-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
1/35
DF_Investor_9-3-09v2
Driving Sustainable,Long-Term Growth
Michael J. MendesPresident and Chief Executive Officer
1
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
2/35
2NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
3/35
Important Information
This material contains forward-looking statements, including
forecasts of growth, long-erm nanc a goa s, expan ng marg ns, n us
ry grow an our s ra eg c p ans, a
involve known and unknown risks and uncertainties that may cause
actual results, levelsof activity, performance or achievements to
differ materially from results expressed orimplied by this
material. Actual results may differ materially from those contained
in theforward-looking statements. Such risk factors include, among
others: safety and qualityissues could harm our sales; fluctuations
in raw material prices and availability couldharm our
profitability; competition could affect our results of operations;
inability tointe rate ac uired entities could harm our rofitabilit
loss of one or more ma or
customers could reduce revenue and profits; risk of failure to
expand distribution inexisting channels or secure new distribution
outlets to sell our products, and changes inthe food industry and
customer preferences could reduce demand for our products.
Factors section of our Annual Report on Form 10-K, on file with
the Securities andExchange Commission, as well as factors
identified in our other periodic reports filed withthe Commission
from time to time.
The forward-looking statements in this material are based on our
assumptions,expectations and projections about future events as the
date of this presentation. Wedo not undertake any obligation to
update this information to reflect events or
3NASDAQ: DMND
.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
4/35
Branded, Consumer Packaged Food Company
Snack Culinary
Delivering Value to Retailers and Consumers
4NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
5/35
Back-to-School Cliff Notes
Expanding Retail Business FuelingDouble-Digit Bottom-Line
Growth
Attractive Markets with Room for GrowthSnack / CulinaryFocus
,
Sustainable FinancialGrowth Model
On-Plan, Industry-LeadingEarnings Performance
5NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
6/35
Transformation to Retail
Total Sales
$550 - 565
$ Millions
$463Snack Snack
Culinary49% >80% + >1000 bpsGross Margin
Non-Retail
2005 2009e
Non-Retail
6NASDAQ: DMND
2009 Estimates Based on Guidance Provided on May 27, 2009.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
7/35
Growth Story
Sales Operating Margin EPS
$463
$550 - 565
.$1.31 - $1.36
2.8% 3.0%
.
0.47$0.53
0.91
N.A. N.A.
'05 '09e '05 '06 '07 '08 '09e '05 '06 '07 '08 '09e
7NASDAQ: DMND
2009 Estimates Based on Guidance Provided on May 27, 2009.Note:
See Appendix for Non-GAAP Reconciliation
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
8/35
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
9/35
Expanding Retail Presence
Multiple Points of Contact with Shoppers
Cereal Aisle
Baking Aisle
Snack Aisle
ProduceDepartment
Checkout
9NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
10/35
Large Addressable Markets
$0.9B$0.9B
$6.2B U.S. Snack and Culinary Markets
Microwave Po corn
$43B+otal
$43B+otal
Snack Nuts $2.9B$2.9B
Produce Snacks,Seeds, Trail Mix
$1.5B$1.5B
Culinary Nuts $0.9B$0.9B
10NASDAQ: DMND
Sources: Euromonitor, IRI, AC Neilsen and Company Estimates
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
11/35
Snack: Bringing Excitement to the Category
