AM Castle & — Investor Presentation (May 2011)
26 slides from AM Castle &'s investor presentation, May 2011
Slide 1: Positioned for Growth
A. M. Castle & Co. POSITIONED FOR Growth •••• May 2011
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., $944 million 2010 revenue • Supplying over 5,000 products to 25,000 customers • Foremost global distributor of specialty grade, high performance metals • Diversified Plas
Slide 4: Key End Markets
Key End Markets Markets Served 2010 Revenue Breakdown Other Machine Tools & 15% General Equip 15% Heavy Equipment Plastics 10% 11% Power Generation Military & 5% Defense 4% Oilil & Gas 10% Aerospace 30% Global Demand Recovery Driving Growth in Key End Markets 4.
Slide 5: Product Portfolio
Product Portfolio Products Provided 2010 Revenue Breakdown Aluminum 24% Stainless & Nickel 23% Alloy 21% Other 3% Titanium 3% Plastics 11% Carbon 15% 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: Recent Transformation
Recent Transformation • Focused on g global,, growing g g markets: Oil and Gas,, Aerospace, p , Mining g and Heavy y Diversified Equipment End- Markets • Expanding our presence in Mexico Mexico, Shanghai Shanghai, Singapore and the UK with facility facility, Expanded equipment and inventory investme
Slide 8: Well-Positioned to Capture Growth Opportunities
Well-Positioned to Capture G Growth Opportunities O 120 65 100 60 55 80 evenue 50 PMI 60 45 Re 40 40 20 35 ‐ 30 Dec Dec Dec J F M A M J J A S O N J F M A M J J A S O N J F M '08 '09 '10 Revenue 84 95 83 74 70 63 62 63 61 60 65 58 59 71 69 83 81 77 82 77 83 85 84 81 71 85 85 10 PMI 33 36 36 36 40 43
Slide 9: Go-To-Market Strategy: Pursuing Profitable and High-Growth End-Markets
Go-To-Market Strategy Pursuing Profitable and High-Growth End-Markets Commercial Defense Oil & Gas Heavy Equipment Aerospace Aerospace •Global energy demand & Infrastructure •Ongoing multi-year •Specialty products and drove healthy growth •Funding for capital backlogs at major supply chain solutions
Slide 10: Go-To-Market Strategy: Optimize 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 11: 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 pl
Slide 12: 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 Over 115 Customers With Sales in Excess of $1.0 million in 2010 12.
Slide 13: Financial Overview
Financial Overview
Slide 14: Positioned For Profitable Growth: Revenue
Positioned For Profitable Growth Revenue $ in millions $1,600 $1,501 $1,200 $944 $813 $800 $400 $223 $273 $ $0 2008 2009 2010 1Q10 1Q11 • Q1 2011 revenue up 22% over Q1 2010 • Increased activity seen in virtually all targeted end markets • Sales volume and gross margin trends accelerated throughout
Slide 15: Positioned For Profitable Growth: EBITDA
Positioned For Profitable Growth EBITDA* $ in millions $120 $100 $95 $80 $60 $40 $17 $20 $10 $0 $(1) ‐$20 $(14) 2008 2009 2010 1Q10 1Q11 • Consolidated gross profit margin was 26.2% in Q1 2011 compared to 24.2% in Q1 2010 reflecting an improved inventory position and improved market conditions * 200
Slide 16: Positioned For Profitable Growth: Operating Cash Flows
Positioned For Profitable Growth Annual Operating Cash Flows* $ in millions $60 $53 $40 $34 $22 $20 $9 $5 $0 2008 2009 2010 1Q10 1Q11 • Working capital metrics improved significantly in the first quarter and combined with earnings improvement to provide $9 million of operating cash flow for the quar
Slide 17: Balance Sheet Comparison
Balance Sheet Comparison $ in millions 03/31/11 12/31/10 Accounts Receivable $ 158 $ 128 Inventory 144 131 Other Current Assets 54 52 Total Current Assets $ 356 $ 311 Accounts Payable (116) (72) Other Current Liabilities (40) (44) Working Capital $ 200 $ 195 Total Capital $ 344 $ 345 Debt, Less Cash
Slide 18: Solid Working Capital Measurements
Solid Working Capital Measurements Inventory Turns – DSI Receivables – DSO Days Days 200 189 60 54.8 175 49.9 50 47 6 47.6 47.2 143 150 130 117 40 125 100 30 75 20 50 10 25 0 0 2008 2009 2010 1Q11 2008 2009 2010 1Q10 • Ahead of schedule in returning DSI to the historical 120 day level in Q1 2001 * A
Slide 19: Strong Financial Position
Strong Financial Position Debt to Total Capital Ratios* 30% 25.2% 21.9% 20% 18 1% 18.1% 18 0% 18.0% 10% 0% 2008 2009 2010 1Q11 • Reduced total debt from $69.1M year-end 2010 to $69.9M Q1 2011 • y in p $230M credit facility place through g January y 2013 • Cash balances improved from $36.7 million at
Slide 20: 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 21: Appendix
APPENDIX
Slide 22: 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 23: Management Team
Management Team G. Nicholas Jones • 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 Ian Grif
Slide 24: 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 25: Blue Chip Platform Support
Blue Chip Platform Support F35 Airbus A380 Stryker Gulfstream V JSF Metal Type End Market Key Platforms Supported • H-T H T Aluminum Al i Pl Plate t • Large L C Commercial i l • Airbus Ai b A318 A318, A319 A319, A320 A320, A321 A321, A330 A330, A380 • Titanium Aircraft • Boeing 737, 747, 777, 787 •
Slide 26: 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 Castle Metals Aerospace business A.M. Castle Products − Minimal Composite Substitutions A.M. Castle Produc