Slide 1: Investor Presentation August 2008
Investor Presentation August 2008 .... 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 Exhi
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: Major Business Units
4 Brush Engineered Materials - Major Business Units Alloy Be Products TMI Other WAM East 0.34 0.06 0.08 0.01 0.51 West North Williams Advanced Materials PVD Targets Optical Coatings Refining Electronic Packaging 51% Alloy (Cu based Be and Ni Alloys) Electronic Connectors Industrial Components 34% Be
Slide 5: Core competency
5 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 pro
Slide 6: Company Overview
6 Company: Brush Engineered Materials Inc. founded 1931, publicly traded since 1956 NYSE Ticker: BW Shares Outstanding: Approximately 20.6 million at 6/27/08 Market Cap: Approximately $520 million at 6/27/08 Component of: S&P Super Composite 1500, Russell 2000 S&P Small Cap 600 Annual Revenue: $956
Slide 7: 2007 Recap ... a record year
7 2007 Recap ... a record year Record sales of $956 million, up 25% over 2006 Earnings per share of $2.59 compares to prior year's $2.45 Earnings per share of $1.70* compares to prior year's $1.38 excluding items that should not repeat Sales growth, adjusting for metal price increased 20% A new annu
Slide 8: YTD Q2 2008 Recap
8 YTD Q2 2008 Recap Sales of $473 million Earnings per share of $0.57* (GAAP) Acquisition of assets of Techni-Met, Inc. for $87.4 million Techni-Met produces precision precious metal coated flexible polymeric films used in a variety of high-end applications, including diabetes diagnostic test strips
Slide 9: Non-GAAP Financial Measures
Non-GAAP Financial Measures 9 For the three months ended June 29, 2007 For the three months ended June 27, 2008 For the six months ended June 29, 2007 For the six months ended June 27, 2008 GAAP diluted EPS ..38 $ ..35 $ 1.50 $ ..57 $ Gain on sale of ruthenium inventory (.14) - - (.66) - - Lower of
Slide 10: 2008 Outlook
10 2008 Outlook Stronger demand as the second quarter begins and expectations for higher shipments of perpendicular media materials as the year progresses Continued strength from the oil and gas, heavy equipment, aerospace, medical, telecom and consumer electronics markets Weak first quarter start,
Slide 11: Strong conditions in key markets driving sales and earnings growth
11 Strong conditions in key markets driving solid sales and earnings growth Strong sales growth driven by Broad based demand increase and new products Added sales from acquisitions Higher metal prices Consumer electronics a primary factor Hard disk drives/data storage Portable devices, such as cell
Slide 12: Strong customer collaboration
12 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 13: Global Leader in High Performance Engineered Materials
13 Global Leader in High Performance Engineered Materials YTD Q2 2008 Revenue by Market Appliance Medical Telecommunications Other Data Storage Industrial Components Automotive Aerospace & Defense 0.06 0.06 0.47 0.11 0.09 0.08 0.07 0.06 Other Appliance Aerospace & Defense Industrial Components Data
Slide 14: Typical End Uses
14 Typical End Uses Data Storage Industrial products for Oil & Gas and Mining Medical Devices Cellular phones, i-Pods and other wireless communication devices Notebook computers and network servers Electronic components in cars and trucks Commercial Aerospace Defense
Slide 15: Applications - Cell Phones
15 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 16: Applications - Hard Disk Drives
16 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 PMR Material Stack Disk Drive Arm (TMI) Clad
Slide 17: Applications - Aerospace
17 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 18: Applications - Oil & Gas
18 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 19: Applications - Medical
19 Applications - Medical Cardiac Rhythm Management (TMI): Electronic Interconnects/Components Niobium/Titanium Electron Bean Weld Insulin Pump (Alloy): EMI Shielding Electrical Terminals in Connectors Mechanical Chips Connector Systems for equipotential grounding Seizure Control (WAM/TFT): Thin Fil
Slide 20: Global Sales and Distribution Network
20 Global Sales and Distribution Network Operations in the U.S. and eleven foreign countries YTD Q-2 2008 International sales were $166 million Act globally ... service locally! ?-------------- Asia / Pacific ------------? ? ---------------- Europe -------------- ? ? - Exports from USA -? Singapore
Slide 21: Targeting Growth Applications in Growing Markets
21 BEM - Targeting Growth Applications in Growing Markets Mobile Telecommunications Build Schedule for Boeing/Airbus O&G - Rotary Rig Count Disk Drive Head Demand 305 378 360 90 312 208 135 540 875 1010 1150 0 200 400 600 800 1000 1200 04' 05' 06' 07' 08' 09' 10' 11' PMR Shipments LMR Shipments
Slide 22: AMTS Business Structure and Operating Locations
22 AMTS Corporate Thin Film Products Electronic Packaging Products Advanced Material Technologies and Services Business Structure Today and Evolving Thin Film Services Fab Services Specialty Inorganic Materials Wheatfield, NY Ireland Czech Republic Brewster, NY Buffalo, NY Buffalo, NY Singapore Phil
Slide 23: Williams Advanced Materials capabilities
23 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 24: Key Markets - Wireless and Photonics
24 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 25: Key Markets - Semiconductor Wafer Fabrication
25 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 26: Key Markets - Semiconductor Packaging
26 Key Markets - Semiconductor Packaging High reliability semiconductor packaging materials. Applications focused in space, military and satellite market segments. Solder preforms and clad materials
Slide 27: New Product and Technology Development
27 New Product and Technology Development Magnetic Media and Head Materials Under Bump Metallization (UBM) for Flip Chip FCCL Materials Wireless and Photonics Visi-Lid(tm) - A transparent lid for New Photonics applications Expanded refining/chamber services supporting the thin film materials busines
Slide 28: Physical Vapor Deposition (PVD) Process
28 Physical Vapor Deposition (PVD) Process
Slide 29: World's only Fully Integrated Beryllium Producer
29 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 Also, new High Be Pebbles Plant underway with DOD Title III funding
Slide 30: Strip Alloy Applications
30 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 Reliabilit
Slide 31: Bulk Alloy Applications
31 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 Undersea
Slide 32: ToughMet - a new unique solution
32 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 33: Beryllium Products - Applications
33 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 34: Technical Materials, Inc.
34 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 35: BEM - Execution Initiatives
35 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 36: Annual Revenue: Historical
36 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% Telecom Crash 0 100 200 300 400 500 600 700 800 900 1000 2000 2001 2002 2003 2004 2005 2006 2007 $ in millions
Slide 37: Shareholder value creation initiatives
37 Our ongoing shareholder 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
Slide 38: Strategic Highlights
38 Strategic Highlights Strong, diverse set of markets served Global market reach New products and services ... a culture of innovation Niche-oriented product offerings Acquisitions adding to growth and earnings Focus on manufacturing excellence resulting in improved operations Strong cash flow Stro
Slide 39: Material Solutions for the World's Leading Companies
39 Brush Engineered Materials - Material Solutions for the World's Leading Companies