Delaware
|
27-0061302
|
(State or other jurisdiction of incorporation)
|
(IRS Employer Identification No.)
|
12200 NW Ambassador Drive, Kansas City, MO
|
64163
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant’s telephone number, including area code: (816) 270-4700
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Exhibit No.
|
Description
|
99.1
|
Investor Presentation
|
WireCo WorldGroup Inc.
|
|||
Date: June 12, 2012
|
By:
|
/s/ J. Keith McKinnish
|
|
J. Keith McKinnish,
|
|||
Senior Vice President and
Chief Financial Officer
|
![]() |
Wire Spool 01.bmpLender Presentation June 2012
|
![]() |
logo Disclaimer This presentation does not constitute an offer to make any investment or a solicitation of offers to make any investment. Any offers to make an investment or solicitation of offers to make an investment will be made only pursuant to definitive agreements and other documents that may be subsequently provided to you, and you are advised to read any such agreements and documents carefully and in their entirety when they become available because they will contain important information relating to any investment opportunity. You are not entitled to rely upon any advice or opinions contained in this presentation with respect to the tax, financial and/or legal structuring of the transactions described herein. Accordingly, in evaluating the investment, you should obtain and rely upon the advice of your own independent tax, financial and legal advisors. In addition, although certain of the information described herein (including, without limitation, information related to Royal Lankhorst (together with its affiliates, “Lankhorst”)) has been obtained from sources which we believe to be reliable, we do not make any representation or warranty as to its accuracy, and such information may be incomplete or condensed. Accordingly, the attached materials should not be relied on by any person. Some statements and information set forth in this communication contain forward-looking statements that are subject to change, including, without limitation, future estimates or projections for WireCo and Lankhorst. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Neither WireCo nor any of its affiliates have any responsibility to update any of the information provided in this presentation. For a brief statement of the factors that could cause these statements to differ materially, see Item 7.01 of the Form 8-K filed by WireCo on June 13, 2012. It is understood and acknowledged that any person’s access to, and use of, any of the attached materials constitutes their overall acceptance of the following: (1) none of WireCo nor any other party involved in the preparation of the attached materials makes any representation, warranty or claim that the materials and information contained therein is current or accurate; (2) by virtue of access to these materials, no one shall be entitled to claim detrimental reliance on any information provided or expressed; (3) no person should rely on statements or representations made within these materials nor should any person rely on the statements or representations made by any other source based on these materials; and (4) neither WireCo nor any other party involved in the preparation of the attached materials shall have any duty or liability to any person in connection with the attached materials. 2
Reported EBITDA and Acquisition EBITDA as used in the attached presentation are consistent with our definitions of Adjusted EBITDA and Acquisition Adjusted EBITDA, respectively, as presented in our annual reports filed on Form 10-K and our quarterly reports filed on Form 10-Q.
|
![]() |
logo 3 Attendees Name Position Ira Glazer CEO and President Eric V. Bruder COO and Executive VP Keith McKinnish CFO and Senior VP Brian Block VP of Strategic Analysis eric_bruder_lg.jpgBrian Block Photo.JPG
|
![]() |
logo 3 Attendees Name Position Ira Glazer CEO and President Eric V. Bruder COO and Executive VP Keith McKinnish CFO and Senior VP Brian Block VP of Strategic Analysis eric_bruder_lg.jpgBrian Block Photo.JPG
|
![]() |
logoTransaction Overview wireco_wg_process_pos
|
![]() |
logo Executive Summary .Affiliates of WireCo WorldGroup Inc. (“WireCo” or the “Company”) have signed a definitive agreement to acquire Koninklijke (Royal) Lankhorst Euronete Group B.V. (“Lankhorst”) –Total purchase price of $231.2 million (including debt assumed, but excluding fees and expenses) or approximately 8.3x (pre-synergies) LTM Adj. EBITDA of $27.9 million as of March 31, 2012¹ .To fund the acquisition the Company will be refinancing its existing Senior Secured Credit Facilities and plans to issue new Senior Notes resulting in a financing comprised of the following: –$135.0 million Senior Secured Revolving Credit Facility –$325.0 million Senior Secured Term Loan –$82.5 million in privately placed Senior Unsecured Notes .The financing transaction will bolster the Company’s liquidity position and extend its maturity profile while the acquisition will enable the combined Company to be positioned as one of the largest manufacturers of steel and synthetic lifting products in the world .Pro forma for the acquisition, the Company will have total and net leverage of 5.4x and 5.1x, respectively, based on PF Adj. EBITDA of $164.3 million² as of the twelve month period ending March 31, 2012 6 ¹ Transaction values assume a €186.5mm purchase price and FX rate of 1.24x Euro / USD. ² Includes cost synergies of $8.5 million. See Appendix for reconciliation to net income.
