TRANSPORTATION & LOGISTICS

Transcription

1 Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number ). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

2 WHAT WE RE READING UNEXPECTED CAR REPAIR COSTS CAN ADD TO OWNERS' DEBT Cars are not only expensive to purchase, they're expensive to own. AAA estimates that the total annual cost of owning and operating a car is more than $8,500. While most owners have a monthly budget for car payments, insurance premiums, and fuel, many drivers may underestimate the importance of putting aside funds for the inevitable vehicle repair unless they don t have the financial means to do so. According to a new AAA survey, 64 million American car owners would have to borrow money to pay for a repair, the cost of which averages between $500 and $600. And that amount can soar if regular maintenance and services are not heeded. Consumer Reports WHILE NEW CAR MARKET PLATEAUS, PARTS AND UPGRADES ARE HOT While the auto market has hit a healthy high-level plateau, a report by Delawarebased Global Market Insights Inc. says automotive aftermarket business is projected to hit $680 billion annually worldwide by In addition to a growing demand for parts reflecting the surge in car ownership in the emerging markets, the report says the dramatic doubling of current volume also reflects a shifting consumer preference towards vehicle comfort, enhancing efficiency and customization for aesthetically pleasant vehicles. CBS Philly FEAR OF AMAZON'S AUTO-PARTS EFFORTS OVERBLOWN While Amazon has been a category-changing competitor in many segments, customer demand for near-instantaneous availability and a high level of service is difficult for digital participants to meet, and we have long held that auto parts are more insulated from digital disruption than most of retail. Though do-it-yourself customers might be more easily enticed by Amazon s price-based appeal, we believe DIY and professional clients require speed and services from their retailers, making an industrywide repricing based on digital-only sellers activities unlikely. Morningstar FORD PUTTING 3D PRINTING TO THE TEST It may not be much longer until 3D-printed car parts are on the streets. Ford is testing 3D printing large-scale single-piece auto parts, such as spoilers. The company announced they are making the move for prototyping and future production vehicles. Ford is using a printer from Stratysys, a 3D printer manufacturer, capable of printing just about any shape and size. If successful, a breakthrough could be in the works. 3D printed parts would provide a more efficient, affordable way to create tooling, prototype parts and components for low-volume vehicles such as Ford Performance products, as well as personalized car parts, Ford said in a press release. AutoServiceWorld MILLENNIALS PRESENT TECH, SOCIAL MEDIA CHALLENGES FOR BUSINESSES 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) Tire dealerships and auto repair shops that are reluctant to adopt the latest technology and social media soon will be forced into it by their growing population of Millennial customers and employees. The Millennial generation, considered to be those ages 19-35, now outnumber Baby Boomers (ages 52-70) and Generation X ( ages 36-51) in the workplace. They also are a growing force in the consumer population, according to Ryan Jenkins, a researcher, columnist and blogger who specializes in helping businesses hire and market to Millennials. He said there are three keys to marketing to the younger generation: Know and understand the needs and demands of the Millennial generation; provide proof of the quality of the product or service; and engage in swift communication across digital platforms. Tire Business PAGE 1

3 M&A TRANSACTIONS 1,2,3 RECENT M&A TRANSACTIONS Date Target Business Description Acquirer 4/6/2017* Rosen Electronics LP Manufacturer of automotive audio equipment VOXX International Corp. 4/4/2017* Truck Hero, Inc. Designs, manufactures, and markets consumer accessories for pickup trucks 4/3/2017 Towmaster, Inc. Manufacturer, distributor, and installer of snow and ice-related equipment 4/1/2017 Empire Wire & Supply LLC Provider of custom cable assemblies and a distributor of network, electrical, automation, and safety products CCMP Capital LLC Monroe Truck Equipment, Inc. Genuine Parts Co. 3/30/2017 AP Exhaust Technologies, Inc. Manufacturer of high-precision injection molded plastic components Harvest Partners, LLC 3/20/2017 Medallion Plastics, Inc Engineer and manufacturer of custom thermoformed products and components Patrick Industries, Inc. 3/7/2017 Zahnradwerk Pritzwalk GmbH Manufacturer of cylindrical spur gears, shafts, and couplings Andreas & Peiffer Gruppe 3/1/2017 RoadWorks Manufacturing Manufacturer and distributor of aftermarket accessories to the heavy truck market 2/28/2017 Hi-Tech Industries, Inc. Manufactures and distributes car care products accessories and aerosols Lund International Highlander Partners LP 2/21/2017* AGM Automotive LLC Supplier of automotive interior trim, lighting, and electrical components Flex Ltd. 2/14/2017 Performance Motorsports, Inc. Manufacturer of pistons and other engine related components Kinderhook Industries LLC 2/7/2017 GenTek, Inc. Designs and develops performance critical valve train components for gas and diesel engines Gentek, Inc. /Private Group/ 1/16/2017 APP-Tech SRL Produces forged monoblock and modular wheels Von Graffenried Holding AG 1/9/2017 J&N Auto Electric, Inc. Distributes aftermarket replacement rotating electrical parts and accessories Arrowhead Engineered Products, Inc. 1/6/2017 Aichi Tire Industry Co. Ltd. Manufactures and sells tires and other industrial rubber products The Yokohama Rubber Co. Ltd. 1/2/2017 Grupo Estampaciones Sabadell SL Manufactures metal components for the automotive industry Acek Desarrollo y Gestión Industrial SL 12/29/2016 American Driveline Systems, Inc. Offers automotive aftermarket franchising services through its subsidiaries Transom Capital Group LLC 12/27/2016 Adco Products, Inc. (California) Produces custom automotive accessory services Covercraft Industries, Inc. *Denotes pending transactions PAGE 2

