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8-K - LMI AEROSPACE INC 8-K 5-8-2012 - LMI AEROSPACE INCform8k.htm

Exhibit 99.1
 
Management Presentation
May 2012
 
 

 
LMI AEROSPACE PROPRIETARY
1
Safe Harbor Statements
In addition to the Company’s past performance and other historical facts, this presentation
contains certain forward-looking information, such as current expectations as to future
performance and schedules. Such forward-looking information is based on management
s
current assumptions and analysis, which are subject to numerous business risks and
uncertainties, including risk and uncertainties that relate to acquisitions. There can be no
assurance that these assumptions will prove to be accurate in the future. Actual results may
differ from these forward-looking statements as a result of, among other things, the factors
detailed from time to time in the Company’s filings with the Securities and Exchange
Commission. Please refer to the Risk Factors contained in the Company
s annual report on Form
10-K for the year ended December 31, 2011.
 
 

 
LMI AEROSPACE PROPRIETARY
2
Senior Management
Lawrence E. Dickinson
CFO & Secretary
Ronald S. Saks
CEO & Director
> Chief Executive Officer of LMI since 1984
> Chief Financial Officer of LMI since 1993
 
 

 
LMI AEROSPACE PROPRIETARY
3
 (1) Based on financials for the 12-month period ended December 31, 2011
Investment Highlights
> Leading provider of design engineering services, structural assemblies, kits and components for
 aerospace and defense markets
> Well-positioned on key programs with leading OEMs and Tier-1 market participants
> Favorable long-term industry trends toward outsourcing engineering, production and assembly
> Broad revenue / customer diversification(1)
  34% services, 66% production and assembly
  38% large commercial, 22% military, 31% regional and business
  Diversification within market sectors remains a focus
> Growth strategy leverages existing programs, integrated design-build model and disciplined M&A
 approach
> Experienced management team with an average of over 20 years’ experience and strong industry
 relationships
> Large capital expenditures planned for growth and redundancy
> Research and development team initiating in second quarter
 
 

 
LMI AEROSPACE PROPRIETARY
4
Operating Income(1)
Revenue(1)
Investment Highlights (continued)
> Proven track record of financial performance
> Overall 2012 Revenues are expected to be $282 - $298 million
  Aerostructures: $186 - 198 million
  Engineering Services: $96 - $100 million
(US$ in millions)
(1) 2012E reflects midpoint of Company guidance as of May 7, 2012
 
 

 
 
 

 
LMI AEROSPACE PROPRIETARY
6
Strong Relationships with OEMs & Tier 1s
(1)
(1) Acquired by Triumph Group in 2010
Recent Awards
D3 Subsidiary wins Boeing Supplier of the Year for non-production for 2011
Aerostructures’ Savannah location wins APB Supplier of the Year for 2011
 
 

 
LMI AEROSPACE PROPRIETARY
7
Strategic Initiatives
> Achieve organic growth within our engineering and manufacturing businesses as well as
 through new design-build projects
> Make project management expertise the cornerstone of our competitive advantage
> Continue to diversify our customers across three major market sectors and within those
 sectors
> Pursue strategic acquisitions to build critical mass and capabilities to win larger, more
 complex projects
> Provide exemplary customer service - mentoring, design for cost
> Target perfect quality and delivery performance
> Implement global sourcing strategy to provide value to our customers
> Continue to invest in training and development of our workforce
 
 

 
LMI AEROSPACE PROPRIETARY
8
LMI Offers Full Lifecycle Support from Engineering &
Design to Assembly & Manufacturing
> Customer defines
 product or project
 requirements
> Done together with
 customer
> Time and materials
 billing
> Testing on fixed
 price basis
> Joint input between
 LMI and Customer
> Quote in
 competition with
 others
> Build to print
> Long-term
 contracts with
 customers
 
 

 
LMI AEROSPACE PROPRIETARY
9
Design-Build Strategy
“We will provide integrated solutions to our
aerospace customers through creative and
value-driven engineering and manufacturing
processes, throughout the product life cycle.”
> LMI is positioned as a “turnkey” aerospace systems
 provider, capitalizing on the accelerating trend of OEMs
 outsourcing complex aircraft development projects
> Technical leadership through over 300 highly skilled D3
 engineers and 49 Intec technicians
> New programs expected to require substantial annual
 investments in engineering and tooling
> Continue to seek acquisitions to broaden capabilities
 and support production of larger, complex assemblies
Select Customers
 
 

 
LMI AEROSPACE PROPRIETARY
10
MRJ Tailcone Development Schedule
> MJET required a supplier with design, tooling and
 fabrication capabilities
> Engineering and tooling funded through milestone
 payments
> 1st unit estimated to be delivered in 1st quarter 2013
 
1 Jan 10
1 Jul 10
1 Jan 11
1 Jun 11
1 Jan 12
1st Flight
PDR
CDR-1
CDR-2
Go-Ahead
Production
Authorization
(estimated)
1 Jun 12
1 Jan 13
1st Delivery
To MITAC
(estimated)
 
 

