Slide 1: Forward-Looking Statements
Forward-Looking Statements These slides contain (and the accompanying oral discussion contains) "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that could cause
Slide 2: Annual Meeting of Shareholders May 6, 2009
1 Brush Engineered Materials Inc. Annual Meeting of Shareholders May 6, 2009
Slide 3: Strength in challenging times
2 Strength in challenging times Unwavering focus on safety Passion for serving the customer New product development
Slide 4: Strategy: in retrospect
3 Strategy: in retrospect Growth - organic and through acquisition Broaden technology and market breadth Maintain strong balance sheet and credit lines
Slide 5: Navigating the global economic turbulence
4 Navigating the global economic turbulence Downturn tests and validates strategy Significant cost reduction measures Mitigated by strong balance sheet and credit flexibility Remain focused on growth
Slide 6: Media update
5 Media update Negative impact on 2008 results Requalified at several customers Target shipments resumed in early 2009 Volumes low due to weak economic conditions
Slide 7: EcoRu
6 EcoRu(tm) Unique physical vapor deposition offering Cost-efficient ruthenium solution for customers Eliminates need for recycling and refining Benefits customer inventories and the environment
Slide 8: Brush Engineered Materials
BRUSH ENGINEERED MATERIALS
Slide 9: As 2008 began, positive factors had come together
8 As 2008 began ... a number of positive factors had come together Growth (Sales in millions) Balance Sheet Quality (Total debt in millions) - - New product introduction - - International expansion - - Manufacturing excellence - - Acquisitions
Slide 10: Earnings at record levels
9 Earnings at record levels Reported Results (EPS) Operating Run Rate (EPS) Reported GAAP Results Non-GAAP ... Excludes gains not expected to recur
Slide 11: Significant global decline in business levels
10 Following an encouraging beginning of the year .... a significant global decline in business levels was noticeable Quarterly Revenue (Dollars in millions) - -------------Growth------------ - -----Global downturn-----
Slide 12: The company entered the downturn stronger
11 The company entered the downturn stronger Balance sheet stronger Markets more diverse Scale larger Growth opportunities greater
Slide 13: Turbulent conditions of late 2008 put pressure
12 The turbulent conditions of late 2008 put pressure on Most of our markets Our customers Our company
Slide 14: Sales and earnings growth did not meet expectations
13 Sales and earnings growth did not meet expectations Total Sales (in millions) International Sales (in millions)
Slide 15: Growth in wireless, medical, solar, oil & gas, undersea
14 Growth in wireless, medical, solar, oil & gas, and undersea helped to offset downdraft Impact on Sales Growth Metal prices passed on to customers +5% Lower shipments to the media market -15% Business activity/real growth +5%
Slide 16: The revenue decline drove a decline in earnings
15 The revenue decline drove a decline in earnings Reported Results (EPS) Operating Run Rate (EPS) GAAP ... includes items that are not expected to recur Non-GAAP ... excludes gains not expected to recur
Slide 17: Balance sheet quality and financial flexibility
16 Our balance sheet quality and financial flexibility are significant strengths Total Debt (in millions) Debt-to-Debt-Plus-Equity Techni-Met acquisition $86.1 million, debt increase only $6.3 million
Slide 18: 2008 summary: good progress in important areas
17 2008 summary ... good progress in a number of important areas New revenues and synergies from our acquisitions and investments Expanded our international foothold further Developed new products and new markets Launched a number of cost reduction and margin improvement initiatives Further strength
Slide 19: 2008 ended and 2009 began in uncertainty
18 2008 ended and 2009 began in an environment of significant and unprecedented uncertainty New priorities ... Reduce cost significantly Press ahead with key initiatives
Slide 20: On the cost front: initially
19 On the cost front Initially ... Reduced headcount 12% Implemented pay freezes Reduced work hours Suspended a portion of the 401(k) match Limited discretionary spending Deferred lower priority initiatives
Slide 21: On the cost front: most recently
20 On the cost front Most recently ... Cumulative employment reduction to 17% Senior executive salary reductions of 10% Director cash retainer reduced 10% Senior manager salary reductions of 7% Suspended the balance of the 401(k) match
Slide 22: Overall actions should ensure a healthy balance sheet
21 Overall actions should Ensure a healthy balance sheet Lead to a leaner, more efficient operating structure Not disrupt investment in critical growth programs
Slide 23: 2009 started weaker than expected
22 While 2009 started weaker than what we expected Our markets appear to have bottomed The company expects to be profitable in the second half
Slide 24: Brush Engineered Materials
BRUSH ENGINEERED MATERIALS 23
Slide 25: Leveraging our capabilities
24 Leveraging our capabilities We are creating powerful new synergies with new and traditional businesses Extending our product offering Diversify our foundation for growth
Slide 26: Acquisitions delivering growth
25 Acquisitions delivering growth Techni-Met, Inc. broadens our technology base and expands foothold in medical Unique coating technology offers potential for emerging market opportunities
Slide 27: Leveraging complementary capabilities
26 Leveraging complementary capabilities Thin Film Technology (TFT) and CERAC partnering to offer: Filter and optical coating materials for medical and defense markets Expanding into solar and new areas of medical
Slide 28: Growing our presence in solar
27 Growing our presence in solar
Slide 29: Driving performance in alternative fuel vehicle
28 Driving performance in alternative fuel vehicle TMI partnering with customers to: Advance adaption of lithium ion batteries Our materials solve interconnect problems
Slide 30: Aiding the pursuit of clean energy
29 Aiding the pursuit of clean energy Beryllium Products' S-65 nuclear grade material qualified for International Thermonuclear Experimental Reactor $7 billion fusion test reactor now under construction in France
Slide 31: Targeted growth opportunities
30 Targeted growth opportunities High intensity LEDs - WAM High-end speaker assemblies - Beryllium Products/ Electrofusion ToughMet(r) alloy for on road vehicles
Slide 32: Brush Engineered Materials
BRUS ENGINEERED MATERIALS