4 PUBLIC MARKETS OVERVIEW 1 TEV / LTM EBITDA TEV / 2017P EBITDA 12.3x 11.1x Dealerships and Services Providers 11.1x Dealerships and Services Providers 10.5x 7.9x 9.3x 6.5x 6.4x AVERAGE REVENUE GROWTH ( ) AVERAGE REVENUE GROWTH ( P) Dealerships and Services Providers 11.2% 6.7% 6.2% Dealerships and Services Providers 6.0% 0.1% 5.1% (1.3%) 0.6% AVERAGE EBITDA GROWTH ( ) AVERAGE EBITDA GROWTH ( P) Dealerships and Services Providers 11.8% 13.2% 11.1% Dealerships and Services Providers 10.1% 3.1% 9.6% 1.7% (0.4%) PAGE 3

5 STOCK PRICE PERFORMANCE 1 MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) Distributors and Retailers 3.5% Distributors and Retailers 21.3% S&P % S&P 500 (2.1%) (1.3%) (19.7%) Vehicle Manufacturers (4.4%) Vehicle Manufacturers (27.3%) Dealerships and Service Providers (6.5%) Dealerships and Service Providers (31.2%) TRAILING TWELVE MONTHS (Indexed to April 8th, 2016) 30% 20% 10% 0% (10%) (20%) Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Dealerships and Service Providers S&P 500 Index PAGE 4

6 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 is merging with an operating company of has merged with in a recapitalization by and has acquired 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 at 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 One International Place Suite 2620 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: Beijing Hong Kong Mumbai EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) NETWORK OFFICES New Delhi Shanghai PAGE 6

8 PUBLIC COMPARABLES 1 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 Apr-15 Oct-15 Current 2017P 2018P Automotive Aftermarket BorgWarner Inc. $9,730 $34.18 (0.7%) (44.6%) $ % 10.9x 8.3x 6.5x 6.4x 6.1x Cooper Tire & Rubber Company 1, (6.1%) (14.4%) % 5.7x 5.5x 3.3x 4.2x 3.8x Dorman Products, Inc. 1, (1.3%) 4.5% % 11.3x 11.1x 9.1x 8.6x 7.9x Goodyear Tire & Rubber Company 13, (3.9%) 12.1% % 5.6x 5.8x 5.4x 5.3x 4.8x Modine Manufacturing Company % (22.7%) % 6.2x 7.8x 4.1x 3.4x 2.9x Motorcar Parts of America, Inc (1.6%) 31.0% % 14.8x 17.8x 11.6x 7.1x 6.2x Standard Motor Products, Inc % (20.7%) % 9.7x 8.2x 6.7x 6.5x 5.9x Tenneco Inc. 3, (1.7%) (19.7%) % 6.1x 5.6x 4.9x 4.2x 4.0x Visteon Corporation 2, % (25.0%) % 8.3x 5.6x 8.3x 7.4x 6.8x Median (1.3%) (19.7%) 75.8% 8.3x 7.8x 6.5x 6.4x 5.9x Advance Auto Parts, Inc. $12,652 $ % 5.4% $ % 10.0x 11.9x 11.9x 10.6x 9.6x AutoZone, Inc. 28, % 12.7% % 12.6x 12.7x 12.0x 11.6x 11.0x Genuine Parts Company 15, % 4.6% % 11.8x 10.4x 12.4x 11.2x 10.6x LKQ Corporation 12, % 22.5% % 11.7x 12.3x 12.3x 11.1x 10.1x O'Reilly Automotive, Inc. 27, % 23.5% % 15.3x 15.9x 14.5x 13.1x 12.1x U.S. Auto Parts Network, Inc (3.4%) 28.4% % NA NA 12.7x 7.4x 6.7x Uni-Select Inc. 1, % 21.3% % 10.5x 9.9x 9.6x 8.3x 7.8x Median 3.5% 21.3% 96.8% 11.8x 12.1x 12.3x 11.1x 10.1x Dealerships and Service Providers Asbury Automotive Group, Inc. $3,071 $53.93 (7.4%) (36.5%) $ % 11.7x 11.0x 9.2x 9.3x 9.1x AutoNation, Inc. 11, (9.8%) (31.2%) % 11.0x 9.9x 11.8x 11.7x 11.2x Boyd Group Income Fund 1, % 34.1% % 8.9x 10.6x 12.2x 10.5x 9.2x CarMax, Inc. 20, % (31.2%) % NM NM NM 16.2x 15.3x Copart, Inc. 5, % 7.1% % 13.3x 12.1x 11.1x 10.4x 9.4x Group 1 Automotive, Inc. 4, (6.5%) (38.0%) % 11.5x 11.2x 9.6x 10.5x 10.1x KAR Auction Services, Inc. 8, % 1.6% % 13.2x 12.9x 11.2x 9.9x 9.2x Lithia Motors, Inc. Class A 4, (14.8%) (20.7%) % 15.3x 13.1x 10.0x 9.3x 8.6x Monro Muffler Brake, Inc. 2, % 4.2% % 16.5x 16.7x 15.2x 13.4x 11.9x Penske Automotive Group, Inc. 7, (11.8%) (35.7%) % 15.1x 14.2x 11.8x 10.8x 11.0x Sonic Automotive, Inc. Class A 3, (16.0%) (34.1%) % 11.1x 10.6x 9.5x 9.9x 9.8x Median (6.5%) (31.2%) 66.1% 12.4x 11.7x 11.1x 10.5x 9.8x PAGE 7

