Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (August 2024)
32 slides from Npk International's investor presentation, Aug 6, 2024
Slide 1: August 2024 Investor Presentation: Positioned for Sustainable Growth
August 2024 Investor Presentation Positioned for Sustainable Growth
Slide 2: Notice to Investors: Forward Looking Statements
Notice to Investors Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical facts are forward-looking statements. Words such as “will,
Slide 3: Agenda
Agenda Introduction End-Market Overview Summary of Key Financial Data 3
Slide 4: Introduction
4 Introduction
Slide 5: Transformation Strategy
Transformation Strategy Aligning Portfolio to Maximize Value Creation Through Accelerated Growth in Power & Infrastructure Markets Disciplined Strategy Aligned with Long-Term Global Megatrends
Slide 6: Company Overview
O&G Exploration & ProductionMidstream Company Overview Newpark Resources, Inc. headquartered in The Woodlands, TX, is a global company operating two independent business units, Industrial Solutions and Fluids Systems, supporting energy and infrastructure markets. We built a reputation for innovating
Slide 7: Leader in Power and Energy Infrastructure Solutions
Leader in Power and Energy Infrastructure Solutions INDUSTRIAL SOLUTIONS Power Infrastructure, O&G, Construction and Renewables Leading provider of specialty rental and services, redefining safety & efficiency standards Unique business model includes integrated manufacturing of 100% recyclable DURA-
Slide 8: Invest & Grow Transformation Supports Growth & Shareholder Return
Projected Invest & Grow Transformation Supports Growth & Shareholder Return 8 ApproachTTM ADJ EBITDA**Net Assets* Fl ui ds S ys te m s $79M $29M * Net Assets represents segment net assets, excluding cash and debt, as of June 30, 2024. ** Adjusted EBITDA is a non-GAAP financial measure. See earnings
Slide 9: Key Operational Highlights Aligned with Strategy
33% Reduction in Fluids Systems net working capital from 2022 Fluid Systems Net Working Capital 11% CAGR in Industrial Solutions Adj. EBITDA (2021 – Q2 '24) Industrial Solutions Adjusted EBITDA* 9% CAGR from Industrial Solutions Rental and Services revenues (2021 – Q2 '24) Key Opera onal Highlights
Slide 10: Well-Positioned in Substantial Energy Megatrends
Well-Positioned in Substantial Energy Megatrends 10 Multi-Trillion Dollar Markets Provide Long-Term Opportunities $14T+ Electrification $1T+ Renewables $12T+ Global Oil & Gas Investment in global electrical grid to enable “electrification of everything” Renewable Generation tie- ins and grid hardeni
Slide 11: Differentiated Model Exploiting Competitive Advantages
Differentiated Model Exploiting Competitive Advantages • Self-funding organic expansion in high-growth, high-returning infrastructure markets • Focused capital light Fluid Systems positioned to generate cash through cycles • Technology, scale, and service drive customer loyalty and productivity • Gl
Slide 12: Repositioning the Company: Change 2019 to Q2 2024
ChangeQ2 20242019 +2%$84M TTM Adjusted EBITDA* $82M Adjusted EBITDA* Maintaining Adjusted EBITDA as we reposition the Company +20%73% % of Segment TTM Adj. EBITDA* generated from Industrial Solutions 61% % of Segment Adj. EBITDA* generated from Industrial Solutions Increasing Adjusted EBITDA generat
Slide 13: End-Market Overview
13 End-Market Overview
Slide 14: Utilities Infrastructure Megatrend Powering Growth
Utilities Infrastructure Megatrend Powering Growth The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) is investing significantly over next decade, including ~ $70B for electric grid and hardened energy infrastructure $300B federal clean energy tax package over next 10 years from Inflati
Slide 15: Positioned for Growth in Multi-Billion Dollar Temporary Access Market
Positioned for Growth in Multi-Billion Dollar Temporary Access Market Specialty Rental and Services Supporting Infrastructure Megatrends Utilities O&G PipelineConstruction Rail & Other Our Footprint What We Do Leading rental provider and manufacturer of composite temporary worksite access solutions
Slide 16: Industrial Solutions End-to-End Operating Model
Industrial Solutions End-to-End Operating Model 16 Differentiated by Optimizing Across the Value Chain Providing Strong Results Product Engineering & Design Materials Sourcing & Procurement Precision Manufacturing Product Direct Sales Mat Fleet Rental & Services Belief in Innovation • High performan
Slide 17: Industrial Solutions: Strategic Progress Supported by Strong Infrastructure Trends
Utilities O&G General Construction Pipeline Rail Other 1H 2024 REVENUE BY INDUSTRY $50 $60 $70 $80 2021 2022 2023 TTM Q2 '24 M IL LI O N S Industrial Solutions • Strategic investments in technology, scale, and service to drive specialty rental differentiation • Expansion of specialty rental fleet to
Slide 18: Global Demand for Oil and Gas Remains Resilient
Global Demand for Oil and Gas Remains Resilient $12T+ Investment in Oil & Gas projected to meet global demand in Sustainable Development Scenario over next 30 years Access to affordable and reliable energy critical for developing economies Geopolitical instability heightens global focus on energy se
Slide 19: Fluids Systems: Agile, Capital-Light Technology & Services
Eastern Hemisphere U.S. Canada • 73% of 1H 2024 revenues generated outside of U.S. • Global footprint aligned to long-term, strategic markets • Reshaping balance sheet to drive “Capital-Light” model, and reduce return cyclicality • FCF generation to support higher-returning growth and return to shar
Slide 20: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy 20 Disciplined Approach Balances Growth Investments with Return of Capital Maintain Target Leverage Invest in Growth Return Excess Cash to Investors Organic M&A• Target net leverage range of 0.5x–1.5x • Net leverage*: 0.3x • Total liquidity**: $110M • Maintainin
Slide 21: Sustainability Embedded in Our DNA
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 2019 2020 2021 2022 2023 Total Company TRIR Sustainability Embedded in Our DNA Environmental Social Governance 21 2023 Sustainability Report Including SASB & TCFD Disclosures Available on Website Shareholder Approval Rate of Executive Compensation * Reflects internal
Slide 22: Why Invest in Newpark Resources?
