![]() 1 Exhibit 99.1 Investor Presentation |
![]() 2 This presentation contains "forward-looking statements" within the meaning of that term set forth in the Private Securities Litigation Reform Act of 1995. These statements reflect our current views of future events and financial performance and are subject to a number of risks and uncertainties. Our actual results, performance or achievements may differ materially from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, decreased demand for new gas turbine power plants, reduced demand for, or increased regulation of, nuclear power, loss of any of our major customers, cost increases and project cost overruns, unforeseen schedule delays, poor performance by our subcontractors, cancellation of projects, competition for the sale of our products and services, shortages in, or increases in prices for, energy and materials such as steel that we use to manufacture our products, damage to our reputation, warranty or product liability claims, increased exposure to environmental or other liabilities, failure to comply with various laws and regulations, failure to attract and retain highly-qualified personnel, volatility of our stock price, deterioration or uncertainty of credit markets, and changes in the economic, social and political conditions in the United States and other countries in which we operate, including fluctuations in foreign currency exchange rates, the banking environment or monetary policy. Other important factors that may cause actual results to differ materially from those expressed in the forward-looking statements are discussed in our filings with the Securities and Exchange Commission, including the section of our Registration Statement on Form 10 titled "Risk Factors." Except as may be required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and we caution you not to rely upon them unduly. Forward-Looking Statements |
![]() 3 Market Overview Market Overview 1. Power Generation equipment and service is one of the largest industries worldwide 2. Technology is stable – owners are conservative due to the large capital investments 3. Economics of power generation plants are dynamic due to fluctuating fuel prices and environmental compliance costs 4. Service market is stable / slow growth and consistently profitable 5. OEM / new equipment market is global, cyclical and generates higher risks and earnings swings Global Power Mission Statement Mission Statement We will safely provide superior engineered products and services that exceed customer standards while affording employees opportunities for career growth and earning our investors a superior rate of return on their investment. |
![]() 4 Global Power What we do Global Power Equipment Group Inc. is a comprehensive provider of power generation equipment and maintenance services for customers in the domestic and international energy, power infrastructure and service industries. |
![]() 5 Global Power Executive management Tracy Pagliara General Counsel, Secretary & VP Business Development 25 yrs experience David Willis CFO & SVP 17 yrs experience Ken Robuck SVP & President of Services 28 yrs experience Dean Glover SVP & President of Products 20 yrs experience David Keller President & CEO 30 yrs experience |
![]() 6 A Global Presence Cost effective / low risk OEM model takes us worldwide |
![]() 7 Financial Overview 6/30/10 Snapshot Market cap (9/9/10): $232 million Total unrestricted cash: $66 million Cash position net of term loan: $42 million Total backlog: $298 million Fully diluted shares: 16.2 million Operating revenues: $282 million Net income: $22 million Earnings per fully diluted share: $1.35 Consolidated operating EBITDA: $26 million Year to Date 6/30/10 As of 6/30/10 EBITDA is a non-GAAP measure; see appendix for reconciliation to net income |
![]() 8 Snapshot of Backlog 66% 51% 38% 37% 33% 34% 49% 62% 63% 67% 2007 2008 2009 1Q10 2Q10 Products Services Historical Backlog Historical Backlog $377 $332 $314 $267 $298 Services 62% Products 38% Segment Cost Plus 90% Fixed Price 10% Contract Type Services (Williams) Fixed Price 100% Contract Type Products (Braden/Deltak) Backlog (6/30/10) Backlog (6/30/10) |
