Slide 1: Investor Presentations September 9-10, 2008
Investor Presentations September 9-10, 2008
Slide 2: Forward-Looking Statements and non-GAAP Financial Information
Forward-Looking Statements and non-GAAP Financial Information The information provided at the meeting today will include forward-looking statements relating among other things to our sales, income from operations, capital expenditures, depreciation and amortization, our worldwide markets, our growth
Slide 3: Investment Highlights
Investment Highlights Worldwide leader of friction technology solutions to diverse markets other than OE automotive 80% of sales derived from specific sole-sourced applications Approximately 50% of sales generated from stable OE service and direct aftermarket due to "wear-part" nature of parts Long
Slide 4: Hawk serves some of the world's best known companies
Hawk serves some of the world's best known companies
Slide 5: 6/30/2008 YTD Sales by Market
6/30/2008 YTD Sales by Market
Slide 6: 6/30/08 YTD Comparative Sales by Market
6/30/08 YTD Comparative Sales by Market Market Change Construction and Mining +32.3% Aircraft & Defense +16.9% Agriculture +39.1% Heavy Truck +12.8%
Slide 7: FPG Market Position
FPG Market Position ($ in Millions) Market Total Market Size 2007 Hawk Sales 2006 Hawk Sales 2005 Hawk Sales Competition Customers Off-Highway $350 $128.5 Up 15.8% $111.0 Up 27.3% $87.2 Friction Holdings (Raytech) Dynax Borg-Worner Caterpillar Deere Carraro ZF Sachs Volvo CNH Aircraft & Defense $125
Slide 8: Company Blueprint
Company Blueprint Focus on shareholder value Excellence in friction technology Dominant niche position Optimize OE business through: Operational excellence Technology advancement Customer intimacy OE heritage broadened through Aftermarket Seeking acquisitions and aggressive organic growth
Slide 9: Manufacturing Initiatives
Manufacturing Initiatives Operations leadership changes provided clear focus on manufacturing excellence Expansion projects underway in North America, Italy and China to support growth demands Productivity levels improved at all facilities Cost controls Scrap On-time metrics Continued focus on lean
Slide 10: Technology Initiatives
Technology Initiatives Current material development and product line extensions Friction technology improvements offering longer life, better friction qualities, lighter weight Carbon composite based friction technology development Other composite material development
Slide 11: Technology Initiatives: Fuel Cell development
Technology Initiatives Fuel Cell development Partnership with UTC in development of next generation fuel cell technology New York Power Authority selected UTC Power to supply 12 fuel cells totaling 4.8 megawatts of power for the Freedom Tower in NYC Providing complete components for UTC Power - Pure
Slide 12: YTD Consolidated Income
YTD Consolidated Income 6/30/2008 6/30/2007 % change Revenue $137.6 $109.5 25.7% Gross profit $38.5 $27.5 40.0% Gross profit % 28.0% 25.1% Operating income $18.1 $10.5 72.4% Operating income % 13.2% 9.6% Income from continuing operations, after tax $10.0 $3.8 163.2%
Slide 13: Consolidated Income Statement
Consolidated Income Statement (in millions) 2006 2007 2008 est '07 - '08 change Revenue $199.9 $215.9 $255.0 - $260.0 18.1% - 20.4% Gross profit $45.6 $51.4 Gross profit % 22.8% 23.8% Operating income $15.4 $19.5 $28.0 - $30.0 43.6% - 53.8% Operating income % 7.7% 9.0% 10.7% - 11.8% Income from cont
Slide 14: 2008 Market Factors
2008 Market Factors Continued strong performance from global industrial markets Construction & mining remains robust Expected rebound in on-highway truck market Softening aircraft market in last half of year Inflationary pressures Steel cost increases Other cost pressures on raw material inputs - fr
Slide 15: Investment Summary
Investment Summary 2008 Focused on Friction Assessing best way to redeploy assets Acquisitions, internal projects Business base Red hot focus on operations Steady, varied end-market growth "Lean" manufacturing providing margin upside Good business characteristics - wear parts, strong after-market, l
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