Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - RTI INTERNATIONAL METALS INC | d280252d8k.htm |
| EX-99.2 - PRESS RELEASE DATED JANUARY 10, 2012 - RTI INTERNATIONAL METALS INC | d280252dex992.htm |
 RTI
International Metals to Acquire Remmele Engineering INVESTOR
PRESENTATION JANUARY 10, 2012
Exhibit 99.1 |
 Safe
Harbor The
information
in
this
presentation,
including
accompanying
oral
comments,
includes
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995,
and
is
subject
to
the
safe
harbor
created
by
that
Act.
These
statements,
which
represent
the
Company’s
expectations
or
beliefs
concerning
various
future
events,
include
statements
concerning
future
revenues,
EBITDA,
synergies,
strategy,
earnings
and
liquidity
associated
with
continued
growth
in
various
market
segments,
cost
reductions
expected
from
various
initiatives,
our
contemplated
acquisition
and
other
events.
Because
such
forward-looking
statements
involve
risks
and
uncertainties,
there
are
important
factors
that
could
cause
actual
results
to
differ
materially
from
those
expressed
or
implied
by
such
forward-looking
statements.
These
factors
include,
but
are
not
limited
to,
the
impact
of
global
events
on
the
commercial
aerospace
industry,
ultimate
titanium
content
per
copy
and
actual
aircraft
build
rates
for
new
commercial
and
military
aircraft
programs,
global
economic
conditions,
the
competitive
nature
of
the
markets
for
specialty
metals,
availability
and
pricing
of
raw
materials,
the
successful
completion
of
our
capital
expansion
projects,
the
ability
to
successfully
acquire
and
integrate
Remmele
Engineering
and
other
acquisitions;
and
other
risks
and
uncertainties
included
in
the
Company’s
filings
with
the
Securities
and
Exchange
Commission.
Actual
results
can
differ
materially
from
those
forecasted
or
expected.
For
additional
information
about
factors
that
could
cause
actual
results
to
differ
materially
from
those
described
in
the
forward-looking
statements,
please
see
the
documents
that
the
Company
has
filed
or
furnished
with
the
Securities
Exchange
Commission,
including
its
quarterly
reports
on
Form
10-Q,
its
most
recent
annual
report
on
Form
10-K,
its
current
reports
on
Form
8-K
and
its
proxy
statement.
All
subsequent
forward-looking
statements
attributable
to
RTI
or
any
person
acting
on
its
behalf
are
expressly
qualified
in
their
entirety
by
the
cautionary
statements
contained
or
referred
to
in
this
section.
RTI
is
not
under
any
obligation
to,
and
expressly
disclaims
any
obligation
to,
update
or
alter
any
forward-looking
statements
whether
as
a
result
of
such
changes,
new
information,
subsequent
events
or
otherwise.
2 |
 Agenda
Key Transaction Terms
Remmele Engineering Overview
Strategic & Financial Rationale
Full Year 2011 Update
Combined Company Benefits
Q&A
3 |
 Key
Transaction Terms 4
RTI is acquiring Remmele Engineering, a privately held company, in a transaction
currently valued at $182.5 million, with approximately $164.5 million in
cash and the assumption of $18.0 million in debt
Purchase price is approximately ~8.3x 2011 EBITDA
Purchase price is approximately ~7.4x 2012 EBITDA*
The transaction will be financed from existing cash reserves
If the transaction would have closed December 31, 2011, RTI’s cash, cash
equivalents and highly liquid investments would have totaled approximately
$165 million Expected to be immediately accretive to RTI’s EPS, before
the inclusion of the benefit from the anticipated cost or revenue synergies
Remmele Engineering’s key senior leadership will remain with and
continue to lead the organization
Transaction currently expected to close during 1Q 2012, subject to customary
closing conditions, including receipt of applicable regulatory
approvals *2012 EBITDA RTI management estimate
STRUCTURE
FINANCING
FINANCIAL BENEFITS
LEADERSHIP
CONDITIONS/TIMING |
 Remmele Engineering Overview
Attractive financial profile with strong margins
o
2011 Sales -
$125.9 million*
•
Aerospace & Defense ($74.9 million)
•
Medical ($51.0 million)
Long-term, blue-chip, customer relationships
Well established contract manufacturer for medical device makers
Highly experienced management team with significant bench strength
Opportunity
for
strategic
capital
investments
to
increase
growth
potential
*Estimated, Unaudited
5
2011 A&D Sales by End Market
2011 Medical Sales by End Market
Well-respected manufacturer of machined products serving the aerospace &
defense and medical device segments
Minimally
Invasive
Surgery
47%
Spine
22%
Vascular
6%
Urology
11%
Other
5%
Drug
Infusion
9%
Military
15%
Radar
29%
Space
7%
Comm'l
Aero
49% |
    Strategic & Financial Rationale Overview
6
•
Accelerates RTI’s downstream strategy in the aerospace and defense
sector •
Enhances ability to adapt to future needs of customers
•
Provides entry into attractive new end markets
•
Transforms profile of Fabrication Segment