![]() 9 Blue Chip Customer Base Bad debt expense and warranty claims represent 0.166% of revenues from top 10 customers from 2007 – 2009. 1) As of August 2010 2) Bond issue rating Credit % of GPEG Bad Debt Warranty Relationship Rating ¹ Revenue Exp Claims Tenure ($ in 000's) ($ in 000's) 1. General Electric AA+ / stable 42 years 2. Southern Company A / stable 40 years 3. Tennessee Valley Authority A / stable ² 34 years 4. Florida Power & Light Group A- / stable 34 years 5. Energy Northwest AA / stable ² 5 years 6. Siemens A+ / stable 39 years 7. Entergy BBB / stable 1 year 8. Jacksonville Electric Authority A+ / stable ² 19 years 9. Alstom BBB+ / Neg 18 years 10. Mitsubishi A / stable 16 years Subtotal - Top Customers 79% 43 $ 1,705 $ All Others 21% Total Revenue 100% Customer 2007 - 2009 |
![]() 10 Strategic Overview Where we have been Global Power has strengthened and repositioned itself over the last four years Exited large-scale HRSG product line Divested foreign subsidiary Successfully exited Chapter 11 Additional equity capital Commenced trading under “GLPW” on Pink Sheets Entered into $150m exit facility: - $90m term loan - $60m revolver facility New management Successfully re-listed on NASDAQ to capitalize on strong performance and position company for growth Solid financials/Operating Performance (across 2008-10) - Unrestricted cash of $66.3m - Term loan balance reduced from $90m to $24.6m Improving management systems and controls |
![]() 11 Strategic Overview Where we are going Organic Outlook Organic Outlook Products OEM market expected to stabilize in 2011 with industry consensus view of recovery in 2012 of gas turbine power projects - 2011 revenues: potential growth range of mid-single digits compared to 2010 - 2011 gross margins anticipated to be mid-single digits lower than 2010 as current prospects are booking at lower margins compared to 1 st half 2010 results Services is positioned to pursue more capital projects; shift in mix from maintenance and modification work could result in “lumpy” bookings activity - 2011 revenues anticipated to be flat to mid-single digit decline compared to 2010 due to the completion of a large site security project - 2011 margins anticipated to stabilize at historical run rates of 10% - 13% Consolidated operating expenses expected to stabilize at more predictable levels in 2011 One time non-recurring expenses: re-listing / SOX audit preparation |
![]() 12 Strategic Overview Where we are going (cont’d) Acquisition Prospects Acquisition Prospects Products acquisition targets include: - Bolt-on product lines - Product offerings that complement existing markets or broaden exposure beyond OEM gas turbine cycle Services acquisitions targets include: - Specialty services that enhance our current capabilities - Engineering and design capabilities open additional EPC project opportunities (we currently participate in this space through alliances with engineering firms or through subcontract relationships) Opportunities will be prioritized based on a disciplined valuation approach, strategic fit and timeline for accretion to shareholders |
![]() 13 Global Power Strong fundamental structure for a growing industry Strong commercial risk / reward profile Flexible manufacturing model Geographic and end-market diversity Long-standing relationships with a blue-chip customer base Strong free cash flow generation Favorable end-market dynamics Acquisition growth opportunities |
![]() 14 Industry |
![]() 15 Poised For Growth In a changing industry Source: DOE Annual Energy Outlook, December, 2009 Hydropower* 10% Nuclear 10% Other Renewables 4% Other 12% Coal 31% Natural Gas 33% 2008 Capacity Nuclear 3% Other Renewables 37% Other 1% Natural Gas 46% Coal 13% Hydropower* 0.4% Capacity Additions 2008 to 2035 * Includes storage 1,008 Gigawatts 250 Gigawatts Natural gas-fired plants utilizing gas turbine power generation equipment are expected to account for 46% of capacity additions through 2035 Environmental concerns favor gas-fired generation, especially in countries with a high dependence on coal-fired output |
