Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Q2 2018 Earnings Presentation
33 slides from Npk International's earnings presentation, Aug 20, 2018
Slide 1: Newpark Resources Presentation August 2018
NEWPARK RESOURCES PRESENTATION AUGUST 2018
Slide 2: Forward Looking Statements
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 that address expectations or projections about the future, including Newpark's strategy for growth, product develo
Slide 3: Non-GAAP Financial Measures
NON‐ GAAP FINANCIAL MEASURES This presentation includes references to financial measurements that are supplemental to the Company’s financial performance as calculated in accordance with generally accepted accounting principles (“GAAP”). These non‐GAAP financial measures include earnings before inte
Slide 4: Company Overview
COMPANY OVERVIEW Consolidated Revenues $1,400 Balanced income contribution from two Full Year operating segments: $1,200 $1,118 First Half $1,042 $1,000 Fluids Systems 3rd largest global provider of Drilling and millions) $800 $748 ($ $677 Completions Fluids to Oil and Gas $600 $471 exploration**
Slide 5: Global Strength
GLOBAL STRENGTH Revenue by Region –First Half 2018 U.S. Canada Latin America Eastern Hemisphere 25% 4% 7% 64% 5
Slide 6: Strengthened by Our Investments
STRENGTHENED BY OUR INVESTMENTS Infrastructure investments significantly enhance our competitiveness and support our market expansion and diversification initiatives Reflects our commitment to be the global leader in fluids and matting technology Fluids: Manufacturing Facility & Distribution Cen
Slide 7: Fluids Systems - Overview
FLUIDS SYSTEMS‐ OVERVIEW Total Segment Revenues $1,200 Full Year Largest independent Drilling $965 $1,000 $926 First Half and Completion Fluids provider $800 globally* millions) $616 $600 $581 ($ $395 $400 $357 Capitalizing on strong market $200 $287 Revenues $0 position in drilling fluids to 20
Slide 8: Fluids Systems - Leading Technology
FLUIDS SYSTEMS‐ LEADING TECHNOLOGY Proven drilling fluid systems designed to enhance wellsite performance Evolution® high‐performance, water‐based technology for global applications Fusion™ brine fluid system creates a unique enhancement for shale basins Kronos™ deepwater drilling fluid syst
Slide 9: Fluids Systems - North America
FLUIDS SYSTEMS –NORTH AMERICA North American Revenues $800 Hold #2 drilling fluids market share $687 $700 $654 Full Year position in U.S. land* $600 First Half millions) $500 Significantly expanded share ($ $395 $400 $352 through cycle $300 $183 Revenue $200 $231 Service quality, operational f
Slide 10: Fluids Systems - International
FLUIDS SYSTEMS – INTERNATIONAL International Revenues $350 International presence remains key to Full Year $300 $272 $278 First Half our strategy, leveraging IOC/NOC $250 $229 $220 relationships globally $212 $200 millions) More stable than NAM through the ($ $150 industry cycles $126 $100 $106
Slide 11: Mats & Integrated Services - Overview
MATS & INTEGRATED SERVICES ‐ OVERVIEW Leading provider of engineered Total Segment Revenues worksite and access solutions $180 $153 Full Year $160 First Half Established core business in NAM $140 $132 $116 E&P market, where mats reduce $120 $96 operator’s costs and improve millions) $100 $106 ($
Slide 12: Mats - Competitive Advantages Across Industries
MATS ‐ COMPETITIVE ADVANTAGES ACROSS INDUSTRIES Superior Transportation, Install & Enhanced EH&S Scale & Quality Remediation Efficiency Attributes Responsiveness DO WE HAVE PHOTOS OF ACTUAL INSTALL? PHOTO FROM PG 3 OF BROCHURE? 12
Slide 13: Mats - Accelerating Market Diversification
MATS – ACCELERATING MARKET DIVERSIFICATION Leveraging manufacturing capacity expansion to diversify market exposure. Primary markets targeted include: Utility Transmission Pipeline Utility Transmission & Distribution – Primary competitive offerings include wood mats and gravel – Market share curre
Slide 14: Mats - Accelerating Product Development
MATS – ACCELERATING PRODUCT DEVELOPMENT Leveraging R&D center to drive innovation, including next‐generation matting systems, accessories and adaptations EPZ Grounding System – Patented system – Elevates worksite safety in utility transmission and distribution markets – Fully integrated with Dura‐
Slide 15: Financial Focus
FINANCIAL FOCUS Operating Cash Flow $200 Consistently generated positive operating $152 cash flow and maintained modest debt $150 $122 level throughout the cycle $100 $89 Short‐Term Focus Millions $ $50 $38 $21 Pursue repatriation of available foreign $11 $0 cash following U.S. tax reform 2013 2
Slide 16: Appendix
cwranx APPENDIX
Slide 17: Mats - Utility Transmission and Distribution
MATS – UTILITY TRANSMISSION AND DISTRIBUTION Market fully addressable by Newpark* Market partially addressable by Newpark* Site Access Market • Represents 5‐10% of total industry spend * • Primary competitive offerings to composite mats include wood mats and gravel Other Key Demand Drivers (for Acce
Slide 18: Mats - Utility Transmission and Distribution
