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8/14/2019 MISCOR Presentation 2008 (DRAFT v3)
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Investor Presentation | 2008
OTC: MIGL
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Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
subject to numerous risks and uncertainties that could cause actual results to
differ materially. For information concerning these risks, please see MISCORGroups publicly available filings with the Securities and Exchange Commission
(SEC) at www.sec.gov. MISCOR Group disclaims any intention or obligation to
update or revise any forward-looking statements, whether as the results of
new information, future events or otherwise.
All information should be read in conjunction with the historical financial
statements contained in MISCOR Groups Form S-1, reports on Form 10-Q and
Form 8-K and public announcements of financial information.
These reports, as well as a financial overview, are available on the Investor
Relations page of MISCOR Groups website, located at www.miscor.com.
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The MISCOR Story
Vision Statement
To become a leading provider of integrated mechanical and electricalindustrial services and products by delivering unmatched experience,
quality and innovation, while creating long-term relationships andtangib le va lue for our employees, customers and shareholders.
Strategic Advantage Leading provider of industrial services for blue-chip customers serving the
domestic and international markets
Track record of organic and acquisition growth
82% compounded annual sales growth (two-time Inc. 500company) Highly experienced management team
Leverage opportunity inherent in the fragmented services market
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Management Team
20+ years experience in electrical contractingand industrial services
A founding shareholder of Trans Tech Electric,Inc., which became a founding member ofQuanta Services, Inc., (NYSE: PWR)
BS in electrical engineering, Notre Dame;Certificate in Executive Management, NotreDame
John Martell, PEPresident and Chief Executive Officer
Richard MullinVP, Chief Financial Officer
Richard TamborksiEVP, Chief Operating Officer
20+ years experience insenior finance positions inpublic accounting and
industry
CFO at NASDAQ-listedStarcraft Corporation,former VP of Finance andPresident of WellsElectronics, Inc.
MBA from Notre Dame
Former VP of Operationsfor Alstrom TransportsTrain Life Services in the
U.S.A. and Canada, adivision of Paris, France-based Alstrom
Former VP of GlobalSourcing and Logistics forNYSE-listed Wabtec, Corp.
BS from Lake Erie College
James LewisVP, General Counsel
13+ years experience incorporate law firm; focusin contract, litigation and
product liability law
Former adjunct professorof law at Notre Dame
JD from Notre Dame
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Management Team
29+ years of industryexperience
President of 3-D Service,former VP Operations at
ABB Services and GrandEagle, Inc.
Duke University, FuquaSchool of Business,Executive BusinessManagement Program
Bernard DeWees
President, Magnetech
J. Cullen Burdette
Vice President, HK Engine Components
Anthony Nicholson
Vice President, Martell Electric
13+ years experience indiesel engine components,manufacturing and repair
Former General Manager
of Hatch & Kirk
BS in electrical engineeringfrom the University ofMaryland
20+ years experience inelectrical contracting andconstruction management
Former COO of Ed
Nicholson & Assoc.
MBA from Notre Dame
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Unique Corporate Model
National,
Multi-IndustrialServicesProvider
Breadth ofGeographic
Reach
StrategicAcquisitionStrategy
Blue-ChipCustomer Base
Best-in-ClassManagement
LeverageExisting
CrossoverPotential
Skilled Workforce
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Diversified Services w ith Crossover Potential
Percent of Total Revenue Contribution (YTD 2007)
Construction and Engineering Services
(CES)
Repair, Remanufacturing, ManufacturingServices
(RRM)
29%71%
American M otive
Power
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Midwest Work Ethic | Global Reach
RRM Growth
$3,271
$11,792$14,820
$24,405
$34,637
$43,202
$32,088
$37,916
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000$40,000
$45,000
$50,000
2001 2002 2003 2004 2005 2006 2006
9mo.
2007
9mo.
Providing global industrial solutions through tw o segments:
Repair, Remanufacture and Manufacturing Services
Construction and Engineering Services
Expanding services through acquisitions and organic growth
RRM Growth
$3,271
$11,792$14,820
$24,405
$34,637
$43,202
$51,734
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
2001 2002 2003 2004 2005 2006 2007
CES Growth
$21,634
$17,552
$11,659
$4,492
$675
$0
$5,000
$10,000
$15,000
$20,000
$25,000
2003 2004 2005 2006 2007
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Repair, Remanufacture and Manufacturing Services (RRM)
Provide maintenance and repair services on industrial electric motors, lifting magnets, engineering ofpower assemblies, engine parts and other components related to large diesel engines.
