20 th Annual Needham Growth Conference. January 17, 2018

Transcription

1 20 th Annual Needham Growth Conference January 17,

2 Safe Harbor Statements made during this presentation that are forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of Such risks, uncertainties and contingencies include, but are not limited to, the following: Dependence upon the sale of products to a small number of vertical markets, many of which are dependent on government funding or government subsidies which may or may not continue in the future; Uncertainties related to the global geopolitical landscape and the recent elections in the United States; Risks related to acquisitions and potential for unsuccessful integration of acquired businesses; Risk that our restructuring efforts may not be successful and that we may not be able to realize the anticipated cost savings and other benefits; Our ability to obtain sufficient capital to meet our operating or other needs; Our ability to manage our liabilities; Our ability to service our debt; Risks related to the triggering of the conditional conversion feature in our senior notes; Downward pressures on product pricing from increased competition and potential shifts in sales mix with respect to low margin and high margin business; Our ability to manage and minimize the impact of unfavorable legal proceedings; Risk that activist stockholders attempt to effect changes to our company which could adversely affect our corporate governance; Dependence upon the sale of products into Asia and Europe, where macroeconomic factors outside our control may adversely affect our sales; Risks related to our international operations including, but not limited to, our ability to adequately comply with the changing rules and regulations in countries where our business is conducted, our ability to oversee and control our foreign subsidiaries and their operations, our ability to effectively manage foreign currency exchange rate fluctuations arising from our international operations, and our ability to continue to comply with the U.S. Foreign Corrupt Practices Act as well as the anti-bribery laws of foreign jurisdictions; Our ability to remain competitive and stimulate customer demand through successful introduction of new products, and to educate our prospective customers on the products we offer; Successful acquisition, development and retention of key personnel; Our ability to effectively manage our reliance upon certain suppliers of key component parts, specialty equipment and logistical services; Our ability to manage product quality problems; Our ability to protect our intellectual property rights and to defend claims against us; Our ability to effectively identify, enter into, manage and benefit from strategic alliances; Occurrence of a catastrophic event at any of our facilities; Occurrence of a technology systems failure, network disruption, or breach in data security; and Our ability to match production volume to actual customer demand. For further information regarding risks and uncertainties associated with Maxwell's business, please refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of our SEC filings, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. The Company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the Company s expectations. 2

3 Maxwell Technologies At a Glance Business Highlights Overview Founded 1965; IPO 1983 (NASDAQ: MXWL) Energy storage & power delivery solutions Headquarters: San Diego, CA Locations: U.S.A., Switzerland, China, South Korea Employees: 456 Financial Highlights Month Revenue: $100M Month Adjusted EBITDA: ($7.8M) Q Cash Balance: $53M Geographic Revenue Breakdown Products & Markets High Voltage Energy Storage Dry Battery Electrode Germ. 15% USA 10% $100M China 39% Rest of World 36% Circuit Breakers Metering Converters Automotive Grid Rail Industrial Lithium-Ion Battery *Revenue from external customers in ROW does not individually comprise of more than 10% of total *See Appendix for GAAP to non-gaap reconciliation of EBITDA 3

4 3 Megatrends Creating Unique Growth Opportunity Automotive & Grid Disruptions Disruption Zone Renewable Power Generation in the Grid 3 2 Electrification of Combustion Engine Vehicles 1 Revolution of Battery Electric Vehicles Disruptions to drive Significant Automotive and Grid Energy Storage Market Growth 44

5 Maxwell Transformation & Growth Strategy Automotive & Grid Disruptions Disruption Zone 1 Revitalized Core Strengthened Management Team Reignited Innovation Engine Organizational Restructuring 2 Optimized Portfolio Business Transformation Sustainable Growth Divested Microelectronics Acquired Nesscap Solidified Balance Sheet 3 Establishing Strategic Partnerships Energy Storage System Solutions Lithium Capacitor Expanding into Lithium-Ion Batteries Leveraging Business Transformation & Megatrends to Deliver Profitable Growth & Value 55

6 Large & Growing Target Markets High Voltage Maintain Leadership Energy Storage Market Consolidation & Scale Dry Battery Electrode Leverage Technology & Partnerships $150M (2022 SAM) $1.35B (2022 SAM) $ Multi-Billion (2022 SAM) Foundational Cash Flow Sustainable Growth Significant Long-Term Growth Opportunity Source: Maxwell Market Research, Navigant Research, Customer Feedback, CNEAI production data Target Markets Growing at 20% CAGR Reaching $1.5B by 2022 Dry Battery Electrode represents Significant Growth Opportunity to Create Unprecedented Value 66

7 High Voltage: Maintaining Leadership to Deliver Foundational Cash Refresh the Core Portfolio Maintain Market Leadership Expand the Portfolio Intersect Digitization Paradigm Shift $100M (2022 SAM) $150M (2022 SAM) Secure Foundational Cash Flow Grow Revenue & Cash Flow Source: Maxwell Market Research, MarketsandMarkets Research, Customer Feedback Factory Expansion to Grow Foundational Cash Flow Critical to Sustain Investment Engine 77

