btu international, inc. q4 and fiscal year 2013 recap presentation

BTU International, Inc. Q4 and Fiscal Year 2013

Paul van der Wansem, Chairman and CEOPeter Tallian, COO

© Copyright 2014 BTU International

This presentation, other than historical financial information, contains express or implied forward-looking statements regarding future business prospects. Such statements are made pursuant to the “safe harbor” provisions established by the federal securities laws, and are based on the current assumptions and expectations of the company’s management. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to, the timely availability and acceptance of new products, general market conditions governing supply and demand, the impact of competitive products and pricing and other risks detailed in the company’s filings with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on any forward-looking statements. The company anticipates that subsequent events and developments may cause management's views to change, however, it assumes no responsibility to update the information contained in this presentation. This presentation and the information contained herein is the property of BTU International, Inc.


Safe Harbor Statement


Corporate Facts

• BTU Background• Thermal process equipment

for in-line, high volume mfg.• Founded in 1950• Public since 1989

(NASDAQ: BTUI)

• Headquarters in Billerica, MA• Manufacturing and engineering

in US and China• Worldwide sales and support• 300 employees worldwide

• Revenue FY 2010, $81.6M FY 2011, $76.1M

FY 2012, $58.1M FY 2013, $47.8M

64%21%

15%

2013 Shipments by Territory

AsiaAmericasEurope

Why Invest in BTU?

• BTU is a proven leader in capital equipment for the Electronics assembly industry

• Advantage: strong brand recognition and leadership

• BTU is strongly positioned as a capital equipment and process provider to the Alternative Energy industry

• Advantage: core technologies for long term growth solar markets, leadership in the nuclear fuel market

• BTU has its core strength in high-volume thermal

processing • Backed by an experienced, multicultural management team• Strong balance sheet


Business Mix (in $M)

2008 2009 2010 2011 2012 2013 $-

$10

$20

$30

$40

$50

$60

$70

$80

$90

Service/PartsOtherEnergyElectronics


• Thermal process - reflow equipment used for electronics assembly and Semiconductor packaging

• Industry Drivers & Strategy• Asia-centric business• Productivity focused• Cost sensitive

• BTU Focus• New product – Dynamo™• China manufacturing & Asian support • High throughput/performance & uptime• Targeted for consumer electronics manufacturers

Electronics Business


™

Electronics Value Chain – Where we Compete


AssemblyPackagingSemiconductor

Screen print

Placement

Solder Reflow

Test & inspect

Wafer bumping

Solder Reflow

Fluxing

Vision and placement

Solder reflow

Underfill and cure

Electronics Market Outlook

• Strong growth equipment spending expected in 2014• Packaging and assembly are expected to be particularly strong

versus other segments


Sources: Gartner, Sept 2013

2013 2014

Global Real GDP +2.1 +3.0

U.S. Real GDP +1.6 +2.7

Elec. Equipment1 +2.5 +4.2

SATS +7.5 +8.4

Capital Spending -6.8 +14.1

Equip. Spending -8.5 +15.8

WFE -9.1 +14.9

PAE -6.4 +17.0

ATE -5.9 +23.71 Production revenue

Solar Value Chain – Where we Compete


ModuleCellIngot/WaferSilicon

Cleaning and Texturing

Diffusion Doping

PSG Etch Removal

AR Coating

Screen Printing Metallization

Edge Isolation/Testing Sorting

BTU Meridian In-line Diffusion System $0.8 to $1M

Metallization Drying and Firing $200 to $300K

Mkt Size: $120M

Mkt Size: >$30M

Source: Solarbuzz & BTU estimate, Sept. 2013

Solar is Becoming Cost Competitive

E S T IM AT E D C O S T O F E L E C T RIC ITY G E N E R AT IO N

$0 .00 /kWh

$0 .10 /kWh

$0 .20 /kWh

$0 .30 /kWh

$0 .40 /kWh

$0 .50 /kWh

$0 .60 /kWh

$0 .70 /kWh

C o st ($/kW h)