End Markets: Rail, Utility, Maritime, Offshore Drilling
Core competencies include both electricaland mechanical repair
Largest non-OEM manufacturer of powerassemblies for EMD diesel engines
Multi-location capability with locationsthroughout the Midwest
Complete industrial repair services On-site repair capabilities Predictive and preventative maintenance
programs Tier 0 Certification with the EPA for power
assemblies Repair services for growing Wind power
industry, hydroelectric, others Control complete supply chain for the
manufacturing process with in-housefactory
Redesigned various features to improve onthe original product design
Highly trained workforce
Value Proposit ion
Industrial Services
Sales
$3,271
$11,792$15,323
$25,389$29,721
$37,228 $38,528
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000$40,000
$45,000
2001 2002 2003 2004 2005 2006 2007
Diesel Engine
Sales
$6,321
$9,672
$13,206
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
2005 2006 2007
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RRM Growth Strategy
Service Areas
Acquisitions: pursue targetedacquisitions to expand geographicreach, customer base
Organic: expand repair services, grow
geographically with customers
Position as service provider of choicefor all industrial maintenance, dieselengine repair/maintenance needs
Leverage existing magnet customerbase as a platform for cross-sellingservices
Continue to take advantage ofoutsourcing trends, documented ROIbenefits
Cross-sell services across internalbusiness divisions
Pursue additional EPA certifications only non-OEM with Tier 0 Certification
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Magnetech Industrial Services
Provide maintenance and repair services toindustry, including: Industrial electric motors
Lifting magnets Engineering services
Business Model
AC and DC motor repair Manufacturing, remanufacturing and repair
of electrical lifting magnets Turbine generator repair Support services
Field services Magnetrac Asset Management Reliability-centered maintenance Predictive and preventative
maintenance Education and training
Services
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3-D System (Acquired Nov. 2007)
Specialize in the repair, remanufacture andmaintenance for a variety of commercialand industrial equipment, including a uniqueexpertise in wind generation repair, to extend
service life, increase performance andreliability, while minimizing downtime.
Business Model
Electric motors and generators
Steam, combustion and hydroelectricturbines Repair services for renewable wind
generation facilities Class I light rail generators, motors, etc. Navy and marine duty motors Nuclear reactor coolant pump motors
Drives, drive systems, printed circuitboards Power systems Plant site services New equipment
Services
Renewable Wind Generation Repair Services
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HK Engine Components
Provides manufacturing, remanufacturing,repair and engineering of power assemblies,engine parts and other components related to
large diesel engines for multiple industries,including: Rail Maritime Offshore drilling
Business Model
Manufacture and remanufacture powerassemblies for 710, 645 and 547 EMDdiesel engines
Only non-OEM with Tier 0 Certificationfrom the Environmental Protection Agency(EPA) for power assemblies
Component parts for engines 1/3 of the production exported to
customers outside North America
Services
Power Assembly
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American Motive Pow er (Acquired Jan. 2008)
Provider of a wide range of services to therailroad industry, including the reconditioning,remanufacturing and manufacturing oflocomotives. The 240,000-square-foot, EastCoast-based facility has the capacity to serviceup to 20 locomotives simultaneously, as well asoffering wreak repair to quickly put assets backinto service.
Business Model
Locomotive reconditioning and rebuilding Engine rebuilding, with an emphasis on
EMD 645 and 710 power assemblies Wreak repair services Technological enhancements 104-foot paint shop with air scaffolding
system Truck repair (locomotive undercarriages)
Services
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Construction and Engineering Services
Provide a wide range of electrical contracting and HVAC services, mainly to industrial and
institutional customers, as well as commercial builders/contractors
A market leader in locations served Recent entry into industrial HVAC
market through Ideal Consolidatedacquisition
Highly trained workforce High level of design/build competency Specialists in fast-track construction
methods Key relationships with all major
general contractors serving ourregional footprint
Value Proposit ion
Electrical Contra cting
Sales
$174
$3,508
$10,254
$14,207
$21,634
$0
$5,000
$10,000
$15,000
$20,000
$25,000
2003 2004 2005 2006 2007
Electrical Contracting
Operating Income
$9
$369
$868
-$74-$200
$0
$200
$400
$600
$800
$1,000
2003 2004 2005 2006 2007
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CES Growth Strategy
Acquisitions: pursue targets thatexpand geographic reach, customerbase
Organic: expand existing customerrepair services
Expand footprint throughout
Midwest; grow with key generalcontractors
Replicate national expansion led bymanagement members in the 1990s
Align with suppliers to leveragepartnership opportunities in currentand target markets
Current Service Hubs
Market Opportunity
Target Service Hubs
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Martell Electric
Provide a wide range of electrical contractingservices, mainly to industrial and institutionalcustomers, as well as commercial builders andcontractors
Business Model
Design/Build and Plan/Specification
Methods Commercial, industrial and institutional
construction Telecommunications Traffic 24/7 service department Three locations in Northern Indiana
Services
Hilton Regional Laundry Facility, Portage, Ind.
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Magnetech Power Services
Maintenance and repair services to industry,including:
Engineering Power system studies Transformer services Circuit breakers Locomotive controls
Business Model
Design/build mechanical solutions Circuit breaker reconditioning 24/7 service Total circuit breaker management
programs
Onsite repair capabilities Predictive and preventative maintenance
programs
Services
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Ideal Consolidated (Acquired Oct. 2007)
Provide a wide range of mechanical contractingservices, mainly to industrial and institutional
customers, as well as commercial builders andcontractors
Business Model
Design/Build, Design Assist andPlan/Specification Methods
Commercial, industrial and institutionalconstruction
Service department
Predictive and preventative maintenance
Services
University of Notre Dame Football Stadium
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MISCOR Growth Story Organic & Acquisit ions
Acquisition TimelineOrganic
Acquisition
2000 2001 2002 2003 2004 2005 2006 2007
SB Hammond
Boardman
Indy
Mobile
Huntington
Merrillville
Martell S.B.