|
![]() |
logo7 Sources and Uses and Pro Forma Capitalization Sources & Uses Sources & Uses Pro Forma Capitalization Pro Forma Capitalization ($ in millions) 1Includes a 1.25% LIBOR Floor. Note: Total debt is defined as face amount of total indebtedness plus capital leases. In addition, net debt is total indebtedness less cash and equivalents. SheetName:PF Cap Table;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo Cap Table 05.xlsx;SheetName:PF Cap Table;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo Cap Table 05.xlsx;
|
![]() |
logo8 Summary Terms: Credit Facility Borrower WireCo WorldGroup, Inc. (the “Company”) Ranking Senior Secured Amount .Revolver: $135.0 million .Term Loan: $325.0 million Maturity .Revolver: February 15, 2017 .Term Loan: February 15, 2017 Amortization .Revolver: None .Term Loan: 1% per annum Coupon .Revolver: L + TBD bps, no floor .Term Loan: L + TBD bps, 1.25% floor Unused Fee .Revolver: 50 bps .Term Loan: N/A Call / Repayment Premium 101 soft call for 1st year Mandatory Repayments .Standard and customary for facilities of this type including debt and asset sales .50% ECF sweep with step downs to 25% and 0% based on leverage Maintenance Covenant .Net Total Leverage1 .Interest Coverage ¹ Maximum cash netting amount TBD.
|
![]() |
logo8 Summary Terms: Credit Facility Borrower WireCo WorldGroup, Inc. (the “Company”) Ranking Senior Secured Amount .Revolver: $135.0 million .Term Loan: $325.0 million Maturity .Revolver: February 15, 2017 .Term Loan: February 15, 2017 Amortization .Revolver: None .Term Loan: 1% per annum Coupon .Revolver: L + TBD bps, no floor .Term Loan: L + TBD bps, 1.25% floor Unused Fee .Revolver: 50 bps .Term Loan: N/A Call / Repayment Premium 101 soft call for 1st year Mandatory Repayments .Standard and customary for facilities of this type including debt and asset sales .50% ECF sweep with step downs to 25% and 0% based on leverage Maintenance Covenant .Net Total Leverage1 .Interest Coverage ¹ Maximum cash netting amount TBD.
|
![]() |
logo 10 WireCo WorldGroup Structure Denotes Guarantor Denotes Non-Guarantor WireCo WorldGroup Inc. (Cayman) 1 WRCA (Luxembourg) Holdings S.a.r.l. 2 China JV WRCA US Holdings, Inc. Mexican Subsidiaries Domestic Subsidiaries WireCo WorldGroup Inc. .Revolver .Term Loan .Senior Notes Note: There will be exceptions to the guarantor status of certain European and Lankhorst subsidiaries. 1 This entity is 99.3% owned by Paine & Partners Fund III and 0.7% owned by the Company management and directors. 2 WRCA (Luxembourg) Holdings S.a.r.l. is a co-borrower under the credit facilities. EBITDA by Guarantors EBITDA by Guarantors European Subsidiaries Lankhorst Subsidiaries SheetName:EBITDA by Guarantors;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Lender Presentation\Excel Back Up\EBITDA by Guarantors.xlsx;
|
![]() |
logoExecutive Summary wireco_wg_process_pos
|
![]() |
logoSheetName:Revenue by Geo_Wire;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;WireCo Overview .Headquartered in the United States, with 14 manufacturing operations in 6 countries and over 3,300 employees .“Mission-critical” products where performance, quality and safety are key buying decision .~87% of sales serving replacement market; products are consumable with 6 – 24 month useful life .Proprietary technology and manufacturing expertise supported by staff of over 55 engineers and metallurgists .Leading market position and premium brands serving diverse end markets including O&G, crane and mining .3/31/12 LTM revenue and Adj. EBITDA of $669 and $128 million, respectively¹ 12 Revenue by End Market Revenue by End Market Revenue by Geography Revenue by Geography Revenue by Product Revenue by Product WireCo is a leading global manufacturer of wire rope, synthetic rope, electromechanical (“EM”) cable and specialty wire Note: As of FYE 2011 and pro forma for Drumet, excluding China JV sales. “Rest of Europe” consists of all European countries except Spain, Portugal, Greece, Italy, Norway, Sweden, Finland, Iceland, Denmark, Netherlands, Germany, U.K. and Belgium. WireCo is a global leader in all value added segments of the lifting products market WireCo is a global leader in all value added segments of the lifting products market SheetName:Revenue by products;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Highly Diversified Business Mix Standalone_03.xlsx;SheetName:Revenue by products (2);Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Highly Diversified Business Mix Standalone_03.xlsx;SheetName:Revenue by Geo_Wire;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;C:\Users\sdix\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\SKAVV9HC\CorpLogo.jpg
|
![]() |
logoSheetName:Sales by End Market;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\Lankhorst Charts 04.xlsx;SheetName:Sales by Product Langk;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;SheetName:L_Contract Sales Geo1;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Committee\2011 Sales Breakdown v4.xlsx;Lankhorst Overview .Headquartered in the Netherlands, with 11 manufacturing operations in 7 countries and over 1,300 employees .Products consist of manufactured specialty ropes and fibers, engineered plastic moldings and yachting accessories .Leading market position and premium brand in synthetics, offshore, fishing and marine end markets .3/31/12 LTM revenue and Adj. EBITDA of $245 and $28 million, respectively¹ .Approximately $150 million in contractual backlog related to offshore projects; driving strong sales growth in 2012 13 Revenue by End Market Revenue by End Market Revenue by Geography Revenue by Geography Revenue by Product Revenue by Product Lankhorst is a leading global provider of value-added synthetic products primarily serving the offshore, oil & gas, fishing, marine, structures, industrial and agricultural markets c:\Documents and Settings\lundnic\Desktop\lankhorst.jpgNote: “Rest of Europe” consists of all European countries except Spain, Portugal, Greece, Italy, Norway, Sweden, Finland, Iceland, Denmark, Netherlands, Germany, U.K. and Belgium. Sales mix represents 2011 sales plus sales under contract. 1 LTM sales and EBITDA assume average FX rate of 1.36x Euro / USD which implies LTM sales and EBITDA of €180.1mm and €20.5mm, respectively. ~70% of EBITDA from fishing, marine and offshore which are driven by the global economy and insulated from European economic conditions ~70% of EBITDA from fishing, marine and offshore which are driven by the global economy and insulated from European economic conditions
