AM Castle & — Investor Presentation (November 2011)
28 slides from AM Castle &'s investor presentation, November 2011
Slide 1: A. M. Castle & Co. Positioned for Growth
A. M. Castle & Co. ® POSITIONED FOR Growth NYSE: CAS •••• •••• November 2011
Slide 2: Forward Looking Statements
Forward Looking Statements Information provided and statements contained in this presentation that are not purely historical are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 forward-looking 1933, as amended (“Securities Act”), Section 21E of the Securiti
Slide 3: Regulation G & Other Cautionary Notes
Regulation G & Other Cautionary Notes This presentation includes non-GAAP financial measures to assist the reader in understanding our business. The non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in acco
Slide 4: Overview
Overview • 120 year history in the metal service center industry • One of the largest metal service center companies in the U.S., $944 million 2010 revenue • Supplying over 5,000 products to 25,000 customers • Foremost global distributor of specialty grade, high performance metals • Diversified Plas
Slide 5: Key End Markets
Key End Markets Markets Served 2010 Revenue Breakdown Other Machine Tools & 15% General Equip 15% Heavy Equipment Plastics 10% 11% Power Generation Military & 5% Defense 4% Oilil & Gas 10% Aerospace 30% Global Demand Recovery Driving Growth in Key End Markets 5.
Slide 6: Product Portfolio
Product Portfolio Products Provided 2010 Revenue Breakdown Aluminum 24% Stainless & Nickel 23% Alloy 21% Other 3% Titanium 3% Plastics 11% Carbon 15% Diversified Product Offering with Focus on Specialty Materials 6.
Slide 7: Service Solutions
Service Solutions Serving Vital Link in Global Metal Supply Chain Sub Sub A. M. Global Mills OEMs Castle Sub Sub Sub Global Sub A. M. Castle is a Vital Link in the Metal Supply Chain • Purchase metal at mill minimum order quantities • Leverage diverse mill relationships to achieve procurement advant
Slide 8: Recent Transformation
Recent Transformation • Focused on g global,, growing g g markets: Oil and Gas,, Aerospace, p , Mining g and Heavy y Diversified Equipment End- Markets • Expanding our presence in Mexico Mexico, Shanghai Shanghai, Singapore and the UK with facility facility, Expanded equipment and inventory investme
Slide 9: Well-Positioned to Capture Growth Opportunities
Well-Positioned to Capture G Growth Opportunities O $400 70 $350 65 $300 60 $250 55 $200 $ 50 $150 45 $100 40 $50 35 $ $‐ 30 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11 3Q'11 Revenue $252 $195 $184 $181 $223 $240 $245 $236 $273 $283 $295 PMI 36 42 51 56 59 58 55 58 61 56 51 • The lat
Slide 10: Go-To-Market Strategy: Pursuing Profitable and High-Growth End-Markets
Go-To-Market Strategy Pursuing Profitable and High-Growth End-Markets Commercial Defense Oil & Gas Heavy Equipment Aerospace Aerospace •Global energy demand & Infrastructure •Ongoing multi-year •Specialty products and drove healthy growth •Funding for capital backlogs at major supply chain solutions
Slide 11: Go-To-Market Strategy: Optimizing Supply Chain Performance
Go-To-Market Strategy Providing Solutions to Optimize Supply Chain Performance • Providing unrivaled industry expertise and forecasting capabilities to create true strategic partnerships with customers • Customer collaborations result in verifiable improvements that impact total cost, delivery, qual
Slide 12: Case Study: F-35 Joint Strike Fighter Program
Go-To-Market Strategy Case Study: F-35 Joint Strike Fighter (JSF) Program • Signed six-year contract extension with Lockheed Martin for the F-35 Joint Strike Fighter (JSF) Program through 2016 • Supplier to the platform since inception • Supplying aluminum plate and cut- to-size aluminum plate produ
Slide 13: Blue Chip Customer Base
Blue Chip Customer Base Serving a Broad Range of Diverse Customers Serving Global OEMs and Thousands of Medium & Smaller-Sized Firms Over 115 Customers With Sales in Excess of $1.0 million in 2010 13.
Slide 14: Financial Overview
® Financial Overview
Slide 15: Positioned For Profitable Growth: Revenue
Positioned For Profitable Growth Revenue $ in millions $1,600 $1,501 $1,200 $944 $813 $850 $800 $708 $400 $0 2008 2009 2010 9 Mos '10 9 Mos '11 • 9 Mos 2011 revenue up 20% over same period last year • Increased activity seen in virtually all targeted end-markets 15.
