Materion Corporation · NYSE:MTRN
Materion — Brush Engineered Materials — Houlihan Lokey's 5th Annual Global Industrials Conference 2010
46 slides from Materion's conference presentation, May 17, 2010
Slide 1: Houlihan Lokey's 5th Annual Global Industrials Conference
Houlihan Lokey's 5th Annual Global Industrials Conference May 18, 2010 .... 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 technolo
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 advanced 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-te
Slide 4: Company Overview
4 Company: Brush Engineered Materials Inc. founded 1931, publicly traded since 1956 NYSE Ticker: BW Shares Outstanding: Approximately 20.3 million at 4/02/10 Market Cap: Approximately $460 million at 4/02/10 Component of: S&P Super Composite 1500, Russell 2000 S&P SmallCap 600, Russell 3000 2009 Rev
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 materials technology" company 5
Slide 6: BEM....the transformation (cont'd)
BEM....the transformation (cont'd) 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
Slide 7: BEM....the transformation: targeted business model
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: Integrated Metals vs Advanced Materials
BEM....the transformation (cont.) 8 Integrated Metals Advanced Materials 29% 71%
Slide 9: Targeted acquisitions increasingly important to total sales
Targeted acquisitions increasingly important to total sales 9 $ in millions
Slide 10: Acquisitions
Acquisitions 2005 OMC Shield kit cleaning services (technology buy) 2006 CERAC Inorganic chemicals ... powders and evaporative targets (optics, security, solar, semiconductor) 2007 TFT Thin film vacuum sputtered coatings 2008 Techni-Met Thin film roll to roll flexible substrate vacuum sputtered coat
Slide 11: Barr Associates, Inc.
Barr Associates, Inc. Acquisition announced on October 23, 2009 Based in Westford, Massachusetts with approximately 300 employees in three leased facilities in the Westford area Leading manufacturer of precision thin film optical filters that enable complex technologies and components throughout the
Slide 12: Academy Corporation
Academy Corporation Acquisition announced on January 5, 2010 Based in Albuquerque, New Mexico with approximately 150 employees in four leased facilities in Albuquerque and Gallup, New Mexico Leading provider of precious and non-precious metals and refining services to customers in a number of techni
Slide 13: Brush Engineered Materials - Major Segments
13 Brush Engineered Materials - Major Segments Williams Advanced Materials PVD Targets Optical Coatings Refining Electronic Packaging 69% Alloy (Cu based Be and Ni Alloys) Electronic Connectors Industrial Components 22% Be Products Defense/Aerospace Specialty Commercial Products 4% TMI (Specialty Cl
Slide 14: Global Leader in High Performance Engineered Materials: 2009 Revenue by Market
Global Leader in High Performance Engineered Materials 2009 Revenue by Market 14 Consumer 32% Infrastructure 21%
Slide 15: 2009 Recap
14 2009 Recap Sales of $715 million Diluted earnings per share of $(0.61) Acquisition of Barr Associates, Inc. for $55.2 million Barr produces precision thin film optical filters that enable complex technologies and components throughout the defense, aerospace, medical, energy, semiconductor, teleco
Slide 16: 2010 Outlook
15 2010 Outlook Demand has continued to improve, especially in the consumer electronics and wireless infrastructure-oriented markets Recently, we have seen improvement in the defense and industrial markets (oil and gas and aerospace) 2010 sales are expected to be approximately $1.2 to $1.3 billion 2
Slide 17: Strength in Challenging Times
Strength in Challenging Times Balance Sheet Revolver $240 mm committed facility, matures November 2012 Debt Debt to total capital of 24% 16
Slide 18: Brush Engineered Materials ... core competency
18 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 19: Global Sales and Distribution Network
19 Global Sales and Distribution Network Operations in the U.S. and eleven foreign countries International sales are approximately 29% of the Company (Q1 2010) Act globally ... service locally! ?-------------- Asia / Pacific ------------? ? ---------------- Europe -------------- ? ? - Exports from U
Slide 20: Strong customer collaboration
20 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 21: Typical End Uses
21 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 22: Applications - Cell Phones
22 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 23: 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 24: Applications - Hard Disk Drives
24 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 25: Applications - Oil & Gas
25 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 26: Applications - Aerospace
26 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 27: Applications - Medical
27 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 28: AMTS Business Structure and Operating Locations
28 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 Albuquerque, N
Slide 29: Williams Advanced Materials capabilities
29 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 30: Key Markets - Wireless and Photonics
30 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 31: Key Markets - Semiconductor Wafer Fabrication
31 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 32: Key Markets - Semiconductor Packaging
32 Key Markets - Semiconductor Packaging High reliability semiconductor packaging materials. Applications focused in space, military and satellite market segments. Solder preforms and clad materials
Slide 33: New Product and Technology Development: Advanced Material Technologies and Services
33 New Product and Technology Development ADVANCED MATERIAL TECHNOLOGIES AND SERVICES Magnetic Media and Head Materials, Eco-Ru(tm) Sputter Targets Under Bump Metallization (UBM) for Flip Chip FCCL Materials Optics Coating Materials Precision Optical Thin Film Coatings (specialty filters) High Value
Slide 34: New Product and Technology Development: Specialty Engineered Alloys
34 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 Alloy 390E and Alloy 25BiQ High Performance Copper Beryllium Strip Alloy for Burn in and Test Sockets (BiTS) app
Slide 35: Physical Vapor Deposition (PVD) Process
35 Physical Vapor Deposition (PVD) Process
Slide 36: World's only Fully Integrated Beryllium Producer
36 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 37: Strip Alloy Applications
37 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 38: Bulk Alloy Applications
38 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 39: ToughMet - a new unique solution
39 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 40: Beryllium Products - Applications
40 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 41: Technical Materials, Inc. - engineered strip metals
41 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 42: BEM - Execution Initiatives
42 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 43: Annual Revenue
43 Annual Revenue 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% -21% +65-85% Telecom Crash Global Economic Recession Recent acquisitions 30%
Slide 44: Value creation initiatives in three key areas
44 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 45: Strategic Highlights
45 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 46: Vision · Mission · Values
Vision · Mission · Values 46 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
Brush Engineered Materials — Houlihan Lokey's 5th Annual Global Industrials Conference 2010 on 6ix