AM Castle & — Investor Presentation (May 2014)
28 slides from AM Castle &'s investor presentation, May 2014
Slide 1: A. M. Castle & Co.
A. M. Castle & Co. ® May 2014 NYSE: CAS A.M. Castle & Co.
Slide 2: Forward Looking Statements
Forward Looking Statements ® Information provided and statements contained in this presentation that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), Section 21E of the Securities Exchange Act of
Slide 3: Regulation G & Other Cautionary Notes
Regulation G & Other Cautionary Notes ® This presentation includes non-GAAP financial measures to assist the reader in understanding our business. The non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in ac
Slide 4: Company Overview
Company Overview ® • One of the largest metal service center companies based in the U.S. with $1.1 billion in 2013 annual net sales • Specialty Products, Specialty Services, Customized Supply Chain Solutions • Strong exposure to long-term growth end markets including Oil & Gas, Aerospace and Industr
Slide 5: Value Added Services & Solutions
Value Added Services & Solutions ® Serving Vital Link in Global Metal Supply Chain Sub Sub Global Mills Sub OEMs Sub Sub Global Sub Mills A.M. Castle Global OEMs • Limited distribution • Many global distribution points • Demand delivery of points and products within short • Robust fabrication servic
Slide 6: Specialty Grade, High Value Metals
Specialty Grade, High Value Metals ® Diversified Product Offering with Focus on Specialty Materials Focus on Value Product Offering Plastics, 14% Alloy Bar, 18% • Sales focused on primarily Other, 8% highly specialized product Aluminum, 13% offering Nickel, 7% • A.M. Castle average selling SBQ Bar,
Slide 7: Diversified Global End Markets
Diversified Global End Markets ® Global Demand Driving Growth in Key End Markets Markets Served (1Q'14 Net Sales) Industrials 45% Industrials Oil & Gas Aerospace Plastics • Primarily focused • Positioned to • Specialty products • Supply on heavy succeed with and supply chain thousands of Oil & Gas 2
Slide 8: Broad Geographic Footprint Serving Global Markets
Broad Geographic Footprint Serving Global Markets ® METALS BRANCH METALS SALES OFFICE METALS PLASTICS BRANCH BRANCH CORPORATE OFFICE METALS SALES OFFICE PLASTICS BRANCH CORPORATE OFFICE Source: 2013 Form 10-K A.M.Castle A.M. . Castle&&CoCo. 8
Slide 9: Blue Chip Customer Base in Various End Markets
Blue Chip Customer Base in Various End Markets ® Serving a Broad Range of Diverse Customers A.M. Castle & Co. 9
Slide 10: Supplier Partners
Supplier Partners ® Stable supplier 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, Tenaris and Republic Allegheny, Special Metals and Nickel & Stainless North American Stainless
Slide 11: Quarterly Net Sales Trend
Quarterly Net Sales Trend ($ in millions) ® $400 70 $350 65 $300 60 $250 55 $200 50 $150 45 $100 40 $50 35 $- 30 1Q'10 2Q'10 3Q'10 4Q'10 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 Revenue $223 $240 $245 $236 $273 $282 $295 $282 $363 $329 $304 $274 $293 $273 $254 $2
Slide 12: Organizational Objectives
Organizational Objectives ® Customer Centric Nimble Business More focused Faster than ever on and easier the customer to do business with Highly Competitive Engaged Employees Highly Earn a reputation competitive for employees in our end who share ideas, markets best practices and process improvement
Slide 13: Commercial Improvement Strategy
Commercial Improvement Strategy ® Strategic Objective Status Update • Realign sales organization into geographic territories Implemented in 1Q'14 – where local teams are accountable for selling all of our Quotes increased 2.3% in 1Q'14 products and services compared to 1Q'13 • Localize certain prici
Slide 14: Growth Focus – Short Term Actions
Growth Focus – Short Term Actions ® Actions Impacts Inventory redeployment and rebalancing Significant improvement in • Completed at 7 facilities in 1Q'14 sales trends at facilities • To be completed at 8 additional facilities completed in 1Q'14 in 2Q'14 Strategic accounts Team recruited and
