Slide 1: Investor Presentation August 2009
Investor Presentation August 2009 .... a leader in creating innovative engineered material solutions and services to make our customers competitive on a global basis .... while enhancing earnings growth, shareholder value, and stability ... by broadening technology, market, and geographic reach Exhi
Slide 2: Forward-Looking Statements
2 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
Slide 3: Brush Engineered Materials Inc. Profile
3 Brush Engineered Materials Inc. Profile A leading manufacturer of high performance specialty engineered materials and services ... an enabling materials technology company Four segments ... with operations, service centers and major office locations in North America, Europe and Asia Serving long-t
Slide 4: Overview
4 Company: Brush Engineered Materials Inc. founded 1931, publicly traded since 1956 NYSE Ticker: BW Shares Outstanding: Approximately 20.2 million at 7/03/09 Market Cap: Approximately $314 million at 7/03/09 Component of: S&P Super Composite 1500, Russell 2000 S&P Small Cap 600 Annual Revenue: $910
Slide 5: BEM....the transformation
BEM....the transformation From Metals & Mining through Specialty Metals to Advanced Materials From an "old industrial" to a "new age technology" company From single digit to double digit growth 5
Slide 6: BEM....the transformation
BEM....the transformation Broaden the base...focused on > GDP opportunities new technologies new markets new products expanded geography Target fastest growing segments of fast growing markets First Priority.....organic growth Second Priority...."manageable" acquisitions All while building and maint
Slide 7: BEM....the transformation (cont.)
BEM....the transformation (cont.) Investments...prioritizing a targeted business model low capital intensity...both working capital and reinvestment capital high IP....technology driven business non-commodity products...high margins good growth potential in >> GDP opportunities Acquisition goals Acc
Slide 8: BEM....the transformation (cont.)
BEM....the transformation (cont.) Beryllium Non-Beryllium 2001 Sales 56 44 Beryllium Non-Beryllium 2009 Sales 32 68 8
Slide 9: Brush Engineered Materials - Major Business Units
9 Brush Engineered Materials - Major Business Units Alloy Be Products TMI Other WAM East 0.25 0.09 0.04 0 0.62 West North Williams Advanced Materials PVD Targets Optical Coatings Refining Electronic Packaging 62% Alloy (Cu based Be and Ni Alloys) Electronic Connectors Industrial Components 25% Be Pr
Slide 10: 2008 Recap
10 2008 Recap Sales of $910 million Diluted earnings per share of $0.89* Acquisition of assets of Techni-Met, Inc. for $86.5 million Techni-Met produces precision precious metal coated flexible polymeric films used in a variety of high-end applications, including diabetes diagnostic test strips Cont
Slide 11: Non-GAAP Financial Measures
Non-GAAP Financial Measures 11
Slide 12: Q-2 2009 Recap
12 Q-2 2009 Recap Revenue of $174 million or an increase of 29% from Q1 2009 Revenue improvement is primarily due to increase in demand from the consumer electronics-oriented markets Sales for Q2 and YTD 2009 were down 29% and 35%, respectively, as compared to the same periods last year Net loss was
Slide 13: Q3 2009 Outlook
13 Q3 2009 Outlook Order entry has continued to improve, especially in the consumer electronics-oriented markets Not much clarity; still uncertain about Q3 and beyond, but have seen signs of the economy bottoming out and certain key markets improving Expect Q-3 sales to improve from Q-2 levels; with
Slide 14: Strength in Challenging Times
Strength in Challenging Times Balance Sheet Revolver $240 mm committed facility, matures November 2012 More than $100 million in availability Debt During Q2 2009, debt was reduced by $14.3 million and cash increased by $8.1 million, significantly improving the balance sheet 14
Slide 15: Global Leader in High Performance Engineered Materials
Global Leader in High Performance Engineered Materials Q2 2009 Revenue by Market 15
Slide 16: Brush Engineered Materials ... core competency
16 Brush Engineered Materials ... core competency Collaborating with customers worldwide to solve material application challenges ... with a focus on enabling technology and services "Own" a Niche orientation ... non-commodity Focus on global growth and service Constantly looking ahead to realign pr
