TRANSPORTATION & LOGISTICS

Transcription

1 Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.

2 WHAT WE RE READING HW&CO. ASSISTS IN SALE OF GROHMANN ENGINEERING GMBH Harris Williams & Co. has announced the pending sale of Grohmann Engineering GmbH to Tesla Motors. Grohmann Engineering is a developer and manufacturer of highly customized, high-yield, multi-process modular assembly solutions for future oriented end-markets. Elon Musk, founder and CEO of Tesla, noted, This will really be our first acquisition of significance in our whole history. We thought it was important that Tesla becomes, in part, a German company. That s what this was all about. We expect this to help drive exponential improvements in our production process, in terms of both speed and quality of output, while cutting the cost-per-vehicle at the same time. Aftermarket News CONSUMER REPORTS: ALL-NEW CARS HAVE MORE PROBLEMS All-new or completely redesigned cars and SUVs tend to have the most problems. Basically, the latest thing is also the most trouble-prone. Take the Honda Civic, for instance. The 2016 Civic is an all-new, totally re-engineered model. Car critics loved it so much that it won the North American Car of the Year award in January, a prize given out by a jury of auto writers. But customers have experienced so many glitches and failures that the car ranked "Much worse than average" in the new dependability survey. CNN Money AAPEX: AFTERMARKET TO GROW 3.6% ANNUALLY The automotive aftermarket is expected to grow 3.6 percent annually over the next six years, according to IHS Markit. Meanwhile, after reaching a new high of 17.5 million units last year, new light vehicle sales are expected to level off and even decline a bit to 17.4 million this year. Even though there will be more new cars on the road, compared with recent years, the average age of light vehicles will extend to 11.6 years old this year, up from 11.5 years last year, and reach an average age of 11.8 years by This trend should lead auto repairers to reconsider the repair sweet spot as vehicles 12 years and older will continue to be a large percentage of vehicles in operation. Tire Business MORE ACCIDENTS, LARGER CLAIMS DRIVE COSTS HIGHER Over the past year, several forces have coincided to place considerable upward pressure on personal automobile insurance costs. Insurer actions in response have drawn considerable media and regulatory scrutiny. The dollar amount of claims per vehicle per year, known in insurance as the loss cost, is rising. Loss costs are the largest component of the price of auto insurance. They are also the most volatile. Whatever direction they move, rates will eventually follow. In recent years, total loss costs have been moving considerably higher, rising 13 percent in the two years ending March 2016, more than 10 times the inflation rate. Insurance Information Institute CONTENTS M&A TRANSACTIONS PUBLIC MARKETS OVERVIEW STOCK PRICE PERFORMANCE OUR GROUP CONTACTS UNITED STATES Frank Mountcastle Managing Director fmountcastle@harriswilliams.com +1 (804) Jason Bass Managing Director jbass@harriswilliams.com +1 (804) Joe Conner Managing Director jconner@harriswilliams.com +1 (804) Jershon Jones Director jjones@harriswilliams.com +1 (804) Jeff Burkett Director jburkett@harriswilliams.com +1 (804) Jeff Kidd Vice President jkidd@harriswilliams.com +1 (804) James O Malley Vice President jomalley@harriswilliams.com +1 (804) EUROPE Jeffery Perkins Managing Director jperkins@harriswilliams.com +49 (0) SAMSUNG CHARGES INTO AUTO TECH WITH $8 BILLION DEAL FOR HARMAN Samsung Electronics Co. agreed to buy a U.S. automotive technology manufacturer for $8 billion, the South Korean electronics giant s biggest deal ever and its latest attempt to branch out beyond smartphones in the wake of its Galaxy Note 7 fiasco. Samsung said it would pay $112 a share in cash for Stamford, Conn. based Harman International Industries Inc., an audio pioneer that has pushed aggressively into the automotive world. Samsung doesn t plan to make cars itself, but sees automotive technology, and the broader shift toward connected, driverless vehicles, as a promising growth area to sell more of its semiconductors, display panels and mobile services. Wall Street Journal PAGE 1

