Exhibit 99.1
EXHIBIT 99.1 |
LMI AEROSPACE |
Investor Presentation |
October 2008 |
Safe Harbor Statements |
This presentation contains several statements about management’s current expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The actual results may differ materially from those indicated by these forward-looking statements as a result of various risks and uncertainties, including risks and uncertainties that relate specifically to our recent acquisition of D3 Technologies, Inc., such as: (i) the risk that the D3 business may not be integrated successfully into LMI; (ii) the risk that the expected benefits of the acquisition may not be realized; and (iii) difficulties, costs or delays in implementing common internal controls, disclosure controls, systems and procedures. Please refer to the discussion contained under the heading “Risk Factors” under item 1A of our annual report on Form 10-K for the year ended December 31, 2007 for more details. |
1LMI AEROSPACE PROPRIETARY |
Senior Management |
Ronald S. Saks |
CEO, President & Director |
· CEO and President of LMI since 1984 |
· Previously served as Executive Vice President with Associated Transports, Inc. |
Lawrence E. Dickinson |
Chief Financial Officer and Secretary |
· CFO of LMI since 1993 |
· Previously served as a Financial Analyst and Controller for LaBarge, Inc. from 1984 to 1993 |
2LMI AEROSPACE PROPRIETARY |
Investment Highlights |
· Demonstrated track record of strong financial performance, with excellent growth outlook |
— 28% Revenue CAGR from 2004 to 2009E — 72% Operating Income CAGR from 2004 to 2009E |
· Revenue / customer diversification1 — 37% services, 63% production and assembly — 36% commercial, 22% military, 34% corporate and regional |
· Favorable long-term industry trends toward outsourcing engineering, production and assembly |
· Approximately 70% of our 2009E revenue is associated with long-term contracts |
· Record Aerostructures segment backlog of $210 million2 |
· Preferred supplier to aircraft OEMs (including Boeing, Sikorsky, Gulfstream and others) and Tier 1 suppliers for nearly 60 years with industry-leading quality and reliability |
· Defined organic growth plan and ongoing acquisition program |
· Experienced management team with an average of over 20 years experience and strong industry relationships |
(1)Based on Q2 2008 results.(2)Includes $47 million in Gulfstream orders received after 6/30/08. |
| | Revenue3 |
| | ($in Millions)2 8% $350= |
G R |
CA 297 $3000 9 E |
2 0 2574— $2502 0 0 D3 $200 169 D3 $150 123 D3 101 $100 86 |
LMI LMI |
$50 LMI $0 |
| | | | | | 2004 2005 2006 2007 2008E 2009E Operating Income3 |
| | | | | | ($in Millions)2% $40=7 39RA GC 33 D39 E $300 0— 24 D30 02 21 $20 16 D3 LMI 10 $10 LMI |
LMI |
3 $0 |
2004 2005 2006 2007 2008E 2009E |
2008E and 2009E reflect midpoint of Company guidance as of 8/6/08 and 9/3/08, respectively. |
3LMI AEROSPACE PROPRIETARY |
Business Overview |
· A leading provider of design engineering services, structural components, assemblies and kits to the aerospace, defense and technology industries |
· Produces more than 30,000 types of aerospace parts, kits and assemblies for integration into a variety of civilian and military aircraft platforms |
· Supports both military and commercial aircraft lifecycles, from conceptual design, analysis and certification through production support, fleet support and service life extensions with over 375 qualified engineers |
· 21 facilities in 15 cities |
· Successfully integrated eight acquisitions since 1996 |
· 2008E revenue of $257 million and operating profit of $32.5 million1 |
(1)2008E reflects midpoint of guidance as of 8/6/08. |
4LMI AEROSPACE PROPRIETARY |
Leading Provider of Assemblies, Kits and Components |
Gulfstream Fuselage Kit Rotorcraft Machined Components Leading Edge |