Slide 17: Global Sales and Distribution Network
17 Global Sales and Distribution Network Operations in the U.S. and eleven foreign countries YTD Q2 2009 International sales were $103 million (33%) Act globally ... service locally! ?-------------- Asia / Pacific ------------? ? ---------------- Europe -------------- ? ? - Exports from USA -? Singa
Slide 18: Strong customer collaboration
18 Strong customer collaboration ... providing enabling technology solutions and service Materials that meet design challenges requiring - Strength - Reliability - Electrical conductivity - Miniaturization - Weight reduction - Corrosion resistance - Reflectivity - Thermal conductivity Targeting prof
Slide 19: Typical End Uses
19 Typical End Uses Data Storage Industrial products for Oil & Gas and Mining Medical Devices Cellular phones, i-Pods(tm) and other wireless communication devices Notebook computers and network servers Electronic components in cars and trucks Commercial Aerospace Defense
Slide 20: Applications - Cell Phones
20 Applications - Cell Phones I/O Connector Contacts (Alloy): Brush 60/17410 Alloy 25/190/290 Battery Contacts (Alloy): Brush 60 Alloy 25/190/290 Internal Antenna Contacts (Alloy): Brush 60/17410 Alloy 25/190/290 Grounding Clips and Audio Jacks (Alloy): Brush 60 Alloy 25/190/290 Micro Mezzanine Conn
Slide 21: Applications - Photovoltaic (Solar)
Applications - Photovoltaic (Solar) Technology: Amorphous Silicon (a-Si, tandem and multi- junction) Thin Film (PVD) Materials Silicon based photovoltaic cells Front and back contact layers TCO Transparent Conductive Oxide layers Technology: Cadmium Telluride (CdTe) Thin Film (PVD) Materials Cadmium
Slide 22: Applications - Hard Disk Drives
22 Thin film materials for the read/write head. (WAM) Sputtering Targets/Evaporation Materials (Precious Metals, Alloys, Non-Precious Metals, Alloys, Magnetic Materials, Heusler Alloys and Oxides) Applications - Hard Disk Drives Example - Hard Disk Drive Media PMR Material Stack Disk Drive Arm (TMI)
Slide 23: Applications - Oil & Gas
23 Applications - Oil & Gas Under Water Wellhead Equipment (Alloy): Brush Alloy 25 ToughMet(r) 3 Blow out preventers, hydraulic actuators Directional Drilling Equipment (Alloy): Brush Alloy 25 ToughMet(r) 3 MWD, LWD, MPT systems Drill Bits (Alloy): Brush Alloy 25 ToughMet(r) 3 Structural Rig Compone
Slide 24: Applications - Aerospace
24 Applications - Aerospace Avionics/Electrical Systems (Alloy): Alloy 25 Airframe (Alloy): Alloy 25 Landing Gear Attachments (Alloy): Alloy 25 ToughMet(r) 3 Engine and Pylon Attachments (Alloy): Alloy 25 ToughMet(r) 3 Flight Control Mechanisms (Alloy): Alloy 25 ToughMet(r) 3 Horizontal Stabilizer &
Slide 25: Applications - Medical
25 Applications - Medical Cardiac Rhythm Management (TMI): Electronic Interconnects/Components Niobium/Titanium Electron Beam Weld Insulin Pump (Alloy): EMI Shielding Electrical Terminals in Connectors Mechanical Chips Connector Systems for equipotential grounding Seizure Control (WAM/TFT): Thin Fil
Slide 26: AMTS Operating Locations
26 AMTS Corporate Thin Film Products Electronic Packaging Products Advanced Material Technologies and Services Business Structure Today and Evolving Thin Film Services Shield Cleaning Services Specialty Inorganic Materials Wheatfield, NY Ireland Czech Republic Brewster, NY Buffalo, NY Buffalo, NY Si
Slide 27: Williams Advanced Materials
27 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 Specialty inorganic chemicals Strong end use markets Data storage Wireless/handsets Semiconductor Op
Slide 28: Key Markets - Wireless and Photonics
28 Key Markets - Wireless and Photonics Thin Film and Packaging materials for varied wireless and photonic applications including RF Power Amplifiers, HBT's, SAW Devices, Light Emitting Diodes (LEDs), Laser Recorders and Micro Electro Mechanical Systems (MEMS)
Slide 29: Key Markets - Semiconductor Wafer Fabrication
29 Key Markets - Semiconductor Wafer Fabrication Thin film materials and chamber services for silicon wafer and UBM (Under Bump Metallization) technologies. Numerous commercial and military microelectronic applications. Under bump metallization
Slide 30: Key Markets - Semiconductor Packaging
30 Key Markets - Semiconductor Packaging High reliability semiconductor packaging materials. Applications focused in space, military and satellite market segments. Solder preforms and clad materials