 
LMI AEROSPACE PROPRIETARY
11
Integrated Design-Build Experience
> Full Design & Development Responsibility:
  Structural Design & Analysis to Civil & Military Requirements
  Full test article and production development and test execution
  Certification Test Support
  ITAR Military program
> Model-Based Design:
  CATIA V5 with Teamcenter PLM
> Supplier Management
  Full supply chain management
   for procured items
> Product Support:
  MTBUR & MTBF Requirements
  LRU Remove/Replacement Times
  Manuals
EMBRAER KC-390 Slat System - Oct 2011
 
 

 
LMI AEROSPACE PROPRIETARY
12
Add New Programs and Market Share Gains
> Pursue new programs with both new and existing customers
  Add new programs across Commercial, Military, Regional and Business Jet sectors
  Aerostructures and Engineering segments have consistently added 4-6 new major
 programs per year
> New design-build programs expected to require substantial initial investments in engineering
 and tooling
  Satisfy stringent ROI requirement
> Potential long-term commitment of in-house design resources may be necessary
 
 

 
LMI AEROSPACE PROPRIETARY
13
Diversified Revenues Across Aerospace Sectors
Disciplined diversification strategy designed to protect LMI from downturns in any single sector
(1) Sector revenue breakdown based on financials for the 12-month period ended December 31, 2011
 Eliminations for the 12-month period totaled $1.6 million and spread ratably across sector percentages
FY 2011 Engineering Services Revenue - $87.5m
FY 2011 LMI Revenue - $254.0m
Regional and Business Jet
Large Commercial Aircraft
Military Aircraft
Other
(US$ in millions)
 $96.4
 
 

 
LMI AEROSPACE PROPRIETARY
14
Growth through Acquisitions
> Plan to acquire businesses with solid management teams and technical capabilities to
 continue expanding the complexity of our products
  Composites and other non-metal products
  High speed machining
> Acquisition program from 1998 through 2009 resulted in 8 successfully acquired and
 integrated businesses
  Broadened our breadth of engineering and manufacturing capabilities
  Diversified our markets and programs served
 
 

 
LMI AEROSPACE PROPRIETARY
15
LMI Programs
Large Commercial Aircraft
Military Aircraft
Regional and Business Jet
767 Winglet
Modification
Boeing Structural
Design
767 Tanker
Sikorsky Cabin
Assembly
Fuselage Kit
MJET
> Wing/Wingbox Design
> Fuselage/Empennage Design
> Composite Design Expertise
> Weight Improvement Studies
> Tool Design and Fabrication
> Rapid Prototyping and Test
> Wing Skins and
 Components
> Fuselage Skins and
 Components
> Leading Edges
> Winglet Leading Edge
 and Modification Kit
> Structural Sheet Metal and
 Extruded Components
> Detail Interior Components
> Helicopter Components
> Helicopter Assemblies
> Housings and Assemblies
 for Gun Turrets
> Avionics and Tactical
 Software Development
> Winglet Design
> Certification Planning
 and Support
> Design for
 Manufacturing Cost
Aerostructures Products
Engineering Services
G-650
G-550
Blackhawk Models
CH-53K
787
777
LMI Platform
 
 

 
LMI AEROSPACE PROPRIETARY
16
History of Financial Success
(US$ in millions)
     
Revenue
$282.0
-
$298.0
Gross Profit Margin
24.2%
-
25.3%
SG&A
$36.7
-
$37.7
Interest Expense
 
$1.0
 
Tax Rate
 
 
35.3%
D&A, Stock Comp.
 
$9.7
 
(US$ in millions)
Aerostructures
Engineering
Services
Revenue
$186.0-$198.0
$96.0-$100.0
Gross Profit
Margin
27.6%-28.8%
17.5 % - 18.5%
SG&A
$28.5-$29.1
$8.2-$8.6
Guidance for 2012
Revenue(1)
Operating Income(1)
(US$ in millions)
Segment Guidance for 2012
 
 

 
LMI AEROSPACE PROPRIETARY
17
> Significant liquidity
  $125 million revolver with additional $25 million in an accordion feature
  Shelf registration on file with SEC
(1) 2012E reflects midpoint of Company guidance as of May 7, 2012. EBITDA equals operating income plus depreciation,
 amortization, stock compensation expense and goodwill impairment
(2) $125 million capacity
(3) Excludes capital leases and equipment notes
 
12/31/11
3/31/12
Cash & Equivalents
$ 7.9
$ 5.5
Drawn revolver(2)
-
-
Net Debt(3)
$(7.9)
$(5.5)
Undrawn revolver(2)
$125.0
$125.0
Strong Cash Generation
EBITDA(1)
Current Net Debt and Revolver Capacity
(US$ in millions)
(US$ in millions)
 
 

 
LMI AEROSPACE PROPRIETARY
18
Investment Highlights
> Leading provider of design engineering services, structural assemblies, kits and
 components for aerospace and defense markets
> Well-positioned on key programs with leading OEMs and Tier-1 market participants
> Favorable long-term industry trends toward outsourcing engineering, production and
 assembly
> Broad revenue / customer diversification
> Demonstrated track record of strong financial performance
> Growth strategy leverages existing programs, disciplined M&A approach and integrated
 design-build model
> Experienced management team with an average of over 20 years’ experience and strong
 industry relationships