|
![]() |
logoAcquisition Strategic Rationale Creates a global leader of value added lifting products, both in steel and synthetic Further diversification by end markets, geographies, products and manufacturing base Complementary strengths; creates leading market position in offshore, marine, fishing Brings critical global mass Improves overall growth profile with penetration in emerging markets and growing end markets Market leading technology, proprietary products and sophisticated R&D team Experienced, high quality, low cost manufacturing base, including Brazil Maximizes conversion of operating profit to cash flow Cost saving opportunities 1 2 3 4 5 6 7 14 WireCo + Lankhorst = Large Diversified Stable Earnings Lankhorst increases WireCo’s earnings growth, stability and free cash flow generation 8 9
|
![]() |
logoPro Forma WireCo Revenue 15 Highly diverse $916 million in sales, $164 million EBITDA and 85% replacement market Highly diverse $916 million in sales, $164 million EBITDA and 85% replacement market Revenue by End Market Revenue by End Market Revenue by Brand Revenue by Brand Note: As of FYE 2011 and pro forma for Drumet and Lankhorst, excluding China JV sales. Sales mix for Lankhorst represents 2011 sales plus sales under contract. “Rest of Europe” consists of all European countries except Spain, Portugal, Greece, Italy, Norway, Sweden, Finland, Iceland, Denmark, Netherlands, Germany, U.K. and Belgium. WireCo WireCo Pro Forma Pro Forma Camesa20% Casar13% Phillystran2% Union18% MacWhyte3% Oliveira7% Drumet11% Lankhorst18% Euronete8%SheetName:Wireco;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Highly Diversified Business Mix Standalone_04.xlsx;Wire25% Crane23%Oilfield18% General Purpose18% Mining Products8% Fishing4% Marine2% Structures2% Offshore1% Wire18% Crane17% Oilfield13% General Purpose18% Mining Products6% Fishing11% Marine6% Structures5% Offshore7%
|
![]() |
logoPro Forma WireCo Revenue 16 Highly diverse $916 million in sales, $164 million EBITDA and 85% replacement market Highly diverse $916 million in sales, $164 million EBITDA and 85% replacement market Revenue by Product Revenue by Product Revenue by Geography Revenue by Geography WireCo WireCo Pro Forma Pro Forma Wire Rope62% Specialty Wire26% EM Cable6% Synthetic Rope6%SheetName:Revenue by Geo_Wire;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;SheetName:Sales by Product;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;SheetName:Revenue by Geo_Pro;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;Note: As of FYE 2011 and pro forma for Drumet and Lankhorst, excluding China JV sales. Sales mix for Lankhorst represents 2011 sales plus sales under contract. “Rest of Europe” consists of all European countries except Spain, Portugal, Greece, Italy, Norway, Sweden, Finland, Iceland, Denmark, Netherlands, Germany, U.K. and Belgium.
|
![]() |
logoCompany Overview wireco_wg_process_pos
|
![]() |
logoLeading Global Producer with Broad Product Offering Wire Rope 46% of Sales EM Cable 5% of Sales Special type of highly engineered wire rope that has strength characteristics and electrical signal conducting capabilities Large diameter, highly engineered rope used in mining, oil and gas, and infrastructure end markets Array of engineered specialty wire products used in general industrial end markets Specialty Wire 17% of Sales wiresHighly engineered, made-to-order synthetic ropes and technical products that have strength characteristics of steel but weigh significantly less Synthetic Products 24% of Sales wireline_logohttp://phillystrand.com/Resource_/Website/335/logo.gif18 union_logoC:\Users\bblock\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\2PBP0187\UnionInternational_Color.jpgcamesa_logohttp://www.google.com/url?source=imglanding&ct=img&q=http://www.lankhorst.co.uk/hst/l18a10n/lankhorst.nsf/0/6F67F52FCC65F245C12577CF003ADEF8/$FILE/Logo%20Euronete%20site.jpg&sa=X&ei=ja62T7aGEIOY8gSD7JTBCg&ved=0CAkQ8wc&usg=AFQjCNHtrRKlSk3KBW9m3AJBYjDZaG6DLwEngineered Products 8% of Sales Highly engineered plastic molding from recycled materials used in a variety of industrial, structural and oil and gas applications Description: TriVIV Suppression SystemDescription: Top plastic products for offshore industrycasar_logocamesa_logohttp://www.google.com/url?source=imglanding&ct=img&q=http://www.lankhorst.co.uk/hst/l18a10n/lankhorst.nsf/0/6F67F52FCC65F245C12577CF003ADEF8/$FILE/Logo%20Euronete%20site.jpg&sa=X&ei=ja62T7aGEIOY8gSD7JTBCg&ved=0CAkQ8wc&usg=AFQjCNHtrRKlSk3KBW9m3AJBYjDZaG6DLwcamesa_logoC:\Users\bblock\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\2PBP0187\UnionInternational_Color.jpghttp://www.google.com/url?source=imglanding&ct=img&q=http://www.lankhorst.co.uk/hst/l18a10n/lankhorst.nsf/0/6F67F52FCC65F245C12577CF003ADEF8/$FILE/Logo%20Euronete%20site.jpg&sa=X&ei=ja62T7aGEIOY8gSD7JTBCg&ved=0CAkQ8wc&usg=AFQjCNHtrRKlSk3KBW9m3AJBYjDZaG6DLwNote: As of FYE 2011 and pro forma for Drumet and Lankhorst, excluding China JV sales. Sales mix for Lankhorst represents 2011 sales plus sales under contract.
