CHARTER STEEL & CHARTER SPECIALTY STEEL AWPA Annual Meeting February 27, 2002 Getting To Know Us Better Some Background Information FAQ • “Which analyst do you want? Tax, stock, or psycho?” There Is A Better Way • Numerous Chapter 11 Bankruptcy Proceedings in the past 24 months. • At Charter Steel, We Completed a $186 million Expansion and Improvement phase and have Embarked on the Next Phase that will Exceed $130 million Over the Next 3 Yrs. – We will do this primarily with earnings, not debt. – We will continue to Invest in people, technologies, and facilities that provide the lowest cost, highest quality and highest level of service to our customers. – We are investing in a lean, flexible, capability that can be married to a customer’s manufacturing process. One entity, one process, one inventory. We Want to be Different Redefine the Customer - Supplier Relationship in Steel • Privately Held, Family Owned, Non-Union, Investing – The Luxury of the Longer View • This is A Service Business. The Key is Distribution – One Stop Shop, From Start to Finish • Focused. Faster, Smarter Smaller, – We Can’t Be All Things to All People – 85% is Cold Headed or Cold Formed • Approach the Market as A Supply Chain Manager – One Entity, One Inventory • Building Strategic Relationships – The Timken Company “Up the Ladder “ More Specialty Grades, Properties and Value Bearing Stainless Steels Specialty Spring High Formability CHQ Cold Heading Quality Special Quality Cold Finishing Industrial Financial Strength New Investment Is the Key to Lower Cost • Net Sales Ended 2001 at $272 million – Average of 10% per year Growth (internal) for Last 5 Yrs. • 36 Consecutive Profitable Quarters Through 12-31-01 • Net Worth up 138% in six years. • Leverage (Liabilities/Net Worth) – .66 at the end of 2001 • Capital Expenditures: $186.2 M In Last 5 Yrs – $134.4 million planned for next three years • D&B Rating of 5A2 Corporate Structure • Charter Manufacturing – Charter Wire :Profiled Steel Shapes – Milwaukee Wire Products :Tier 1 Auto – Charter Steel :Carbon producer – Charter Specialty Steel :Stainless rod/processed. Charter Steel Facilities • Saukville, Wisconsin – Carbon and Alloy Steel Manufacture and Distribution • Melt, Hot Roll • Clean, Anneal, Draw, Coat • Distribute • Rising Sun, Ohio – Full Service Processing and Distribution Facility • Clean, Anneal, Draw, Coat • Distribute Charter Steel Steel Manufacturing, Coil Processing and Distribution Saukville, Wisconsin Melt Shop Rolling Mill 100 Ton DC Electric Arc Furnace / VAD Carbon and Alloy Chemistries 4-Strand Continuous Casting 5.5 inch Square Billet, Surface Quality is Born Here Danielli Re-Heat Furnace High Efficiency, Walking Beam Design for Superior Surface Danielli-Morgardshammer Rolling Mill Highly Automated, No-Twist, Orbis (dia.) and Eddy Current (surface) Rolling Mill: Stelmor Laying Deck Controlled Cooling to Optimize Metallurgical Structure Rolling Mill: Sizes From 7/32 to 1-1/32 4,400 lbs. Coils, Sizes to 1.4375 inches Diameter by March, 2002 Bar Mill Y Split Bar Sizing Mill Carbon and Alloy Coil Processing (4 Lines) Chemical Cleaning: Hydrochloric and Sulfuric and Coating: Polymers, Phosphorus, Lube and Lime Carbon and Alloy Coil Processing Mechanical Cleaning: Shot Blasting Unit Carbon and Alloy Coil Processing Endothermic Annealing: 2 Salem-Daido Continuous Furnaces Carbon and Alloy Coil Processing Endothermic Annealing: 3 Salem-Daido STC, and 22 Box Furnaces Coil Processing Expansion Indoor Coil Storage Charter Specialty Steel • Fond du Lac, Wisconsin – Stainless Steel Coil Processing • Clean, Anneal, Coat • Distribute Danielli-Morgardshammer Rolling Mill Highly Automated, No-Twist, Orbis (dia.) and Eddy Current (surface) Stainless Steel Cleaning / Coating Line New Stainless Annealing Furnaces Stainless Coil Quench Charter Specialty Steel (P5) Conclusion • Charter Steel is a Different Kind of Steel Supplier – A Service Organization First – Privately Held, Family Owned – Financially Sound and Investing In the Business – A Supply Chain Manager / Partner • We Are Better Today than We Were One Year Ago and One Year From Now • We will Better Than We Are Today Questions ?
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