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Investor Presentation
August 2017
1
Certain Notices and Disclaimers
This presentation (“Presentation”) contains certain forward-looking statements relating to the investment
objectives, strategy, and approach of 180 Degree Capital Corp. (“180”). Forward looking statements generally can
be identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,”
“could,” “intend,” “intent,” “belief,” “estimate,” “project,” “plan,” “likely,” “will,” “should” or similar words or phrases.
Forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may
differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. 180
may not be successful in executing and implementing their investment strategies and reaching their investment
objectives. Prospective investors are urged not to place undue reliance on these forward-looking statements.
Prospective investors should carefully review and consider the risks and uncertainties. Any performance data set
forth herein represents past performance. Past performance does not guarantee future results.
This Presentation is provided for informational purposes only and does not constitute an offer to sell or a
solicitation of an offer to buy any security. Any such offering will be made only by means of a registration statement,
private placement memorandum, subscription agreement, or other documents as permitted by law. This
Presentation does not purport to be complete and is for discussion purposes only. If and when an investment
opportunity is offered to you, you must carefully read all of the distributed materials, including any included Risk
Factors (the “Disclosure Package”). All information provided in this Presentation is qualified in its entirety by the
disclosure set forth in any Disclosure Package.
This presentation on is intended solely for the party to whom it has been distributed. Any reproduction,
distribution or dissemination of this Presentation or the information included herein is expressly prohibited.
2
Firm Overview
Current Entity/Business
Prior Entity/Business
• Changes Effective in March 2017
• New Leadership:
§ Kevin Rendino joined as CEO 3
180’s Philosophy and Core Beliefs
• The price we pay relative to the business we buy is the most important driver of investment returns.
• Markets overreact to near-term internal or environmental challenges creating attractive valuations.
• Out-of-favor companies and industries create opportunities to identify investments that offer
asymmetric return-to-risk potential.
• Companies with strong franchises, managements, and balance sheets are the best positioned to
turnaround, gain market share, and improve profitability in an industry recovery.
• Constructive Activism
6
Differentiated Investment Strategy
20
16.5%
15
12.0%
10
7.0%
5
2.2%
0
<=$300M $300M-$3B $3B-$6B $6B-$12B >$12B
Source: Furey Research Partners, March 2016 via Grant Wasylik, Uncommon Wisdom Daily. Source: Ibbotson Classic Yearbook, 2015 via Grant Wasylik, Uncommon Wisdom Daily.
Traditional, Long-Only
180 Degree Capital Corp
Micro-Capitalization Funds (Constructive Activism)1
(Passive Investing)
Active engagement with management of investee
Wait passively for identified catalysts to realize value
companies to impact timing of catalysts
Not often willing to run proxy campaigns Ability to run proxy campaigns, if required
Generally not able to hold board seats
Able to hold board seats at portfolio companies
on portfolio companies
Concentrated portfolios available, but Able to offer co-investment opportunities on a single-
not often single-position focused funds company basis through special purpose vehicles
(1) Subject to applicable laws and regulations.
9
Experienced Management Team
• Joined as Board Member in 2016 and Chief Executive Officer and Portfolio Manager in March 2017.
• 25+ year career in deep value investing at BlackRock / Merrill Lynch
• Value team leader managing $13B in assets over 11 funds.
• Member of BlackRock’s leadership committee.
• Frequent contributor to financial focused television and media outlets.
• Since 2012, served as Chief Executive Officer of RGJ Capital, LLC, a firm focused on deep value investing in micro-
capitalization publicly traded companies.
Kevin M. Rendino
• Joined 180’s predecessor company in 2004; now serves as President and Portfolio Manager.
• 13+ year career managing the investments and operations of a publicly traded investment company
• Sourced, executed and managed investments across multiple asset classes including private and public equities and debt.
• Actively led and participated in multiple capital formation efforts at 180 and its portfolio companies.
• Responsibility for day-to-day operations, finance, legal and compliance functions of the firm.
• Current and past member of the board of multiple privately held and publicly traded portfolio companies.
Daniel B. Wolfe 10
Rigorous, Analytical Investment Process
Fundamental Plan
Screening Research Development Execution Exit
>250k Companies 300-600 Companies 30-40 Companies 10-15 Companies
• We are not corporate raiders. Our ultimate goal is to engage constructively with existing boards and
management teams to unlock value through:
• Realignment of financial performance to achieve growth of cash flows not just revenues
• Improving investor relations strategies and outreach
• Evaluation of strategic options including mergers, acquisitions, sales, and divestitures
• Identification of complementary talent and expertise
• Introductions to value-add resources and capabilities
• Alignment of interests with and support from large shareholders
• We are not adverse, however, to pursuing change through other routes including:
• Private and public shareholder communications
• Proxy solicitations
• All efforts will be grounded by and based on our fundamental research and diligence.
