29 slides from Cactus, Inc. Class A Common Stock's investor presentation, November 2022
Slide 1: Investor Presentation
slnvestor Presentation Gactus, Inc: (NYSENWI November 2022
Slide 2: Important Disclosures
Important Disclosures Non-GAAP Measures This presentation includes references to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and EBIT, which are not measures calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of EBIT
Slide 3: Experienced Executive Team
Experienced Executive Team ◼ Mr. Bender has served as President and CEO since co-founding Cactus Wellhead, LLC (“Cactus LLC”) in 2011. ◼ Mr. Bender previously was President of Wood Group Pressure Control from 2000 to 2011. Scott Bender ◼ Mr. Bender successfully built and monetized Ingram Cactus Comp
Slide 4: Investment Highlights
Investment Highlights A Leading Pure Play Equipment Solutions Provider 1 for Onshore Markets Innovative and Differentiated Products & Services 2 that Sustain Relative Margin Resilience 3 Dynamic Operating and Manufacturing Capabilities Through-Cycle Outperformance 4 Strong Margins and Free Cash Flow
Slide 5: Company Overview
Company Overview Cactus designs, manufactures, sells and rents highly engineered products which generate improved drilling and completions efficiencies while enhancing safety 2022 YTD Revenue by Type Revenue ($ in millions) $628 $667 $544 Field $439 Service $341 $349 and Other 20% Rental 2017 2018 2
Slide 6: Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well
Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well Technologically advanced wellhead and frac solutions deliver greater reliability and time savings ◼ Designed for pad drilling and intense completion environments ◼ Principal products: SafeDrill® wellheads, frac relate
Slide 7: Market Leader with Strong Market Share
Market Leader with Strong Market Share Historical U.S. Onshore Market Share(1) 350 45.0% 41.8% 40.0% 300 Cactus Rigs Followed 272 270 34.8% (1) Market Share 35.0% 250 211 30.0% 29.5% 200 193 26.9% 25.0% 169 19.9% 24.8% 145 20.0% 150 110 109 15.0% 99 100 14.4% 61 10.0% 9.4% 50 6.4% 5.0% 15 0.8% 3.4%
Slide 8: Differentiated Margin Profile Through the Cycle
Differentiated Margin Profile Through the Cycle Total Adjusted EBITDA Margin (2014 – 2021) (1)(2) YTD 2022 Adjusted EBITDA Margin (1)(2) 33% 32% 26% 22% 18% 15% 13% 14% 13% 13% 10% 10% 9% 7% Peer A Peer B Peer C Peer D Peer E Peer F Peer C Peer A Peer F Peer D Peer E Peer B Strength of margin profil
Slide 9: Technologically Advanced Pad Drilling Wellhead Systems
Technologically Advanced Pad Drilling Wellhead Systems Cactus SafeDrill® SafeDrill® Advantages Safety Time Savings Fewer trips into Eliminates time confined space (cellar) consuming BOP - manipulation No BOP manipulation No waiting on cement after intermediate after running casing casing has
Slide 10: Favorable Macro Trends Benefit Cactus
Favorable Macro Trends Benefit Cactus Improving Activity Environment ◼ Recovery in energy demand driving increased need for oil & gas production ◼ Industry underinvestment in 2020 and 2021 driving potential multi-year growth in rig and well counts ◼ U.S. land rig count forecasted to grow by ~10% in
Slide 11: Growing Product Revenue Per U.S. Rig Followed
Growing Product Revenue Per U.S. Rig Followed Drivers For Increased Revenue Per Rig Cactus Product Revenue Per U.S. Onshore Rig Followed(1) (Data Indexed to 100) ◼ Sale of higher-end wellhead systems 180 ◼ Shift to higher-pressure wells requires higher value equipment 162 ◼ Customer utilization of a
Slide 12: Significant Growth Potential Through Geographic Expansion
Significant Growth Potential Through Geographic Expansion Percentage of 2021 Global Land Rig Count (Excluding Russia & Central Asia) 24% Countries where Cactus provided wellhead equipment prior to Areas of 2022 potential expansion 76% (1) U.S. & Australia Rest-of-World Cactus Is Making Its First Pro
Slide 13: Differentiated Offerings Enable Customers to Meet ESG-Related Goals
Differentiated Offerings Enable Customers to Meet ESG-Related Goals Faster Safer Cleaner ◼ Cactus enables customers to ◼ Cactus’ equipment increases ◼ Recently began deploying drill and complete wells faster employee safety by enabling: equipment allowing for: ◼ Translates to fewer rig and frac ◼ Au
Slide 14: Small Expenditures Can Have a Big Impact on Operators
Small Expenditures Can Have a Big Impact on Operators Cactus Value Proposition Components of Onshore Well Costs(1) ◼ Cactus offerings make up a Other relatively small portion of the 15% overall cost to drill & complete a well Completion 54% ◼ Efficiency and reliability can cause a disproportionate a