Snack Net Sales GrowthSnack Net Sales GrowthInnovative Products
for
-
$ Millions
,
$89
$7
2004 2008 2009eSnack Nutsrail Mixes
Produce SnacksPo corn
11NASDAQ: DMND
2009 Estimates Based on Guidance Provided on May 27, 2009.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
12/35
Culinary: History of Quality and Commitment
Market Share LeaderEstablished 1912
$ Share
5x Larger Than
30%
2%
6%
Culinary and Baking NutsIn-Shell Nuts
Diamond Planters Fisher
12NASDAQ: DMND
Source: AC Nielsen 08/09
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
13/35
We Build Brands
Advertising Sponsorships
e a
RetailContent
13NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
14/35
14NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
15/35
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
16/35
Scalable Platform for Growth
Growing Retail Opportunities
Efficient Warehouse Delivery SystemEstablished Customer
Service
Ability to Add Scale Incrementally
16NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
17/35
oy . o nsonExecutive Vice President
Chief Sales Officer
17NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
18/35
Building Retail Strength
Keys toSuccess
18NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
19/35
Core Product Distribution: Emerald
CoreCore
Dry Roasted Almonds
DeluxeMixed Nuts
Smoked Almonds
WholeCashews
Cocoa Roast Almonds
Sea Salt andPepper Cashews
Dry Roasted Dry Roasted Berr Blend Breakfast Blend Glazed
GlazedPeanuts Peanuts L.S. Trail Mix Trail Mix Walnuts Pecans
ExpandedExpanded100 Calorie
Natural Almonds
100 CalorieDry Roasted
Almonds Apple Cinnamon
Walnuts n AlmondsButter Toffee
WalnutsTropical Blend
Trail Mix
19NASDAQ: DMND
SmoresTrail Mix
Chocolate CherryTrail Mix
RegularMixed Nuts
Cashew Halvesand Pieces
Honey RoastedPeanuts
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
20/35
Leading Segment Growth
CoreCore
Dry Roasted Almonds
DeluxeMixed Nuts
Smoked Almonds
WholeCashews
Cocoa Roast Almonds
Sea Salt andPepper Cashews
Dry Roasted Dry Roasted Berr Blend Breakfast Blend Glazed
GlazedPeanuts Peanuts L.S. Trail Mix Trail Mix Walnuts Pecans
ExpandedExpanded
Dry Roasted Almonds
DeluxeMixed Nuts
WholeCashews
100 CalorieNatural
Almonds
100 CalorieDry Roasted
Almonds Apple Cinnamon
Walnuts n AlmondsButter Toffee
WalnutsTropical Blend
Trail Mix
100 Calorie Almonds Glazed Pecans
20NASDAQ: DMND
SmoresTrail Mix
Chocolate CherryTrail Mix
RegularMixed Nuts
Cashew Halvesand Pieces
Honey RoastedPeanuts
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
21/35
Emerald: Accelerated Growth and Share
$3.0
9
10
$ Millions
$ Change vs. Year Ago
1.5
$2.0
2.5
6
7
8
$ Changevs. $ Share
are
$0.5
$1.0
3
4
5 Year Ago
($0.5)
$0.0
27-Dec 24-Jan 21-Feb 21-Mar 18-Apr 16-May 13-Jun 11-Jul0
1
2
Week Ending
21NASDAQ: DMND
Source: Nielsen 7 4-Week Periods Ending 7/11/09. Total US Over
$2 Million Snack Shelled.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
22/35
Core Product Distribution: Pop Secret
HomestyleHomestyle 100 Calorie100 CalorieSnack Snack
6 ct. 3 ct.10 ct.Butter 10 ct. Homestyle 10 ct.
Movie TheaterMovie TheaterButterButter
94% Fat Free94% Fat Free
10 ct. Snack 6 ct. 3 ct.6 ct.3 ct.
Extra ButterExtra Butter Jumbo PopJumbo Pop
Movie Theater3 ct.6 ct. 3 ct.10 ct. Butter 6 ct.
ButterButter FlavorsFlavors
22NASDAQ: DMND
Kettle Corn3 ct.
Cheddar3 ct.
Light Butter3 ct.6 ct. 3 ct.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
23/35
Core Product Distribution: Diamond Culinary
Peg Bag
WalnutsWalnutse e oppe . e e oz. oppe oz. e e
ecansecansHalves Chopped 1 lb. Halves 8 oz. Chopped 6 oz.
