Slide 1: 2008 Earnings Conference
2008 Earnings Conference April 24, 2008 Jeffrey T. Gill President and CEO T. Scott Hatton Vice President and CFO
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer Each “forward-looking statement” herein is subject to serious risks and should not be relied upon, as detailed in our most recent Form 10-K and Form 10-Q and subsequent SEC filings. Briefly, we currently believe that such risks also include: our ability to liquidate our equity
Slide 3: Agenda
Agenda Overview Market Outlook Conclusion Financial Discussion – Q1 2008 Results – Q2 2008 Outlook – FY 2008 Outlook – Wrap Up Q&A Session 2
Slide 4: Overview
Overview Q1 2008 – Key Results: ● EPS better than guidance ● Revenue at the top end of guidance range > Electronics Group revenue increased 13% year over year ¾ 19% increase in Aerospace & Defense ¾ 3% increase in Test & Measurement ¾ Certification and launch of new generation link encryption produc
Slide 5: Market Outlook
Market Outlook ACT North American Production Forecast Heavy-Duty Vehicles Class 8 400,000 April forecast for 2008 down 5% 350,000 from March forecast 300,000 250,000 Reflects impact of rising fuel prices 200,000 150,000 Current view flat with 2007 100,000 50,000 2009 rebounds 49% - 2004 2005
Slide 6: Market Outlook
Market Outlook Industrial Group – The outlook for the production of trailers continues to weaken, with 2008 volume now expected to decline 25% from 2007 levels – The market recovery in class 5-7 production has slowed – Despite these obstacles, new programs will fuel a gradual recovery throughout t
Slide 7: Conclusion
Conclusion Strong start to first quarter – Margin improvement in the Industrial Group and strong cash flow performance for the quarter served as notable positives The economy continues to be uncertain given threat of recession and soaring fuel prices Despite this, we expect 2008 to show improv
Slide 8: Q1 2008 / Outlook
Q1 2008 / Outlook SOLUTIONS
Slide 9: Q1 2008 Results
Q1 2008 Results ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $102 - $107 $106 $15 $0.02 $0.00 ($8)–($10) Guidance Actual Guidance Actual Guidance Actual Revenue within guidance PBT and EPS above guidance Cash flow $24 above guidance SIG better-than-expected heavy truck
Slide 10: Q2 2008 Outlook
Q2 2008 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $116 $115 - $118 $2 ($0.00)-($0.05) ($0.13) ($14) - ($16) 2007 Guidance 2007 Guidance 2007 Guidance Revenue consistent with 2007 EPS up $0.10 as PBT improves by $3.2 Cash flow lower by (-$17) SIG down 3% SIG G
Slide 11: Total Year 2008 Outlook
Total Year 2008 Outlook ($M, except EPS) Revenue Revenue EPS EPS Free Free Cash Cash Flow Flow $460 – $480 $436 $0 $0.05 – $0.10 ($21) ($0.12) 2007 Guidance 2007 Guidance 2007 Guidance Revenue up 8% PBT up $5.0 to $6.0; EPS up 17-22 cents Significant free cash flow improvement SIG up 5% SIG Ex
Slide 12: 2008 Priorities
2008 Priorities Complete Phase 1 of SIG restructuring…prepare for market upturn – New business transfers are on track – Exiting non-core lines of business on schedule – New leadership team populated and driving commercial and operating improvements – Productivity results beginning to show from ent
Slide 13: Wrap-Up
Wrap-Up 1st Quarter performance exceeded expectations Re-affirming guidance for total year 2008 2H (in particular in Q4) should be stronger for both segments of the portfolio On track to deliver on priorities Double-digit Electronics growth Operational improvements in Industrial Resour