Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (November 2020)
28 slides from Cactus, Inc. Class A Common Stock's investor presentation, Nov 18, 2020
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation Cactus, Inc. (NYSE: WHD) November 2020
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: Executive Team
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 Company (sold to
Slide 4: Investment Highlights
Investment Highlights A Leading Pure Play Wellhead and Pressure Control 1 Equipment Solutions Provider for Onshore Markets Innovative and Differentiated Products & Services 2 That Drive Margin Stability Through the Cycle Through-Cycle 3 Dynamic Operating and Manufacturing Capabilities Outperformance
Slide 5: Company Overview
Company Overview Cactus designs, manufactures, sells and rents highly engineered products which yield greater pad drilling and completions efficiencies while enhancing safety Q3 2020 LTM Revenue by Type Revenue ($ in millions) $628.4 $544.1 $420.7 Field $341.2 Service and $155.0 Other 21% Rental Pro
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 Growth
Market Leader with Strong Market Share Growth Historical U.S. Onshore Market Share(1) 400 40.0% 37.9% 350 35.0% Cactus Rigs Followed 32.7% 30.9% (1) Market Share 295 29.3% 300 30.0% 27.0% 275 276 28.2% 24.4% 250 245 26.6% 240 25.0% 21.5% 220 200 20.0% 179 17.5% 158 14.4% 14.5% 150 15.0% 129 119 119
Slide 8: Cactus is Well Prepared for a Recovery
Cactus is Well Prepared for a Recovery Highlights 2017 Incremental EBITDA Margins(1)(2) ◼ Greater operating leverage provides benefits as activity levels increase 80% ◼ Incremental EBITDA margins were strong during the last market recovery (2017) ◼ Slower activity environment 45% provides opportunit
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 bee
Slide 10: Innovations Enhance Rental Business Value Proposition
Innovations Enhance Rental Business Value Proposition Complement & enhance legacy rental offerings without additional personnel ◼ Planning deployment in Q1 of enhanced remote capabilities with minimal capital required ◼ Additional product introductions awaiting more constructive pricing environment
Slide 11: 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 12: Flexible and Scalable Operating Footprint
Flexible and Scalable Operating Footprint U.S. Operations United States ◼ Service centers support field services and provide repair services Bakken Bossier City, Louisiana Powder Manufacturing Facility ◼ Spread across all key producing basins River Basin Marcellus Utica ◼ Flexible cost structure at
Slide 13: 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 14: Experienced and Well Aligned Management Team with Strong Industry Relationships
Experienced and Well Aligned Management Team with Strong Industry Relationships ◼ Management team is well incentivized as it owns more than 25% of the business ◼ 2020 executive management salaries reduced by 33 - 80% ◼ Performance-based stock compensation tied to Return on Capital Employed (“ROCE”)
Slide 15: Well Established Relationships with High-Quality Customer Base
Well Established Relationships with High-Quality Customer Base YTD 2020 Total Revenue by Customer YTD 2020 Product Revenue by Customer YTD 2020 Rental Revenue by Customer Type Type Type Other Majors Other Majors Other 1% 8% 1% 3% Private 0% Private Majors Private 17% 21% 20% 22% SMID E&P 8% SMID E&P
Slide 16: Returns & Margins Have Outperformed Peers
Returns & Margins Have Outperformed Peers YTD 2020 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 (2015 – YTD 2020) (%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Source: Company filings and Factset. Note: LTM Adj. EBITDA Margins based on latest p
Slide 17: History of Prudent Investment Strategy
History of Prudent Investment Strategy Goodwill, Intangible, Long-Lived & Other Asset Impairment Expenses ($mm) (2015 – YTD 2020) ($mm) $10,597 $1,000 $750 $664 $613 $487 $500 $250 $179 $132 $68 $30 $0 $- WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Cactus Has Recorded Zero Impairment
Slide 18: Execution Has Driven Post-IPO Equity Performance
Execution Has Driven Post-IPO Equity Performance Indexed Share Price Performance of Cactus vs. Indexed Share Price Performance of OSX 6x 5x 5.1x 4x 3x 2x 1x Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Nov-20 Cactus’ Share Price Has Outperformed the OSX by ~5x Since I
Slide 19: Clean Balance Sheet & Low Capital Intensity
Clean Balance Sheet & Low Capital Intensity Adjusted EBITDA(1) – Net Capital Expenditures(2) ($ in Balance Sheet & Capital Summary millions) ◼ September 30, 2020 cash balance of $273.9 $173.1 million $144.4 ◼ Cash balance has grown by over $70 million $114.9 during 2020, net of dividends and associa
Slide 20: Recent Performance & Outlook
Recent Performance & Outlook Third Quarter 2020 Performance ◼ Generated Adjusted EBITDA margins of 41% ◼ Increased Product market share(1) to nearly 38% ◼ Increased EBITDA margins across all business lines on a sequential basis Outlook & Recent Developments ◼ Q4 2020 revenues expected to improve seq
Slide 21: Positive Developments with Limited Capital Required
Positive Developments with Limited Capital Required ◼ Product ◼ Potential for share gains given strong customer profile and operator search for efficiency gains ◼ Downturns typically drive increased rig efficiency as operators drop least efficient rigs ◼ More wells drilled per rig ◼ Opportunity to g
Slide 22: Cactus Is Committed to ESG
Cactus Is Committed to ESG Environmental Social ◼ Cactus, Inc. is committed to reducing its impact on the ◼ Cactus, Inc. is dedicated to improving lives and protecting human environment. We will continue to strive to improve our rights. We seek to make the world a better place by encouraging environ
Slide 23: Appendix
Appendix
Slide 24: Company Organizational Structure
Company Organizational Structure Company Profile Organizational Structure(1) Ticker WHD (NYSE) Class A Shares Outstanding(1) 47.5mm CW Unit Public Class B Shares Outstanding(1) 27.8mm Holders Investors Total Shares Outstanding(1) 75.4mm Market Capitalization(2) ~$1.9bn Class B Common Stock Class A C
Slide 25: Cactus Equipment Positioned on a 4-Well Pad
Cactus Equipment Positioned on a 4-Well Pad 1 2 4 4 3 4 1 1 Product Sold 2 Equipment Rented 3 Equipment Rented 4 Services Provided Product Sold ▪ Wellheads are required ▪ Frac stacks are ▪ Zipper manifolds used ▪ Variety of equipment to ▪ Production trees (not by each well over connected to the duri
Slide 26: 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 27: 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 28: Investor Relations Contact
Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com 28