|
![]() |
logo19 Lankhorst + WireCo: Synthetic + Steel Products Rope Material Comparison Rope Material Comparison Product Overview Product Overview .As depth increases, the weight of steel wire increases, while installation capacity decreases .Solutions using fiber rope can reach great depths (unlimited) with virtually no increase in weight .High end synthetics are more expensive than steel ropes due to greater performance capability .Fiber ropes offer attractive physical characteristics vs. steel –Equal strength / greater flexibility / lighter weight –Weight of steel prevents use beyond 2,000m in depth; Fiber ropes practical up to ~10,000m –High demand as offshore well depth continues to increase .Common uses include mooring lines, offshore hook-ups to O&G offloading systems, submerging subsea equipment, towing seismic equipment, vessels, fishing equipment Synthetic products are primarily used in offshore and maritime applications, but the market is expanding to other technical applications where high strength and low weight are critical Fiber Ropes feature low weight and high strength HMPE Steel High Strength Low High Low Weight Polyester Nylon Aramid, Kevlar
|
![]() |
logoPremium Brands Across All Market Segments .Focus on complementary brands addressing each tier in the marketplace .WireCo provides same standards of quality support and service for all brands and all tiers .Talented research and development team continues to produce innovative products to meet customers' needs –Advanced metallurgical knowledge –74 product engineers & metallurgists –State-of-the-art full-line manufacturing facilities and production expertise –Over 6,000 highly engineered rope designs 20 Tier 1 Brands (65% of sales): High end applications and performance Tier 3 Brands (10% of sales): High performance value priced Tier 2 Brands (25% of sales): Well established brands for critical applications casar_logocamesa_logounion_logohttp://phillystrand.com/Resource_/Website/335/logo.gif C:\Users\bblock\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\2PBP0187\UnionInternational_Color.jpgwireline_logocamesa_logoWire and Synthetic Rope EM Cable and Specialty Wire Wire Rope and Wire Specialty Wire Wire Rope c:\Documents and Settings\lundnic\Desktop\lankhorst.jpg
|
![]() |
logo21 Global Manufacturing Footprint Manufacturing facilities USA.wmfNorth America Asia Europe United States (7) Mexico.wmfMexico (2) Germany.wmfGermany (2) Portugal.wmfPortugal (6) China.wmfChina (1) (Joint Venture) Poland (1) c:\Documents and Settings\lundnic\Desktop\poland-flag.gifMexico Poland Global Manufacturing Capacity Global Capacity: 408,000 Tons Global Capacity: 330,000 Tons Mexico China Poland India (1) (Joint Venture) France (1) Netherlands (2) Greece (1) (Joint Venture) South America Brazil (1) netherlands.bmpbrazil.giffrance.gifgreece.pngindia.gifGlobal Asset Base (3/31/12) Rope and Engineered Products Wire 76,000 ($ in millions) SheetName:Rope and Eng prod;Type:GsPicture;FilePath:\\Ibnjs002vf\tightrope2012\Rating Agency Presentation\RAP Excel back-up\Manufacturing Pie Charts 01.xlsx;SheetName:Wire Capacity;Type:GsPicture;FilePath:\\Ibnjs002vf\tightrope2012\Rating Agency Presentation\RAP Excel back-up\Manufacturing Pie Charts 01.xlsx;Note: Manufacturing capacity as of FYE 2011. WireCoLankhorstTotalA/R$121$63$184Inventory$192$58$250PP&E$250$67$317Total$563$188$751
|
![]() |
logo22 Global Sales and Distribution Network 25 manufacturing facilities, 22 distribution centers,18 sales offices and 175+ person sales force globally servicing 122 different countries around the world 25 manufacturing facilities, 22 distribution centers,18 sales offices and 175+ person sales force globally servicing 122 different countries around the world Untitled.wmfUntitled.wmf
|
![]() |
logoCredit Strengths wireco_wg_process_pos
|
![]() |
logoCredit Strengths wireco_wg_process_pos
|
![]() |
logo25 1. Global Leader in Lifting Products .Target markets for WireCo in excess of ~$12 billion .WireCo maintains leading global market share in core technical end markets and applications –Lankhorst bolsters presence in offshore, fishing and marine end markets .Few competitors have the breadth of product offering or geographic coverage .WireCo focused on segments where quality, service, and engineering support is key buying decision –74 engineering, metallurgist and R&D professionals critical to market position .Primarily serving replacement market; consumable products with 6 – 24 month useful life .Long term global trends in key end markets provide sustained underlying growth 25 Core End Market Applications Core End Market Applications 0 XXX 0000 0:00 1/1 Market Estimated Market Position(1) Competitors Oil & Gas #1 . Bridon . Kiswire . Usha Martin Offshore #1 . Bridon . Bexco . CSL/Lupatech . Samson Cranes #1 / #2 . Diepa . Verope . Bridon . Teufelberger Mining #1 . Haggie Rand . One Steel . Severstal . WRI Marine #1 . Samson . DSR . Dong Yang Fishing #1 . Bridon . Gareware . Tufrope . DSR Structures NM . Tysca . Usha Martin . Fatzer . Radaelli (1) Management estimates.