3 M&A TRANSACTIONS RECENT M&A TRANSACTIONS 1,2,3 Date Target Business Description Acquirer 11/8/2016* Grohmann Engineering GmbH Develops automated manufacturing systems for batteries and fuel cells Tesla Motors, Inc. 11/3/2016* Metaldyne Performance Group, Inc. Provides transmission, engine, driveline, and safety critical applications in passenger, commercial, and industrial vehicles American Axle & Manufacturing Holdings 10/31/2016 Autoteile Jakobs GmbH & Co. KG Manufacturers automotive replacement parts, accessories, and industrial supplies Hess Holding GmbH & Co. KG 10/28/2016 JAC Products, Inc. Manufactures roof racks and other automotive body trim JAC Products, Inc. /Private Group/ 10/27/2016* Atwood Mobile Products LLC Designs and manufactures vehicles seating and chassis components Drew Industries, Inc. /Seating & Chassis Component Bus/ 10/12/2016* Transamerican Auto Parts Manufacturer and distributer of off-road Jeep and truck accessories Polaris Industries Inc. 10/4/2016 Andrew Page Ltd. Distributes vehicle parts and accessories LKQ Corp. 10/4/2016 Hoosier Racing Tire Corp. Provides a variety of racing tires Continental AG 10/3/2016 Winfield Consumer Products, Inc. Manufactures and distributes automobile products Truck Hero, Inc. 10/3/2016 REMY International, Inc. /Light Vehicle Aftermarket Bus/ Manufactures starters, alternators and other related products TA Associates Management LP 10/3/2016 Ravaglioli SpA Manufactures lifts, aligners, tire changers, wheel balancers and test lanes Kinderhook Industries LLC 9/30/2016 Travis Body & Trailer, Inc. Manufacturer of medium and heavy dump body and hydraulic moist equipment Truck Bodies & Equipment International, Inc. 9/6/2016 Keystone Powdered Metal Co. Designs and manufactures metal products for the automotive industry Sumitomo Electric Industries Ltd. 9/2/2016* Accuride Corp. Manufacturers and supplies commercial vehicle components Crestview LLC 9/2/2016 International Tyre & Wheel Solutions Ltd. Distributes road tires for the waste, recycling and demolition industries Trelleborg AB 8/26/2016* Industrial Levorin SA Provides tires and offers repair services for motorcycles and industrial vehicles Compagnie Générale des Établissements Michelin SCA 8/24/2016 Britannia Tyres Ltd. Manufactures and supplies tires, brakes, exhausts and batteries Exhaust Tyres & Batteries (Worcester) Ltd. 8/19/2016* Omega Acquisition Corp Provides aftermarket automotive truck and off road air conditioning products AEA Holdings LLC *Denotes pending transactions PAGE 2

4 PUBLIC MARKETS OVERVIEW TEV / LTM EBITDA TEV / 2016P EBITDA 11.8x Dealerships and Services Providers 12.0x Dealerships and Services Providers 11.7x 11.7x 8.6x 10.9x 7.0x 6.1x AVERAGE REVENUE GROWTH ( ) AVERAGE REVENUE GROWTH ( P) Dealerships and Services Providers 13.9% Dealerships and Services Providers 6.2% 6.6% 4.3% (0.7%) 4.3% (2.1%) (2.3%) AVERAGE EBITDA GROWTH ( ) AVERAGE EBITDA GROWTH ( P) Dealerships and Services Providers 16.1% 15.9% 7.0% 12.8% 4.7% Dealerships and Services Providers 7.9% 3.4% (4.9%) PAGE 3

5 STOCK PRICE PERFORMANCE MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) 6.5% S&P % Dealerships and Service Providers 3.6% 1.2% Vehicle Manufacturers 3.2% Vehicle Manufacturers 0.5% S&P 500 Distributors and Retailers (1.9%) 2.0% Distributors and Retailers Dealerships and Service Providers (13.7%) 0.1% TRAILING TWELVE MONTHS (Indexed to November 18 th, 2015) 20% 15% 10% 5% 0% (5%) (10%) (15%) (20%) (25%) (30%) Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Dealerships and Service Providers S&P 500 Index PAGE 4

6 INDUSTRY UPDATE NOVEMBER 2016 OUR GROUP Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & Logistics Group serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marine and air transportation, transportation equipment, and the automotive and heavy duty vehicle market. RECENTLY CLOSED T&L TRANSACTIONS has merged with an operating company of has acquired in a recapitalization by and RCL Services Group in partnership with and has sold and to DEEP EXPERIENCE ACROSS T&L SECTORS THIRD-PARTY LOGISTICS RAIL & RAIL SERVICES MARINE TRANSPORTATION TRANSPORTATION EQUIPMENT NICHE TRANSPORTATION AUTOMOTIVE & HEAVY DUTY VEHICLE AIR TRANSPORTATION PAGE 5

