MISCOR Presentation 2008 (DRAFT v3)

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


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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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

Documents

MISCOR Presentation 2008 (DRAFT v3)