![]() 16 Comparative Economics Source: Compiled by FERC staff from various sources FERC forecast data demonstrates gas is expected to be a compelling fuel source for power generation capacity additions Nuclear Conventional Coal IGCC Coal Combined Cycle (Gas) Combustion Turbine (Gas) Wind 2003-04 Geothermal 2008 Concentrated Solar $/kw $6,000 $7,000 $8,000 $0 $1,000 $2,000 $3,000 $4,000 $5,000 |
![]() 17 United States currently has 104 operating nuclear reactors at 65 plant sites that generate about 20% of electricity used in the US. These plants have been in operation for an average of 30 years and are operating at close to 90% capacity. In 2000, the NRC issued the first license renewal to a nuclear power plant, extending its license for an additional 20 years beyond its original 40-year license. Capacity Factor Trend Source: Department of Energy Maintenance: A Multi-Billion Dollar Industry Aging nuclear fleet that requires extensive ongoing services |
![]() 18 Services Spectrum 2010 Nuclear Power Plant Maintenance Fossil Fuel, Hydroelectric Power Plant Maintenance Industrial Painting and Coatings Insulation Roofing Systems Abatement Valve Services What it is Performed during outages, decommissioning services Routine maintenance, repair and capital project services Clearing, surface preparation, coatings application, quality control and inspection testing Industrial insulation services commonly packaged with industrial coatings projects Replace, repair and upgrade industrial facility roofing systems Removal of asbestos and heavy metal based coatings such as lead paint Inspection, preventative maintenance, repair of valves and actuators Nature of contract award Primarily Cost Plus Primarily Cost Plus Cost Plus Cost Plus Cost Plus Cost Plus Cost Plus/Fixed Price Key Players Bartlett, Day & Zimmerman, Shaw Group, URS Alstom, Babcock & Wilcox, Foster Wheeler, Jingoli, Kiweit, Matrix, Shaw Group, Southern Industrial, URS, WW Gay, Yates Brock, K2 Industrial, Manta Brock, K2 Industrial, LVI, Shook and Fletcher, Vulcan Brock, Denard, K2 Industrial K2 Industrial, LVI, Shook and Fletcher, Vulcan Day & Zimmerman, Ames, Crane |
![]() 19 Products Spectrum 2010 Filter Houses Inlet Systems Exhaust Systems Diverter Dampers HRSGs Specialty Boilers What it is Cleans debris and dirt from air that enters gas turbine Connects the filter house to gas turbine and provides noise control Directs hot exhaust from the turbine to the atmosphere Diverts hot exhaust from the gas turbine into a HRSG at a CCS facility, or into exhaust stack at a simple cycle facility Boiler that creates steam to drive a steam turbine used for industrial processing Highly customized system to capture waste heat and convert it to steam Nature of contract award Fixed Price Fixed Price Fixed Price Fixed Price Fixed Price Fixed Price Key Players AAF, BHA/Altair, Camfill Farr Eng, Donaldson, J&G Steel, Bilfinger & Burger, G&H AAF, BHA/Altair, Camfill Farr Eng, Donaldson, J&G Steel, Bilfinger & Burger AAF, Atco/Higgot Kane, Bachmann, Camfill Farr Eng, G&H, NEM Power Systems, Peerless Bachmann, Camfill Farr Eng, Donaldson, NEM Power Systems, Stejasa EIT, Vogt, Aalborg, NEM Power Systems, Nooter Erikson Rentech, NEM Power Systems, Technotherm |
![]() 20 Operating Divisions |
![]() 21 Braden Headquarters in Tulsa, OK and Herleen, The Netherlands Global sales representatives located in the US, The Netherlands, Egypt, Korea and China Braden engineers work exclusively on gas turbine plan designs Highly flexible outsourced manufacturing model - 25-30% In-house - 70-75% Outsourced |
![]() 22 Supplied Filter Houses and Exhaust Systems for 2 X 7FA Gas Turbine Power Plant in Florida All fabrication completed in house by Braden Mexico Very stringent low noise acoustical requirements Two Customers: Braden Greenland Energy Center Project - Florida - Filter Houses Supplied to Turbine OEM - Exhaust System supplied to the EPC |
