Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (August 2019)
27 slides from Cactus, Inc. Class A Common Stock's investor presentation, Aug 12, 2019
Slide 1: Investor Presentation Cactus, Inc. (NYSE: WHD) August 2019
Investor Presentation Cactus, Inc. (NYSE: WHD) August 2019
Slide 2: Non-GAAP Measures and Forward-Looking Statements
2 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 EBITDA, Adjusted EBITDA
Slide 3: Executive Team
3 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. ◼ Mr. Bender successfully built and monetized Ingram Cactus Company (sold to Cameron in
Slide 4: Investment Highlights
4 Investment Highlights Highly Experienced Management and Operating Team with Strong Industry Relationships Innovative and Differentiated Products with Presence Across Major Basins A Leading Pure Play Wellhead and Pressure Control Equipment Solutions Provider for U.S. Onshore Returns Focused with Su
Slide 5: Company Overview
5 17.9% 9.6% 23.9% 26.5% 27.7% 2015 2016 2017 2018 LTM Q2 2019 28.5% 20.8% 32.9% 39.1% 38.3% $63.1 $32.2 $112.1 $212.6 $236.5 2015 2016 2017 2018 LTM Q2 2019 $221.4 $155.0 $341.2 $544.1 $617.9 2015 2016 2017 2018 LTM Q2 2019 Revenue ($ in millions) LTM Q2 2019 Revenue by Type ◼ Bakken ◼ Eagle Ford ◼
Slide 6: Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well
6 Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well ◼ Designed for pad drilling and intense completion environments ◼ Principal products: SafeDrill® wellheads, frac stacks, zipper manifolds and production trees ◼ Time savings can exceed 30 hours of rig time per well
Slide 7: Market Leader with Strong Growth
7 1,931 1,899 1,729 1,694 1,703 1,780 1,820 825 684 388 601 902 909 1,035 1,045 941 15 47 75 100 119 158 179 119 99 68 129 220 245 275 295 276 0.8% 2.5% 4.3% 5.9% 7.0% 8.9% 9.8% 14.4% 14.5% 17.5% 21.5% 24.4% 27.0% 26.6% 28.2% 29.3% Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-1
Slide 8: Historical Margin Sustainability Through the Cycle
8 34% 25% 23% 23% 22% 16% 15% 12% 11% 0% 5% 10% 15% 20% 25% 30% 35% WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H (20%) (10%) 0% 10% 20% 30% 40% 2014 2015 2016 2017 2018 WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Historical Margin Sustainability Through the Cycle Histo
Slide 9: Technologically Advanced Pad Drilling Wellhead Systems
9 Technologically Advanced Pad Drilling Wellhead Systems SafeDrill® Advantages Eliminates time consuming BOP manipulation No waiting on cement after running casing strings Mandrel hangers, pack offs run and set through BOPs Fewer trips into confined space (cellar) No BOP manipulation after inte
Slide 10: Well Counts and Pad Drilling Drive Our Product Business
10 22% 35% 39% 55% 64% 0% 25% 50% 75% 100% 2014 2015 2016 2017 2018 Pct 2.2 2.3 2.4 2.4 2.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 2014 2015 2016 2017 2018 Avg. Pad Size DJ / Niobrara Powder River Basin Bakken SCOOP / STACK Haynesville Eagle Ford Utica Gulf Coast Bossier City, Louisiana Manufacturing Facility
Slide 11: Small Expenditures Can Make Big Impact on Operators
11 Small Expenditures Can Make Big Impact on Operators Components of Onshore Well Costs(1) ◼ Cactus offerings make up a relatively small portion of the overall cost to drill & complete a well ◼ Efficiency and reliability can cause a disproportionate amount of benefit for operators ◼ Operators willin
Slide 12: Focus on Completions Efficiency Drives Our Rental Business
12 Focus on Completions Efficiency Drives Our Rental Business ◼ Growth opportunity for Cactus ◼ Priced on per diem basis ◼ More wells per pad and/or stages per well generally translates into more rental equipment on location for greater periods of time ◼ Increasing market share ◼ Proprietary rental
Slide 13: Cactus Completions Equipment Advantage
13 Cactus Completions Equipment Advantage Designs, manufactures, and rents a range of highly engineered and internally-developed products Reliable equipment providers rewarded for reducing non-productive frac time Larger pad sizes, longer laterals and more intensive fracs increase duration of rental