Slide 15: Operating Expense Analysis
Operating Expense Analysis ® 2014 Quarterly Expense Target • 2013 restructuring actions ($ in millions) generated $25 million of annual cost reductions Operating expenses, excluding ($6.2 million per quarter) $ 72.0 restructuring charges, 1Q'13 • Weather related and Restructuring improvements – temp
Slide 16: Financial and Operating Targets
Financial and Operating Targets ® Lower Operating Higher Lower Days Sales in Fortify Balance Sheet Expenses Operating Profits Inventory 22% operating 10% operating Maximize free cash expense ratio* by 150 days by end of flow, reduce debt, end of 2014 profit in normal 2014 create further financial *o
Slide 17: Financial Overview
® Financial Overview A.M. Castle & Co. 17
Slide 18: Sales Trends
Sales Trends ® Annual Net Sales Quarterly Net Sales ($ in millions) ($ in millions) $1,600 $400 $363 $1,270 $329 $1,132 $304 $293 $1,200 $1,053 $300 $1,013 $274 $273 $944 $254 $253 $233 $800 $200 $400 $100 $0 $0 2010 2011 2012 2013 LTM 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 1Q'14 • Sa
Slide 19: Focused on Improving Cash Flows
Focused on Improving Cash Flows ® Adjusted EBITDA* Cash Flow* ($ in millions) ($ in millions) $80 $75 $40 $31 $30 $60 $20 $20 $17 $16 $43 $10 $7 $40 $5 $26 $0 $17 $18 $20 -$10 $(5) $(12) -$20 $0 -$30 $(28) 2010 2011 2012 2013 LTM 1Q'14 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 • Focused
Slide 20: Key Balance Sheet Items ($ in 000s)
Key Balance Sheet Items ($ in 000s) ® March 31, 2014 December 31, 2013 Cash and Cash Equivalents $25,708 $30,829 Accounts Receivable 145,911 128,544 Inventory, net of LIFO reserves (1) 213,846 214,900 Other Current Assets 16,911 16,418 Total Current Assets $ 402,376 $ 390,691 Accounts Payable (88,27
Slide 21: Next Step, Improve Working Capital Measurements
Next Step, Improve Working Capital Measurements ® Inventory – DSI Receivables – DSO Days Days 200 187 180 60 175 164 50 51 49 49 50 150 129 125 40 100 30 75 20 50 25 10 0 0 2011 2012 2013 1Q'14 2011 2012 2013 1Q'14 • Focused on significantly improving both DSI and DSO over the next several quarters
Slide 22: Improving Financial Position
Improving Financial Position Debt-to-Capital ® 54.0% • Focus on cash flow generation 50.0% has resulted in lower leverage 50.2% and a stronger balance sheet 46.0% 46.8% 45.7% • Net debt reduction of $60 42.0% 44.3% million in fiscal year 2013 38.0% 45.3% • Remain focused on creating 43.4% 40.9% addi
Slide 23: Appendix
® APPENDIX A.M. Castle & Co. 23
Slide 24: Annual and LTM Financial Business Trends As Reported
Annual and LTM Financial Business Trends As Reported ($ in millions, except EPS) ® Net Sales EBITDA* $1,600 $80 $74 $1,270 $1,200 $1,132 $1,053 $1,013 $60 $944 $37 $800 $40 $17 $16 $400 $20 $11 $0 $0 2010 2011 2012 2013 LTM 2010 2011 2012 2013 LTM 1Q'14 1Q'14 Diluted EPS Operating Income (Loss) $40
Slide 25: Quarterly Financial Business Trends As Reported
Quarterly Financial Business Trends As Reported ($ in millions, except EPS) ® Net Sales EBITDA* $400 $363 $329 $30 $28 $304 $293 $300 $274 $273 $254 $253 $233 $20 $20 $17 $200 $10 $9 $100 $5 $5 $5 $1 $- $0 $0 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3
Slide 26: Liquidity and Balance Sheet
Liquidity and Balance Sheet ® SELECTED CONSOLIDATED RESULTS Three Months Ended ($ are in Millions) March 31, Unaudited 2014 2013 Cash From (Used in) Operations $ (2.9) $ 32.6 Cash Paid for CapEx $ (2.0) $ (1.9) Avg Days Sales in Inventory 164 173 Avg Receivables Days Outstanding 49 51 SELECTED CONSO
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation ® Reconciliation of EBITDA to Net Loss/Income ($ in millions) Unaudited 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 Net (Loss)/Income $(4.3) $(3.0) $3.2 $(5.6) $(10.6) $(3.8) $(6.9) $(12.7) $(16.0) Depreciation and Amortization Expense 6.6 6.5 6.3 6.5 6.6 6.6 6.4 6.
Slide 28: Thank You
Thank You ® NYSE: CAS A.M. Castle & Co.