Sikorsky Helicopter Cabin Assembly Gun Assembly Components 767 Winglet Modification Leading Edge |
Great customer relationships built over many years around our superior reputation for quality and on-time delivery |
5LMI AEROSPACE PROPRIETARY |
D3 Acquisition Added Design Engineering Services |
Airbus A330 Wing Boeing 787 Structural and Boeing Dreamlifter Structural Systems Designand Systems Design Gulfstream G-650 Structural F-35 Wing and Fuselage F-18 Program Management Design and Analysis |
Well-positioned on corporate, commercial and military platforms |
6LMI AEROSPACE PROPRIETARY |
Strategic Benefits of the D3 Combination |
D3 LMI / D3 LMI EngineeringDesign-Build Manufacturing Services |
· LMI is positioned as a “turnkey” aerospace systems provider —Strengthens LMI’s current customer relationships —Potential access to Airbus with combined capabilities |
· Capitalizes on accelerating trend toward OEM |
outsourcing of complex aircraft development projects |
· Enhances the depth of LMI’s management and engineering team — Employs over 375 highly skilled engineers |
· Adds additional 787 program participation and unique composite materials engineering expertise |
7LMI AEROSPACE PROPRIETARY |
Growth Strategy |
· Leverage strong customer relationships |
· Expand value-added services and solutions |
· Invest in production efficiencies and capacity |
· Pursue strategic acquisitions |
· Pursue design-build opportunities |
8LMI AEROSPACE PROPRIETARY |
Acquisition Focus |
Design and engineering services High speed machining Composite technologies Other complex metal capabilities |
Enhance portfolio of design and manufacturing capabilities |
9LMI AEROSPACE PROPRIETARY |
Strategic Geographic Locations |
Mukilteo |
Auburn |
Washington DC St. Louis Wichita Sun Valley San Diego Tulsa Vista Catoosa Greenville Mexicali Savannah Irving Dallas |
FormingMachining Processing Distribution Design HQ |
10LMI AEROSPACE PROPRIETARY |
Strong Relationships with OEMs & Tier 1s |
Exclusive long-term agreements with blue-chip customers |
11LMI AEROSPACE PROPRIETARY |
Diversified Across Aerospace Sectors |
· LMI applies its capabilities across multiple customers and aircraft platforms |
· Disciplined diversification strategy significantly protects LMI from any downturns in the aerospace cycle |
Aerostructures Revenue |
8.2% |
33.9% 28.1% |
29.8% |
Engineering Services Revenue |
5.8% 12.5% |
46.7% |
35.0% |
Total Revenue |
7.3% |
34.3% 22.4% |
36.0% |
Corporate and Regional Aircraft Large Commercial Aircraft Military Other |
(1)Sector revenue breakdown based on Q2 2008 results. |
12LMI AEROSPACE PROPRIETARY |
LMI Focuses on Attractive Markets |
Business Aviation |
· Strong backlog at business jet OEMs |
· Domestic and international demand expected to remain elevated for large cabin models |
Jet Deliveries of LMI Aerospace Customers1 |
9% |
500= |
R |
AG |
C 409 400 |
300 272 |
200 |
2005 2010 |
Commercial Aerospace |
· Traffic expected to increase from 2.5 trillion to 3.0 trillion RPMs from 2005 to 2010 |
· High oil prices driving demand for: |
— Lighter, more fuel-efficient aircraft |
— Winglet modifications that enhance fuel efficiency |
Large Commercial Aircraft Deliveries2 |
1,2000% 11,075 |
=RA G 1,000C 800 |
663 |
600 |
400 |
2005 2010 |
Military |
· Rotorcraft demand driven by high |
utilization and aging fleet |
· Engineering services for military |
aircraft programs driven by |
upgrades, maintenance, |
modification and new aircraft |
development |
Defense Aircraft |
Procurement Budget |
$ 408% |
= $ 37 |
R |
A G |
$ 35C |
$ 30 |
$25 |
$ 25 |
$ 20 |
2005 2010 |
(1)LMI Aerospace customers include Bombardier and Gulfstream.(2)Includes Boeing and Airbus deliveries. |
Sources: Teal Group Research 2008; Airline Monitor July 2008; National Defense Budget Estimates for FY 2009. |
