Materion Corporation · NYSE:MTRN
Materion — Brush Engineered Materials — Tenth Annual New York Emerging Growth Institutional Investor Forum 2006
28 slides from Materion's conference presentation, Mar 28, 2006
Slide 1: Tenth Annual New York Emerging Growth Institutional Investor Forum
Tenth Annual New York Emerging Growth Institutional Investor Forum April 4-5, 2006 .... creating innovative material solutions to make our customers competitive on a global basis
Slide 2: Forward-Looking Statements
Forward-Looking Statements These slides contain (and the accompanying oral discussion will contain) "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 ca
Slide 3: Company Overview
Company: Brush Engineered Materials Inc. founded 1931, publicly traded since 1956 NYSE Ticker: BW Shares Outstanding: Approximately 19.3 million at 12/31/05 Market Cap: Approximately $305 million at 12/31/05 Component of: S&P Super Composite 1500 Russell 2000 S&P Small Cap 600 Annual Revenue: $541 m
Slide 4: Brush Engineered Materials Inc. Profile
Brush Engineered Materials Inc. Profile A leading manufacturer of high performance engineered materials Operations, service centers and major office locations in North America, Europe and Asia Serving long-term growth oriented global markets from consumer electronics to heavy mining equipment
Slide 5: Strong customer collaboration providing technology solutions and service
Strong customer collaboration ... providing technology solutions and service Demanding material applications - Strength - Reliability - Thermal & electrical - Miniaturization conductivity - Weight reduction - Corrosion resistance - Reflectivity Targeting growth applications in growing markets Advanc
Slide 6: Typical End Uses
Typical End Uses Magnetic & Optical Data Storage for hard disk drives Industrial products For Oil & Gas and mining Medical Cellular phones and other wireless communications Notebook and network computers Electronic components in cars and trucks Aerospace and Defense
Slide 7: Global Leader in High Performance Engineered Materials
Global Leader in High Performance Engineered Materials Note: Total 2005 revenues were $541.3 million 2005 Revenue by Segment 2005 Revenue by Market Metal Systems Group Microelectronics Group 0.57 0.43 Other Telecommunications Medical Automotive Magnetic and Data Storage Industrial Components Aeorspa
Slide 8: Targeting Growth Applications in Growing Markets
BEM - Targeting Growth Applications in Growing Markets Mobile Telecommunications Oil & Gas Disk Drive Head Demand 2001 2002 2003 2004 2005 Est. 2006 2007 2008 2009 Pico 640 634 713 885 1180 1385 1580 1666 1687
Slide 9: Global Sales and Distribution Network
Global Sales and Distribution Network Operations in the U.S. and ten foreign locations International sales are 33% and growing Act globally ... service locally! ?-------------- Asia / Pacific ------------? ? ---------------- Europe -------------- ? ? - Exports from USA -? Singapore Korea Hong Kong U
Slide 10: Major Business Units
Brush Engineered Materials - Major Business Units WAM Other TMI Be Products Alloy East 0.38 0.06 0.09 0.08 0.39 West North Williams Advanced Materials PVD Targets Optical Coatings Refining Electronic Packaging 38% Alloy Electronic Connectors Industrial Components 39% Be Products Defense/Aerospace Sp
Slide 11: Fully Integrated Beryllium Producer
Fully Integrated Beryllium Producer Bertrandite Ore Mining & Extraction Delta, UT Casting, Rolling & Finishing Elmore, OH Thin Gauge Rolling & Finishing Reading, PA Service & Distribution Centers Global Network Also, new High Be Pebbles Plant underway with DOD Title III funding
Slide 12: Strip Alloy Applications
Strip Alloy Applications (strength, conductivity, spring characteristics) Current Carrying Springs and Relays Integrated Circuitry Sockets Electrical and Electronic Connectors Air Bag Sensors Pressure Responsive Devices Fire Extinguisher Sprinkler Heads
Slide 13: Bulk Alloy Applications
Bulk Alloy Applications (strength, corrosion resistance, non-galling, conductivity) Aircraft Bushings Heavy Equipment Bearing and Wear Applications Oilfield well drilling, completion and production equipment Plastic Injection & Blow Molds Power Generation Undersea/Marine Housings for Telecom & Instr
Slide 14: Beryllium Products - Applications
