Investor Presentation September 2012
Safe Harbor Provision of 1933, (the “ Exchange Act ” ), as amended, and Section 21E of the Securities Exchange Act of 1934, as This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act amended, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Such forward-looking statements include the discussions of our business strategies, estimates of future global steel production, trends toward outsourcing and other market metrics and our expectations concerning future operations, margins, profitability, liquidity and capital resources, among others. Although we believe that such forward-looking statements are reasonable, there can be no assurance that any forward-looking statements will prove to be correct. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Certain areas of this presentation depict Revenue After Raw Materials Costs, EBITDA and Discretionary Cash Flow, which are non-GAAP financial measures. Revenue After Raw Materials Costs, EBITDA and Discretionary Cash Flow are not and should not be considered alternatives to revenues or net income or any other financial measure under U.S. GAAP. We reconcile these measurements to GAAP in our quarterly and annual reports on forms 10-Q and 10-K, filed with the S.E.C. pursuant to the Exchange Act. Our calculation of Revenue After When we use the term “ North America ” in this presentation, we are referring to the United States and Canada; Raw Materials Costs, EBITDA and Discretionary Cash Flow may differ from methods used by other companies. when we use the term “ international, ” we are referring to countries other than the United States and Canada; when we use the term “ Latin America ” , we are referring to Mexico, Central America, South America and the Caribbean, including Trinidad & Tobago. 1 �
Management Team � Joe Curtin: Chairman, President and CEO � Ray Kalouche: Chief Operating Officer, and President and COO of the Mill Services Group � David Aronson: COO, Raw Materials and Optimization Group � Tom Lippard: Executive Vice President & General Counsel � Dan Rosati: Executive Vice President & CFO � Kelly Boyer: VP, Investor Relations & Treasurer 2 �
Agenda Company Overview Current Operating Environment Global Growth Strategy Financial Overview Outlook 3 �
Company Overview 4 �
A Leading Provider of Mission Critical Services Throughout the Steel Production Process Post-Steel Making Pre-Steel Making Steel Making Semi-Finished Raw Materials and Finished Procurement Material and Logistics Handling Proprietary, Metal Recovery Software-Based and Slag Raw Materials Handling, Cost Processing and Optimization Sales Scrap Surface Management Conditioning and Preparation Raw Material and Optimization Group Mill Services Group (RMOG) (MSG) TMS enables steel producers to generate substantial operational efficiencies and cost savings 5 �
Outsourcing to TMS Allows Steel Producers to Focus on Their Core Business – Making Steel Pig Iron Surface Iron Ore 70-75% Conditioning As Needed for quality Liquid Steel === � � to Casting � � On-Site Transport 85-87% Coke Blast Furnace Rolling/Finishing Produces molten pig iron Facilities from iron ore Basic Oxygen Furnace Limestone On-Site Produces molten steel Semi-Finished Transport Material Slag On-Site Transport Raw Materials Sourcing & Logistics Finished Goods 80-85% Loading Liquid Steel === � � to Casting � � Dock/Rail/Truck Electric Arc Furnace Produces molten steel 15-20% 80-85% TMS is embedded in all phases of our customers ’ ’ operations – ’ ’ ��������� Scrap Steel providing mission critical services throughout the steel-making process � 6
Leading Global Provider of Outsourced Services to Steel Mills TTM at 06/30/12 Revenue After Raw Materials Costs: $587MM Adjusted EBITDA: $141MM Mill Services Group Raw Material and Optimization Group #1 Scrap Management and Preparation #2 Raw Materials Procurement and Logistics Services / #1 Semi-Finished and Finished Material Handling #1 North Proprietary, Software-Based Raw Materials Cost America #1 Metal Recovery and Slag Handling, Processing Optimization Market and Sales Share #1 Surface Conditioning � 34 offices supporting global operations � Operations 82 customer sites in 11 countries � Contracts typically have minimums/tiered pricing � Minimal inventory and commodity price risk Unique � Approximately 80% of cash operating costs � Business No capital required for growth variable Model Reduces � Capital not spent until contract is signed Cyclicality � Long-term contracts with price indexing provides And Risk good visibility 7 �
Broadest Portfolio of Services in the Industry ������ ��������������� ������������� �������������� �������������� ����������� ������������������ �������� ��������� ����� �������� ������������� ���������������� ���� ��������������� ������������ �������������� ����������������� ��������� ����������� ����� �����!�����"����� � � � � � � � � � � � � � � � � � � � � � � � � #��$�� ������� � � � � � � � � � � � � � � � � ������������ ������ ������������������� �������� � � � � � � � � � � � � ������%��������� ������ &�������'������ � � � � � � � � � � � � � � � � ��������������������� ������ �������� � � � � � � � � � � � � ����� � ��!������� (�����)'�)����� � � � � � � � � � � � � ������ ��"��#��$�%&���� � � � � ������"�������� ������ � � � � ����������� ������ ���������� !��������� � � � � � ��!������� ��"��#��$��'(� � � � � � � � � *������������ )&��*�+���� � 8
Industry Leading Safety Performance 7 6 5 4 3 Incident Rates 2 1 *���*�����+�, 0 2005 2006 2007 2008 2009 2010 2011 1Q12 2Q12 EAF Mills (SMA) 4.01 4.32 4.33 3.97 3.19 4.15 4.91 2.98 Integrated Mills (AISI) 5.42 3.63 2.64 2.33 1.97 2.45 1.87 Slag (NSA) 6.47 6.46 4.7 4.47 2.72 3.25 TMS 4.17 4.7 3.06 2.6 0.93 1.44 1.51 1.48 1.57 %���-�!�������������&����#�&������.��/�0��1���&���".��.�����&���*�$�����.���&������1������#�������2&������$��334333���#������ #���#�����$��.���������&������1�.�&���"��5�# ������������������������������������������������������������������������������������������������������ ������������������������������������������� ����������������������������������������������������������������� ������������������� !!"� 9 ,
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