roth oc 2009
DESCRIPTION
Presentation given by Chris Wang, President and CFO, and Dwight Berry, Chief Operating Officer, at Roth OC Conference in February 2009TRANSCRIPT
Fushi Copperweld, Inc. (Nasdaq: FSIN)
ROTH OC Conference 2009
Safe Harbor Statement
Except for the historical statements made herein, the statements made in
this presentation are forward-looking statements that could cause actual
results to differ materially from those projected in forward-looking
statements include, but are not limited to, general business conditions,
managing growth, and political and other business risks. All forward-
looking statements are expressly qualified in their entirety by this
Cautionary Statement and the risks and other factors detailed in the
Company’s reports filed with the Securities and Exchange Commission.
Fushi Copperweld, Inc. undertakes no duty to update these forward-
looking statements.
Fushi Copperweld – Who we are
• World’s largest manufacturer of bimetallic wire; principally copper-clad aluminum and copper-clad steel
• Operate through wholly-owned subsidiaries Fushi International (Dalian), based in Dalian, P.R.C., and Copperweld Bimetallics LLC, based in Fayetteville, Tennessee. Over 100 years of operations.
• Exclusive worldwide rights to proprietary cladding technologies through 2015
• Global sales network serving over 60 countries in North and South America, Europe, Africa, and Asia.
• Manufacturing facilities in Dalian, P.R.C., Fayetteville, Tennessee, and Telford, England
• Market share leader in Asia, North America, and Europe
• Nasdaq Global Select.……………………………………………………….FSIN
• Price (Feb 13 2009)….…...…………………………………………….. ….$5.11
• Market Capitalization……………………………………...….....$145 million
• Fully Diluted Shares Outstanding………………………….28.506 million
• 2007 Revenues (FY end December 31)…..……….........$128.2 million
• 2007 EPS…………………………………………………….……………..…….$1.08*
• FY08 EPS…………..…………………………………………………$1.03 - $1.13**
Our business
Market reach
Key metrics
*Encludes $0.11 million tax-loss carry forward- **EPS excludes $0.08 litigation accrual
Company Highlights
Market Leader
Brand & Technology Dominance
Margin increase
Growth Potential
• Leading designer, developer, manufacturer, and innovator of copper-cladded bimetallic products in all major markets throughout the world.
• Copperweld is the single most recognized brand in the bimetallicsindustry worldwide.
• Focus on expansion within and into new, higher-margin products, applications and markets through investment into new machinery and R&D.
• Strong array of bimetallic products used in growth-oriented sectors of global economy
• Copperweld’s underutilized CCS and CCA lines will relocate to Dalian and significantly expand Fushi’s product offerings and capacity.
the power of two
Increased capacity
Bimetallics vs. Pure Copper
• Copper prices have risen dramatically— 97% since 2003*. Bimetallic wire offers greater value than pure copper in many industrial applications.
• CCA yields up to 2.7 times more wire length by weight than traditional solid copper wire.
• CCA has the same utility and functionality of pure copper and can be up to 65% cheaper.
• Pure copper wire is at risk for theft. The higher tensile strength of CCS and lower scrap value of aluminum and steel makes bimetallic wire significantly less valuable to thieves. Also, it is virtually impossible to separate the copper cladding from the core metal.
Cost benefits and technological advantages of bimetallics
*Source: New York Commodities Exchange (COMEX) high-grade copper trading prices January 2003 - January 2009
Applications of Bimetallics
Each category below can serve as a significant revenue driver. Shown are area percentage of sales.
Expansive Global Distribution
• Both Fushi and Copperweld are worldwide brands with a sales presence in over 60 countries. In the first quarter 2008 we served roughly 400 customers in 30 countries from our facilities in Dalian, PRC; Fayetteville, Tennessee; and Telford, U.K.