7 OUR FIRM Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website. Aerospace, Defense & Government Services Building Products & Materials Business Services Consumer Energy, Power & Infrastructure Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston Two International Place 24th Floor Boston, Massachusetts Phone: +1 (617) Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio Phone: +1 (216) Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota Phone: +1 (612) UNITED STATES Richmond (Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia Phone: +1 (804) San Francisco 575 Market Street 31st Floor San Francisco, California Phone: +1 (415) Washington, D.C th St. NW 2nd Floor Washington, D.C Phone: EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 6

8 PUBLIC COMPARABLES Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA ($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Nov-15 May-16 Current 2016P 2017P Automotive Aftermarket BorgWarner Inc. $9,805 $ % (15.8%) $ % 7.8x 6.8x 6.8x 6.5x 6.4x Cooper Tire & Rubber Company 1, % (5.7%) % 5.3x 2.9x 3.5x 3.9x 4.2x Dorman Products, Inc. 2, % 49.3% % 9.7x 10.2x 13.6x 12.5x 11.5x Federal-Mogul Holdings Corp 4, % 30.6% % 8.0x 7.1x 7.2x 6.2x 5.9x Goodyear Tire & Rubber Company 13, (3.1%) (10.9%) % 6.0x 5.3x 5.6x 5.2x 5.0x Modine Manufacturing Company % 35.3% % 7.8x 5.2x 4.5x 5.9x 5.1x Motorcar Parts of America, Inc (0.2%) (31.2%) % NM 11.6x 8.6x 5.9x 5.2x Standard Motor Products, Inc. 1, % 20.2% % 9.7x 9.0x 10.4x 9.9x 9.6x Tenneco Inc. 4, % 8.1% % 5.9x 5.1x 5.3x 5.2x 4.9x Visteon Corporation 2, % (34.0%) % 7.2x 14.4x 7.9x 7.3x 6.8x Median 6.5% 1.2% 91.6% 7.8x 7.0x 7.0x 6.1x 5.5x Advance Auto Parts, Inc. $12,931 $ % 0.1% $ % 10.4x 10.1x 9.5x 11.0x 10.5x AutoZone, Inc. 27, % (3.1%) % 13.3x 12.0x 11.8x 11.7x 11.1x Genuine Parts Company 14, (1.9%) 6.2% % 10.8x 11.5x 11.8x 11.9x 10.7x LKQ Corporation 12, (2.1%) 9.4% % 12.5x 14.2x 12.9x 12.3x 10.8x O'Reilly Automotive, Inc. 26, (4.4%) (1.2%) % 16.8x 14.6x 14.4x 14.0x 12.8x U.S. Auto Parts Network, Inc (1.7%) 20.0% % NA NA 11.6x 8.1x 6.9x Uni-Select Inc. 1, (7.9%) (4.5%) % 9.9x 11.7x 10.4x 10.0x 9.2x Median (1.9%) 0.1% 89.2% 11.6x 11.8x 11.8x 11.7x 10.7x Dealerships and Service Providers Asbury Automotive Group, Inc. $2,989 $ % (17.4%) $ % 10.5x 9.5x 9.3x 9.3x 9.1x AutoNation, Inc. 10, (8.2%) (30.3%) % 12.4x 11.7x 10.8x 10.7x 10.3x Boyd Group Income Fund 1, % 28.5% % 10.3x 14.9x 14.8x 14.4x 12.2x CarMax, Inc. 21, % (2.0%) % NM NM NM 17.6x 16.5x Copart, Inc. 7, % 53.2% % 12.0x 12.7x 16.1x 16.0x 14.4x Group 1 Automotive, Inc. 4, % (13.7%) % 10.8x 10.0x 10.0x 11.2x 10.8x KAR Auction Services, Inc. 8, (8.2%) 10.1% % 10.9x 10.9x 12.5x 12.0x 10.9x Lithia Motors, Inc. Class A 4, (6.9%) (26.6%) % 13.7x 10.2x 11.0x 11.0x 10.1x Monro Muffler Brake, Inc. 2, (4.7%) (19.9%) % 16.9x 14.5x 14.5x 13.4x 11.8x Penske Automotive Group, Inc. 9, % 7.6% % 13.3x 12.3x 13.8x 13.4x 12.8x Sonic Automotive, Inc. Class A 3, % (14.7%) % 10.9x 10.1x 10.3x 11.0x 10.5x Median 3.6% (13.7%) 83.8% 11.5x 11.3x 11.7x 12.0x 10.9x PAGE 7