|
![]() |
logoRevenue by Geography Revenue by Geography 2. Highly Diversified Business Mix Revenue by Product Revenue by Product Revenue by End Market Revenue by End Market Revenue by Brand Revenue by Brand 1 2 3 4 All Other 80% 26 SheetName:Sales by End Market;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v4.xlsx;SheetName:Sales by Brand;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v6.xlsx;SheetName:Sales by Product;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v6.xlsx;SheetName:Revenue by Geo_Pro;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Charts_v10.xlsx;Note: As of FYE 2011 and pro forma for Drumet and Lankhorst, excluding China JV sales. Sales mix for Lankhorst represents 2011 sales plus sales under contract. “Rest of Europe” consists of all European countries except Spain, Portugal, Greece, Italy, Norway, Sweden, Finland, Iceland, Denmark, Netherlands, Germany, U.K. and Belgium.
|
![]() |
logoToday: ~6,000 Customers 2006: ~2,000 Customers Top 10 Customers ~20% No one customer is greater than 5% of sales 3. Long-Term Customer Relationships .Loyal, consistent customer base, demonstrating the long-term stability of the business –20 of the largest customers (representing approximately ~28% of sales) have been customers on average approximately 20 years .Volumes from largest customers have grown or remained stable Alcoa Inc_left_Oct07.wmfArcelorMittal_Oct07.wmfCaterpillar Inc_horizontal_Jan03.wmfFastenal Company_Oct10.wmfGoodrich Corp_right_Oct03.wmfHalliburton Company Inc_Text.wmfJohn Deere_Mar06.wmfL3 Communications UK Limited_Jan09.wmfManitowoc Company Inc, The_left_Feb10.wmfNexans SA_left_May04.wmfNorthrop Grumman Corp_horizontal_Jan01.wmfOshkosh Truck Corporation_Jul08.wmfOtis Elevator Company_left_Sep06.wmfPrysmian_Jun06.wmfRaytheon Company_horizontal_Feb10.wmfSchlumberger Ltd_blue text_Jan02.wmfSiemens AG _Mai06.wmfValmont Industries Inc_right_Jan06.wmfWESCO International Inc_Oct10.wmfBombardier_May05.wmfLafarge_Dec06.wmfMosaic Company (The)_Oct06.wmfPetrobras SA_left_Sep09.wmfPfeifer_horizontal_Apr11.wmfSelected Customers Selected Customers 27 2011 WireCo Sales by Customer 2011 WireCo Sales by Customer
|
![]() |
logo28 4. Mission-Critical Products with Recurring Revenue Oil and Gas Oil and Gas Crane and Industrial Applications Crane and Industrial Applications Mining Mining Products Drill lines Sand lines Tubing lines Riser tensioners Buoy pendant lines Anchor lines Electromechanical cable Hoist lines Auxiliary hoists Boom hoists Trolley lines Boom pendants Drag lines Dragline hoists Shovel hoists Crowd and retract ropes Boom pendants Shaft ropes Balance ropes Example Drill Lines Hoist Ropes Shovel Hoists Primary Application Oil and Gas Exploration Cranes Coal and Copper Mining Cost ~$20K ~$1K – $250K ~$20K Estimated Replacement Cycle 6-12 months 1-4 years 2-4 months Estimated % Replacement ~95% of business ~70%-80% of business ~95% of business CranesBuildingCranes_211-2Due to Mission Critical Nature, Customers Choose Product Based on Quality, Service and Engineering Support. Rigorous Operating Conditions Require Frequent Replacement, Generating a Steady Stream of Recurring Revenue.
