EXHIBIT 99.1
Management Presentation
September 2011
LMI AEROSPACE PROPRIETARY
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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, 2010.
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, 2010.
LMI AEROSPACE PROPRIETARY
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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
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(1) Based on financials for the 12-month period ended December 31, 2010
Investment Highlights
> Leading provider of design engineering services, structural assemblies, kits and components
for aerospace and defense markets
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
assembly
> Broad revenue / customer diversification(1)
• 33% services, 67% production and assembly
• 39% large commercial, 24% military, 30% regional and business
> Growth strategy leverages existing programs, disciplined M&A approach and integrated
design-build model
design-build model
> Experienced management team with an average of over 20 years’ experience and strong
industry relationships
industry relationships
LMI AEROSPACE PROPRIETARY
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Operating Income(1)
Revenue(1)
Investment Highlights (continued)
> Proven track record of financial performance
> Overall 2011 Revenues are expected to be $258 - $268 million
• Aerostructures: $172 - $178 million
• Engineering Services: $86 - $90 million
(1) 2011E reflects midpoint of Company guidance as of August 8, 2011
LMI AEROSPACE PROPRIETARY
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LMI’s Operations In Key Aerospace Markets
LMI AEROSPACE PROPRIETARY
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Strong Relationships with OEMs & Tier 1s
(1)
(1) Acquired by Triumph Group in 2010
LMI AEROSPACE PROPRIETARY
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Strategic Initiatives
> Achieve organic growth within our engineering and manufacturing businesses as well as
through new design-build projects
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
> Pursue strategic acquisitions to build critical mass and capabilities to win larger, more
complex projects
complex projects
> Provide exemplary customer service
> 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
Goal: Double our revenue by 2014 and maintain debt to equity ratio less than 1:1
LMI AEROSPACE PROPRIETARY
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LMI Offers Full Lifecycle Support from Engineering &
Design to Assembly & Manufacturing
Design to Assembly & Manufacturing
> Customer defines
product or project
requirements
product or project
requirements
> Done together with
customer
customer
> Time and materials
billing
billing
> Testing on fixed
price basis
price basis
> Joint input between
LMI and Customer
LMI and Customer
> Quote in
competition with
others
competition with
others
> Build to print
> Long-term
contracts with
customers
contracts with
customers
LMI AEROSPACE PROPRIETARY
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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.”
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
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
engineers and 49 Intec technicians
> New programs expected to require substantial annual
investments in engineering and tooling
investments in engineering and tooling
> Continue to seek acquisitions to broaden capabilities
and support production of larger, complex assemblies
and support production of larger, complex assemblies
Select Customers
LMI AEROSPACE PROPRIETARY
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Mitsubishi Regional Jet Tailcone
> MJET required a supplier with design, tooling and fabrication
capabilities
capabilities
> Critical Design Review held in 4th quarter 2010
> 1st unit to be delivered in 1st quarter 2012
> Engineering and tooling funded through milestone payments
LMI AEROSPACE PROPRIETARY
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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
programs per year
> New design-build programs expected to require substantial initial investments in engineering
and tooling
and tooling
• Satisfy stringent ROI requirement
> Potential long-term commitment of in-house design resources may be necessary
LMI AEROSPACE PROPRIETARY
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Growth through Acquisitions
> Plan to acquire businesses with solid management teams and technical capabilities to
continue expanding the complexity of our products
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
integrated businesses
• Broadened our breadth of engineering and manufacturing capabilities
• Diversified our markets and programs served
LMI AEROSPACE PROPRIETARY
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FY 2010 Aerostructures Revenue - $149.0m
