocuses on laundromat, dry- cleaning and OPL segments nCissell facilities: Louisville, KY and Portland, TN nIpso sales center: Fort Mill, SC nEmployees: 153 nProduction: 1,000 units per year (primarily large stand-alone tumbler dryers) nUnaudited 2005 Financials (1) : Net Revenue: $30.1 million Adj. EBITDA: $2.0 million nPrimary Competitors: Alliance, Dexter, Milnor, Girbau 5 1.CLD financials subject to E&Y diligence adjustments.
CLD Unit Sales By Geography (European Operations)(U.S. Operations) 2005 Net Revenue: €53.7 million2005 Net Revenue: $30.1 million 6 1.EMEA refers to Europe, the Middle East and Africa. The acquisition further diversifies Alliance’s geographical reach and customer base (1)
7 CLD Historical Financials 1.Financial results unaudited and are subject to E&Y diligence adjustments. 2.Converted at an exchange rate of €1.24 / $ Converted at an exchange rate of €1.27 / $1.00. European Operations (1) U.S. Operations (1) CLD (Total) (1) (€ and $ in millions)
8 GrowthOpportunities Synergies and Cost Savings Key Credit Strengths Increased size and scale Diversification with increased sales contribution from Europe Increased product differentiation to support Alliance’s multi-brand strategies Ownership of soft-mount technology broadens product lines and reduces risk Branding unique products across markets creates opportunity Increased economies of scale provide potential opportunities for cost savings, such as corporate overhead Substantial US manufacturing consolidation opportunity Additional synergies expected from combined procurement Strong Market Position Access to two strong brands with significant market share Significant presence in Western Europe Access to CLD’s European distribution network Existing management expected to continue operating European business
Summary of Terms 1.Reflects 3/31/06 pro forma balance. 9
Proposed Transaction Timeline 10 Week ofAlliance-CLD Transaction Events June 26 th n Lender Presentation (June 28) July 10 th n Commitments and consents due from lenders (July 11) n Comments due from lenders on documentation n Close and fund (July 14) Holiday June SMTWTFS July SMTWTFS / Key Dates