Appleton
Martell Elk.
HKEC:
Haggerstow Sarland
HKEC:
Weston Martell Valpo.
Ideal
Consolidated
Mobile, Ala.
3-D Service
$-
$20.0
$40.0
$60.0
$80.0
$100.0
2000 2001 2002 2003 2004 2005 2006 2007
Total Growth
Total Acquisition Total Organic
82% CAGR
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Grow th Summary
1
2008N/A1250,00068
1
2007N/A115,36041
N/AN/A14,00021
5
01, 02(3), 06
3
2000, 04, 079325,784385
2
05(2)N/A370,57684
N/A
1
200416,00017
10618712,724702
1
2004
2
03, 05341,00486
Employees Square Ft. Locations OrganicStarts
OperatingAcquisitions
MCGL TOTAL
Includes 3-D Service
American Motive
Power
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Grow th Driver: End-Market Diversification
Rail$144 bil l ion
Transit$65 bil l ion
Utilities$554 bil l ion
Steel$574 bil l ion
Marine$4 bil l ion
Construction$24 bil l ion
Petrochemical$101 bil l ion
Energy/
Renewable Power$204 bil l ion
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Leveraging Complementary Business Units
Divisional Cross-Selling Diversified business segments offer customers a wide range of industrial-based services
One-stop-shop for Blue Chip customers
Increased penetration reduces cost for customers, drives MISCOR profitability
Case Study: Australia Rail Group
Aggregating Special ized Talent
Training programs for customers = cost savings, loyalty Shrinking talent pool of industrial services workforce creates competitive advantage
Average employee has 15+ years experience
Attracting talent through aggressive growth
Training and education programs
Case Studies: Magnetrac Asset Management, Beta Steel
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Sizing the Market Potential
Fragmented, legacy-basedindustries create numerous
acquisition and expansionopportunities
Midwest location, combined with aglobal reach, provides a strategic
advantage for increasing marketshare
Motor & Magnet
Total U.S. Market $8 Billion
U.S.A., $3.5
Eastern
U.S.A., $4.5
Electrial Contract ing Market
Total U.S. Market $76 Billion
Midwest
$56B
Balance of
U.S. $20B
Diesel Engine Power Ass em bly Mark et
Total World Market $370 Million
World
$137.0MU.S.A.
$223M
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Favorable Industry Tailw inds
Outsourcing non-core industrial services can create significant cost savings
Internal uti l ization of skil led employees w il l never be at 100% : The mountingcosts of training skilled employees, maintaining a satisfactory safety record andcomplying with rapidly changing government regulations are driving outsourcing
Breadth of Geographic Coverage Remains Critical: National and multi-siteindustrial companies prefer to simplify vendor management, work with larger providerswith broad geographic coverage
Aging U.S. Industria l Base: As equipment and motors continue to age, companiesturn to preventative, predictive and remanufactured goods as a valuable cost-saving tool
Industry Succession Plans: Fragmented legacy-based industry lacks successionplanning, resulting in attractive acquisition targets with unrealized potential
In response to these trends, we have made strategic business acquisitions toconsolidate fragmented service providers in the M idwest, resulting in
significant revenue growth and geographic expansion
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Evolution of a National Leader
Long-Term Plan
Seasoned coremanagementProven track recordFocused service offeringsTarget blue-chip customers
Addition of MartellElectric6 acquisitions, 12 newlocations
IPOIndustry recognitionContinued acquisitionsStrengthen management
team
$500 million diversifiedservices provider
National exchange listingLeverage public companycurrency
2000 MISCOR Founded
Build managementLeverage industry trendsExpand service offeringsGrow customer baseInc. 500
2000 2004
Company Formation
2008 Beyond: Our Future
Profitability&
IncreasingRevenueGrowth
Building national imageExecute strategic visionAcquisitions and organicgrowthBring Company story to theStreet
Service provider of choiceLive the strategic visionStrengthen managementteam
Achieve national reputationContinue organic andacquisition growthBuild a following on theStreet
Team in placeLeverage industry trendsExpand service offeringsStrong customer base
Team in placeLeverage industry trendsExpand service offeringsStrong customer base
2005 2007
Accelerated Growth
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Financial Overview
Sales
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
Gros s Pro fit
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
Operating Income
$0
$100
$200
$300
$400
$500
$600
$700
$800
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
EBITDA
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
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Investment Catalysts
Leading industrial services and manufacturing company in growing nichemarkets
Established, nationwide blue-chip customer base
Highly-trained workforce with niche expertise amid limited pool of talent
Industry Tailwinds: The aging industrial backbone needs maintenance;repairs are a fraction of the replacement cost
Highly experienced management team with proven track record
Diversified end-market exposure
Balance of organic and acquisition growth
Fragmented legacy-based industry creates attractive acquisition targets withuntapped potential
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Investor Presentation | 2008