Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (February 2023)
29 slides from Npk International's investor presentation, Feb 17, 2023
Slide 1: February 2023 Investor Presentation
February 2023 Investor Presentation Refocusing Portfolio to Maximize Returns Through the Energy Transi on
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: Disciplined growth strategy generating returns through the energy transition
Maximizing value creation through accelerated growth in high returning markets, margin expansion and consistent free cash flow generation Disciplined growth strategy generating returns through the energy transition
Slide 6: Company Overview
Renewable GenerationTransmission & Distribution Company Overview Newpark Resources, Inc. is a global company supporting energy and infrastructure markets. We built a reputation for innovating and adapting to the changing needs of our customers, delivering sustainable technologies that enable society
Slide 7: Leader in Energy and Power Infrastructure Solutions
Leader in Energy and Power Infrastructure Solutions INDUSTRIAL SOLUTIONS Power Infrastructure, O&G Construction and Renewables Preeminent provider of specialty rental and services, redefining safety & efficiency standards of the temporary worksite access market Unique business model includes integra
Slide 8: 2022 Key Highlights Aligned with Strategy
2022 Key Highlights Aligned with Strategy 8 Business Improvement and Portfolio Rebalancing for Long-term Shareholder Value Crea on ~80% of CAPEX driving expansion of rental fleet and utilities market penetration 70% growth in Adjusted EBITDA from 2021 to 2022 Divestitures provided $100m+ of liquidit
Slide 9: Differentiated Model Exploiting Competitive Advantages
Differentiated Model Exploiting Competitive Advantages • Self-funding organic expansion in high-growth, higher-returning infrastructure markets • Capital light Fluid Systems now positioned to generate cash through cycles • Technology, scale, and service drive customer loyalty and productivity • Glob
Slide 10: Transformation Not Reflected in Valuation
Transformation Not Reflected in Valuation Significant Structural Improvements Since 2019 to Accelerate Growth, Improve Margin and Capital Returns 2019 Q4 2022 Change Expanding EBITDA as we reposition the Company $82M Adjusted EBITDA* $86M Adjusted EBITDA* (Annualized) +5% Increase EBITDA generation
Slide 11: S i > iS oO => e) ~ c oe = © = mo)
S i > iS oO => e) ~ c oe = © = mo) {=| uu
Slide 12: Positioned Well Within Substantial Energy Megatrends
Positioned Well Within Substantial Energy Megatrends ~$14T Investment in global electrical grid to enable “electrification of everything” Renewable Generation tie-ins and grid hardening driving long-term infrastructure development ~$12T - $26T Investment in Oil & Gas projected to meet demand in Sust
Slide 13: Industrial Solutions
• Expansion of specialty rental fleet to meet long-term infrastructure build-out • 10% CAGR in Revenues from Utilities & Industrial Markets from 2018 - 2022 • Rental fleet assets typically have 10+ year useful life, with high residual value and limited maintenance cost • Strategic investments in tec
Slide 14: Fluids Systems
$0 $200 $400 $600 2019 2020 2021 2022 M IL LI O N S NAM EMEA Other • Global footprint aligned to long-term, strategic markets • Reshaped balance sheet to drive “Capital-Light” model, and reduce return cyclicality • Strong focus on margin expansion through technology, service differentiation, and wor
Slide 15: Long-term Capital Allocation Strategy
Long-term Capital Allocation Strategy 15 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*: 1.1x • Total liquidity**: $107 million • ABL
Slide 16: Driving Efficiency in our Transition
$0 $10 $20 $30 $40 2019 2022 $0 $4 $8 $12 $16 2019 2022 INTEREST EXPENSE 6% Average Borrowing Rate on Outstanding Debt • Leveraging asset-based lending to drive reductions in borrowing cost • Primary bank facility matures in May 2027 Driving Efficiency in our Transition 16 $0 $200 $400 $600 $800 Q4
Slide 17: Built on a Solid Foundation of Values
Built on a Solid Foundation of Values Environmental Social Governance 17 Embedded in Our Operating DNA Shareholder Approval Rate of Executive Compensation * Reflects internal estimates of impact of DURA-BASE® Composite Matting System. Reflects cumulative effect unless otherwise stated. Board Indepen
Slide 18: Why Invest in Newpark Resources?