Halves
Almonds Almondsverece o e oz. ce oz. vere oz. o e . o e
23NASDAQ: DMND
ererPine Nuts Macadamia Hazelnut Nut Topping
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
24/35
Optimal Shelf Location
Pop Secret
Emerald
DiamondCulinary
24NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
25/35
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
26/35
Driving Category Growth
12 Week Dollar Sales Change
Microwave PopcornSnack Nuts
+56%
Culinary Nuts
+5% +5%+7%
Pop Orville Category-2%
+6%
Emerald Category
0% +2%
Diamond CategoryecretPlanters
-49%Planters
26NASDAQ: DMND
* Ending 8/8/09. Total U.S. Grocery Over $2M.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
27/35
eve . eExecutive Vice President
Chief Financial & Administrative Officer
27NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
28/35
Dramatic Retail Sales Growth
$ Millions$452
- -
$275 $278$300
$323 $333 $345 $346 $355
$370$399
$427
$153$189
$229 $247
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q32005 2006
2007 2008 2009
28NASDAQ: DMND
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
29/35
Attractive Cash Flow Profile
Cash Generation Is Highly Accretive to Earnings
Adjusted EBITDA Net Debt
ons $60-62 ons
$201
$23$29 $124$133
$90-95
%Sales 5%5% 6%6% 7%7% 8-9%8-9%
Q4 Q1 Q2 Q3 Q4e
($55)
06 07 08 09e
29NASDAQ: DMND
20092008
2009 Estimates Based on Guidance Provided on May 27, 2009.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
30/35
Generating Shareholder Value
EVA Valuation
13.7% are r ce
$30 0.9
. .
$50 1.4
$60 1.7
WACC ROIC Industry Average 1.6WACC Includes 2.7% Small Company
Size Premium
30NASDAQ: DMND
First Call Consensus: FY09: $1.38; FY10: $1.73
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
31/35
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
32/35
Ahead of Initial Long-Term Targets
FY 2006 FY 2009e
$ Millions,Except per Share and % LT TargetsLT Targets Actual
Actual GuidanceGuidance
Top Line +8 - 10% per Year $477 $550 - 565
-
Gross Margin 20% 14.3% > 22%
Operating Margin 10% 2.8% > 7%
EPS > +15% per Year $0.46 $1.31 - 1.36
32NASDAQ: DMND
2009 Estimates Based on Guidance Provided on May 27, 2009.
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
33/35
A Transformational Company
HighHigh--Growth BrandedGrowth Branded
GrowerGrower--OwnedOwnedWalnut CooperativeWalnut Cooperative
IPO
33NASDAQ: DMND
1912 2005
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
34/35
Driving Sustainable,
Long-Term Growthppen x
34
-
8/14/2019 Sept 2009 Diamond Foods DMND Presentation
35/35
Non-GAAP Reconciliation
2009e 2008 2007 2006 2005GAAP Net Sales $531,492 $522,585
$477,205 $428,297
,
Non-GAAP Net Sales $531,492 $522,585 $477,205 $462,548
GAAP Cost of Sales $443,490 $443,945 $411,809 $191,387
and NRV Accounting to Cost Basis Accounting and to
RecordEstimated Walnut Cost of Goods Sold
$222,363
Non-GAAP Cost of Sales $443,490 $443,945 $409,039 $413,750
GAAP Operating Expense $64,121 $66,025 $58,465 $55,341
Adjustment To Remove Restructuring and Other Costs andLoss on
Termination of Defined Benefit Plan ($3,039) ($3,442)
Non-GAAP Operating Expense $64,121 $62,986 $55,023 $55,341
GAAP Interest and Other Non-Operating Expense $1,040 $1,389 $605
$7,158
Debt Prepayment Penalty Less Sale of Emission ResourceCredits
($898)
Non-GAAP Interest and Other Non-Operating Expense $1,040 $1,389
$605 $7,158
GAAP Income Tax Expense $8,085 $2,793 ($1,010) ($8,385)
Net Income Tax Adjustments $366 $2,625 $6,276 $3,775
Non-GAAP Income Tax Expense $8,085 $5,418 $5,266 ($4,610)
GAAP Net Income $21,400 - $22,200 $14,756 $8,433 $7,336
$182,796
35NASDAQ: DMND
Non-GAAP Net Income $21,900 - $22,700 $14,756 $8,847 $7,272
($6,366)
GAAP EPS $1.28 - $1.33 $0.91 $0.53 $0.47 nm
Non-GAAP EPS $1.31 - $1.36 $0.91 $0.56 $0.46 ($0.41)
