Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (August 2023)
35 slides from Npk International's investor presentation, Aug 2, 2023
Slide 1: August 2023 Investor Presentation: Positioned for Sustainable Growth
August 2023 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: Aligning Portfolio to Maximize Value Creation Through Accelerated Growth in Power & Infrastructure Markets
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 Segment Approach Supports Growth & Shareholder Return
Invest & Grow Segment Approach Supports Growth & Shareholder Return 8 ApproachTTM ADJ EBITDA**Net Capital Employed* Fl ui ds S ys te m s $77M $34M * Net Capital Employed represents segment net assets excluding cash and debt, as of June 30, 2023. ** Adjusted EBITDA is a non-GAAP financial measure. Se
Slide 9: Key Operational Highlights Aligned with Strategy
32% YoY reduction in Fluids Systems asset base Fluid Systems Net Capital Employed 41% YoY growth in Industrial Solutions EBITDA (TTM) Industrial Solutions EBITDA* (TTM) 27% YoY growth from Industrial Solutions Rental and Services revenues (TTM) Key Opera onal Highlights Aligned with Strategy 9 Disci
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: Maintaining Adjusted EBITDA as we reposition the Company
2019 1H 2023 Change Maintaining Adjusted EBITDA as we reposition the Company $82M Adjusted EBITDA** $82M Adjusted EBITDA** (TTM) --- Increasing Adjusted EBITDA generation from more stable Industrial Solutions segment 61% % of Segment Adj. EBITDA* generated from Industrial Solutions 69% % of Segment
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 manufacturer and rental fleet provider of composite temporary worksite access solu
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
1H ‘23 BY INDUSTRY Utilities O&G General Construction Pipeline Rail Other $50 $60 $70 $80 2021 2022 TTM 1H '23 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 meet long-ter
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
U.S. Canada Int'l • Recent divestitures driving shift to international markets; 54% of 1H ‘23 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 supp
Slide 20: Simplifying Business and Driving Efficiency
$0 $10 $20 $30 $40 2019 TTM 1H '23 $0 $4 $8 $12 $16 2019 TTM 1H '23 INTEREST EXPENSE 7% Average Borrowing Rate on Outstanding Debt • Leveraging asset-based lending to drive reductions in borrowing cost • Primary bank facility matures in May ‘27 Simplifying Business and Driving Efficiency 20 $0 $100
Slide 21: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy 21 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*: 0.9x • Total liquidity**: $102M • Maintainin
Slide 22: Sustainability Embedded in Our DNA
Sustainability Embedded in Our DNA Environmental Social Governance 22 2022 Sustainability Report Including SASB & TCFD Disclosures Available on Website Shareholder Approval Rate of Executive Compensation * Reflects internal estimates of impact of DURA-BASE® Composite Matting System. Board Independen
Slide 23: Why Invest in Newpark Resources?
Why Invest in Newpark Resources? Meaningful growth opportunity tied to 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 growth markets with return of capital Capital s
Slide 24: Summary of Key Financial Data
24 Summary of Key Financial Data
Slide 25: Business Segment Overview
Business Segment Overview Industrial Solutions Fluids Systems 25 $40 $60 $80 $100 $100 $120 $140 $160 $180 $200 $220 $240 2021 2022 TTM 1H '23 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* $0 $20 $40 $60 $300 $375 $450 $525 $600 $675 $750 2021** 2022** T
Slide 26: Consolidated Statements of Operations (unaudited)
Consolidated Statements of Operations (unaudited) 26 (In thousands, except per share data) June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenues 183,256$ 200,030$ 194,144$ 383,286$ 370,582$ Cost of revenues 150,170 164,738 168,206 314,908 319,194 Selling, general and admini
Slide 27: Operating Segment Results (unaudited)
Operating Segment Results (unaudited) 27 (In thousands) June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenues Fluids Systems 135,181$ 144,174$ 145,261$ 279,355$ 286,275$ Industrial Solutions 48,075 55,856 48,883 103,931 84,307 Industrial Blending - - - - - Total revenues 18
Slide 28: Impact of 2022 Divestitures (unaudited)
Impact of 2022 Divestitures (unaudited) 28 (In thousands) June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Revenues Excalibar -$ -$ 12,099$ -$ 26,445$ Gulf of Mexico - - 7,412 - 10,106 Total revenues -$ -$ 19,511$ -$ 36,551$ Operating income (loss) Excalibar -$ (77)$ 817$ (77)$
Slide 29: Consolidated Balance Sheets (unaudited)
Consolidated Balance Sheets (unaudited) 29 (In thousands, except share data) June 30, 2023 December 31, 2022 ASSETS Cash and cash equivalents 22,353$ 23,182$ Receivables, net 193,365 242,247 Inventories 147,113 149,571 Prepaid expenses and other current assets 14,231 10,966 Total current assets 377,
Slide 30: Consolidated Statements of Cash Flows (unaudited)
Consolidated Statements of Cash Flows (unaudited) 30 (In thousands) 2023 2022 Cash flows from operating activities: Net income (loss) 7,322$ (5,231)$ Adjustments to reconcile net income (loss) to net cash provided by operations: Impairments and other non-cash charges 2,816 7,905 Depreciation and amo
Slide 31: Non-GAAP Financial Measures: Consolidated
Non-GAAP Financial Measures (unaudited) 31 Consolidated (In thousands) 2019 2020 2021 2022 2022 2023 2023 Net income (loss) (GAAP) (12,946)$ (80,696)$ (25,526)$ (20,834)$ (5,231)$ 7,322$ (8,281)$ Interest expense, net 14,369 10,986 8,805 7,040 2,844 4,235 8,431 Provision (benefit) for income taxes 9
Slide 32: Non-GAAP Financial Measures: Consolidated Quarterly
Non-GAAP Financial Measures (unaudited) 32 Consolidated (In thousands) June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 Net income (loss) (GAAP) (7,752)$ (24,595)$ 8,992$ 5,620$ 1,702$ Interest expense, net 1,638 1,875 2,321 2,089 2,146 Provision (benefit) for income t
Slide 33: Non-GAAP Financial Measures: Fluids Systems
33 Non-GAAP Financial Measures (unaudited) Fluids Systems (In thousands) 2019 2020 2021 2022 2022 2023 2023 Revenues 620,317$ 354,608$ 420,789$ 622,601$ 286,275$ 279,355$ 615,681$ Operating income (loss) (GAAP) 3,814$ (66,403)$ (19,012)$ (15,566)$ 3,799$ 5,431$ (13,934)$ Depreciation and amortizatio
Slide 34: Non-GAAP Financial Measures: Free Cash Flow
Non-GAAP Financial Measures (unaudited) 34 Consolidated (In thousands) 2019 2020 2021 2022 2022 2023 Net cash provided by (used in) operating activities (GAAP) 72,286$ 55,791$ (3,013)$ (25,021)$ (23,011)$ 36,848$ Capital expenditures (44,806) (15,794) (21,793) (28,273) (9,515) (15,347) Proceeds from
Slide 35: Non-GAAP Financial Measures: Net Debt and Net Leverage
Non-GAAP Financial Measures (unaudited) 35 Consolidated (In thousands) 2019 2020 2021 2022 2022 2023 Current debt 6,335$ 67,472$ 19,210$ 22,438$ 22,484$ 21,654$ Long-term debt, less current portion 153,538 19,690 95,593 91,677 121,975 76,466 Total Debt 159,873 87,162 114,803 114,115 144,459 98,120 L
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