Slide 1: Investor Presentation November 2009
Investor Presentation November 2009 .... 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 technology, market, and geographic reach Ex
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 specialty 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-t
Slide 4: Overview
4 Company: Brush Engineered Materials Inc. founded 1931, publicly traded since 1956 NYSE Ticker: BW Shares Outstanding: Approximately 20.2 million at 10/02/09 Market Cap: Approximately $462 million at 10/02/09 Component of: S&P Super Composite 1500, Russell 2000 S&P Small Cap 600 Annual Revenue: $91
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 technology" company 5
Slide 6: BEM....the transformation
BEM....the transformation 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 and maint
Slide 7: BEM....the transformation (cont.)
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: 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 9: 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 10: BEM....the transformation (cont.)
BEM....the transformation (cont.) Beryllium Non-Beryllium 2001 Sales 56 44 Beryllium Non-Beryllium 2009 Sales 30 70 10
Slide 11: Brush Engineered Materials - Major Business Units
11 Brush Engineered Materials - Major Business Units Alloy Be Products TMI Other WAM East 0.24 0.07 0.05 0 0.64 West North Williams Advanced Materials PVD Targets Optical Coatings Refining Electronic Packaging 64% Alloy (Cu based Be and Ni Alloys) Electronic Connectors Industrial Components 24% Be P
Slide 12: 2008 Recap
12 2008 Recap Sales of $910 million Diluted earnings per share of $0.89* Acquisition of assets of Techni-Met, Inc. for $86.5 million Techni-Met produces precision precious metal coated flexible polymeric films used in a variety of high-end applications, including diabetes diagnostic test strips Cont
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures 13
Slide 14: Q-3 2009 Recap
14 Q-3 2009 Recap Revenue of $190.5 million or an increase of 9% from Q2 2009 Revenue improvement is primarily due to increase in demand from the consumer electronics-oriented markets Sales for Q3 and YTD 2009 were down 21% and 30%, respectively, as compared to the same periods last year Net income
Slide 15: Q4 2009 Outlook
15 Q4 2009 Outlook Order entry has continued to improve, especially in the consumer electronics-oriented markets Not much clarity; still uncertain about Q4 and beyond, but have seen signs of improvement in consumer electronics- oriented markets Expect Q4 sales to improve from Q3 levels by up to 8% S
Slide 16: Strength in Challenging Times
Strength in Challenging Times Balance Sheet Revolver $240 mm committed facility, matures November 2012 Debt Debt to total capital of 12% 16
Slide 17: Global Leader in High Performance Engineered Materials
Global Leader in High Performance Engineered Materials Q3 2009 Revenue by Market 17
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 35% of the Company Act globally ... service locally! ?-------------- Asia / Pacific ------------? ? ---------------- Europe -------------- ? ? - Exports from USA -? Sing
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 Today and Evolving
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 Buffalo, NY Si
Slide 29: Williams Advanced Materials
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 - AMTS
33 New Product and Technology Development ADVANCED MATERIAL TECHNOLOGIES AND SERVICES Magnetic Media and Head Materials Under Bump Metallization (UBM) for Flip Chip FCCL Materials Visi-Lid(tm) - A transparent lid for New Photonics applications Expanded refining/chamber services supporting the thin f
Slide 34: New Product and Technology Development - 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 390E High Performance Copper Beryllium Strip Alloy for Burn in and Test Sockets (BiTS) applications BrushForm 15
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.
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: Historical
43 2000 2001 2002 2003 2004 2005 2006 2007 2008 564 473 373 401 496 541 763 956 909.7 Annual Revenue: Historical 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% Telecom Crash
Slide 44: Ongoing 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