Slide 1: 2007 Earnings Conference
2007 Earnings Conference February 28, 2008 Jeffrey T. Gill President and CEO T. Scott Hatton Vice President and CFO
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer Each “forward-looking statement” herein is subject to serious risks and should not be relied upon, as detailed in our most recent Form 10-K and Form 10-Q and subsequent SEC filings. Briefly, we currently believe that such risks also include: our ability to liquidate our unsecu
Slide 3: Agenda
Agenda Overview Market Outlook Strategic Direction Conclusion Financial Discussion – Q4 2007 Results – FY 2007 Results – Q1 2008 Outlook Q&A Session 2
Slide 4: Overview: Q4 2007
Overview Q4 2007 – Key Results: ● EPS in line with guidance ● Revenue was slightly stronger than latest outlook > Electronics Group revenue increased 55% to $44.8 million ¾ 73% increase in Aerospace & Defense ¾ 24% increase in Test & Measurement > Industrial Group revenue declined 27% to $58.9 mil
Slide 5: Overview: Full Year 2007
Overview Full Year 2007 – Key Results: ● Revenue, gross profit and net income were down year-over-year > Industrial Group revenue declined 23%, driven by a 44% reduction in commercial vehicle production > Electronics Group revenue increased 18% to $156.8 million ¾ 19% increase in Aerospace & Defen
Slide 6: Market Outlook
Market Outlook ACT North American Production/Build Forecast Heavy-Duty Vehicles CLASS 8 400,000 February forecast for 2008 up from 350,000 December forecast by 4% 300,000 250,000 Current view up 6% over 2007 200,000 150,000 2009 rebounds 46% 100,000 50,000 - 2004 2005 2006 2007 2008 Dec 2008 F
Slide 7: Market Outlook
Market Outlook ACT North American Production Forecast Class 8 Heavy-Duty Vehicles 80,000 Q108 37% below that of prior year, 70,000 but even with Q407 60,000 50,000 Progressive sequential recovery 40,000 forecast, subject to economy 30,000 20,000 Q408 up 47% vs. prior year period 10,000 - and 2
Slide 8: Market Outlook
Market Outlook Industrial Group – The outlook for the production of trailers continues to weaken, with 2008 volume now expected to decline 16% from 2007 levels – Production of sport utility vehicles and light trucks is forecast to decline year over year, with recovery forecast for 2009 – Despite h
Slide 9: Strategic Direction
Strategic Direction Electronics Group to play an increasingly larger role in the overall portfolio – Target 50% or greater of consolidated results over long-term ● Drive margin expansion ● Balance customer and industry exposure – Emphasis on expanding product mix within Aerospace & Defense segment
Slide 10: Conclusion
Conclusion The fourth quarter concluded a year that was expected to be difficult … and was – Dana contract resolution and double digit growth in Aerospace & Defense and Test & Measurement segments served as notable positives 2008 is expected to be a better year, with continued double digit growt
Slide 11: 2007 Update / 2008 Forecast
2007 Update / 2008 Forecast 10
Slide 12: Q4 2007 Results
Q4 2007 Results ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $104 $93 - $98 ($0.12) – ($0.10) ($0.12) ($10) – ($5) ($12) Guidance Actual Guidance Actual Guidance Actual Revenue up $8 from guidance PBT and EPS within guidance Cash flow down $4 from guidance SIG volumes wer
Slide 13: Total Year 2007 Results
Total Year 2007 Results ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $42 $498 ($0.08) ($0.12) $436 ($21) 2006 2007 2006 2007 2006 2007 Revenue down (-$62) from Prior Year PBT down (-$1.1); w/o settlement (-$13.1) Cash down $63 from Prior Year Industrial gross profit is fl
Slide 14: Q1 2008 Outlook
Q1 2008 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $111 $102 - $107 $0.00 ($0.01) ($2) * ($8 - $10) 2007 2008 Fcst 2007 2008 Fcst 2007 2008 Fcst Revenue down 6% or $7 PBT up $0.4, EPS up 1 cent Cash flow usage due to one-time pymt SIG down 12% due to Q1’07 SIG
Slide 15: Looking Forward to 2008
Looking Forward to 2008 Complete Phase 1 of SIG restructuring…prepare for market upturn – New business transfers are on track – Exiting non-core lines of business on schedule – Relocation of certain operations to low cost locations largely on track – Emphasis on lean and standard operations, manag