9 PUBLIC COMPARABLES Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA ($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Nov-15 May-16 Current 2016P 2017P Automotive Aftermarket Bayerische Motoren Werke AG $154,871 $ % (19.2%) $ % 8.0x 7.5x 7.9x 9.9x 9.8x Daimler AG 175, (2.3%) (18.2%) % 5.9x 7.1x 6.8x 9.1x 8.1x Ford Motor Company 150, (1.1%) (19.3%) % 14.3x 8.7x 11.1x 12.0x 12.3x General Motors Company 105, % (8.7%) % 6.4x 5.8x 5.3x 6.1x 6.3x Harley-Davidson, Inc. 16, % 16.7% % 11.8x 10.8x 11.4x 13.2x 12.5x Navistar International Corporation 6, % 118.0% % 9.4x 9.2x 12.0x 12.0x 11.2x Oshkosh Corp 5, % 55.4% % 8.1x 9.2x 11.3x 10.7x 9.9x PACCAR Inc 26, % 17.1% % 7.2x 7.4x 8.7x 12.7x 13.6x Toyota Motor Corp. 299, (1.0%) (8.0%) % 8.7x 7.8x 8.4x 11.1x 10.3x Volkswagen AG Pref 197, (6.9%) 9.0% % 6.0x 8.2x 6.5x 6.5x 6.0x Median 3.2% 0.5% 88.9% 8.1x 8.0x 8.6x 10.9x 10.1x PAGE 8

10 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2017P '12-15 '15-17P P 2017P '12-15 '15-17P Automotive Aftermarket BorgWarner Inc. $7,178 $7,435 $8,304 $8,025 $9,120 $9, % 8.4% $1,106 $1,224 $1,385 $1,330 $1,500 $1, % 7.7% Cooper Tire & Rubber Company 4,201 3,439 3,421 2,959 2,912 3,022 (11.0%) 1.0% % (4.8%) Dorman Products, Inc % 7.6% % 10.9% Federal-Mogul Holdings Corp 6,664 6,786 7,317 7,419 7,440 7, % 1.7% % 17.0% Goodyear Tire & Rubber Company 20,992 19,540 18,138 16,443 15,316 15,830 (7.8%) (1.9%) 1,824 2,107 2,251 2,349 2,553 2, % 7.0% Modine Manufacturing Company 1,376 1,478 1,496 1,353 1,345 1,362 (0.6%) 0.3% % 7.3% Motorcar Parts of America, Inc (3.2%) 13.6% NM 44.1% Standard Motor Products, Inc ,062 1, % 7.7% % 16.5% Tenneco Inc. 7,363 7,964 8,420 8,209 8,540 8, % 4.7% % 7.9% Visteon Corporation 6,857 7,439 7,509 3,245 3,109 3,215 (22.1%) (0.5%) (18.7%) 14.7% Total $56,556 $55,988 $56,639 $49,796 $50,122 $52,069 (2.1%) 4.3% $5,348 $6,002 $6,475 $6,258 $6,978 $7, % 12.8% Advance Auto Parts, Inc. $6,205 $6,494 $9,844 $9,737 $9,502 $9, % (0.4%) $847 $901 $1,244 $1,147 $1,174 $1, % 3.8% AutoZone, Inc. 8,604 9,148 9,475 10,187 10,636 10, % 2.2% 1,841 2,002 2,081 2,223 2,358 2, % 3.0% Genuine Parts Company 13,014 14,078 15,342 15,280 15,345 15, % 1.9% 1,122 1,117 1,273 1,266 1,249 1, % 3.4% LKQ Corporation 4,123 5,063 6,740 7,193 9,058 10, % 18.9% ,056 1, % 19.8% O'Reilly Automotive, Inc. 6,182 6,649 7,216 7,967 8,581 9, % 7.4% 1,154 1,287 1,465 1,743 1,909 2, % 9.8% U.S. Auto Parts Network, Inc (1.4%) 4.5% (8.5%) 61.3% Uni-Select Inc. 1,821 1,788 1,784 1,355 1,206 1,251 (9.4%) (3.9%) % 10.5% Total $40,253 $43,474 $50,685 $52,010 $54,630 $57, % 4.3% $5,554 $6,031 $6,961 $7,331 $7,868 $8, % 15.9% Dealerships and Service Providers Asbury Automotive Group, Inc. $4,640 $5,335 $5,868 $6,588 $6,468 $6, % 0.2% $209 $270 $313 $331 $320 $ % 0.1% AutoNation, Inc. 15,669 17,518 19,109 20,862 21,721 22, % 3.9% ,009 1, % 2.7% Boyd Group Income Fund ,026 1, % 14.4% % 17.6% CarMax, Inc. 10,963 12,574 14,269 15,150 15,843 17, % 6.3% ,232 1, % 27.7% Copart, Inc ,046 1,163 1,146 1,268 1, % 5.2% % 7.5% Group 1 Automotive, Inc. 7,476 8,919 9,938 10,633 10,913 11, % 2.1% % (3.2%) KAR Auction Services, Inc. 1,963 2,173 2,365 2,640 3,075 3, % 12.1% % 13.6% Lithia Motors, Inc. Class A 3,316 4,006 5,390 7,864 8,602 9, % 10.0% % 6.5% Monro Muffler Brake, Inc ,035 1, % 9.5% % 9.5% Penske Automotive Group, Inc. 13,164 14,705 17,177 19,285 20,189 20, % 2.7% % 6.0% Sonic Automotive, Inc. Class A 8,365 8,843 9,197 9,624 9,672 9, % 1.6% % (0.9%) Total $67,648 $76,512 $86,134 $95,653 $99,813 $104, % 6.2% $3,553 $4,019 $4,617 $5,142 $5,767 $6, % 7.9% PAGE 9