![]() 23 One of the world’s largest natural gas transmission projects; 12,000 miles across China 71 gas turbine exhaust systems; 100% market share Order executed in local currency using Braden Shanghai Office Fabricated In China using local fabrication partners and locally available material, 100% on time Braden West to East Gas Pipeline Project - China |
![]() ![]() ![]() 24 Braden The value model…attractive margins / low cost base • Proprietary designs • Extensive operating track record • High end quality • Commercial savvy • Low capital asset base • Low cost fabrication • Absence of performance guarantees Pricing Leverage Attractive Profit Margins Favorable Cost Position |
![]() Braden Industry Braden primarily serves the worldwide gas turbine market Natural gas-fired plants expected to account for 46% of capacity additions, as compared with 37% for renewables, 12% for coal-fired power plants and 3% for nuclear through 2035 Upwards trend on average revenue per new unit shipped Average Revenue per Turbine Shipped *Information per internal company estimates; 2005 is unaudited Source: DOE Annual Energy Outlook 2010 Braden Revenue & EBITDA 25 |
![]() 26 Williams Headquarters in Tucker, GA Seasoned Management/Project Supervisory Staff Top 5% in Industrial Safety Performance Primarily Services US Nuclear Power Plants Multi-year Contracts for Nuclear Outage Maintenance and Modification Work Provider of Specialty Services at Nuclear and Industrial Sites - On 35 of 65 Nuclear Plant Sites |
![]() 27 Williams Value proposition Client Benefits |
![]() Williams Industry Williams primarily services U.S. nuclear power plants Nuclear power is a significant component of the U.S. power supply Electricity generation from nuclear power plants is expected to grow from 806 billion kilowatt- hours in 2008 to 898 billion kilowatt-hours in 2035 The mix of future investments in new power plants expected to include fewer coal-fired plants than other fuel technologies Source: EIA Outlook, December 2009 Billion kwh Williams Revenue & Gross Margin 28 *2005 is unaudited; reflects results post acquisition from 4/5/05 – 12/31/05 |
![]() 29 Security upgrades for entire nuclear fleet – North and South Integrated design / build contract ENERCON has design scope Williams has construction, purchasing, and subcontracts Cameras, fencing, observation towers and other security upgrades Williams/ENERCON Alliance for nuclear capital project |
![]() 30 Williams Energy Northwest reactor siding project An excellent safety record with zero recordables while working 200’ in the air Only re-siding project in the world that was performed while the station was on-line Provided the client with specialized methods for accessing the work area Delivered the project under the estimated funding and ahead of schedule Completed extended condition repairs to other buildings |
![]() 31 Williams Company information Employees - Approximately 250 FT - Up to 6,000 Craft - (Average 3,000) Work Type - 60% maintenance - 30% capital projects - 10% new construction Double-breasted - Union labor - Non-union labor Customers - 70% private sector - 65% repeat business |
![]() 32 Deltak Headquarters in Plymouth, MN Majority of manufacturing is completed in-house for domestic projects Specialty boiler systems for municipal waste incinerators and chemical processes Mid-sized HRSGs (<85MW) for power applications, industrial process and enhanced oil recovery |
![]() 33 Deltak Industry Industrial and utility markets which include refineries, petrochemical, pharmaceutical, paper and pulp and steel companies, in addition to utilities, account for the bulk of the market for cogeneration equipment Deltak anticipates growth in the mid-sized HRSG and CHP markets General shift towards lowering carbon off take adding momentum to generation Sweet spot refineries |
![]() 34 Global Power Strong fundamental structure for a growing industry Strong commercial risk / reward profile Flexible manufacturing model Geographic and end-market diversity Long-standing relationships with a blue-chip customer base Strong free cash flow generation Favorable end-market dynamics Acquisition growth opportunities |