|
![]() |
logo5. Consistent Margins Despite Volatile Raw Material Prices .Strong EBITDA margins maintained throughout volatile cost environment –“Mission critical” product status leads to relative price insensitivity among customers as the Company’s quality, service, and engineering support are key differentiating factors against competitors –Margins are stabilized during volatile commodity markets by the use of surcharges –Surcharges are added to steel rope products at the time of sale to reflect current commodity prices .In 2011, raw materials costs comprised 48% of sales, with steel rod, fiber and plastics accounting for the single largest amount of purchases 29 Indexed Steel Price Indexed Steel Price Reported EBITDA & EBITDA Margin Reported EBITDA & EBITDA Margin SheetName:Chart1;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Financials\Steel price history spreadsheet 8Jan2011 v2.xlsx;Source: Purchasing Magazine, SBB. SheetName:ebitda;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Lender Presentation\Excel Back Up\EBITDA Margin_V1.xlsx;
|
![]() |
logo$ 26 $(28) $ 53 $ 51 $ 26 2008 2009 2010 2011 PF LTM 3/31/12 6. Highly Flexible, Low Cost Manufacturing Base Generates Strong FCF $8 $8 $8 $12 $14 $21 $7 $10 $12 $38 $29 $15 $18 $24 $52 2008 2009 2010 2011 PF LTM 3/31/12 $0$5$10$15$20$25$30PFGrowth CapexMaintenance CapexChange in Working Capital2 Change in Working Capital2 Historical Capital Expenditures Historical Capital Expenditures .Highly flexible cost structure which generates strong free cash flow through all economic cycles .87% of WireCo’s costs are variable or semi-variable –Support EBITDA margins in a downturn .Significant manufacturing capacity in low cost regions .Low maintenance capital requirements and efficient use of working capital –FY 2011 maintenance capex of $14mm, with run-rate capex of $38mm for the combined Company –FY 2011 inventory, A/R and A/P turnover of 127 days, 53 days and 40 days, respectively 30 Free Cash Flow1 Free Cash Flow1 1Free Cash Flow defined as EBITDA less increases in working capital and capital expenditures. 2Change in Working Capital is accounts receivable plus inventory less accounts payable ($ in millions) Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Financial Charts 04.xlsx;SheetName:Free Cash Flow;
|
![]() |
logoAcquisition Date 2005 2007 2007 2009 2010 2011 2012 Purchase Price $111m $21m $87m $15m $81m $100m $231m 31 7. Track Record of Successful Tuck-in Acquisitions Key Acquisitions Key Acquisitions 2005 2006 2007 2008 2009 2010 2011 Aceros Camesa: Electromechanical cable and low-cost facilities in Mexico Wireline Works: Additional EM cable products CASAR: High performance wire rope for crane and mining markets; added European manufacturing Phillystran: Leading manufacturer of synthetic ropes Oliveira: Steel and synthetic rope manufacturer; expanded European footprint Drumet: Low cost manufacturing and vertical integration within Europe WireCo has created significant earnings growth, additional cash flow and efficient de-leveraging through successful integration of tuck-in acquisitions WireCo has created significant earnings growth, additional cash flow and efficient de-leveraging through successful integration of tuck-in acquisitions . . . Geographical diversification . . . . . . End-Market diversification . . . http://www.google.com/url?source=imglanding&ct=img&q=http://www.lankhorst.co.uk/hst/l18a10n/lankhorst.nsf/0/6F67F52FCC65F245C12577CF003ADEF8/$FILE/Logo%20Euronete%20site.jpg&sa=X&ei=ja62T7aGEIOY8gSD7JTBCg&ved=0CAkQ8wc&usg=AFQjCNHtrRKlSk3KBW9m3AJBYjDZaG6DLw. . . . Product diversification . . ($ in millions) Average Multiple Paid: 6.8x EBITDA Average Multiple after Synergies: 4.2x EBITDA
|
![]() |
logo32 Management Ira Glazer 61 11 President – Chief Executive Officer Eric V. Bruder 48 20 Executive Vice President – Chief Operations Officer J. Keith McKinnish 55 6 Senior Vice President – Chief Financial Officer Jose Gramaxo 52 34 Senior Vice President – Global Synthetics Wolfgang Oswald 46 11 Senior Vice President – Eastern Hemisphere Sales Miguel Gomez 44 10 Senior Vice President – Western Hemisphere Sales David T. Hornaday 60 35 Senior Vice President – Chief Administrative Officer Phil Crouse 47 23 Senior Vice President – Western Hemisphere Operations Joaquin Barrios 52 29 Senior Vice President – Global Supply Chain Dennis Fetter 62 40 Senior Vice President – Chief Technical Officer Mark B. Henshaw 51 28 Senior Vice President – Global Quality 8. Experienced and Proven Management Team Name Age Industry Experience Title .Management holds ~20% ownership interest in the Company on a fully diluted basis and compensation is tied directly to WireCo’s financial performance .Management has successfully integrated 7 strategic acquisitions since 2005 .Management team has driven significant EBITDA margin improvement
|
![]() |
logoFinancial Overview wireco_wg_process_pos
|
![]() |