9 PUBLIC COMPARABLES 1 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 Apr-15 Oct-15 Current 2017P 2018P Automotive Aftermarket Bayerische Motoren Werke AG $150,595 $84.76 (4.2%) (31.7%) $ % 7.9x 7.4x 7.8x 9.7x 9.4x Daimler AG 168, (5.4%) (27.0%) % 6.7x 5.6x 6.4x 8.0x 7.9x Ford Motor Company 151, (5.1%) (21.3%) % 18.4x 14.5x 12.3x 12.2x 11.5x General Motors Company 94, (4.3%) (19.1%) % 7.1x 5.9x 4.6x 5.5x 5.6x Harley-Davidson, Inc. 14, (4.8%) (28.7%) % 12.4x 12.6x 11.7x 11.5x 10.8x Navistar International Corporation 5, % (58.9%) % 13.5x 11.6x 11.5x 10.2x 7.8x Oshkosh Corp 3, % (19.4%) % 8.1x 8.0x 7.3x 7.0x 6.4x PACCAR Inc 23, % (16.7%) % 9.2x 7.7x 8.1x 11.5x 9.8x Toyota Motor Corp. 284, (5.3%) (27.5%) % 9.0x 8.6x 8.3x 8.9x 8.3x Volkswagen AG Pref 198, (4.5%) (55.5%) % 6.7x 5.5x 5.2x 5.9x 5.6x Median (4.4%) (27.3%) 70.3% 8.5x 7.8x 7.9x 9.3x 8.1x PAGE 8