8 Energy Storage: Gaining Momentum in Target Markets Automotive Rail E-Active Suspension Ramp LCAP Production Ramp Start Stop, eactive Suspension Autonomous Driving Significant Mid-Term Autonomous Driving Opportunities Onboard Rail Wayside Rail Mid-Term Opportunities Expanding Wind Grid Energy Storage Stable Base First Large Scale Project Electric Pitch Control Battery Retrofit System Industry Leading Portfolio Grid Stabilization Microgrids Near Term Microgrid Electrification in Automotive, Grid and Rail will drive Sustainable Long-Term Growth 88

9 Design Wins Accelerating with Market Leaders High Voltage New products, initiatives & design win traction enabling growth path Energy Storage Cumulative design wins in target markets tripling over last three years Design in momentum building as 3 global megatrends gain traction Cumulative Design Wins 3x Design Wins Key Design Wins 14 confirmed design wins at various stages of progress and in several different applications including eactive Suspension & Backup Power for Autonomous Driving First Utility-scale power stabilization Grid Energy Storage project confirmed with global leading OEM set for deployment in Further deployments expected in 2019 & 2020 Well Positioned to capitalize on Market Leadership to drive Long-Term Profitable Growth 99

10 20 M+ Revolution of Battery Electric Vehicles: Megatrend Driving Global Transformation of Automotive & Battery Industries Battery Electric Vehicles 15 M GWh Battery Capacity Disruption Zone 15M 30M Electric Vehicles Forecasted by 2030 Forecast represents 12x grow from % CAGR 10 M 1350 GWh 1350 GWh Lithium-Ion Capacity by 2030 Equivalent to more than 25 new giga factories 5 M 2.5 M Lithium-Ion Battery Energy Density Must Double Required for EV Range Extension & Cost Reduction 27GWh Sources: Forecast range derived from Maxwell Market Research, Navigant Research and 3 rd party Automotive OEM forecasts Patented Breakthrough Dry Battery Electrode Technology to Disrupt & Capitalize on Coming Megatrend 10 10

11 Dry Battery Electrode: Transformational Battery Technology Enabling Electric Vehicle Megatrend Disruption Zone 500 Wh/kg 1 Strategic Partnerships for Commercialization Pilot Scale Demonstration of Technology Validates Benefits & Scalability 435 Wh/kg 2 Proof of concept complete (300 Wh/kg; 10%+ advantage vs. Wet) Saves $200-$1000 Per Electric Vehicle Path to >350 Wh/kg at <$100 cost per kwh by early 2020s P.O.C. Complete >300 Wh/kg Wh/kg Wet Electrode Challenges 2 Increasing Investments for Breakthrough Innovation Advancing Technology to Enable >500Wh/kg & Solid State Eliminating First Cycle Loss via Advanced Technologies Extending Differentiation to Enable >500 Wh/kg Extending Technology to Unlock True Benefits of Solid State Dry Electrodes Wet Electrodes Unlocking Significant Value for Customers, Partners & Shareholders 11 11

12 Maxwell Technologies Inc. (NASDAQ: MXWL) Large Growing Markets Strongest Portfolio Ever Solid Balance Sheet Strategic Partners Global Leader with Transformational Opportunities Coming Inflection Points for Maxwell Products Capitalized to Unlock Value of Technology Platform Partnering with Global Leaders to Intersect Megatrends Leveraging Business Transformation & Megatrends to Deliver Growth & Shareholder Value 12 12

13 Thank You 13

14 Disclaimers Non-GAAP Financial Information Management also uses certain non-gaap financial measures in this presentation which constitute non-gaap financial measures as defined by the Securities and Exchange Commission. Management uses these non-gaap financial measures to enable it to further and more consistently analyze the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-gaap measures gives them additional information to enable them to assess, in the same way management assesses, the Company s current and future continuing operations. These non-gaap measures are not in accordance with, or an alternative for, GAAP, and may be different from non-gaap measures used by other companies. These non-gaap measures are in addition to, and not a substitute for or superior to, measures prepared in accordance with GAAP. Reconciliations of the non-gaap financial measures to the comparable GAAP financial measures are included on Appendix A of this presentation. 14

15 Appendix A: GAAP to non-gaap Reconciliation USD in millions Months Adjusted EBITDA Reconciliation: GAAP net income (loss) ($34) Interest expense, net $0 Income tax provision $3 Depreciation $7 Amortization $1 EBITDA ($24) Foreign currency exchange loss, net $0 Other income ($0) Stock-based compensation expense $7 Restructuring and related costs $2 Acquisition related expense $2 Shareholder proxy advisement fees $1 Strategic equity transaction costs $1 Legal costs for SEC and FCPA matters $3 Adjusted EBITDA ($8) 15