Anything you can dream, we can build

Transcription

1 Anything you can dream, we can build Richmond Club Presentation by Guy Nelson, CEO on April 30, 2014 TSX.V: EIL Jarvis Ave Winnipeg, MB (204)

2 Reader Advisory This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire's business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". These forward looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this press release, and Empire assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

3 Anything you can dream, we can build EIL s growth has come from: Corporate transformation Strengthening our proprietary product line Expanding into new markets

4 How did we get here? Principal Historical Events Went public July 2006 through CPC Original strategy was focused on steel fabrication in Western Canada Acquired 14 business units in 2006 and 2007 totaling $80M Issued $33M of equity (91M shares) and assumed $47M of debt Recession of 2008 and 2009 required radical changes to survive and get debt reduced Transformed Business Sold 6, closed 3 and consolidated 1 business unit to reduce domestic steel fabrication capacity and capital employed Created Chinese steel fabrication Joint Venture to access lower cost, fabricated steel Created Dynamic Attractions New strategy focuses on proprietary product manufacturing and differentiated steel fabrication

5 What was the cost? Financial Metrics Total Net Losses of $34M in 2008 to 2011 $21M of tax loss carry-forwards generated (12/2013 have $16M remaining) Issued 162M additional shares in 2011 to 2013 ($0.05/share) as follows; Two Chinese strategic partners purchased 75M shares Officers, Directors and Management purchased 40M shares Public 47M shares Reduced total net senior debt from $47M (12/2009) to NIL (6/2012) Re-levered total senior debt with CIBC to stand at $11 million (12/2013) Shares were issued to ensure continued support by the banks during the restructuring and to add new strategic partners

6 What We Do Proprietary Engineered Products Media Based Attractions Hydrovac trucks World class telescopes Differentiated Steel Fabrication Western Canadian Steel fabrication First Nation partnership in Fort McMurray to erect steel and oil sands maintenance services Low cost, Chinese steel fabrication partnership

7 Corporate Structure 100% Wholly Owned Operations Steel Fabrication Media Based Attractions Manufactured Products 49% 51% (to be incorporated) 45% QIGUANG DYNAMIC STEEL STRUCTURES R&D for the commercialization of large optical telescopes Proprietary equipment manufacturing in China Strategic Partnership Investments

8 Designs & manufactures complex structures Unrivaled reputation in the precision design/build market Built more than half the world s largest optical and radio telescopes Have manufactured some of the best Media Based Attractions in the world for the two largest entertainment companies in the business Proprietary position in break through technologies High speed switches Robotic based attractions Telescope enclosures Operating since 1928

9 Designs & builds the world's largest telescopes

10 Proprietary Media Based Attractions Product line of 5 attractions with 2 more under development Sold over $60 million of Media Based Attractions since 2011 Growing pipeline of prospects Strong position in the rapidly expanding Asian market, especially China Started in 2011 but able to leverage Dynamic Structure s reputation in Media Based Attractions built over the past 15 years

11 Created 5 New Rides plus have 2 under development

12 Proprietary Technology to Safely Dig Around Infrastructure Rapidly growing niche market within the excavation equipment manufacturing market in Western Canada Implemented Lean Manufacturing methods to increase production to 7 trucks per month from 3 trucks per month in 2011 Management is identifying ways to broaden its geographic coverage and expand its product line Operating since 1984

13 Steel Fabricating Business Operations Empire Iron - Edmonton (since 1956) Conventional structural steel fabrication in Edmonton A strategy has commenced to integrate unique, cost competitive steel supply chain Parr Metal - Winnipeg (since 1979) Fabricates industrial pressure vessels, pipe and tanks Produces the steel tank assemblies for Tornado s hydrovac trucks ACE Industrial Services - Ft. McMurray (since 1989) Aboriginal controlled, oil sands steel installation Largest machine shop in Ft. McMurray Qiguang Dynamic Steel Structures (operating since 2011) Empire (45%) and Qiguang Group s (55%) partnership located in Dongguan, Guangdong, China Fabricate low cost/high quality steel QIGUANG DYNAMIC STEEL STRUCTURES

14 Steel Fabrication and Installation Empire Iron has developed spare capacity to; pre-qualify, estimate, bid, prepare shop drawings (Edmonton and Romania) Procurement, quality, safety and overall project management Shop fabrication (Empire, QDS and sub-contractors) and field erection Commenced a strategy to build a unique, cost competitive steel supply chain between its own shop west of Edmonton, QDS and ACE

15 Steel Installation & Machine Shop Empire s partner is ACDEN (the Business Unit of the Athabasca Chipewyan First Nation). ACDEN has numerous business joint ventures totaling $300 million in annual revenue and 3000 employees and are a strong strategic partner Fort McMurray is one of the major growth markets in North America and Empire has an excellent foothold to participate in this growth through the ongoing maintenance of the rapidly growing production

16 QIGUANG DYNAMIC STEEL STRUCTURES Chinese Steel Fabricating Operations 150,000 square foot shop Purchase cost of $20 per shop hour versus $80 in Western Canada Empire saved over $1 million by subcontracting steel fabrication to QDS for two Chinese jobs

17 Increasing Shareholder Value

18 Capital Market Highlights TSX-EIL.V May 12, 2013 April 25, 2014 Share Price $0.05 $0.13 Book Value per share (December 31) $0.04 $0.06 EPS (basic) ($0.00) for 2012 $0.02 for 2013 Shares Issued (basic) 193 million 253 million Market Capitalization $10 million $33 million 52 week HI/LO $0.07/$0.03 $0.14/$0.035 O & D & Insiders (basic) 36% 51% Warrants 57 million 34 million Options 10 million 21 million Average trading volume/day (prior month) 146, ,853

19 Good Overall Operating Results Fiscal 2013 Fiscal 2012 ($ millions except share price and per share amounts) Financial Results Revenue Adjusted EBITDA ($) Adjusted EBIT ($) Net income from all operations 4.4 (0.6) Financial Position (at December 31) Total assets Long-term debt (including current portion) Shareholders equity Per Share Information Income per share (Basic) 0.02 (0.00) Income per share (Diluted) 0.02 (0.00)

20 Good Overall Operating Results Strong growth and performance in 2013 with the exception of Steel Fabrication. The impact of lower volumes and reduced activity in the sector and region lowered margins as well

21 Good Overall Operating Results At the end of Q3 2013, Steel Fabrication had very low backlog and very little volume was produced in Q Reduced activity in the industry and region impacted Steel Fabrication s margins throughout the year

22 Adjusted Gross Margin (Revenue minus cost of sales- $000) 2013 $19, % of Revenue 2012 $11, % of Revenue $2, % $4, % $12, % $5, % $3, % $1, % Adjusted Gross Margin is a contribution to overhead, depreciation, interest and profit

23 Long Term Debt to Funded Capitalization Dec 31, 2013 Dec 31, 2012

24 Backlog ($000) All three segments increased in Q4 totaling $116 million versus $73 million in Q3

25 Ongoing Financial Performance Improvements are anticipated to come from: Media Based Attractions market growth (Asia & Middle East) Leveraging of Chinese partnerships is expected to add to Empire s profit and improve our margins Hydrovac manufacturing throughput increases in Alberta and possibly China Potential commercialization of new technologies in telescopes

26 Anything you can dream, we can build THANK YOU Guy Nelson, CEO (204) TSX.V: EIL