AM Castle & — Investor Presentation (May 2010)
22 slides from AM Castle &'s investor presentation, May 2010
Slide 1: A. M. Castle & Co. Celebrating 120 Years of Service
A. M. Castle & Co. Celebrating 120 Years of Service •••• May 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. Actual results may differ materially as a result of factors over which the Company has no control. These risk factors and additional information are included i
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 • Growing Plastics
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 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 Unmatched Experience and Expertise in Key End-Markets 3 7.
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 (JSF) 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
Financial Overview
Slide 12: Focused on Profitable Growth
Focused on Profitable Growth Revenue $ in millions 2 1.7% R = CAG • Increased activity seen in early-cycle businesses • Improving trend of customers buying materials for production 12.
Slide 13: Focused on Profitable Growth: Quarterly Cash Flows
Focused on Profitable Growth Quarterly Cash Flows $ in millions .1 % = 17 $90 $79 R $80 CAG $70 $60 $53 $50 $40 $30 $22 $20 $10 $6 $- 2007 2008 2009 2010 • Company generated substantial cash flows during brutal economic environment in 2009 • Maintain operating expenses and capital expenditures at or
Slide 14: Solid Working Capital Measurements
Solid Working Capital Measurements Inventory Turns - DSI Receivables - DSO Days Days • Right-sized inventory base expected to lead to gross margin improvement throughout 2010 • On track to return DSI to historical levels of 120 days • New ERP system generated $1M in immediate savings • * Annual rati
Slide 15: Strong Financial Position
Strong Financial Position Debt to Total Capital Ratios * • Reduced total debt from $117.1M year-end 2008 to $89.2M year-end 2009 – $6M further debt reduction in 1Q’10 • Over 200% reduction in capital expenditures in 2009 2008 increase primarily reflects the January 2008 acquisition of Metals UK 15.
Slide 16: 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 17: Appendix
Appendix
Slide 18: 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 • Pr
Slide 19: Management Team
Management Team Scott F. Stephens • Interim President Castle Metals Oil & Gas Blain Tiffany • President Castle Metals Aerospace • Formerly President, Castle Metals Plate Thomas Garrett • President Total Plastics Inc. • Held various positions at TPI since 1988 including Controller and Vice President
Slide 20: Suppliers
Suppliers Stable supply base values A. M. Castle as a key customer and provides access to specialty metals Product Category Supplier Aluminum Kaiser Aluminum and Alcoa Alloy Timken and Republic Nickel & Stainless Allegheny and Special Metals Carbon Mittal-Arcelor, Ipsco & Gerdau Titanium RMI Plastic
Slide 21: Blue Chip Platform Support
Blue Chip Platform Support Airbus A380 Stryker Gulfstream V JSF JSF End Market Key Platforms Supported • Large Commercial • Airbus A318, A319, A320, A321, A330, A380 Aircraft • Boeing 737, 747, 777, 787 • Regional Aircraft • Bombardier, Embraer • Military Aerospace • C-17, C-27, C130, F15, F16, F18,
Slide 22: 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. A.M. Castle Products −− Castle Products Minimal Minimal Composites Composites Sub