UCT Shareholder Meeting February 11, 2014 UCT COATINGS, INC. - - PowerPoint PPT Presentation

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Shareholder Meeting UCT Shareholder Meeting February 11, 2014 UCT COATINGS, INC. February 11, 2014 3300 SW 42 ND AVENUE PALM CITY, FL USA This Document Contains Information that is Confidential and Proprietary to UCT Coatings, Inc 2013

SLIDE 1

UCT Shareholder Meeting

February 11, 2014

Shareholder Meeting

February 11, 2014

This Document Contains Information that is Confidential and Proprietary to UCT Coatings, Inc

UCT COATINGS, INC. 3300 SW 42ND AVENUE PALM CITY, FL USA

SLIDE 2

2013 Accomplishments

Completed new plant and offices (cost of $2M) with

internally generated funds

Moved out of and remediated the Stuart, Florida facility

(cost of $160K)

Paid off the remaining debt on Palm City plant ($300K)
Enhanced IT infrastructure and improved data backup

capabilities

Increased sales

– UCT ‐ Up 53% (from $3.4M to $5.2M) – IKS ‐ Up 6.5% (from $20M to $21.4M)

Increased EBITDA

– UCT EBITDA increased 340% (from $257K to $872K) – Consolidated EBITDA up 25% (from $2.4M to $3.0M)

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SLIDE 3

2013 Challenges

UCT

Move to new plant location ($160K) and time and

interruption of production schedule

New plant failures, vendor support, quality issues
Difficulty fulfilling FailZero
rders
General Contractor dispute on office construction

IKS

Defendant on lawsuit filed in Washington state (IKS’

insurance company has also filed to a lawsuit to deny coverage)

Capacity and mechanical breakdown issues

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SLIDE 4

Consolidated Financial Overview

UCT Coatings Consolidated Statements Of Operations 2008 2009 2010 2011 2012 2013 Revenue 30,117,881 $ 21,528,239 $ 19,689,319 $ 20,517,147 $ 23,647,804 $ 26,548,327 $ COGS 22,187,303 14,828,098 10,703,016 11,171,753 16,642,947 18,631,779 Gross Margin 7,930,578 6,700,141 8,986,303 9,345,394 7,004,857 7,916,548 SG&A 17,794,475 16,142,885 11,035,580 25,580,452 5,401,647 6,061,012 Net Income (loss) (9,863,897) $ (9,442,744) $ (2,049,277) $ (16,235,058) $ 1,603,210 $ 1,855,536 $ EBITDA (5,490,700) $ (2,115,647) $ (780,688) $ 539,990 $ 2,378,295 $ 2,658,166 $

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SLIDE 5

UCT Financial Overview

UCT Coatings Statements Of Operations 2008 2009 2010 2011 2012 2013 Revenue 14,963,297 $ 7,974,581 $ 2,913,950 $ 2,560,682 $ 3,584,750 $ 5,184,312 $ Cost of Sales 10,624,511 5,098,313 2,054,250 1,684,414 2,225,607 3,074,088 Gross Margin 4,338,786 2,876,268 859,700 876,268 1,359,143 2,110,224 SG&A 14,254,967 12,842,858 4,198,572 17,977,028 1,421,132 1,615,627 Net Income (loss) (9,916,181) $ (9,966,590) $ (3,338,872) $ (17,100,760) $ (61,989) $ 494,597 $ EBITDA (6,028,286) $ (3,157,276) $ (2,414,749) $ (781,469) $ 256,018 $ 872,294 $

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SLIDE 6

IKS Financial Overview

International Knife and Saw Statements Of Operations 2008 2009 2010 2011 2012 2013 Revenue 15,154,584 $ 13,553,658 $ 16,775,369 $ 17,956,465 $ 20,063,054 $ 21,364,015 $ Cost of Sales 11,562,792 9,729,785 8,648,766 9,487,339 14,417,340 15,557,691 Gross Margin 3,591,792 3,823,873 8,126,603 8,469,126 5,645,714 5,806,324 SG&A 3,539,508 3,300,027 6,837,008 7,603,424 3,980,515 4,445,385 Net Income 52,284 523,846 1,289,595 865,702 1,665,199 1,360,939 EBITDA 537,586 $ 1,041,629 $ 1,634,061 $ 1,321,459 $ 2,122,277 $ 1,785,872 $

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SLIDE 7

Business Overview

budget

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SLIDE 8

Business Overview

2011 2012 2013 2014 Commercial Arms Spikes Tactical 139 199 156 240 Sales by Market 2011 2012 2013 2014 LWRC Intl 197 151 544 365 Freedom Group 38 105 218 160 Commercial Arms 981 1,367 2,671 2,150 Government 408 121 146 175 Brownells 66 227 256 200 Oil & Gas 603 1,509 1,951 1,900 RSR Group 45 240 405 300 Industrial 40 62 26 50 Amchar 90 100 131 100 Affiliates 342 369 368 450 Rifle Gear 132 100 Chemistry, R&D, Other Plating 16 23 100 FailZero Kits 88 176 360 120 Key Acct Total 663 1,198 2,202 1,585 Totals 2,390 3,428 5,185 4,825 % of Segment sales 68% 88% 82% 74% Oil & Gas Baker Hughes Centrilift 368 1089 1156 1070 GE Oil & Gas 112 261 688 700 Key Acct Total 480 1,350 1,844 1,770 % of Segment sales 80% 89% 95% 93% White out this line

SLIDE 9

2014 Business Development Plans

Mitigate Firearm Market Cool‐down Following 2013 Frenzy
Expand FailZero

Distribution & Dealer Program

With Baker Hughes –

Launch Abrasion Resistant Stage Program

Take Advantage of Oil & Gas Applications Successes

– Oil Tools, Plunger Lift Systems, Ball Valves

Broaden Oil & Gas Customer Base

– Schlumberger, Halliburton, IES Valves USA, IPS Systems

Commercialize Russian Licensee

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SLIDE 10

2014 Strategic Plan ‐ UCT

Develop and implement a preventive maintenance

program for the Palm City plant

Hire product development engineer and

commercial arms manager

Continue to focus on the oil and gas and

commercial arms markets

Develop production procedures and

methodologies to reduce operating costs

Prepare feasibility study for opening new UCT

plants in Houston and Northeast U.S.

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SLIDE 11

2014 Strategic Plan ‐ IKS

Develop and implement a preventive maintenance

program

Develop metrics for quality, service and productivity
Focus on selling grinding system to key customers

(new patent pending)

Continue to aggressively sell UCT coated log saw

blades at high margins

Take steps to increase sales in new markets, esp.

South America and Europe

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SLIDE 12

2014 Budget

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UCT Coatings 2014 Consolidated Budgets IKS UCT Coatings Intercompany Consolidated Revenue 23,556,000 $ 4,007,000 $ (450,000) $ 27,113,000 $ Cost of goods sold 16,460,519 2,653,421 (450,000) 18,663,940 Gross Margin 7,095,481 1,353,579 8,449,060 Selling, general and administrative 4,761,375 1,309,705 6,071,080 Other expense, net (96,220) (129,800) (226,020) Net Income (loss) 2,237,886 $ (85,926) $ 2,151,960 $ EBITDA 2,606,662 $ 355,749 $ 2,962,411 $

SLIDE 13

Questions?

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