Net sales breakdown by region Q1-Q3’08:
DalianTelford
Fayetteville
Targeted Growth Markets
Telecommunication
Transportation
Electrical Power Utilities
Electrical Wire and Cable
Top Five Customer Breakdown
Q1-3/2007
Top Five Customer Breakdown
Q1-3/2008
Fushi’s Strong Financial Performance
*Copperweld Bimetallics LLC, acquired Oct. 29, 2007. All figures are in millions of USDs
Revenue CAGR = 56.1% — EBITDA CAGR = 52.2%
*
*
*
Fushi Key Financial Metrics
Net Income Growth (in millions of USD) Gross Margin %
EBITDA MarginSG&A as % of Sales
* Copperweld Bimetallics LLC, acquired Oct. 29, 2007 — ** Net Income Includes $2.1 million litigation accrual
EPS Growth
0.50
0.84
1.08 1.13
0.0
0.5
1.0
1.5
2.0
FY05 FY06 FY07 FY08 Guidance
YoY Growth
-
(in $ per share)
*Excludes $0.11 tax-loss carry forward- **EPS excludes $0.08 litigation accrual
* **1.03 -
Strong Balance Sheet
September 31, 2008
(Unaudited)
December 31, 2007
Cash 50,043,410 79,914,758
Accounts Receivable 50,018,459 23,611,186
Inventory 20,444,709 12,308,295
Plant and Equipment 107,816,898 87,228,600
Total assets 294,616,554 246,468,617
Current Liabilities 43,542,897 33,665,563
Long-term Liabilities 45,305,993 68,515,396
Capacity Expansion
*Estimated annualized capacity and actual YTD production, FY08
92.63%96.56% 93.77% 82.83% 60%
Utilization % (Output/Capacity)
4,800 4,446
8,400 8,111
12,000 11,152
26,000———CCA:
22,650
CCS:3,350
21,536———CCA:
19.936
CCS:1,600
63,500———CCA:
46,400
CCS:17,100
28,366———CCA:
22,331
CCS:6,035
DalianDalian FayettevilleFayetteville Fayetteville Fayetteville Dalian Dalian
– 27,600 MT of installed annualized CCA capacity at onset of 2008
– Additional 6,000 MT installed in Q1’08 – 33,600 MT of annualized CCA capacity installed
– Ample facility space available for equipment transfer and future expansion
– 12,400 MT annualized CCA capacity
– 16,300 MT annualized CCS capacity
– Capital investment implemented Q4’07 to expand product line and address value migration trend
– Additional 4,100 MT of CCS scheduled to be added in 2009
– Phase I -6,000 MT of CCA cladding capabilities completed in Q1’08
– Phase II - 4,100 MT of CCS cladding capacity arrived in Dalian in Q4’08 and currently being installed
– Phase III - Additional 6,000 MT of CCA cladding capabilities scheduled to be operational in Q1‘09
Addressing Demand
Highly Experienced Management Team
the power of two
Chairman & CEO
Li Fu
President/CFO
Chris Wang
Mr. Fu is the Chairman and CEO of Fushi Copperweld, which he founded in 2001. Mr. Fu holds a degree in engineering from PLA University of Science and Technology. Under his leadership, Fushi has experienced phenomenal growth.
Wenbing Chris Wang has served as CFO of Fushi Copperweld since 2005 and President since January of 2008. Mr. Wang has worked for Redwood Capital, China Century, and Credit Suisse First Boston. Mr. Wang holds an MBA from the University of Rochester. Mr. Wang was named one of the top ten CFO’s of 2007 in China by CFO magazine.
EVP, Chief Operating Officer
Dwight Berry
Dwight Berry oversees Fushi Copperweld's sales, R&D, and manufacturing operations at all locations wordlwide. Mr. Berry has 15 years of direct CATV/wire and cable experience and over 20 years experience in manufacturing management. Mr. Berry's education includes a B.S. from Mississippi College and the Wharton Financial School at the University of Pennsylvania.
Company Highlights
Market Leader
Brand & Technology Dominance
Margin increase
Growth Potential
• Leading designer, developer, manufacturer, and innovator of copper-cladded bimetallic products in all major markets throughout the world.
• Copperweld is the single most recognized brand in the bimetallicsindustry worldwide.
• Focus on expansion within and into new, higher-margin products, applications and markets through investment into new machinery and R&D.
• Strong array of bimetallic products used in growth-oriented sectors of global economy
• Copperweld’s underutilized CCS and CCA lines will relocate to Dalian and significantly expand Fushi’s product offerings and capacity.
the power of two
Increased capacity
Contact Us
Investor contact
Beijing office
• Nathan AndersonDirector of Investor Relations & Corporate Development [email protected]
• Fushi Copperweld, Inc.
TYG Center Tower B, Suite 2601
Dong San Huan Bei Lu Bing 2
Beijing PRC 100027
Tel + 139 1150 8107
+1 931 652 2433
Thank you!
Appendix: Bimetallic Wire Basics
• We manufacture a composite wire in which copper strip is bonded to a solid aluminum or steel core
• CCA and CCS can be engineered to meet the electrical properties and functionality of copper wire
• CCS combines copper’s conductivity with the strength and stability of price in steel
• CCS high corrosion and fatigue resistance make it an ideal choice for grounding applications
• The ratio of copper thickness tothe core remains constant throughout the drawing process
• Bimetallics come in a large variety of sizes, conductivities and strengths
• CCA’s outer copper sleeve acts as an insulating layer for the aluminum, preventing oxidation
• CCA has become the industry standard for trunk & distribution, and cell-tower connecting cables
PRC Broadband Subscribers (in millions)
Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08
*Source: China Telecom, China Netcom
PRC Mobile Subscribers (in millions)
Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 Q3/08
*Source: China Mobile, China Unicom