Acquisition is consistent with the objectives RTI has set out when capital raising
– to be in a position to take advantage of growth opportunities
|
 Accelerates RTI’s downstream strategy in the
aerospace and defense sector
Expands RTI’s precision machining and collaborative engineering
capabilities in the A&D market
o
Remmele Engineering -
$70 million current backlog, $200 million LTAs over seven years
Highly respected supplier of finished engineered products to aerostructures, radar
and space markets
Improves scale and capabilities of manufacturing base, providing
opportunities to bid
on additional contracts
Acquisition repositions RTI to adapt to evolving defense landscape
A&D –
Key growth drivers:
o
Increase in commercial air travel
o
Industry need to reduce operating / fuel costs through more efficient
aircraft 7
RTI expects to leverage Remmele Engineering’s collaborative engineering
processes and resources across the RTI enterprise, bringing tremendous
benefits to its aerospace and defense customers |
 Enhances ability to adapt to future needs of customers
Remmele
Engineering
has
long
standing
relationships
with
many
of
RTI’s
key
A&D
customers,
such as Boeing and Lockheed Martin; adding RTI’s manufacturing expertise and
investment will help Remmele Engineering accelerate the combined
opportunities to provide advanced solutions for these customers
A&D customers increasingly looking for US-based partners that can provide
a more complete offering of titanium products and services alongside
best-in-class engineering design Remmele Engineering will provide
RTI with an advanced manufacturing platform with a demonstrated record of
collaborative engineering and customer partnering o
Original Equipment Manufacturers (OEMs) increasingly depend on US-based
contract manufacturers as a way to decrease manufacturing costs and improve
production capabilities o
Contract
manufacturers
are
a
cost
effective
solution
for
OEMs
to
manufacture
products
that
require
highly specialized capabilities or supplementary production capacity
8 |
 Provides entry into attractive new end markets
Remmele Engineering’s strong position in
medical engineering and precision machining
of titanium provides access to fast-growing
medical device market
Medical segment provides steady returns and
real diversification
Technical capabilities required for medical
are different than those needed in A&D
Remmele Engineering’s Top Medical Device
sub-segments include:
o
Minimally invasive surgery
o
Spine
o
Urology
9
Medical device industry poised for growth at annual
rate of ~6% from 2011-2016*
Key drivers include:
o
Aging US population, number of physician visits,
increasing rate of obesity
o
Greater need for cost-efficient solutions to address
pressures faced by medical industry, specifically with
regard to Medicare and Medicaid funding
o
New medical devices / new treatments
o
Regulatory considerations
*
Source: IBIS World
24
27
23
28
35
42
48
60
65
68
71
76
82
55
-7%
9%
7%
6%
5%
7%
8%
16%
-14%
25%
22%
13%
19%
11%
0
15
30
45
60
75
90
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
'16
$, bn
-20%
-10%
0%
10%
20%
30%
40%
% Growth
Revenue
% Growth
Medical Device (OEMs) Growth Trends
(1) |
 Transforms profile of Fabrication Segment
Machining operations will fill out a capability need for RTI Fabrication
Remmele Engineering’s fabrication capabilities include: precision machining,
integrated assembly, program management and engineering support
Remmele Engineering’s capabilities complement RTI’s current capabilities
such as advance forming, precision production, hot forming, superplastic
forming, and thermal-mechanical hot working
Fabrication segment growth will increase opportunities and reduces cyclical
volatility Improves sustainable operating profile
10
Fabrication
31%
Titanium
Distribution
Fabrication
46%
Titanium
Distribution
RTI Sales Today
Pro-forma Sales |
 Full
Year 2011 Update 11
Estimated Mill Product Volume
~14.6 million pounds
2011 Net Sales
$520-$535 million
Cash and Liquid Securities at End of Year
~$330 million |
 Combined Company Benefits
Enhances leadership position as an integrated, value-add titanium manufacturer
in the A&D segment
Transaction
builds
on
RTI’s
core
strength
in
titanium
manufacturing
and
is
expected
to
enhance
our
engineering
and
precision
machining
capabilities
o
Combination will offer superior engineering support and capabilities
o
Medical engineering processes and expertise can be used to enhance what RTI does
currently on the
aerospace side
Fulfills
the
demand
from
customers
looking
to
identify
strategic
partners
in
the
supply
chain
Strong cultural alignment: Both companies share a commitment to excellent customer
service and best-in-class manufacturing
Transaction expected to be immediately accretive and will leave ample liquidity to
pursue further growth opportunities
12 |
 Q&A
13 |