Slide 15: Flexible and Scalable Operating Footprint
Flexible and Scalable Operating Footprint U.S. Operations United States ◼ Service centers support field operations and provide repair services Bossier City, Louisiana Manufacturing Facility ◼ Located in all key producing basins ◼ Flexible cost structure at branches & Bossier City ◼ Ability to scale
Slide 16: A Dynamic Manufacturing Advantage; Responsive, Highly Scalable and Lower Cost
A Dynamic Manufacturing Advantage; Responsive, Highly Scalable and Lower Cost Responsive manufacturing in the U.S. supplemented by high volume production in China Bossier City Facility Suzhou Facility ◼ Rapid-response manufacturing of equipment ◼ Less time-sensitive, high-volume wellhead equipment ◼
Slide 17: Experienced and Well Aligned Management Team with Strong Industry Relationships
Experienced and Well Aligned Management Team with Strong Industry Relationships ◼ Management is well incentivized as it owns approximately 20% of the business ◼ Performance-based stock compensation tied to Return on Capital Employed (“ROCE”) ◼ Management team has built the foundation of this company
Slide 18: Well Established Relationships With High-Quality Customer Base
Well Established Relationships With High-Quality Customer Base 2021 Total Revenue by Customer Type 2021 Product Revenue by Customer Type 2021 Rental Revenue by Customer Type Majors Majors 8% 5% Majors Private 19% Private Private 27% 27% 29% SMID SMID SMID E&P E&P E&P 3% 4% 1% Large Large Large E&P E
Slide 19: Returns & Margins Have Outperformed Peers
Returns & Margins Have Outperformed Peers YTD 2022 Adjusted EBITDA Margin (%) 40.0% (1) 30.0% NCSM SBO 20.0% FTI OIS WEIR NOV FET HTG 10.0% ROCE(2) 0.0% DRQ (2017 – 2021) (%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Source: Company filings and Factset. Note: Adj. EBITDA Margins based on latest publicly
Slide 20: Execution Has Driven Equity Outperformance
Execution Has Driven Equity Outperformance Share Price Performance of Cactus vs. the OSX since IPO 178% 0% (42%) WHD OSX Share Price Outperformed the OSX in 2018, 2019, 2020 and 2021 Note: Data based on share price performance from 2/7/2018 to 11/9/2022.Cactus 2/7/2018 price set as IPO price of $19
Slide 21: History of Prudent Investment Strategy
History of Prudent Investment Strategy Goodwill, Intangible, Long-Lived & Other Asset Impairment Expenses ($mm) (2015 – 2021) ($mm) $10,597 $7,722 $1,000 $750 $664 $656 $500 $251 $250 $133 $0 $- WHD Peer A Peer B Peer C Peer D Peer E Peer F Cactus Has Recorded Zero Impairment Charges Through the Cyc
Slide 22: Steadily Increasing Return of Capital Profile
Steadily Increasing Return of Capital Profile Cactus’ Dividends & Associated Distributions to Members Paid Since 2018 ($ in millions) $40 $30 $20 $10 $- 2018 2019 2020 2021 YTD 2022 (1) Annualized Cactus Has Increased Shareholder Returns in Every Year Since Going Public Source: Company filings and a
Slide 23: Clean Balance Sheet & Low Capital Intensity
Clean Balance Sheet & Low Capital Intensity Adjusted EBITDA(1) – Net Capital Expenditures(2) ($ in Balance Sheet & Capital Summary millions) $188 ◼ September 30, 2022 cash balance of $173 approximately $321 million $144 ◼ Full year 2022 net capital expenditure guidance $109 $103 of approximately $25
Slide 24: Recent Performance & Outlook
Recent Performance & Outlook Third Quarter 2022 Performance ◼ Revenues up 8% sequentially ◼ Adjusted EBITDA up 13% sequentially ◼ Product market share(1) of over 38% ◼ Adjusted EBITDA margin(2) increased to approximately 34% Outlook & Recent Developments ◼ Q4 2022 U.S. land rigs followed expected to
Slide 25: Cactus Is Committed to ESG
Cactus Is Committed to ESG Environmental Social ◼ Cactus, Inc. is committed to reducing its and its industry’s impact on the ◼ Cactus, Inc. is dedicated to improving lives of our employees and the communities environment. We will continue to strive to improve our products over time and to where they
Slide 26: Appendix
Appendix y
Slide 27: Company Organizational Structure
Company Organizational Structure Company Profile Organizational Structure(1) Ticker WHD (NYSE) Class A Shares Outstanding(1) 60.7mm CW Unit Public Class B Shares Outstanding(1) 15.2mm Holders Investors Total Shares Outstanding(1) 75.9mm Market Capitalization(2) ~$4.0bn Class B Common Stock Class A C
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation Important Disclosure Regarding Non-GAAP Measures EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP. EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and external users of our consolidated financia
Slide 29: Investor Relations Contact
Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com 29