MATS – UTILITY TRANSMISSION AND DISTRIBUTION Market % Spend Distribution by State 1 Infrastructure activity levels tend to track directionally with population distribution across the U.S. Targeted Customer Base • Utility Companies • EPC Companies • Construction Service Companies Service company mark
Slide 19: Mats - Oil and Gas Pipeline
MATS –OIL AND GAS PIPELINE Market fully addressable by Newpark* Market partially addressable by Newpark* Site Access Market • Represents 5‐10% of total industry spend * • Primary competitive offerings to composite mats include wood mats and gravel Other Key Demand Drivers (for Access Outlook Product
Slide 20: Mats - Oil and Gas Pipeline
MATS –OIL AND GAS PIPELINE % Spend Distribution by State 1 Infrastructure activity is concentrated in the regions close to oil and gas resources Targeted Customer Base • Pipeline Operators • EPC Firms • Integrity/Inspection Companies • Construction Service Companies Service company market is very fr
Slide 21: Consolidated Statements of Operations (Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) Three Months Ended June 30, March 31, June 30, (In thousands, except per share data) 2018 2018 2017 Revenues$ 236,262 $ 227,293 $ 183,020 Cost of revenues 188,480 186,455 148,431 Selling, general and administrative expenses 28,708 26,954 26,630 Other
Slide 22: Operating Segment Results (Unaudited)
OPERATING SEGMENT RESULTS (UNAUDITED) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, (In thousands) 2018 2018 2017 2018 2017 Revenues Fluids systems$ 179,738 $ 177,379 $ 150,623 $ 357,117 $ 286,673 Mats and integrated services 56,524 49,914 32,397 106,438 55,038 To
Slide 23: Consolidated Balance Sheets (Unaudited)
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share data) June 30, 2018 December 31, 2017 ASSETS Cash and cash equivalents$ 71,722 $ 56,352 Receivables, net 252,154 265,866 Inventories 189,571 165,336 Prepaid expenses and other current assets 20,492 17,483 Total current assets 533,93
Slide 24: Consolidated Statements of Cash Flows (Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, (In thousands) 2018 2017 Cash flows from operating activities: Net income$ 18,068 $ 649 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 22,755 19,244 Stock‐based compensa
Slide 25: Non-GAAP Financial Measures (Unaudited)
NON‐ GAAP FINANCIAL MEASURES(UNAUDITED) To help understand the Company’s financial performance, the Company has supplemented its financial results that it provides in accordance with generally accepted accounting principles (“GAAP”) with non‐GAAP financial measures. Such financial measures include e
Slide 26: Non-GAAP Financial Measures (Unaudited)
NON‐ GAAP FINANCIAL MEASURES(UNAUDITED) Six Months Ended Fluids Systems Twelve Months Ended December 31, June 30, (In thousands) 2013 2014 2015 2016 2017 2018 Operating income (loss) (GAAP) (2) $ 72,604 $ 95,600 $ (86,770) $ (43,631) $ 27,580 $ 23,804 Depreciation and amortization 26,679 22,934 22,1
Slide 27: Non-GAAP Financial Measures (Unaudited)
NON‐ GAAP FINANCIAL MEASURES(UNAUDITED) The following table reconciles the Company’s ratio of total debt to capital calculated in accordance with GAAP to the non‐GAAP financial measure of the Company’s ratio of net debt to capital: Consolidated December 31, June 30, (In thousands) 2013 2014 2015 201
Slide 28: Experienced Leadership
EXPERIENCED LEADERSHIP • Paul Howes President & Chief Executive Officer • Gregg Piontek Senior Vice President & Chief Financial Officer • Mark Airola Senior Vice President, General Counsel & Administration Officer • Phil Vollands President Fluids Systems • Bruce Smith Chief Technology Marketing Offi
Slide 29: Management Biographies
MANAGEMENT BIOGRAPHIES Paul L. Howes, President & CEO:Paul L. Howes joined our Board of Directors and was appointed as our Chief Executive Officer in March 2006. In June 2006, Mr. Howes was also appointed as our President. Mr. Howes’ career has included experience in the defense industry, chemicals
Slide 30: Management Biographies
MANAGEMENT BIOGRAPHIES Phillip T. Vollands, President, Fluids Systems: Phil joined Newpark in October 2013 as President, North America Fluids Systems and became President, Western Hemisphere in 2016. Prior to Newpark, he was Vice President, Tubular Running Services for Weatherford International from
Slide 31: Management Biographies
MANAGEMENT BIOGRAPHIES Ida Ashley, VP, Human Resources: Ida joined Newpark in March 2015 as Vice President, Human Resources. Ida has over 20 years of experience in Human Resources, 17 of which were specific to Oilfield Services where she specialized in Employee Relations, Mergers & Acquisitions and
Slide 32: Board of Directors
BOARD OF DIRECTORS Our Board members represent a desirable mix of diverse backgrounds, skills and experiences and we believe they all share the personal attributes of effective directors. They each hold themselves to the highest standards of integrity and are committed to the long‐term interests of
Slide 33: Focused on Customer's Needs
FOCUSED ON CUSTOMER’S NEEDS me Ries XA ~ hd v ¢s LIJTION