Why Invest in Newpark Resources? Meaningful growth opportunity tied to the energy transition and critical infrastructure Global presence in large-scale energy markets Proven technologies with economic and environmental benefits Demonstrated ability to adapt and grow Balancing investment in growth wi
Slide 23: Summary of Key Financial Data
23 Summary of Key Financial Data
Slide 24: Business Segment Overview
Business Segment Overview Industrial Solutions Fluids Systems 24 $0 $20 $40 $60 $300 $375 $450 $525 $600 $675 $750 2021** 2022** 2023 TTM Q2 '24 AD JU ST ED E BI TD A (M IL LI O N S) RE VE N U E (M IL LI O N S) Revenues Adjusted EBITDA* Rental & Service (R&S) Product Sales U.S. U.K. 1H 2024 REVENUES
Slide 25: Consolidated Statements of Operations
Consolidated Statements of Operations (unaudited) 25 (In thousands, except per share data) June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Revenues 179,009$ 169,107$ 183,256$ 348,116$ 383,286$ Cost of revenues 140,084 134,587 150,170 274,671 314,908 Selling, general and admini
Slide 26: Operating Segment Results
Operating Segment Results (unaudited) 26 (In thousands) June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Revenues Fluids Systems 112,218$ 120,140$ 135,181$ 232,358$ 279,355$ Industrial Solutions 66,791 48,967 48,075 115,758 103,931 Total revenues 179,009$ 169,107$ 183,256$ 348,
Slide 27: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited) 27 (In thousands, except share data) June 30, 2024 December 31, 2023 ASSETS Cash and cash equivalents 35,087$ 38,594$ Receivables, net 158,834 168,457 Inventories 127,421 141,079 Prepaid expenses and other current assets 10,284 9,094 Total current assets 331,6
Slide 28: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows (unaudited) 28 (In thousands) 2024 2023 Cash flows from operating activities: Net income 15,333$ 7,322$ Adjustments to reconcile net income to net cash provided by operations: Impairments and other non-cash charges - 2,816 Depreciation and amortization 14,835 15
Slide 29: Non-GAAP Financial Measures: Consolidated
Non-GAAP Financial Measures (unaudited) 29 Consolidated (In thousands) 2019 2020 2021 2022 2023 2023 2024 2024 Net income (loss) (GAAP) (12,946)$ (80,696)$ (25,526)$ (20,834)$ 14,516$ 7,322$ 15,333$ 22,527$ Interest expense, net 14,369 10,986 8,805 7,040 8,181 4,235 3,546 7,492 Provision (benefit) f
Slide 30: Non-GAAP Financial Measures: Fluids Systems
30 Non-GAAP Financial Measures (unaudited) Fluids Systems (In thousands) 2019 2020 2021 2022 2023 2023 2024 2024 Revenues 620,317$ 354,608$ 420,789$ 622,601$ 541,952$ 279,355$ 232,358$ 494,955$ Operating income (loss) (GAAP) 3,814$ (66,403)$ (19,012)$ (15,566)$ 11,857$ 5,431$ 9,181$ 15,607$ Deprecia
Slide 31: Non-GAAP Financial Measures: Free Cash Flow
Non-GAAP Financial Measures (unaudited) 31 Consolidated (In thousands) 2019 2020 2021 2022 2023 2023 2024 Net cash provided by (used in) operating activities (GAAP) 72,286$ 55,791$ (3,013)$ (25,021)$ 100,001$ 36,848$ 39,531$ Capital expenditures (44,806) (15,794) (21,793) (28,273) (29,232) (15,347)
Slide 32: Non-GAAP Financial Measures: Net Debt and Net Leverage
Non-GAAP Financial Measures (unaudited) 32 Consolidated (In thousands) 2019 2020 2021 2022 2023 2024 Current debt 6,335$ 67,472$ 19,210$ 22,438$ 16,916$ 17,591$ Long-term debt, less current portion 153,538 19,690 95,593 91,677 58,117 40,392 Total Debt 159,873 87,162 114,803 114,115 75,033 57,983 Les
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