11 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2017P '12-15 '15-17P P 2017P '12-15 '15-17P Automotive Aftermarket Bayerische Motoren Werke AG $98,709 $100,976 $106,648 $102,215 $100,391 $102, % 0.3% $20,286 $19,443 $21,734 $19,303 $15,562 $15,688 (1.6%) (9.8%) Daimler AG 146, , , , , , % 0.1% 19,691 21,079 24,558 25,604 19,644 21, % (9.3%) Ford Motor Company 134, , , , , , % (2.4%) 12,958 13,183 11,324 15,557 12,193 11, % (15.2%) General Motors Company 152, , , , , , % 3.1% 10,670 12,708 8,853 15,518 17,440 15, % 1.2% Harley-Davidson, Inc. 5,581 5,900 6,229 5,995 5,318 5, % (4.8%) 1,183 1,324 1,452 1,330 1,270 1, % 0.4% Navistar International Corporation 12,948 10,775 10,806 10,140 8,229 8,175 (7.8%) (10.2%) (374) (192) NM 3.1% Oshkosh Corp 8,181 7,665 6,808 6,098 6,279 6,279 (9.3%) 1.5% % (0.3%) PACCAR Inc 17,051 17,124 18,997 19,115 15,885 15, % (10.8%) 2,458 2,648 2,899 3,198 2,062 1, % (22.4%) Toyota Motor Corp. 266, , , , , ,825 (3.9%) 1.5% 30,332 35,160 38,164 36,457 26,058 28, % (11.8%) Volkswagen AG Pref 247, , , , , ,498 (1.5%) (1.3%) 29,739 30,822 33,686 24,722 30,857 32,524 (6.0%) 14.7% Total $1,089,420 $1,119,448 $1,138,291 $1,084,281 $1,065,952 $1,082,852 (0.7%) (2.3%) $127,443 $136,819 $143,587 $142,779 $126,158 $129, % (4.9%) PAGE 10

12 TRANSPORTATION & LOGISTICS SOURCES 1. FactSet. 2. MergerMarket. 3. Pitchbook. DISCLOSURES Harris Williams & Co. ( and is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan, authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. The information and views contained in this report were prepared by Harris Williams & Co. ( Harris Williams ). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 2016 Harris Williams & Co., all rights reserved. PAGE 11