Slide 14: New Innovations Strengthen Moat in Rental Business
14 ◼ Designed to significantly reduce non-productive time by increasing reliability and automation ◼ Increases safety by removing personnel from the exclusion zone ◼ SafeInjectTM ◼ Remotely operated and HMI controlled method to perform frac tree maintenance and collect valuable data at wellsite ◼ Ef
Slide 15: A Dynamic Manufacturing Advantage
15 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 ◼ Facility has 16 5-axis computer numerically controlled machines that facilitate rapid-response
Slide 16: Management Team Track Record
16 1986 Current Scott and Joel Bender found Cactus Wellhead LLC Scott and Joel Bender appointed President and SVP, respectively, of Wood Group Pressure Control Scott and Joel Bender become President and VP Operations, respectively, of Ingram Cactus Company ◼ QA Director ◼ Chief Wellhead Engineer ◼ S
Slide 17: Well Established Relationships with High-Quality Customer Base
17 Majors 26% Large E&P 50% SMID E&P 11% Private 13% Majors 2% Large E&P 59% SMID E&P 18% Private 20% Other 1% Majors 10% Large E&P 56% SMID E&P 16% Private 17% Other 1% Well Established Relationships with High-Quality Customer Base 1H 2019 Total Revenue by Customer Type 1H 2019 Rental Revenue by Cu
Slide 18: Returns & Margins Have Outperformed Peers
18 FTI DRQ WEIR NCSM SBO OIS HTG FET NOV 0.0% 10.0% 20.0% 30.0% 40.0% (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Returns & Margins Have Outperformed Peers Source: Company filings and Factset. Note: Adj. EBITDA Margins as of 2Q 2019 for WHD, APY, DRQ, FET, GDI, NOV, and OIS, as of 1Q 2019 for SBO, and as o
Slide 19: Clean Balance Sheet & Low Capital Intensity
19 $23.4 $17.4 $30.7 $68.2 $65.6 2015 2016 2017 2018 LTM Q2 2019 $39.7 $14.8 $81.4 $144.4 $171.0 2015 2016 2017 2018 LTM Q2 2019 ◼ June 30, 2019 cash balance of $131.1 million; no borrowings on revolving credit facility ◼ $75.0 million asset-based revolving credit facility ($50.0 million accordion)
Slide 20: Well Positioned in 2019 Following Strong First Half Results
20 Well Positioned in 2019 Following Strong First Half Results ◼ Reported record revenue across all business lines ◼ Product market share reached all time high ◼ Customers’ completions activity showed continued strength from year-end 2018 lows ◼ Maintained attractive margins while gaining market sha
Slide 21: Appendix
Appendix
Slide 22: Company Profile and Ownership
22 Float 63% Management & Employees 26% Cadent Energy Partners 11% Ownership Profile (4) Company Organizational Structure Source: Company filings. 1. As of July 31, 2019. Excludes effect of dilutive securities. 2. As of August 8, 2019 utilizing total shares outstanding. 3. As of June 30, 2019, not i
Slide 23: Building a Leading Equipment Company
23 1959 1980 1975 1985 1990 1995 2000 2005 2010 ICC sold to Cooper Cameron Corporation (1996) 2018 Scott Bender appointed President of Cactus Wellhead Equipment (“CWE”), a subsidiary of Cactus Pipe (1977) Cactus Pipe founded (1959) CWE Merges with Ingram Petroleum Services, forming Ingram Cactus Com
Slide 24: Quarterly Financial Performance
24 $55.1 $62.7 Q2 2018 Q2 2019 $138.5 $168.5 Q2 2018 Q2 2019 $59.0 $62.7 Q1 2019 Q2 2019 $158.9 $168.5 Q1 2019 Q2 2019 Quarterly Financial Performance Total Revenue ($ in millions) Adj. EBITDA(1) ($ in millions) & Adj. EBITDA(1) as % of Revenue +22% +14% 39.8% of Total Revenue Source: Company filing
Slide 25: Cactus Equipment Positioned on a 4-Well Pad
25 Cactus Equipment Positioned on a 4-Well Pad 2 4 3 4 1 1 4 ▪ Wellheads are required by each well over production life ▪ One of the first pieces of equipment to be installed ▪ Cactus wellheads installed below surface Product Sold 1 ▪ Frac stacks are connected to the wellhead for the fracturing phas
Slide 26: Non-GAAP Reconciliation
26 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 finan
Slide 27: Investor Relations Contact
27 Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com