Beryllium Products - Applications (lightweight, strength, dimensional, stability) - - Optical mirrors for NASA space-based telescopes - - Infrared sensors for fighter jet optical targeting, radar and navigation/guidance systems and special ops -Structural and electronic components for satellites -X-
Slide 15: Williams Advanced Materials
Williams Advanced Materials also has broad capabilities in precious and non-precious materials Comprehensive product line High purity / proprietary PVD targets Micro-electronic packaging materials Strong end use markets Data storage Optical media Optics Industry leading service and support Global sa
Slide 16: Williams Advanced Materials - Physical Vapor Deposition (PVD) Products
Cellular Phone (wireless) Sputtering Targets Williams Advanced Materials - Physical Vapor Deposition(PVD) Products Products Precious Metal Sputtering Targets and Evaporation Materials Precious Metal Refining Services Non-precious Metal Sputtering Targets and Evaporation Materials Inorganic chemical
Slide 17: Physical Vapor Deposition (PVD) Process
Physical Vapor Deposition (PVD) Process
Slide 18: Williams Advanced Materials - Packaging Materials
Solder preforms and clad materials Hybrid Microelectronic Device Williams Advanced Materials - Packaging Material Products Products Markets Wireless, Photonics and Hybrid/ Traditional Microelectronic Devices Typical End-uses Cell phones, LEDs, fiber-optic networks, PC's, military electronics, avioni
Slide 19: Capacity to Support Profitable Market Growth
Capacity to Support Profitable Market Growth $160 million invested between 1996 and 2001 Operating with significant available excess capacity Significant productivity gains in recent years
Slide 20: Annual Revenue: Historical
Annual Revenue: Historical In 2001, the telecommunications and computer market declined; In 2003, our revenue growth began to return to historical rates 2000 2001 2002 2003 2004 2005 2006 564 473 373 401 496 541 605 Growth % 24% -16% -21% +8% +24% +9% +8-12% est.
Slide 21: Annual Operating Profit (Loss) Compared to Revenue
Annual Operating Profit (Loss) Compared to Revenue: Historical ($ in millions) 2000 2001 2002 2003 2004 O.P. Revenue $23 ($14) ($23) ($9) $25 $564 $473 $373 $401 $496 $541 $23 2005 Note: 2005 excludes $3.8 million subdebt prepayment charge
Slide 22: Performance improvement initiatives focused on five key areas
Our on-going performance improvement initiatives are focused on five key areas Expanding and diversifying the revenue base Targeting growth applications in growing markets Improving operating efficiencies Reducing overhead costs Expanding global market growth Strategic acquisitions
Slide 23: Historical Gross Margin Trends
Margins have improved through cost reduction and productivity improvement initiatives Historical Gross Margin Trends Margin % Sales ($MM) 2000 2001 2002 2003 2004 2005 0.21 0.14 0.13 0.18 0.22 0.2 564 473 373 401 496 541
Slide 24: Outlook
Outlook Assuming no change in recent trends, sales for 2006 are currently expected to be in the range of $580 to $600 million ... up 8% to 12% Order book gaining momentum across most sectors Consumer electronics is strengthening ... steady growth Telecom infrastructure seems to be recovering from an
Slide 25: Outlook
Outlook Includes an additional $.24 to $.28 per share tax expense compared to 2005 New effective tax rate of 28% to 30% The majority of tax expense is non-cash due to sizable NOL's Gross margin % should improve by as much as 1 to 2 pts, driven by: Favorable mix shift Recent price increases Interest
Slide 26: Acquisitions
Acquisitions OMC Scientific adds services and technology Thin Film Technology adds our visi-lid partner and PVD coating services for existing and new markets Cerac compliments the products and services we currently supply and adds a new platform of inorganic materials for a variety of markets The ag
Slide 27: Strategic Highlights
Strategic Highlights Strong, diverse set of markets served Global market reach New products and services ... a culture of innovation Niche oriented product offerings Acquisitions adding to growth and earnings Focus on operational excellence paying dividends Strong cash flow Strong balance sheet prov
Slide 28: Material Solutions for the World's Leading Companies
Brush Engineered Materials - Material Solutions for the World's Leading Companies