![]() 35 David L. Keller President and Chief Executive Officer David L. Keller served as the President and Chief Operating Officer of The Babcock & Wilcox Company (B&W), a wholly owned subsidiary of McDermott International, Inc., from March 2001 until his retirement in June 2007. B&W, a company with approximately $2 billion in revenues in 2006, supplies fossil-fuel fired boilers, commercial nuclear steam generators, environmental equipment and components, and boiler auxiliary equipment and provides related services, including construction services. Mr. Keller’s prior position was President of Diamond Power International, Inc., a wholly owned subsidiary of B&W, from March 1998 to February 2001. During his tenure with B&W, Mr. Keller served as a Board Chairman or Director of subsidiaries and joint ventures in the Peoples Republic of China, Denmark, the United Kingdom, Australia and South Africa. He holds a Bachelor of Science degree in Mathematics from the University of Akron. David L. Willis Chief Financial Officer and Senior Vice President • David L. Willis has a broad range of leadership experience across a range of industries: restructuring advisory services, telecommunications, energy companies and public accounting. From October 2001 to January 2008, he was with the restructuring practice of Alvarez & Marsal LLC, a global professional services firm, where he served clients in advisory and interim management capacities, most recently as Senior Director, overseeing the development and implementation of initiatives to improve operational and financial performance. Prior to Alvarez & Marsal, Mr. Willis held positions with The Williams Communications Group and Ernst & Young. Mr. Willis received his Bachelor of Business Administration degree from the Price College of Business at the University of Oklahoma and holds an M.B.A. from the University of Tulsa. He is a Certified Public Accountant and has a Certified Insolvency and Restructuring Advisor certification (inactive). Management Years of Experience 30 17 |
![]() 36 Tracy D. Pagliara General Counsel, Secretary and VP of Business Development • Tracy D. Pagliara served as the Chief Legal Officer of Gardner Denver, Inc., a leading global manufacturer of highly engineered compressors, blowers, pumps and other fluid transfer equipment, from August 2000 through August 2008. He also had responsibility for other roles during his tenure with Gardner Denver, including Vice President of Administration, Chief Compliance Officer, and Corporate Secretary. Prior to joining Gardner Denver, Mr. Pagliara held positions of increasing responsibility in the legal departments of Verizon Communications/GTE Corporation from August 1996 to August 2000 and Kellwood Company from May 1993 to August 1996, ultimately serving in the role of Assistant General Counsel for each company. Mr. Pagliara has a B.S. in Accounting and a J.D. from the University of Illinois. He is a member of the Missouri and Illinois State Bars and a Certified Public Accountant. Kenneth W. Robuck Senior Vice President and President of the Services Division • Kenneth W. Robuck originally joined the Williams Group in 1995; he left the company for a brief period and returned in 2005 to run Williams Plant Services, LLC, the largest of the Williams’ subsidiaries, which is responsible for all major maintenance and construction services work. In early 2006, Mr. Robuck assumed the additional responsibility of Chief Operating Officer and was appointed President of the Williams Group in October 2007. Mr. Robuck has over 27 years experience in the nuclear power, fossil-fuel power, petrochemical and related industrial industries. Mr. Robuck is a graduate of Auburn University with a B.S. in Civil Engineering. • Management Years of Experience 25 28 |