13LMI AEROSPACE PROPRIETARY |
Key Capabilities on a Variety of Platforms |
Business AviationG-450 / G-550 G-650 |
Design G-150 Engineering |
· Manufacturing: Fuselage Skins and Components, Wing Skins and Components, Leading Edges, Structural Sheet Metal and Extruded Components |
· Design Engineering Services: Wing / |
Wingbox Design, Winglet Design, Systems Design and Integration, Certification Planning and Support, Tool Design and Fabrication |
Commercial Aerospace767 777 787 737 |
· Manufacturing: Fuselage Skins and Components, Wing Skins and Components, Leading Edges, Winglet Leading Edges |
· Design Engineering Services: Wing / Wingbox Design, Fuselage / Empennage Design, Composite Design Expertise, Weight Improvement Design |
MilitaryF-35 F-18 |
AH-64 UH-60 |
· Manufacturing: Helicopter Components, Helicopter Assemblies, Housings and Assemblies for Gun Turrets |
· Design Engineering Services: Wing / Wingbox Design, Fuselage / Empennage Design, Composite Design Expertise, Weight Improvement Design, Tool Design and Fabrication, Rapid Prototyping and Test |
14LMI AEROSPACE PROPRIETARY |
Strong Financial Performance |
Guidance for 2008 $in Millions Revenue $249 — $265Gross Profit Margin 25% — 26% SG&A $32.5 — $33.5 Interest Expense $1.6 — $1.8Tax Rate 36.5% Guidance for 2009 $in Millions Revenue $289 — $304Gross Profit Margin 24% — 25% SG&A $33.8 — $34.3 Interest Expense $1.5 — $1.7Tax Rate 36.5% |
Revenue |
$ in Millions $3508% |
=2R 296.5 |
A G $300E C0 9 257.0 |
2 0 $2504— |
0 0 D32 |
$200 D3 168.5 $150 123.0 D3 101.1 |
85.9 LMI $100 |
LMI LMI $50 |
$0 |
2004 2005 2006 2007 2008E 2009E |
Operating Income |
$ in Millions |
38.6 $40 |
2%7=32.5 |
R D3A G $30C9 E0 0 D3— 2 40 0 21.4 |
2 $20 D3 16.2 LMI 10.3 LMI $10 LMI 2.5 |
$0 2004 2005 2006 2007 2008E 2009E |
Note: 2008E and 2009E reflect midpoint of Company guidance as of 8/6/08 and 9/3/08, respectively. 15LMI AEROSPACE PROPRIETARY |
Well-Capitalized to Execute Growth Strategy |
· Significant acquisition capacity |
— $80 million revolver with additional $40 million accordion feature |
— Shelf registration on file with SEC |
Current Capitalization |
$ in Millions |
Actual 6/30/08 |
Cash & Cash Equivalents $0.0 Total Debt 29.9 Shareholders’ Equity 115.5 Total Capitalization $145.5 |
16LMI AEROSPACE PROPRIETARY |
Investment Highlights |
· Demonstrated track record of strong financial performance, with excellent growth outlook |
— 28% Revenue CAGR from 2004 to 2009E — 72% Operating Income CAGR from 2004 to 2009E |
· Revenue / customer diversification1 — 37% services, 63% production and assembly — 36% commercial, 22% military, 34% corporate and regional |
· Favorable long-term industry trends toward outsourcing engineering, production and assembly |
· Approximately 70% of our 2009E revenue is associated with long-term contracts |
· Record Aerostructures segment backlog of $210 million2 |
· Preferred supplier to aircraft OEMs (including Boeing, Sikorsky, Gulfstream and others) and Tier 1 suppliers for nearly 60 years with industry-leading quality and reliability |
· Defined organic growth plan and ongoing acquisition program |
· Experienced management team with an average of over 20 years experience and strong industry relationships |
(1)Based on Q2 2008 results.(2)Includes $47 million in Gulfstream orders received after 6/30/08. |
| | Revenue3 |
| | ($in Millions)2 8% $350= |
G R |
CA 297 $3000 9 E |
2 0 2574— $2502 0 0 D3 $200 169 D3 $150 123 D3 101 $100 86 |
LMI LMI |
$50 LMI $0 |
| | | | | | 2004 2005 2006 2007 2008E 2009E Operating Income3 |
| | | | | | ($in Millions)2% $40=7 39RA GC 33 D39 E $300 0— 24 D30 02 21 $20 16 D3 LMI 10 $10 LMI |
LMI |
3 $0 |
2004 2005 2006 2007 2008E 2009E |
(3)2008E and 2009E reflect midpoint of Company guidance as of 8/6/08 and 9/3/08, respectively. |
17LMI AEROSPACE PROPRIETARY |