Slide 31: New Product and Technology Development - AMTS
31 New Product and Technology Development ADVANCED MATERIAL TECHNOLOGIES AND SERVICES Magnetic Media and Head Materials Under Bump Metallization (UBM) for Flip Chip FCCL Materials Visi-Lid(tm) - A transparent lid for New Photonics applications Expanded refining/chamber services supporting the thin f
Slide 32: New Product and Technology Development - Specialty Engineered Alloys
32 New Product and Technology Development SPECIALTY ENGINEERED ALLOYS ToughMet(r) Alloy for High Volume Bearing Applications Cupronickel alloy rod for offshore and marine seawater systems 390E High Performance Copper Beryllium Strip Alloy for Burn in and Test Sockets (BiTS) applications BrushForm 15
Slide 33: Physical Vapor Deposition (PVD) Process
33 Physical Vapor Deposition (PVD) Process
Slide 34: World's only Fully Integrated Beryllium Producer
34 World's only 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 New Beryllium Pebbles Plant underway with DOD Title III funding, targeted
Slide 35: Strip Alloy Applications
35 Strip Alloy Applications (strength, conductivity, spring characteristics ... typically 1% to 2% Beryllium) Current Carrying Springs and Relays Integrated Circuitry Sockets Electrical and Electronic Connectors Air Bag Sensors Pressure Responsive Devices Fire Extinguisher Sprinkler Heads EMI shield
Slide 36: Bulk Alloy Applications
36 Bulk Alloy Applications (strength, corrosion resistance, non-galling, conductivity ... typically 1% to 2% Beryllium) Aircraft Bushings Heavy Equipment Bearing and Wear Applications Oilfield well drilling, completion and production equipment Plastic Injection & Blow Molds Power Generation Tooling
Slide 37: ToughMet - a new unique solution
37 Toughmet(r) - a new unique solution for the most challenging wear and load conditions Oil & Gas...deeper drilling...tougher conditions Rotary steering drills Sour well drilling and completion tools Sub-sea control valves Blow-out preventions Heavy equipment ... larger equipment ... critical uptim
Slide 38: Beryllium Products - Applications
38 Beryllium Products - Applications (lightweight, strength, dimensional, stability...typically 40% to 100% Beryllium) - - Optical mirrors for NASA space-based telescopes - - Infrared sensors for fighter jet optical targeting, radar and navigation/guidance systems and special ops (FLIR) -Structural
Slide 39: Technical Materials, Inc.
39 Technical Materials, Inc. - solving customers' problems with engineered strip metals Mill Products Specialty cladding and inlay Electron beam welding of dissimilar materials Profiling shapes by milling and/or grinding Close tolerance rolling Electroplating Precious and non-precious metals Overall
Slide 40: BEM - Execution Initiatives
40 BEM - Execution Initiatives Profitable organic growth through new products, new applications, and new services Close collaboration with customers Expansion of international base and sales Broaden markets and technology Leverage above through "smart" acquisitions No let up in manufacturing excelle
Slide 41: Annual Revenue: Historical
41 2000 2001 2002 2003 2004 2005 2006 2007 2008 564 473 373 401 496 541 763 956 909.7 Annual Revenue: Historical Our diversification and value creation initiatives are leading to strong growth in revenue and profitability Growth % 24% -16% -21% +8% +24% +9% +41% +25% -5% Telecom Crash
Slide 42: Ongoing value creation initiatives in three key areas
42 Our ongoing value creation initiatives are focused in three key areas Growth Expanding and diversifying the revenue base Targeting profitable niche growth applications in growing markets New product innovation and service Ongoing global expansion Strategic acquisitions, fast accretion Margin Impr
Slide 43: Strategic Highlights
43 Strategic Highlights The Company is well positioned; strong balance sheet and revolver capacity to operate in this severe economic environment and to take advantage of strategic opportunities as they arise Strong, diverse set of markets served Global market reach New products and services ... a c
Slide 44: Vision · Mission · Values
Vision · Mission · Values 44 Vision We will be a leader in creating innovative engineered material solutions and services that make our customers competitive in global markets Mission ...in support of our vision: We bring value to our customers, globally, through innovative technology, service, and