Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (November 2012)
27 slides from Npk International's investor presentation, Nov 13, 2012
Slide 1: Newpark Resources Presentation November 2012
NEWPARK RESOURCES PRESENTATION November 2012 al EL NEWPARK
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future
Slide 3: Company Overview
Company Overview First Nine Months 2012 Revenue > Specialized provider of: $768 million ‘ i : Be > Fluids Systems and Engineering Sy > Mats and Integrated Services 82% > Environmental Services > Customers: [ll Fluids systems and Engineering > Oil and Gas Industry {Bl Mats and Integrated Services Hil
Slide 4: Drilling Fluids — Market Share
Drilling Fluids — Market Share 2011 Worldwide FI nea > Demonstrated our ability to tw Newpark Resources 8.1% grow worldwide market share over the past decade ™ Baker Hughes 11.1% Halliburton Corp. 23.7% > Our growth has been driven by independents, major ™ Schlumberger 35.7% . 5 5 ‘ international oi
Slide 5: Technology
Technology > Focused on providing customized solutions for E&P operators to improve their drilling economics > Offshore - Deepwater and Shelf > Deepdrill’ water-based system used extensively in Brazil’s deepwater market > Inearly 2011, completed our deepest offshore well for a major 10C in over 7000
Slide 6: Evolution®
Evolution® > Award-winning Evolution system continues to demonstrate superior performance vs. oil based mud > Higher lubricity > Improves rate of penetration > Increases length of lateral sections > Minimizes days on well > Environmentally friendly > Reduces disposal cost for cuttings > Reduces asso
Slide 7: Evolution
Evolution > After 2010 introduction in the Haynesville shale, we have since expanded into most North American basins. > First Evolution well outside of North America (EMEA region) being drilled in Q4 2012 Total Revenue from Evolution First Nine Months 2012 Revenue by Region 35 30 6% @ East Texas 7:
Slide 8: Customer Support
Customer Support Availability &Dalivery > Focused on backing our leading technology with superior customer support > Over 600 fluids technicians customize and deliver our technology worldwide Drilling Fuids lads >» Advancedtraining programs for fluid technicians continue to enhance product and servi
Slide 9: Customer Revenue Mix
Customer Revenue Mix > Growth with lOC’s and NOC’s > Results of strategic shift started in 2006 > Focus on lOC’s and NOC’s > Why? >» Less competition versus independents » Longer investment horizons (stability) >» Longer-term contracts NYSE: NR s 2006 Fluids Systems & Engineering Revenue - $481 mill
Slide 10: International Revenue Growth/Mix
International Revenue Growth/Mix >» Focused on driving balance between North American and International revenues > International expansion provides greater stability >» Longer investment horizons > Lower concentrations in individual markets, reducing exposure to individual market dynamics NYSE: NR 2
Slide 11: Fluid Systems & Engineering — North America
Fluid Systems & Engineering — North America NorthAmericanRevenues cui year ExonMobil = $568 $585 m First Nine Months $425 ke 400 ConocoPhillips 8 300 $268 > Serves most all North American 2 00 basins, with majority of revenue 500 coming from oil or liquids-related é drilling 2008 2009 2010 2011 2012
Slide 12: Fluid Systems & Engineering — EMEA
Fluid Systems & Engineering — EMEA > Core Markets > Italy, Algeria, Tunisia, Romania, Libya > Near-Term Growth Markets > Kurdistan, Georgia, Ukraine, Hungary, Spain > Region revenue growth in 2011 despite loss of Libya revenue $6 EMEA Revenues mrabyese 123 $136 ga22 $2238 priest Nine un Months Reven
Slide 13: Fluids Systems & Engineering — Latin America
Fluids Systems & Engineering — Latin America > 24 largest drilling fluids capacity in Brazil Se > Improving profitability > Expand work with OCs >» Focus on proprietary products such as DeepDrill *, water-based technology >» Looking to expand beyond Brazil Latin America Revenues 100 ey Full Year 2 7
Slide 14: Fluids Systems & Engineering — Asia Pacific
Fluids Systems & Engineering — Asia Pacific > Acquisition of Rneochem drilling fluids business in April 2011 > Australia > New Zealand > India > Two year offshore contract began in late second quarter 2012 Asia Pacific Revenues 30 Je $25 Full Year 5 20 $10 = First Nine e Months ~~ 10 e 4 Z & : & 0 2
