Innovex International, Inc. · NYSE:INVX
Innovex International — Q3 2024 Earnings Presentation
20 slides from Innovex International's earnings presentation, Nov 8, 2024
Slide 1: Innovex International Q3 2024 Earnings Presentation
Innovex International Q3 2024 Earnings Presentation Highly Confidential | 1
Slide 2: Disclaimer
Disclaimer Important Information and Disclaimers This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “Presentation.” Historical financial results
Slide 3: Disclaimer (Cont'd)
Disclaimer (Cont’d) Industry Information We obtained the industry, market and competitive position data used throughout this Presentation from our own internal estimates and research, as well as from independent industry publications, government publications and other published independent sources.
Slide 4: Innovex is Building a Unique Energy Industrial Platform
Innovex is Building a Unique Energy Industrial Platform Our VISION is to create a unique energy industrial platform focused on driving exceptional value and service to our customers, and exception absolute returns for our shareholders. 1 Curated Portfolio of Complementary, Mission Critical Products
Slide 5: Innovex's No Barriers Culture
Innovex’s No Barriers Culture No Barriers between our customers and our employees No Barriers to our ongoing success Big Impact, Customer Small Ticket Centric Products Disciplined Flat, Lean and Acquisitions Unbureaucratic & Divestitures Organization Empowered Rapid Response Employees to Market Need
Slide 6: Vision + Culture = Results
Vision + Culture = Results Legacy Innovex has a strong track record of success as a private company Leading Top Line Growth Consistently High Margins1 (2016 - 2023 Revenue per Share CAGR) (Historical Adj. EBITDA Margins) 2023 Total Debt / Adjusted EBITDA: 45 % 0.4x 0.0x 1.9x 0.9x 0.5x 2.9x 1.5x 1.5x
Slide 7: Innovex / Dril-Quip Merger
Innovex / Dril-Quip Merger Transaction Recap & Next Steps Next Steps: Ignite and Invigorate the Combined Transaction Recap Company All-stock merger closed 9/6/24 Embrace a singular No Barriers corporate culture Legacy Dril-Quip stockholders own ~52% and Legacy Innovex stockholders own ~48% Lever
Slide 8: Innovex / Dril-Quip Merger: Accounting Policy and Presentation Differences
Innovex / Dril-Quip Merger Key Accounting Policy and Presentation Differences: Go-Forward Innovex vs. Legacy Dril-Quip • Accounting Acquirer – Legacy Innovex is the accounting acquirer in the Merger, meaning current and comparative financials are presented from a Legacy Innovex perspective • Q3 Repo
Slide 9: Q3 2024 Performance & Q4 2024 Outlook
Q3 2024 Performance & Q4 2024 Outlook Innovex / Dril-Quip Merger closed 9/6/2024 Q3 Commentary Financial Performance(1)(2) Revenue Adj. EBITDA Adj. EBITDA Margin % • Revenue of $152 million, up 17% quarter over quarter $160 $152 80% $139 $140 $133 $128 $130 70% $120 60% • Adjusted EBITDA(2) of $27 m
Slide 10: Q3 2024 Balance Sheet & Liquidity
Q3 2024 Balance Sheet & Liquidity $100 $23 $77 Million Million Million Total Total Net Cash Cash Debt (Total Cash less Total Debt) $91 $191 Million Million Revolver Borrowing Total Liquidity Capacity (Total Cash + Revolver ($0 drawn on 9/30/24) Borrowing Capacity) 10
Slide 11: Innovex will Transform Legacy Dril-Quip via Our Proven Playbook
Innovex will Transform Legacy Dril-Quip via Our Proven Playbook No Barriers culture will drive focus on margins & market share through a differentiated management approach • Expected Annual Cost Synergies of at least Clear Path to Margin Enhancement via Cost Synergies1 $30mm in total cost synergies
Slide 12: A Complementary Portfolio of Curated, High Margin Offshore Products & Services
A Complementary Portfolio of Curated, High Margin Offshore Products & Services Core products represent ~4%1 of the cost of an average offshore well Our Deepwater Subsea Wellbore Complementary Business Model Product Legend Big Impact, Small Ticket Single use / consumable products Sustained
Slide 13: A Complementary Portfolio of Curated, High Margin Onshore Products & Services
A Complementary Portfolio of Curated, High Margin Onshore Products & Services Represents ~2%1 of the cost of an average North American land well Our Onshore Wellbore Complementary Business Model Product Legend Big Impact, Small Ticket Wellhead Penetrator Single use / consumable products Du
Slide 14: Appendix: GAAP Reconciliations
Appendix: GAAP Reconciliations 14
Slide 15: Legacy Standalone Innovex Reconciliation to Non-GAAP Metrics
Legacy Standalone Innovex Reconciliation to Non-GAAP Metrics Quarterly Net Income to Adjusted EBITDA ($ in millions) Q3’23 Q4’23 Q1’24 Q2’24 Q3’243 Net Income $15 $18 $16 $10 $83 (+) Net Interest Expense 2 1 1 1 1 (+) Income Tax Provision 8 5 5 4 (3) (+) Depreciation and Amortization Expense 6 6 5 7
Slide 16: Legacy Standalone Innovex Reconciliation to Non-GAAP Metrics
Legacy Standalone Innovex Reconciliation to Non-GAAP Metrics Quarterly Free Cash Flow ($ in millions) Q3’23 Q4’23 Q1’24 Q2’24 Q3’241 Cash Flow from Operating Activities $32 $21 $13 $23 $22 Capital Expenditures (6) (1) (2) (2) (2) Free Cash Flow $26 $20 $10 $21 $20 (1) Reflects Legacy Innovex’s resul
Slide 17: Legacy Innovex Reconciliation to Non-GAAP Metrics
Legacy Innovex Reconciliation to Non-GAAP Metrics Return on Capital Employed (ROCE) 2023 2022 2021 2020 2 2019 2 2018 2 ($ in millions) Income From Operations $97 $77 $14 ($1) $44 $35 Income Tax Expense 20 10 4 2 9 (4) Operating Profit After Tax $77 $67 $10 ($3) $34 $39 Beginning Debt 90 39 26 65 83
Slide 18: Legacy Standalone Innovex Reconciliation to Non-GAAP Metrics
Legacy Standalone Innovex Reconciliation to Non-GAAP Metrics Annual Adjusted EBITDA and Adjusted EBITDA Margin ($ in millions) 2023 2022 2021 20202 20192 20182 Revenue $556 $467 $295 $189 $325 $277 Net Income 74 63 10 (5) 32 35 Interest Expense, Net 6 4 2 2 4 4 Income Tax Expense 20 10 4 2 9 (4) Dep
Slide 19: Legacy Standalone Dril-Quip Reconciliation to Non-GAAP Metrics
Legacy Standalone Dril-Quip Reconciliation to Non-GAAP Metrics Annual Adjusted EBITDA and Adjusted EBITDA Margin ($ in millions) 2023 2022 2021 2020 2019 2018 Revenue $478 $362 $322 $365 $415 $385 Net Income 1 (2) (128) (31) 2 (96) Interest Expense, Net (8) (4) 0 (2) (8) (8) Income Tax Provision 13
Slide 20: Combined Net Income to Adjusted EBITDA Reconciliation
Combined Net Income to Adjusted EBITDA Reconciliation 2023 ($ in millions) Dril-Quip Innovex Cost Synergies Pro Forma Net Income $1 $74 $24 $98 (+) Net Interest Expense (8) 6 – (3) (+) Income Tax Provision 13 20 6 40 (+) Depreciation and Amortization Expense 30 23 – 53 1 3 (-) Other Expense / (Incom
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