Why Invest in Newpark Resources? Operate across the spectrum of the energy transition Global presence in large-scale energy markets Proven technologies with economic and ESG benefits Demonstrated ability to adapt and grow Balancing investment in higher growth markets with return of capital Capital s
Slide 19: Summary of Key Financial Data
19 Summary of Key Financial Data
Slide 20: Business Segment Overview
Business Segment Overview Industrial Solutions Fluids Systems 20 $0 $20 $40 $60 $80 $100 $120 $0 $50 $100 $150 $200 $250 2018 2019 2020 2021 2022 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) Utilities & Other Revenue E&P Revenue Adjusted EBITDA* ($20) $0 $20 $40 $60 $80 $100 $0
Slide 21: Consolidated Statements of Operations
Consolidated Statements of Operations (unaudited) 21 (In thousands, except per share data) December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Revenues 225,159$ 219,853$ 179,563$ 815,594$ 614,781$ Cost of revenues 186,980 187,884 153,182 694,058 529,552 Selling
Slide 22: Operating Segment Results
Operating Segment Results (unaudited) 22 (In thousands) December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Revenues Fluids Systems 167,705$ 168,621$ 127,892$ 622,601$ 420,789$ Industrial Solutions 57,454 51,232 51,138 192,993 185,171 Industrial Blending - - 53
Slide 23: Impact of 2022 Divestitures
Impact of 2022 Divestitures (unaudited) 23 (In thousands) December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Revenues Excalibar 11,922$ 17,623$ 10,816$ 55,990$ 36,396$ Gulf of Mexico 8,011 8,591 4,049 26,708 25,366 Total revenues 19,933$ 26,214$ 14,865$ 82,698
Slide 24: Consolidated Balance Sheets
Consolidated Balance Sheets (unaudited) 24 (In thousands, except share data) December 31, 2022 December 31, 2021 ASSETS Cash and cash equivalents 23,182$ 24,088$ Receivables, net 242,247 194,296 Inventories 149,571 155,341 Prepaid expenses and other current assets 10,966 14,787 Total current assets
Slide 25: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows (unaudited) 25 (In thousands) 2022 2021 Cash flows from investing activities: Capital expenditures (28,273) (21,793) Proceeds from divestitures 71,286 - Business acquisitions, net of cash acquired - (13,434) Proceeds from sale of property, plant and equipment 3,
Slide 26: Non-GAAP Financial Measures (Quarterly)
Non-GAAP Financial Measures (unaudited) 26 Consolidated (In thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net income (loss) (GAAP) (3,681)$ 2,521$ (7,752)$ (24,595)$ 8,992$ Interest expense, net 2,057 1,206 1,638 1,875 2,321 Provision (benefit) for in
Slide 27: Non-GAAP Financial Measures (Consolidated)
Non-GAAP Financial Measures (unaudited) 27 Consolidated (In thousands) 2018 2019 2020 2021 2022 Net income (loss) (GAAP) 32,281$ (12,946)$ (80,696)$ (25,526)$ (20,834)$ Interest expense, net 14,864 14,369 10,986 8,805 7,040 Provision (benefit) for income taxes 14,997 9,788 (11,883) 7,293 4,371 Depre
Slide 28: Non-GAAP Financial Measures (Segments)
28 Non-GAAP Financial Measures (unaudited) Fluids Systems (In thousands) 2018 2019 2020 2021 2022 Revenues 715,813$ 620,317$ 354,608$ 420,789$ 622,601$ Operating income (loss) (GAAP) 40,337$ 3,814$ (66,403)$ (19,012)$ (15,566)$ Depreciation and amortization 20,922 21,202 20,555 17,877 13,875 EBITDA
Slide 29: Non-GAAP Financial Measures (Free Cash Flow)
Non-GAAP Financial Measures (unaudited) 29 Consolidated (In thousands) 2018 2019 2020 2021 2022 Net cash provided by (used in) operating activities (GAAP) 63,403$ 72,286$ 55,791$ (3,013)$ (25,021)$ Capital expenditures (45,141) (44,806) (15,794) (21,793) (28,273) Proceeds from sale of property, plan
Newpark Resources — Investor Presentation (February 2023) on 6ix