Slide 15: Mats & Integrated Services
Mats & Integrated Services > New environmental applications drove growth in recent years ial > Use of composite mats to minimize adverse bo impacts of land drilling > Revenues include sale of DuraBase™ composite mats and rentals > Mat sales nearly doubled from 2010 to 2011; Mats and Integrated Servi
Slide 16: Environmental Services
Environmental Services > Processes and disposes Environmental Services Revenues 70 ul r of E&P waste sez aS > Non-hazardous oilfield waste $49 $49» First Nine @® = $43 Months wo 40 > Leading market position $ 30 in U.S. Gulf Coast 5 bp * 10 > Uses low pressure injection technology is ° > Waste dispo
Slide 17: 3rd Quarter 2012
3'4d Quarter 2012 > Revenues of $260 millioninQ3 =, = Revemete = 2012 operating income 250 (right) 50 > Down 1% from prior year Q3, as North America rig count is down 6% oe Ps > Up 6% from prior quarter, benefiting from 2, “9 strength of international operations a 3 fs 20 3 >EPS of 20¢ inQ3 compared
Slide 18: Capital Structure
Capital Structure Capital Structure - September 30, 2012 Sin millions Convertible Senior Notes $ 1725 Other 29.41 Total Debt 201.6 Equity 513.4 Total Capitalization $ 7147 Debt / Capitalization 28.2% $300 mm Total Debt (left) —#Debt to Capital (right) $250 $200 $150 $100 Total Debt ($ in millions) $
Slide 19: Outlook
Outlook U.S. Drilling Rigs by Type” 1% 70% | Horizontal ‘Vertical Directional 60% | 50% | 40% 30% 20% b> 10% 0% rt PP PP PPP LS LPH AMS A I DS SS AY SP OSI HWS EAE WG WG Oil vs Gas Rig Mix” 90% sox | 70% > — = 60% 50% = 20% 5 sue —oil = Sa, 20% 10% E ——Gas ee eee | ee ee LESSEE SSE OM MP SO IOS * So
Slide 20: al
al EL NEWPARK NYSE: NR 20
Slide 21: Consolidated Statements of Operations
Consolidated Statements of Operations (Unaudited) ‘Three Months Ended ‘Nine Months Ended Ga thousands, except per share data) Sep 30,2012 Jun 30,2012 Sep 30,2011 Sep 30,2012 Sep 30, 2011 Revemues $ 259,599 § 245,756 $ 261,193 $ 767,691 $ 694,666 Cost of revenues 210,276 201,534 201,272 626,712 539,1
Slide 22: Operating Segment Results
Operating Segment Results (Unaudited) Three Months Ended (Gn thousands) Sep 30, 2012 Jun 30,2012 Sep 30, 2011 Revenues Fluids systems and engineering $211,457 $ 202388 $ 216,160 Mats and integrated services 35,067 30,071 30.179 Environmental services 13.075 13,297 14,854 Total revenues $__ 259,599 $
Slide 23: Consolidated Balance Sheets
Consolidated Balance Sheets NYSE: NR Wazesites) (ia thousands excaptshae dat) ‘Sep30,2012 Dee31,2011 ASSETS Cash and cash equivalents $ 35457 «$25,247 Receivables, nat 312,00 328,550 Inventories isl.ies 175929 Deferred taxassat 14.438 13204 Prepaid expenses andotharcurrantassats 11361 10/828 ‘Total
Slide 24: Consolidated Statements of Cash Flow
Consolidated Statements of Cash Flow NYSE: NR ‘Wrausited) Nine Months Ended September30, (Ga thousands) 2012 2011 ‘Cash flows from operating activi ‘Netincome S453 0S 58,131 ‘Adjustments toreconcile net income tonet cash provided by operations: Depreciation and amortization 24406 21162 Stock:-based
Slide 25: Experienced Leadership
Experienced Leadership + Paul Howes President & CEO + Gregg Piontek VP & CFO ¢ Mark Airola SVP, GC & Admin Officer « Lee Ann Kendrick VP, Human Resources + Bruce Smith President Fluids Systems and Engineering + Jeff Juergens President Mats & Integrated Services & Environmental Services al EL NEWPARK
Slide 26: Management Biographies
Management Biographies Paul L. Howes, President & CEO: Paul joined Newpark’s Board of Directors and was appointed its Chief Executive Officer in March 2006. In June 2006, Mr. Howes also was appointed as Newpark’s President. Mr. Howes’ career has included experience in the defense industry, chemicals
Slide 27: Management Biographies
Management Biographies Lee Ann Kendrick, Vice President, Human Resources: Lee Ann joined Newpark in January 2012 as Vice President ‘of Human Resources. Prior to joining Newpark, Ms. Kendrick was responsible for human resources for The Americas with Lloyd's Register, a risk management and safety assu
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