19 90

N ote: PV LC O E as s um e s ene rg y yie ld o f 1.4kWh/Wp p er year. A l l value s in dic ati ve o nly, w ith w id e var iabi lity.J anua ry 201 4

19 95 20 00 20 05 20 10 20 15 20 20

K c114 .311e ph -gen er ation

E le c tr ic ity from C o al

E le c tr ic ity from O il

P V L C O E (un s ub s id ize d)

5% C A AG R

1% C A AG R


• P & N-Type Silicon Solar Cell diffusion – formation of front and back junctions

• Advantages•High cell efficiencies •Lower cost of ownership

• BTU Strategy•Developed innovative in-line co-diffusion process•Largest installed base for in-line diffusion•Provide equipment and process solutions

• Proven solution – BTU’s #1 customer producing 17.6% efficient cells on poly-Si

Solar Cell Diffusion


Solar Cell Metallization

• China and Taiwan combined >70% of market • Key competitors - Centrotherm and Despatch

• Centrotherm – turn-key capability• Despatch – price alternative

• BTU Strategy:• SinTerra introduced May 2013• Best-in-class uptime/reliability• Lower cost and short lead-time• China manufacturing• Local service and support


Nuclear Fuel

• High volume, high temperature processing of nuclear fuels• BTU customers include most major nuclear fuel producers

• Over 60 units shipped for high volume production of Uranium Oxide (UO3) fuel

• Requires ultra-high temperature (1800ºC) and very precise process atmosphere

• China, Russia, India: building > 45+ new nuclear reactors

• US & Europe: limited expansion

• Increasing energy source in high growth economies

Nuclear pellet, rod and bundle


Financials


Net Sales

2008 2009 2010 2011 2012 20130

10

20

30

40

50

60

70

80

90

$ m

illi

on

s

BTU Company Confidential

Quarterly Sales

Q4-10

Q1-11

Q2-11

Q3-11

Q4-11

Q1-12

Q2-12

Q3-12

Q4-12

Q1-13

Q2-13

Q3-13

Q4-13

0

5

10

15

20

25

30

$ m

illi

on

s


Gross Margin

2008 2009 2010 2011 2012 20130

5

10

15

20

25

30

35

40

45%


Financial Highlights ($ millions except per share data)


2008 2009 2010 2011 2012 2013

Net Sales $72.3 $45.1 $81.6 $76.1 $58.1 $47.8

Gross Margin % 42.5 27.5 41.4 37.5 28.4 30.8%

S, G & A 23.2 19.0 23.1 22.7 21.0 19.8

R, D & E 7.3 6.9 6.6 7.1 5.5 4.6

Restructuring 0.4 0.4

Net Income/loss (1.1) (14.6) 2.2 (2.7) (11.0) (11.5)

Income/loss per share (0.12) (1.58) 0.24 (0.29) (1.16) (1.20)

Cash 27.5 25.4 22.8 18.9 20.2 14.0

Stockholders’ Equity 49.6 35.7 39.8 39.5 29.5 18.9

Target Operating Model (as % of Sales)


2008 2009 2010 2011 2012 2013 Target

Gross Margin

42.5% 27.5% 41.4% 37.5% 28.4% 30.8% 43-45%

S,G&A 32.1% 42.0% 28.3% 29.8% 36.1% 41.4% 23-25%

R,D&E 10.1% 15.3% 8.1% 9.3% 9.4% 9.6% 8-9%

EBITDA 3.0% -25.7% 7.7% 0.6% -7.9% -17.1% 13-15%

Global Force

Cross-cultural team - Unique local strength


Summary

• “The Foundation” - Electronics • Strong global brand and customer base • Established infrastructure to support growth• Additional market penetration –high volume – low cost ; “DYNAMO™”

• “Growth opportunity ” - Solar 2014+• BTU investment in solar significant• New product introductions for Silicon solar • Increased throughput and cell efficiencies lower cost/watt

• “Largely Asian Opportunities” – Nuclear

• “The Back Bone”• Thermal & process gas innovation and expertise • High volume, continuous processing • Operational excellence, USA & China• Strong worldwide / Asian customer base



Thank You

btu international, inc. q4 and fiscal year 2013 recap presentation

Technology