Slide 1: Investor Presentation May 14, 2008
Investor Presentation May 14, 2008
Slide 2: Forward-Looking Statements and non-GAAP Financial Information
Forward-Looking Statements and non-GAAP Financial Information The information provided at the meeting today will include forward-looking statements relating among other things to our sales, income from operations, capital expenditures, depreciation and amortization, our worldwide markets, our growth
Slide 3: Investment Highlights
Investment Highlights Worldwide leader of friction products to diverse industrial markets 80% of sales derived from specific sole-sourced applications Approximately 50% of sales generated from stable OE service and direct aftermarket due to "wear-part" quality nature of product Long standing blue ch
Slide 4: Hawk serves some of the world's best known companies
Hawk serves some of the world's best known companies
Slide 5: First Quarter 2008 Sales by Market
Performance Friction Aircraft & Defense Heavy Truck Construction and Mining Speciality Friction Agriculture 0.042 0.185 0.09 0.486 0.043 0.154 First Quarter 2008 Sales by Market
Slide 6: First Quarter Comparative Sales by Market
First Quarter Comparative Sales by Market Market Change Construction and Mining 25.1% Aircraft & Defense 20.4% Agriculture 46.3% Heavy Truck (6.5%)
Slide 7: Friction Products Group
Friction Products Group Friction materials used in brakes, clutches and transmissions Products Markets Friction Materials - Construction & Mining Metallic Aircraft Cellulose "Paper" Military Carbon composites Agriculture Truck Recreation and performance automotive Friction technology improvements of
Slide 8: FPG Market Position
FPG Market Position ($ in Millions) Market Total Market Size 2007 Hawk Sales 2006 Hawk Sales 2005 Hawk Sales Competition Customers Off-Highway $350 $128.5 Up 15.8% $111.0 Up 27.3% $87.2 Raytech Dynax Borg-Worner Caterpillar Deere Carraro ZF Sachs Volvo CNH Aircraft & Defense $110 $43.3 Up 5.6% $41.0
Slide 9: Company Blueprint
Company Blueprint Focus on shareholders value Excellence in friction technology Dominant niche position Optimize OE business through: Operational excellence Technology advancement Customer intimacy Aftermarket OE heritage broadened through Street (Hawk Performance) Fleet Military Industrial (Velveto
Slide 10: Manufacturing Initiatives
Manufacturing Initiatives Operations leadership changes provided clear focus on manufacturing excellence Productivity levels continue to strengthen at all facilities Cost controls taking effect Scrap levels continue to decline Past due levels declining On-time delivery metrics improving Continued fo
Slide 11: Technology Initiatives
Technology Initiatives Current material development and product line extensions Fuel Cell development Partnership with UTC in development of next generation fuel cell technology Recipient of $1.0 million grant from State of Ohio Carbon composite based friction technology development Other composite
Slide 12: 2007 Consolidated Income versus 2006
2007 Consolidated Income versus 2006 12/31/2007 12/31/2006 Revenue $215.9 $199.9 Gross profit $51.4 $45.6 Gross profit % 23.8% 22.8% Operating income $19.5 $15.4 Operating income % 9.0% 7.7% Income from continuing operations, after tax $7.8 $1.6
Slide 13: YTD Consolidated Income
YTD Consolidated Income 03/31/2008 03/31/2007 Revenue $65.6 $54.2 Gross profit $17.4 $14.0 Gross profit % 26.5% 25.8% Operating income $6.5 $3.5 Operating income % 9.9% 6.5% Income from continuing operations, after tax $3.8 $1.9 Diluted EPS from continuing operations $0.40 $0.20
Slide 14: Net Sales
Net Sales $250 $200 $150 $100 $5 ro 2005 YTD 2006 YTD 2007 YTD 2008 Estimate 2007 2008 First First Quarter Quarter
Slide 15: Operating Income
Operating Income $20 $15 $10 $5 , @ a 2005 2006 2007 2008 2007 2008 YTD YTD YTD Estimate First First Quarter Quarter 8 SD
Slide 16: 2008 Market Factors
2008 Market Factors Continued strong performance from global industrial markets Construction & mining remains robust Expected rebound in on-highway truck market Softening in aircraft market in last half of year Inflationary pressures Steel cost increases Other cost pressures on raw material inputs -
Slide 17: 2008 Guidance
2008 Guidance Estimated 12/31/2008 (in millions) Actual 12/31/2007 (in millions) Net Sales $245.0 - $250.0 $215.9 Income from continuing operations $21.0 - 23.0 $19.5 Effective tax rate 41.0% 43.4% Capital Expenditures $15.0 $7.9 Depreciation and amortization expense $8.0 $7.6
Slide 18: Investment Summary 2008
Investment Summary 2008 Company focusing on strongest segment - Friction Assessing best way to redeploy assets Acquisitions, internal projects Business base Red hot focus on operations Steady, varied end-market growth Lean-out manufacturing providing margin upside Good business characteristics - wea
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