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, 2010
Eliminations for the 12-month period totaled $0.5 million and spread ratably across sector percentages
FY 2010 Engineering Services Revenue - $74.4m
FY 2010 LMI Revenue - $223.4m
Regional and Business Jet
Large Commercial Aircraft
Military Aircraft
Other
(US$ in millions)
(US$ in millions)
(US$ in millions)
$18.6
$5.6
$59.4
$29.1
$45.2
$21.1
$34.6
$9.8
$15.4
$66.3
$88.5
$53.2
LMI AEROSPACE PROPRIETARY
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> Global GDP growth leading to
increased air traffic volumes in
domestic and international
markets
increased air traffic volumes in
domestic and international
markets
> OEMs have increased planned
production rates (e.g. 737, 747,
777, 787, A320)
production rates (e.g. 737, 747,
777, 787, A320)
> New fuel-efficient aircraft
programs are gaining traction
(e.g. 787, A350) with significant
backlog
programs are gaining traction
(e.g. 787, A350) with significant
backlog
> Rotorcraft demand driven by high
utilization and aging fleet
utilization and aging fleet
> Engineering services for military
aircraft programs driven by
upgrades, maintenance,
modification and new aircraft
development
aircraft programs driven by
upgrades, maintenance,
modification and new aircraft
development
> Expectations for Sikorsky military
helicopter deliveries to reach 210
units in 2012
helicopter deliveries to reach 210
units in 2012
> Business jet flight operations
experienced double-digit growth
for most of 2010
experienced double-digit growth
for most of 2010
> High end large cabin market is
showing signs of recovery
showing signs of recovery
> Large cabin Gulfstream deliveries
expected to grow to 115 in 2013
from 75 in 2010
expected to grow to 115 in 2013
from 75 in 2010
Military Aircraft
Regional and Business Jet
Focus on Diverse Markets
Large Commercial Aircraft
Gulfstream Large Cabin Deliveries
Sikorsky Military Helicopter Deliveries
Boeing Aircraft Deliveries
Source: DoD, Industry and Wall Street research
LMI AEROSPACE PROPRIETARY
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LMI Programs
Large Commercial Aircraft
Military Aircraft
Regional and Business Jet
767 Winglet
Modification
Modification
Boeing Structural
Design
Design
767 Tanker
Sikorsky Cabin
Assembly
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
Components
> Fuselage Skins and
Components
Components
> Leading Edges
> Winglet Leading Edge
and Modification Kit
and Modification Kit
> Structural Sheet Metal and
Extruded Components
Extruded Components
> Detail Interior Components
> Helicopter Components
> Helicopter Assemblies
> Housings and Assemblies
for Gun Turrets
for Gun Turrets
> Avionics and Tactical
Software Development
Software Development
> Winglet Design
> Certification Planning
and Support
and Support
> Design for
Manufacturing Cost
Manufacturing Cost
Aerostructures Products
Engineering Services
G-650
G-550
Blackhawk Models
CH-53K
787
777
LMI Platform
LMI AEROSPACE PROPRIETARY
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History of Financial Success
|
(US$ in millions)
|
|||
|
Revenue
|
$258.0
|
-
|
$268.0
|
|
Gross Profit Margin
|
24.0%
|
-
|
24.8%
|
|
SG&A
|
$33.8
|
-
|
$35.2
|
|
Interest Expense
|
$1.4
|
-
|
$1.5
|
|
Tax Rate
|
|
|
32.5%
|
|
D&A, Stock Comp.
|
$9.6
|
|
$10.2
|
|
(US$ in millions)
|
Aerostructures
|
Engineering
Services |
|
Revenue
|
$172.0-$178.0
|
$86.0-$90.0
|
|
Gross Profit
Margin |
27.0%-27.8%
|
18.0 % - 18.8%
|
|
SG&A
|
$26.0-$27.0
|
$7.8-$8.2
|
Guidance for 2011
Revenue(1)
Operating Income(1)
Segment Guidance for 2011
(1) 2011E reflects midpoint of Company guidance as of August 8 2011
LMI AEROSPACE PROPRIETARY
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> Significant liquidity
• $125 million revolver with additional $25 million in an accordion feature
• Focus on achieving significant free cash flow
(1) 2011E reflects midpoint of Company guidance as of August 8 2011. EBITDA equals operating income plus depreciation,
amortization, stock compensation expense and goodwill impairment
(2) $125 million capacity
(3) Excludes capital leases and equipment notes
|
|
12/31/10
|
6/30/11
|
|
Cash & Equivalents
|
$1.9
|
$7.5
|
|
Drawn revolver(2)
|
-
|
-
|
|
Net Debt(3)
|
$(1.9)
|
$(7.5)
|
|
Undrawn revolver(2)
|
$80.0
|
$125.0
|
Strong Cash Generation
EBITDA(1)
Current Net Debt and Revolver Capacity
(US$ in millions)
LMI AEROSPACE PROPRIETARY
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Investment Highlights
> Leading provider of design engineering services, structural assemblies, kits and
components for aerospace and defense markets
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
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
design-build model
> Experienced management team with an average of over 20 years’ experience and strong
industry relationships
industry relationships