logo2007A2008A2009A2010A2011A PF LTM3/31/12$372 $537 $383 $448 $605 $669 $78 $89 $71 $138 $65 $245 $ 450 $ 626 $ 454 $ 586 $ 670 $ 914 Reported RevenueAcquisition Revenue WireCo Organic and Acquisition Growth WireCo Net Sales WireCo EBITDA 34 10.5% CAGR from 2007A to 2011A 11.5% CAGR from 2007A to 2011A WireCo has generated revenue and EBITDA growth in excess of the overall market by executing on a well defined growth strategy and successfully integrating strategic acquisitions WireCo has generated revenue and EBITDA growth in excess of the overall market by executing on a well defined growth strategy and successfully integrating strategic acquisitions 2007A2008A2009A2010A2011A PF LTM3/31/12$72 $103 $78 $94 $123 $128 $12 $19 $15 $18 $6 $28 $ 84 $ 122 $ 93 $ 112 $ 130 $ 164 Reported EBITDAAcquisition EBITDASynergies ($ in millions) Note: WireCo acquisition adjusted revenue and EBITDA represents the pro forma effect from acquisitions over the five year period. $9
|
![]() |
logoActual Revenue Pro Forma Revenue Pro Forma EBITDA Actual EBITDA Q1 Financial Overview 35 ($ in millions) Note: Pro Forma Revenue and Pro Forma EBITDA as of March 31, 2011 are adjusted to reflect the acquisition of Drumet (acquired in July 2011) as if it occurred at the beginning of the period. $ 138.7 $ 166.5 $ 62.8 $ 66.2 2011 2012 WireCo Lankhorst $ 167.4 $ 166.5 $ 62.8 $ 66.2 2011 2012 WireCo Lankhorst SheetName:PF EBITDA (2);Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Financials\Summary Financials for Bank Book 10.xlsx;SheetName:Actual EBITDA;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Financials\Summary Financials for Bank Book 10.xlsx;
|
![]() |
logo36 Historical Financial Snapshot Revenue Revenue Adj. EBITDA1 Adj. EBITDA1 Free Cash Flow2 Free Cash Flow2 Capex Capex Note: WireCo acquisition adjusted revenue and EBITDA as of December 31, 2011 are adjusted to reflect pro forma effects of the Drumet acquisition (acquired in July 2011) as if it was acquired at the beginning of the relevant twelve month period. Pro forma revenues and EBITDA as of March 31, 2012 are adjusted to reflect pro forma effects of the acquisition of Lankhorst as if it was acquired at the beginning of the relevant twelve month period. ¹ Includes projected Lankhorst synergies of $8.5 million. ² Free Cash Flow defined as EBITDA less capital expenditures and increases in working capital. Working capital defined as accounts receivable plus inventory less accounts payable .Lankhorst maintenance capex is $2-$4 million ($ in millions) SheetName:Revenue;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Financial Charts 01.xlsx;SheetName:Adj. EBITDA;Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Financial Charts 02.xlsx;$52 Type:GsPicture;FilePath:\\IBNJS002VF\TIGHTROPE2012\Rating Agency Presentation\RAP Excel back-up\WireCo RAP Financial Charts 04.xlsx;SheetName:Capex;
|
![]() |
logo37 Historical Financials Note: WireCo acquisition adjusted revenue and EBITDA as of December 31, 2011 are adjusted to reflect pro forma effects of the Drumet acquisition (acquired in July 2011) as if Drumet was acquired at the beginning of the relevant twelve month period. Pro forma revenues and EBITDA as of March 31, 2012 are adjusted to reflect pro forma effects of the acquisition of Lankhorst as if Lankhorst was acquired at the beginning of the relevant twelve month period. 1 PF LTM includes projected Lankhorst synergies of $8.5 million. 2 Reported EBITDA excluding impact of acquisitions. 3 Change in Working Capital is accounts receivable plus inventory less accounts payable 4 Total Unlevered Free Cash Flow defined as EBITDA less increases in working capital and capital expenditures. ($ in millions) Summary Financials20072008200920102011PF LTM 3/31/12Revenues$450$626$454$586$670$914% growth-39%(27)%29%14%- Acquisition EBITDA¹$84$122$93$112$130$164% margin19%19%20%19%19%18% % growth-45%(24)%21%16%- Selected Cash Flow ItemsReported EBITDA2$72$103$78$94$123$164Change in Net Working Capital3-(26)28(53)(51)(26) Total Capital Expenditures(20)(29)(15)(18)(24)(52) Total Unlevered Free Cash Flow4$52$48$91$23$48$86
|
![]() |
logoClosing Summary wireco_wg_process_pos
|
![]() |
logo WireCo: Diverse, Global Leader in Lifting Products 39 Highly diverse $916 million in sales, $164 million EBITDA and 85% replacement market Highly diverse $916 million in sales, $164 million EBITDA and 85% replacement market .WireCo is a leading global producer of value added lifting products, both in steel and synthetic .Lankhorst is a highly complementary acquisition; core strengths are in attractive markets where WireCo has limited presence (synthetic products serving offshore, marine and fishing) .“Mission-critical” consumable products where performance, quality and safety are key buying decision .Diverse sales by end market, geography, product and brand coupled with an extensive global manufacturing, distribution and sales footprint .Track record of successfully integrating and enhancing seven acquisitions through sales and margin growth leading to increased returns and deleveraging .Strong international organization across all disciplines 39 Revenue by End Market Revenue by End Market Revenue by Geography Revenue by Geography Revenue by Product Revenue by Product Note: As of FYE 2011 and pro forma for Drumet and Lankhorst, excluding China JV sales. Sales mix for Lankhorst represents 2011 sales plus sales under contract. “Rest of Europe” consists of all European countries except Spain, Portugal, Greece, Italy, Norway, Sweden, Finland, Iceland, Denmark, Netherlands, Germany, U.K. and Belgium.