Slide 16: Positioned For Profitable Growth: Adjusted EBITDA
Positioned For Profitable Growth ADJUSTED EBITDA* $ in millions $120 $100 $95 $80 $60 $40 $ 0 $33 $17 $20 $13 $(14) $0 ‐$20 2008 2009 2010 9 Mos '10 9 Mos '11 * This slide contains Non-GAAP information, specifically 2008 and 2009 exclude non-cash charges of $58.9 million and $1.4 million, respective
Slide 17: Positioned For Profitable Growth: Operating Cash Flows
Positioned For Profitable Growth Annual Operating Cash Flows $ in millions $60 $53 $40 $34 $22 $ $20 $6 $0 ‐$20 ‐$40 $(38))* $( ‐$60 2008 2009 2010 9 Mos '10 9 Mos '11 * Cash used in operating activities is a result of increased investment in working capital to support 20% sales growth YTD September
Slide 18: Balance Sheet Comparison
Balance Sheet Comparison $ in millions 09/30/11* 12/31/10 Accounts Receivable $ 168 $ 128 Inventory 188 131 Other Current Assets 37 52 Total Current Assets $ 393 $ 311 Accounts Payable (112) (72) Other Current Liabilities (76) (44) Working Capital $ 205 $ 195 Total Capital $ 429 $ 382 Debt (104) (69
Slide 19: Solid Working Capital Measurements
Solid Working Capital Measurements Inventory Turns – DSI Receivables – DSO Days Days 200 189 60 54.8 175 49.9 49.2 49.2 50 47.6 143 145 150 130 123 125 40 100 30 75 20 50 10 25 0 0 2008 2009 2010 9 Mos '10 10 9 Mos '11 11 2008 2009 2010 9 Mos '10 10 9 Mos '11 11 • Ahead of schedule in returning DSI
Slide 20: Strong Financial Position
Strong Financial Position Debt to Total Capital Ratios* 30% 25.2% 24.2% 21.9% 20% 18.1% 10% 0% 2008 2009 2010 3Q11 z Total debt increased from $69.1M at year-end 2010 to $103.9M at Q3 2011 z Increase in debt and decrease in cash is a result of increased investment in inventory to support higher sale
Slide 21: Investment Highlights
Investment Highlights • Specialty Product Focus with Value- Added Processing Emphasis • Strong Alignment with Growing End- Markets, Positioned for Profitable Growth • Increased Global Presence and Capabilities • Extensive Supplier Relationships • Increased Customer Penetration Through Collaborative
Slide 22: Appendix
® APPENDIX
Slide 23: Management Team
Management Team Michael H. Goldberg • President and Chief Executive Officer • Prior experience includes Executive Vice President of Integris Metals and Executive Vice President of the North American Metals Distribution Group, a division of Rio Algom Ltd Scott F. Stephens • VP, CFO and Treasurer VP •
Slide 24: Management Team
Management Team Blain Tiffany • To succeed Stephen Hooks as President Castle Metals & Castle Metals Plate, anticipated 1/1/2012 G. Nicholas Jones • President Castle Metals Oil & Gas James C J Callan ll • President Castle Metals Aerospace Thomas Garrett • President Total Plastics Inc. p James Phillip
Slide 25: Suppliers
Suppliers Stable supply base values A. M. Castle as a key customer and provides id access tto specialty i lt metals t l Product Category Supplier Aluminum Kaiser Aluminum and Alcoa Alloy Timken and Republic Nickel & Stainless Allegheny and Special Metals Carbon ArcelorMittal, Ipsco & Gerdau Titanium
Slide 26: Blue Chip Platform Support
Blue Chip Platform Support F35 Airbus A380 Stryker Gulfstream V JSF Metal Type End Market Key Platforms Supported • H-T H T Aluminum Al i Pl Plate t • Large L C Commercial i l • Airbus Ai b A318 A318, A319 A319, A320 A320, A321 A321, A330 A330, A380 • Titanium Aircraft • Boeing 737, 747, 777, 787 •
Slide 27: Aerospace Structural Material Usage
Aerospace Structural Material Usage Heat-treated aluminum is the dominant structural material in aircraft fabrication Composite usage will increase in certain applications but will not displace Castle Metals Aerospace business A.M. Castle Products − Minimal Composite Substitutions A.M. Castle Produc
Slide 28: SEC Regulation G Non-GAAP Reconciliation
SEC Regulation G Non-GAAP Reconciliation The financial measures presented below are not in accordance with, or an alternative for,, financial measures presented p in accordance with U.S. g generally y accepted accounting principles (GAAP). The non-GAAP financial information presented herein should b
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