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AMM Aerospace Metals Conference

AMM Aerospace Metals Conference. Pittsburgh, PA Dan Hennessy V.P. - Manufacturing April 11, 2007. Outline. LSS History LSS Capital Investment Market Conditions Future Aircraft requirements LSS Response. Latrobe Specialty Steel. Latrobe Electric Steel Company founded in 1913

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AMM Aerospace Metals Conference

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  1. AMM Aerospace Metals Conference Pittsburgh, PA Dan Hennessy V.P. - Manufacturing April 11, 2007

  2. Outline • LSS History • LSS Capital Investment • Market Conditions • Future Aircraft requirements • LSS Response

  3. Latrobe Specialty Steel • Latrobe Electric Steel Company founded in 1913 • Became part of The Timken Company in 1975 • Sold by Timken on December 8, 2006 to a group led by Watermill Ventures and Hicks Holdings • Reliably supply high performance materials and related services

  4. Latrobe Specialty Steel • From inception began developing high alloyed steels for specialized applications • Began producing remelted aerospace steels – 1958 • VIM and VAR • One of the first producers • Today • Largest global producer of remelted steels • Largest domestic producer of high speed steel • Largest master distributor of tool steels

  5. Capital Expenditures • Invested $100+M from 1990 - 2000 • Forging facility, remelt capacity, machining plant • 2001 – 2006 invested additional $35M • Additional remelting capacity, added VIM capacity, grinding capacity, sawing capacity, upgraded rolling mill • Result: Modern well equipped facilities for our market segments

  6. Aerospace Assets • Operating Today: • 13 vacuum arc remelt furnaces • Three of the largest in the world • 30 ton VIM • Numerous approvals and process agreements • Largest number of grades in the industry • Maintaining a dedicated technical department for CI, customer service and product development

  7. Current Market Condition • Boeing and Airbus forecast is stable • Will produce 900+ planes per year • Growth of defense related market • These combine to drive abnormally high demand • However the aerospace market will remain cyclical

  8. Steel Industry’s Reaction • Capacity added at many producers • Last year LSS: • added two vacuum remelt furnaces • Downstream processing equipment • Manpower • Result: Lead time reduction however lead time remains long

  9. Future Outlook • Continued significant requirements for aerospace steels on future commercial aircraft due to: • Combination of strength, ductility and fracture toughness unmatched in materials • Ex. A380 landing gear – one of two globally approved producers • Future aircraft will continue this trend • Producers will require extensive technological expertise and service

  10. LSS Plans • Add additional capacity to further reduce lead time • Will add another large remelt furnace • Start-up first quarter, 2008 • Considering other investments • Expect lead times to become reasonable prior to any new entrants becoming certified • Continue to extend our position in marketplace • Technological leadership in premium aerospace steels • Service leadership in our markets

  11. Questions?

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