|
![]() |
logoQ&A wireco_wg_process_pos
|
![]() |
logoAppendix wireco_wg_process_pos
|
![]() |
logo 42 EBITDA Reconciliation ($ in millions) 1 Non-cash loss incurred due to write-off of unamortized debt issuance costs in connection with term loan refinancing. 2 Unrealized foreign currency exchange (gains) losses associated with the revaluation of intercompany loans. 3 Consists primarily of purchase accounting adjustments associated with prior year acquisitions and restructuring costs. 4 Third party fees paid in connection with term loan refinancing. 5 Consists of management fee, bank fee and board payments, foreign currency exchange (gains) losses and other expenses. 6 Includes headcount reductions, factory rationalizations and internal rope sourcing. SheetName:EBITDA Rec;Type:GsPicture;FilePath:\\Ibnjs002vf\tightrope2012\Model\Updated Leverage Calc\Copy of WireCo Current Leverage Calc_v11_LP.xlsx;
|
Successor
|
Predecessor
|
|||||||||||||||||||||||
Years ended December 31,
|
327 days
ended
December 31,
|
38 days
ended
February 7,
|
||||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
2007
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Net income (loss)
|
$ | (50,707 | ) | $ | (6,565 | ) | $ | 4,086 | $ | 11,682 | $ | (17,401 | ) | $ | (11,623 | ) | ||||||||
Plus:
|
||||||||||||||||||||||||
Income tax expense (benefit)
|
5,016 | (13,170 | ) | (4,435 | ) | 1,899 | 203 | (7,048 | ) | |||||||||||||||
Depreciation and amortization
|
39,224 | 34,247 | 31,543 | 33,404 | 31,543 | 1,636 | ||||||||||||||||||
Interest expense, net
|
51,063 | 33,720 | 24,718 | 33,358 | 30,677 | 2,748 | ||||||||||||||||||
Loss on extinguishment of long-term debt
|
5,654 | 6,520 | — | — | — | — | ||||||||||||||||||
Other expense, net
|
523 | 1,073 | 1,249 | 1,418 | 5,432 | 14,599 | ||||||||||||||||||
Loss on investment in China joint venture
|
33,015 | 16,726 | 3,703 | 1,539 | 544 | 17 | ||||||||||||||||||
Foreign currency exchange losses (gains)
|
12,445 | 3,050 | (3,268 | ) | 11,305 | (4,522 | ) | — | ||||||||||||||||
Share-based compensation
|
3,841 | 3,161 | 3,034 | 2,904 | 2,863 | 2,891 | ||||||||||||||||||
Management fee and board payments (a)
|
2,931 | 2,830 | 4,357 | 3,143 | 1,803 | — | ||||||||||||||||||
Bank fees (b)
|
1,289 | 1,171 | 472 | 530 | 565 | — | ||||||||||||||||||
Acquisition costs
|
6,114 | 5,287 | 996 | (346 | ) | 3,290 | — | |||||||||||||||||
Purchase accounting (inventory step-up) (c)
|
1,875 | 1,364 | — | — | 9,481 | — | ||||||||||||||||||
Restructuring costs (d)
|
9,389 | 2,669 | 3,720 | 1,255 | 2,801 | — | ||||||||||||||||||
Other adjustments (e)
|
1,547 | 261 | 1,810 | 1,118 | 1,661 | 162 | ||||||||||||||||||
Production curtailment (f)
|
— | — | 3,532 | — | — | — | ||||||||||||||||||
Pro forma savings from restructuring (g)
|
— | 1,281 | 2,628 | — | — | — | ||||||||||||||||||
Adjusted EBITDA
|
123,219 | 93,625 | 78,145 | 103,209 | 68,940 | 3,382 | ||||||||||||||||||
Phillystran pro forma EBITDA(h)
|
— | — | 2,955 | 3,389 | 2,371 | — | ||||||||||||||||||
Oliveira pro forma EBITDA (i)
|
— | 11,397 | 11,465 | 15,194 | 9,251 | — | ||||||||||||||||||
Drumet pro forma EBITDA (j)
|
6,388 | 6,685 |
NM
|
NM
|
NM
|
— | ||||||||||||||||||
Acquisition Adjusted EBITDA
|
$ | 129,607 | $ | 111,707 | $ | 92,565 | $ | 121,792 | $ | 80,562 | $ | 3,382 |
Three months ended
|
||||||||
March 31,
|
||||||||
2012
|
2011
|
|||||||
(dollars in thousands)
|
||||||||
Net income
|
$ | 8,710 | $ | 4,163 | ||||
Plus:
|
||||||||
Interest expense, net
|
11,570 | 10,952 | ||||||
Income tax expense
|
4,949 | 2,519 | ||||||
Depreciation and amortization
|
10,035 | 9,523 | ||||||
Loss on investment in and advances to the China JV
|
440 | 3,077 | ||||||
Foreign currency exchange gains, net
|
(8,063 | ) | (6,593 | ) | ||||
Share-based compensation
|
269 | 972 | ||||||
Other expense, net
|
10 | 295 | ||||||
Acquisition costs
|
219 | 950 | ||||||
Purchase accounting (inventory step-up)
|
— | 1,289 | ||||||
Bank fees
|
482 | 244 | ||||||
Management fee and board payments
|
851 | 733 | ||||||
Restructuring costs (a)
|
851 | 931 | ||||||
Other adjustments
|
318 | 261 | ||||||
Adjusted EBITDA
|
30,641 | 29,316 | ||||||
Drumet pro forma EBITDA (b)
|
— | 3,025 | ||||||
Acquisition Adjusted EBITDA
|
$ | 30,641 | $ | 32,341 |
(D&0,W]U?F/Z5SWB'Q% Q@^.+_`&".T1R&;EP/3W_$_I7"RGFK
M-Q-)(
BJU-P9ZG15'2-174
M]/CN!@/]V11V8=:O5])&2DE)'R4XN$G&6Z"D)`!).`.II:Y_Q7JGV6S%G$V)
M9Q\V.R=_SZ?G4U:BIPAS\K#\>?2K`3XPW:BV=FA4\-)FW4X]
RJ?RO[B>>/^\,
M^`O"VJR-KDI/VAMUO:`R,L4?3)QDGG/4_0<54JT8RY;.XE!M7/)Z*]0\<>`=
M&M_#IU[0`8DC"R,BR%TD1B/F&
_Y
MO^ON7_P!#-4*OZ]_R,&I?]?`O7@;<`^X&3
M@>E<[P\TK1:VL:>T3W.R\(,-:^*&M:PVTQVP94.,XD1E/N,4#T-8>,_$)?/V]B,=#TJC?ZG
]2$Q6EOGA8XQ@"@"Y;"'S!Y\@
MCC_B<]%'K5_6]#L;1X+BVO6N8V7Y