10 PUBLIC COMPARABLES 1 Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2018P '13-16 '16-18P P 2018P '13-16 '16-18P Automotive Aftermarket BorgWarner Inc. $7,435 $8,304 $8,025 $9,071 $9,071 $9, % 2.2% $1,224 $1,385 $1,330 $1,507 $1,507 $1, % 3.2% Cooper Tire & Rubber Company 3,439 3,421 2,959 2,925 2,925 3,317 (5.3%) 6.5% % (7.9%) Dorman Products, Inc % 6.9% % 9.6% Goodyear Tire & Rubber Company 19,540 18,138 16,443 15,158 15,158 17,063 (8.1%) 6.1% 2,107 2,251 2,349 2,520 2,520 2, % 6.4% Modine Manufacturing Company 1,478 1,496 1,353 1,480 1,864 1, % 14.5% (3.1%) 35.0% Motorcar Parts of America, Inc % 12.2% NM 12.3% Standard Motor Products, Inc ,058 1,058 1, % 5.0% % 6.0% Tenneco Inc. 7,964 8,420 8,209 8,599 8,599 9, % 4.1% % 11.2% Visteon Corporation 7,439 7,509 3,245 3,161 3,161 3,312 (24.8%) 2.4% (18.2%) 10.2% Total $49,202 $49,322 $42,377 $42,743 $43,175 $47, % 6.7% $5,433 $5,902 $5,684 $6,229 $6,300 $6, % 9.6% Advance Auto Parts, Inc. $6,494 $9,844 $9,737 $9,568 $9,568 $10, % 2.2% $901 $1,244 $1,147 $1,068 $1,068 $1, % 11.6% AutoZone, Inc. 9,148 9,475 10,187 10,636 10,636 11, % 4.1% 2,002 2,081 2,223 2,358 2,358 2, % 5.2% Genuine Parts Company 14,078 15,342 15,280 15,340 15,340 16, % 3.3% 1,138 1,273 1,266 1,217 1,217 1, % 8.9% LKQ Corporation 5,063 6,740 7,193 8,584 8,584 9, % 7.8% ,007 1,007 1, % 10.1% O'Reilly Automotive, Inc. 6,649 7,216 7,967 8,593 8,593 9, % 6.9% 1,287 1,465 1,743 1,917 1,917 2, % 9.0% U.S. Auto Parts Network, Inc % 4.4% % 37.4% Uni-Select Inc. 1,788 1,784 1,355 1,197 1,197 1,367 (12.5%) 6.9% % 10.1% Total $43,474 $50,685 $52,010 $54,221 $54,221 $59, % 5.1% $6,052 $6,961 $7,331 $7,684 $7,684 $9, % 13.2% Dealerships and Service Providers Asbury Automotive Group, Inc. $5,335 $5,868 $6,588 $6,528 $6,528 $6, % 1.3% $270 $313 $331 $334 $334 $ % 0.5% AutoNation, Inc. 17,518 19,109 20,862 21,609 21,609 23, % 3.3% , % 2.9% Boyd Group Income Fund ,047 1,047 1, % 13.0% % 15.9% CarMax, Inc. 12,574 14,269 15,150 15,875 15,875 17, % 6.3% , % 47.2% Copart, Inc. 1,046 1,163 1,146 1,268 1,268 1, % 10.6% % 12.9% Group 1 Automotive, Inc. 8,919 9,938 10,633 10,888 10,888 11, % 1.1% % (2.5%) KAR Auction Services, Inc. 2,173 2,365 2,640 3,150 3,150 3, % 7.1% % 9.9% Lithia Motors, Inc. Class A 4,006 5,390 7,864 8,678 8,678 10, % 7.4% % 6.7% Monro Muffler Brake, Inc ,036 1,158 1, % 10.3% % 14.0% Penske Automotive Group, Inc. 14,705 17,177 19,285 20,119 20,119 21, % 3.2% % 4.8% Sonic Automotive, Inc. Class A 8,843 9,197 9,624 9,732 9,732 10, % 2.4% % (1.9%) Total $76,512 $86,134 $95,653 $99,929 $100,051 $108, % 6.0% $4,019 $4,617 $5,143 $5,211 $5,236 $6, % 10.1% PAGE 9

11 PUBLIC COMPARABLES 1 Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2018P '13-16 '16-18P P 2018P '13-16 '16-18P Automotive Aftermarket Bayerische Motoren Werke AG $100,976 $106,648 $102,215 $104,163 $104,163 $106, % 1.2% $19,443 $21,734 $19,303 $19,370 $19,370 $16,018 (0.1%) (9.1%) Daimler AG 156, , , , , , % 0.7% 21,575 25,517 25,668 26,177 26,177 21, % (10.1%) Ford Motor Company 146, , , , , , % (3.1%) 13,183 11,324 15,079 12,296 12,296 12,466 (2.3%) 0.7% General Motors Company 155, , , , , , % (0.4%) 13,284 10,160 15,518 20,671 20,671 16, % (10.9%) Harley-Davidson, Inc. 5,900 6,229 5,995 5,996 5,996 5, % (4.2%) 1,324 1,452 1,330 1,240 1,240 1,327 (2.2%) 3.4% Navistar International Corporation 10,775 10,806 10,140 8,111 8,111 8,803 (9.0%) 4.2% (192) NM 20.0% Oshkosh Corp 7,665 6,808 6,098 6,279 6,279 6,845 (6.4%) 4.4% (7.0%) 7.1% PACCAR Inc 17,124 18,997 19,115 17,005 17,005 16,878 (0.2%) (0.4%) 2,436 2,899 3,198 2,939 2,939 2, % (11.8%) Toyota Motor Corp. 256, , , , , ,216 (1.7%) 3.1% 35,160 38,164 36,457 26,363 30,458 32,753 (9.2%) 11.5% Volkswagen AG Pref 261, , , , , ,369 (2.8%) 0.2% 30,822 36,343 26,777 37,788 37,788 34, % (4.4%) Total $1,119,448 $1,138,291 $1,084,281 $1,113,375 $1,124,933 $1,124,681 (1.3%) 0.6% $137,679 $148,510 $144,420 $147,835 $151,931 $138, % (0.4%) PAGE 10

12 SOURCES 1. FactSet. 2. MergerMarket. 3. Pitchbook. DISCLOSURES Harris Williams & Co. ( 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. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number ). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US. 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 2017 Harris Williams & Co., all rights reserved. PAGE 11