![]() 37 Dean J. Glover Senior Vice President and President of the Products Division Dean J. Glover joined Braden Manufacturing in December 2005 as Chief Operating Officer and was promoted to his positions at Global Power and Deltak in September 2008. Mr. Glover has extensive international experience having lived in various international locations for most of his career. Mr. Glover has over 18 years of commercial and technical experience in the power industry. Prior to joining Global Power, Mr. Glover led the global supply chain, including manufacturing for Diebold Inc. Prior to this, Mr. Glover spent 13 years with General Electric in various managerial and technical roles and is a certified Six Sigma Master Blackbelt. Mr. Glover holds a Bachelors Degree in Mechanical Engineering from the University of Nebraska and an M.B.A. from the Kellogg Graduate School of Management, Northwestern University. • Management Years of Experience 20 |
![]() 38 Appendix Company history The Braden Group founded as Braden Steel in 1923 in Tulsa Various owners over the next six decades, vast assortment of products spanning several industry sectors: - Metal buildings, air inlet and exhaust systems, large mining trucks, pump jacks, magnetic containment enclosures, industrial incinerators, heat recovery boilers The Williams Group formed in 1958 as a family owned specialty painting business The Deltak Group formed in 1969 and spun out to employees in 1972 The Braden Group sold to Jason Incorporated in 1989, which also purchased the Deltak Group in 1994, forming Global Power’s predecessor, Jason Power Systems GEEG Holdings L.L.C. created through leveraged buyout in 1998 - Private equity sponsor — Sawmill Capital - GEEG purchased by Harvest Partners in August 2000 - Purchased Consolidated Fabricators in September 2000 Global Power Equipment Group formed through IPO in May, 2001 - Purchased Deltak Power Equipment China (“DPEC”) in July 2004* - Purchased the Williams Group in April 2005 * Sold in 2007 when Deltak exited the large-scale HRSG business |
![]() 39 Appendix Balance sheet highlights GPEG has strengthened its balance by building cash and paying down debt since the emergence from Chapter 11 in January 2008. Cumulative 3/31/08 12/31/08 12/31/09 6/30/10 Variances Unrestricted Cash 36,540 $ 57,633 $ 103,220 $ 66,283 $ 29,743 $ Restricted Cash 3,006 3,013 2,018 1,019 Other Current Assets 138,092 124,154 109,774 107,949 Current Assets 177,638 184,800 215,012 175,251 Fixed Assets 12,639 12,610 12,945 12,545 Goodwill & Intangibles 98,414 96,909 95,149 94,269 Other Assets 6,227 6,720 6,114 4,196 Total Assets 294,918 301,039 329,220 286,261 Accounts Payable / Accruals 44,665 42,588 58,801 41,832 Deferred Revenue 17,895 8,695 3,006 - Other Current Liabilities 53,222 44,174 46,311 45,285 Current Liabilities 115,782 95,457 108,118 87,117 Term Debt (including current portion) 88,750 85,000 65,325 24,633 (64,117) $ Other Long-Term Liabilities 19,379 15,309 19,299 19,032 Total Liabilities 231,040 195,766 192,742 130,782 Stockholders Equity 71,007 105,273 136,478 155,479 84,472 $ Total Liabilities & Equity 302,254 $ 301,039 $ 329,220 $ 286,261 $ |
![]() 40 Appendix Operations highlights Over this period, GPEG’s Products and Services platforms have balanced one another through the recent cycle in the gas turbine OEM space Actual Actual Six Months Ended 2008 2009 6/30/10 Revenue 556,764 $ 540,610 $ 281,810 $ Cost of Sales 456,784 460,185 232,406 Gross Profit 99,980 80,425 49,404 % of Revenue 18.0% 14.9% 17.5% Operating Expenses 50,418 46,664 24,788 % of Revenue 9.1% 8.6% 8.8% Operating Profit (Loss) 49,562 33,761 24,616 % of Revenue 8.9% 6.2% 8.7% EBITDA 53,354 $ 37,912 $ 25,728 $ % of Revenue 9.6% 7.0% 9.1% Revenue Mix Products 56% 36% 26% Services 44% 64% 74% EBITDA is a non-GAAP measure; see following page for reconciliation to net income. |
![]() 41 Appendix Reconciliation of EBITDA to net income Actual Actual Six Months ended 2008 2009 6/30/10 EBITDA 53,354 $ 37,912 $ 25,728 $ Less: Income tax provision (3,151) (5,282) (1,778) Interest expense (11,667) (9,667) (3,276) Depreciation and amortization (3,792) (4,151) (2,052) Reorganization items (23,574) (1,030) - Add: Income from discontinuted operations 23,668 10,105 3,164 Net Income 34,838 $ 27,877 $ 21,786 $ |