AM Castle & — Investor Presentation (August 2010)
24 slides from AM Castle &'s investor presentation, August 2010
Slide 1: A. M. Castle & Co. Celebrating 120 Years of Service
A. M. Castle & Co. C l b ti 120 Y Celebrating Years off S Service i •••• August 2010
Slide 2: Forward Looking Statement & Non-GAAP Measures
Forward Looking Statement & Non-GAAP Measures This presentation may contain forward-looking statements relating to future financial results. results Actual results may differ materially as a result of factors over which the Company has no control. These risk factors and additional information are in
Slide 3: Overview
Overview • 120 year history in the metal service center industry • One of the largest metal service center companies in the U.S., $813 million 2009 revenue • Supplying over 5,000 products to 25,000 customers • Foremost global distributor of specialty grade, high performance metals • Solutions provid
Slide 4: End Markets
End Markets Markets Served Machine Tools & General Other Equip 15% 15% Plastics Heavy 11% Equipment 10% Military & Defense 4% Oil & Gas Power 10% Generation 5% Aerospace 30% Global Demand Recovery Driving Growth in Key End Markets 4.
Slide 5: Product Portfolio
Product Portfolio Products Provided Plastics Titanium 11% Alloy 4% 20% All Others 4% Carbon 14% Aluminum Stainless 23% & Nickel Ni k l 24% Diversified Product Offering with Focus on Specialty Materials 5.
Slide 6: 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 7: Go-To-Market Strategy
Go-To- Market Strategy Pursuing Profitable and High-Growth End-Markets Commercial Defense Oil & Gas Heavy Equipment Aerospace Aerospace & Infrastructure f • Global energy • Ongoing multi-year • Specialty products demand driving • Funding for capital backlogs at major and supply chain healthy growth
Slide 8: 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 capacity to create true strategic partnerships with customers • Customer collaborations result in verifiable improvements that impact total cost, delivery, quality
Slide 9: Case Study: F-35 Joint Strike Fighter Program
Go-To- Market Strategy Case Study: F-35 Joint Strike Fighter (JSF) Program • Recently 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 p
Slide 10: 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 3 10.
Slide 11: Financial Overview
Fi Financial i l Overview O i
Slide 12: Focused on Profitable Growth: Revenue
Focused on Profitable Growth Revenue $ in millions $1,600 $1,501 $1,420 $1 178 $1,178 $1,200 $813 $800 $463 $400 $0 2006 2007 2008 2009 H1 '10 • H1 2010 sales up 26.8% sequentially from H2 2009 • Recoveries under way in virtually all key end markets 12.
Slide 13: Focused on Profitable Growth: EBITDA
Focused on Profitable Growth EBITDA $ in millions $140 $116 $120 $110 $95 $ $100 $80 $60 $40 $20 $6 $0 -$20 $(14) -$40 2006 2007 2008 2009 H1 '10 • Maintain 2010 operating expenses and capital expenditures at or below 2009 levels 2008 Excludes non-cash charge of $58.9 million for goodwill impairment
Slide 14: Focused on Profitable Growth: Operating Cash Flows
Focused on Profitable Growth Operating Cash Flows $ in millions $100 $79.0 $80 $60 $53.0 $40 $22.0 $20 $4 5 $4.5 $0 2007 2008 2009 YTD June 2010 • Company generated substantial cash flows during economic downturn in 2009 2008 Excludes non-cash charge of $58.9 million for goodwill impairment 14.
Slide 15: Balance Sheet Comparison
Balance Sheet Comparison 06/30/10 12/31/10 Accounts Receivable $ 130 $ 106 Inventory 169 171 Other Current Assets 17 24 Total Current Assets $ 316 $ 301 Accounts Payable (98) (71) Other Current Liabilities (30) (34) Working Capital $ 188 $ 196 Total Capital $ 369 $ 379 Debt, Less Cash (54) (60) Equi
Slide 16: Solid Working Capital Management
Solid Working Capital Management Inventory Turns - DSI Receivables - DSO Days Days 200 189 60 54.8 175 47.6 49.3 50 45.1 43 7 43.7 150 142 132 130 117 40 125 100 30 75 20 50 10 25 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 H1 '10 • Right-sized inventory base expected to lead to gross margin im
Slide 17: Strong Financial Position
Strong Financial Position Debt to Total Capital Ratios 60% 51.2% 50% 40% 30% 25.2% 21.9% 21.5% 18.3% 20% * 10% 0% 2006 2007 2008 2009 2010 • Reduced total debt from $117.1M year-end 2008 to $89.2M year-end 2009 • $230M credit facility in place through January 2013 2008 increase primarily reflects th
Slide 18: 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 S
Slide 19: Appendix
A Appendix di
Slide 20: 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 21: Management Team
Management Team Scott F. Stephens • Interim President Castle Metals Oil & Gas Blain Tiffany • President P id t C Castle tl MMetals t l AAerospace • Formerly President, Castle Metals Plate Thomas Garrett • President Total Plastics Inc. • Held various positions at TPI since 1988 including Controller a
Slide 22: 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 Mittal-Arcelor, Ipsco & Gerdau Titaniu
Slide 23: Blue Chip Platform Support
Blue Chip Platform Support Airbus A380 Stryker Gulfstream V JSF JSF End Market Key Platforms Supported • Large Commercial • Airbus A318 A318, A319 A319, A320 A320, A321 A321, A330 A330, A380 Aircraft • Boeing 737, 747, 777, 787 • Regional Aircraft • Bombardier, Embraer • Military Aerospace • C C-17
Slide 24: 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 Transtar’s Business A.M. Castle Products − Minimal Composites Substitutions A.M. Castle Products − Engine