12
Constructive Activism
Near-term potential winners that do not Near-term potential winners that may Longer-term projects where we
require substantial time/involvement require a bit of time/involvement, but not instigate/lead turnarounds of businesses
substantial allocations of time.
Approach: Identify quality, deeply Approach: Identify deeply undervalued
undervalued companies with strong Approach: Identify quality, deeply companies in need of substantial changes.
management teams in the process of undervalued companies with strong
executing a turnaround. management teams but where we believe Constructive Activism (Levels 1 and 2+):
small changes can result in increased value
Constructive Activism: and management is interested in engaging • Propose changes to management
constructively. and/or board.
• Introductions to our institutional • Propose fundamental changes to
investors and/or individual investors Constructive Activism (Level 1+): business, including potential sale of
that own or have owned our stock. company.
• Leverage our general knowledge of the • Actively suggest changes to IR strategy • If required, run competing proxy
public markets gained over our and/or messaging. campaigns.
collective 40+ years of experience for • Actively suggest changes in business • Take seat(s) on board
advice and value-add introductions. related primarily to financial • Leverage ownership/control to drive
performance improvements. change. 13
Assets Allocated to Activist Funds are Growing
While assets are flowing out of actively managed funds at record rates,
assets allocated to activist strategies are growing.
14
Shareholder Activism in
Small-to-Micro Capitalization Companies is Growing
Shift to Constructive
$7.00 Activism and Engagement Catalysts: • Adesto sells low-power memory solutions that enable
$6.00
broad classes of connected devices.
$5.00 1. Profitability
$4.00
2. New Products • Formed based on proprietary memory technology and
$3.00 acquired flash-memory product lines from Atmel.
IPO @
(EcoXip, Mavriq)
$2.00 ~140%
$1.00 $5.00/Share 3. IoT Growth • Focused on growing Internet-of-Things (IoT) sector.
Increase
$0.00
• Top-tier, diversified customer base.
$9.00
Position Acquired Press
Company Profile
$8.00 Letters Sent Release H2 2017 and 2018
$7.00 to Board Catalysts:
• Xplore is the second largest supplier of industrial-grade
$6.00 Issued
rugged tablet computers.
$5.00 1. Restructuring of board
$4.00 2. Revenue growth • Acquired product line of competitor, Motion, in 2015.
$3.00 3. Potential sale of
$2.00 • Clean balance sheet and capital structure.
company
$1.00
$0.00
Example of Level 3 Engagement
12/31/13
3/31/14
6/30/14
9/30/14
12/31/14
3/31/15
6/30/15
9/30/15
12/31/15
3/31/16
6/30/16
9/30/16
12/31/16
3/31/17
6/30/17
9/30/17
12/31/17
3/31/18
6/30/18
9/30/18
12/31/18
• Began Level 2 constructive activist engagement through
private communications early 2016 focused on
Valuation Analysis ($ million) improving:
FY2017 FY2018 FY2019 FY2019 § investor communications;
(Actual)1 (Modeled)1,2 (Modeled)1,2 (Modeled)1,2 § presentation materials;
Revenues $77.9 $80.6 $88.4 $97.0 § corporate governance;
Growth Rate (YoY) (22.5%) 3.5% 9.7% 9.7%3 § financial operating performance.
Modeled PPS @ 0.5x EV/Revenue Multiple4 N/A $3.44 $3.80 $4.18 • Some, but not all, recommended changes implemented.
Modeled change from PPS on
N/A 76% 95% 115% • Transitioned to Level 3 with public activism in June 2017
June 30, 2017: $1.95
seeking changes in the composition of the board.
1. Xplore’s fiscal year runs from April 1 to March 31.
2. Models based on analyst estimates. Actual results may be materially different than those estimated. • Preparing for proxy campaign, if required.
3. Model based on same year-over-year growth as that modeled for 2017 to 2018. Actual results may be materially
different than those estimated. Note: XPLR is a personal holding of Kevin Rendino through RGJ Capital, LLC,
4. Calculations based on cash of $0.65 million and outstanding debt of $3.1. XPLR historically traded at a median acquired prior to joining 180. Information provide as example of steps 180 18
and average EV/Rev. of 0.5 and 0.7, respectively. Actual trading multiple may be materially different. would take in Level 3 Engagement.
Managed Funds and Special Purpose Vehicles
19
Risk Management Within a Concentrated Portfolio
20
Summary
24
Adesto Comparable Company List
Median 2.8