28 slides from Cactus, Inc. Class A Common Stock's investor presentation, September 2023
Slide 1: Cactus, Inc. September 2023
Cactus, Inc. (NYSE: September, 2023
Slide 2: Important Disclosures
Important Disclosures Non-GAAP Measures This presentation includes references to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Segment EBITDA, Adjusted Segment EBITDA, Adjusted Segment EBITDA margin, and EBIT, which are not measures calculated in accordance with accounting principles generally ac
Slide 3: Experienced Executive Team
Experienced Executive Team ◼ Mr. Bender has served as Chairman and CEO since August 2023 and previously served as President and CEO since co- founding Cactus Wellhead, LLC (“Cactus LLC”) in 2011. ◼ Mr. Bender previously was President of Wood Group Pressure Control from 2000 to 2011. Scott Bender ◼ M
Slide 4: Investment Highlights
Investment Highlights A Leading Pure Play Equipment Solutions Provider 1 for Onshore Markets Innovative and Differentiated Products & Services 2 that Sustain Relative Margin Resilience 3 Dynamic Operating and Manufacturing Capabilities Through-Cycle Outperformance 4 Strong Margins and Free Cash Flow
Slide 5: Products & Operations Overview
Products & Operations Overview Cactus designs, manufactures, sells and rents highly engineered products which generate improved drilling, completion and production efficiencies while enhancing safety Cactus Provides Service, 33.4% Margin 37.1% Margin Installation & Maintenance for its Wellhead syste
Slide 6: Historical Financial Overview
Historical Financial Overview YTD ‘23 Ann.(1) Rev. by Segment Revenue(1) ($ in millions) $1,209 Spoolable $421 Technologies Mar-Jun $628 $688 Annualized(1) $544 $439 Spoolable $349 Technologies $788 35% Pressure Control 2018 2019 2020 2021 2022 YTD 2023 Ann. 65% Adjusted EBITDA(1,2) ($ in millions)
Slide 7: Differentiated Margin Profile Through the Cycle
Differentiated Margin Profile Through the Cycle Total Adjusted EBITDA Margin (2014 – 2022) (1)(2) YTD 2023 Adjusted EBITDA Margin (1)(2) 36% 33% 25% 21% 19% 17% 15% 13% 13% 12% 11% 11% 11% 10% Peer A Peer B Peer C Peer D Peer E Peer F Peer C Peer A Peer F Peer E Peer D Peer B Strength of margin prof
Slide 8: Technologically Advanced Pad Drilling Wellhead Systems
Technologically Advanced Pad Drilling Wellhead Systems Cactus SafeDrill® SafeDrill® Advantages Safety Time Savings Fewer trips into Eliminates time confined space (cellar) consuming BOP - manipulation No BOP manipulation No waiting on cement after intermediate after running casing casing has
Slide 9: Technologically Advanced Spoolable Pipe Systems
Technologically Advanced Spoolable Pipe Systems FlexSteel Spoolable Pipe FlexSteel Advantages Features Operator Savings Durable and corrosion- Lower maintenance cost resistant for operators Faster installation times Lower cost to install Withstands cyclic Reduced operating field loading
Slide 10: Spoolable Pipe Applications Across the Industry Value Chain
Spoolable Pipe Applications Across the Industry Value Chain Production Lines / Pipe-Under-Pad Gathering Lines Takeaway Lines Wellhead Tank Battery Midstream Sales Refining / End Use Meter Multiphase Production Oil / Gas / Water Oil / Gas / Water Gas Lift / CO2 CO2 / CCUS CO2 / CCUS Customer E&P E&P
Slide 11: Differentiated Offerings Enable Customers to Meet ESG-Related Goals
Differentiated Offerings Enable Customers to Meet ESG-Related Goals Faster Safer Cleaner ◼ Equipment takes less time to ◼ Equipment enhances ◼ Switching from diesel to solar install versus legacy offerings employee safety powered generation in certain ◼ Enables customers to drill, ◼ Automation of hu
Slide 12: North American Operating Footprint
North American Operating Footprint Operational Footprint ◼ Headquarters located in Houston, TX ◼ U.S. manufacturing facilities located in Bossier City, LA and Baytown, TX ◼ Significant overlap in Cactus and FlexSteel service centers & yards ◼ Service centers support field operations and provide repa
Slide 13: Global Operating Footprint
Global Operating Footprint Global Operations ◼ Manufacturing facility located in China ◼ Established legacy business in Australia ◼ Cactus started to provide rental equipment in the Middle East in late 2021 ◼ Approved as vendor in key Middle East markets ◼ First wellhead/production tree sales in Mid
Slide 14: A Dynamic Manufacturing Advantage; Responsive, Scalable and Low Cost
A Dynamic Manufacturing Advantage; Responsive, Scalable and Low Cost Bossier City Facility Suzhou Facility Baytown Facility ◼ Rapid-response manufacturing ◼ Less time-sensitive, high-volume ◼ Produces 100% of FlexSteel wellhead equipment equipment ◼ 5-axis computer numerically controlled machines ◼
Slide 15: Experienced and Well Aligned Management Team with Strong Industry Relationships
Experienced and Well Aligned Management Team with Strong Industry Relationships ◼ Management is well incentivized as it owns over 18% of the business ◼ Performance-based stock compensation tied to Return on Capital Employed (“ROCE”) ◼ Management team has built the foundation of this company over mor
Slide 16: Returns & Margins Have Outperformed Peers
Returns & Margins Have Outperformed Peers YTD 2023 Adjusted EBITDA Margin (%) 40.0% (1) 30.0% NCSM SBO 20.0% FTI OIS WEIR NOV FET HTG 10.0% ROCE(2) 0.0% DRQ (2017 – 2022) (%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Source: Company filings and Factset. Note: Adj. EBITDA Margins based on latest publicly
Slide 17: Execution Has Driven Equity Outperformance
Execution Has Driven Equity Outperformance Share Price Performance of Cactus vs. the OSX since IPO 168% 0% (37%) WHD OSX Share Price Outperformed the OSX in 4 of 5 years since IPO Note: Data based on share price performance from 2/7/2018 to 8/25/2023. Cactus 2/7/2018 price set as IPO price of $19 pe
Slide 18: Steadily Increasing Return of Capital Profile
Steadily Increasing Return of Capital Profile Cactus’ Dividends & Associated Distributions to Members Paid Since 2018 ($ in millions) $40 Announced inaugural share repurchase program in June 2023 and 9% quarterly dividend increase in August 2023 $30 $20 $10 $0 (1) 2018 2019 2020 2021 2022 YTD 2023 A
Slide 19: Multiple Avenues of Growth for Spoolable Technologies
Multiple Avenues of Growth for Spoolable Technologies ◼ Growth In Core Production Products ◼ Transition from legacy offerings to spoolable technologies still underway ◼ Increase customer penetration for larger-diameter gathering-based technologies ◼ Expand customer penetration for under pad applicat
Slide 20: Strong Balance Sheet & Low Capital Intensity
Strong Balance Sheet & Low Capital Intensity Balance Sheet & Capital Summary Adjusted EBITDA – Net Capital Expenditures ($ in millions)(1)(2) ◼ Paid off remaining balance of the bank debt $403 raised for the FlexSteel acquisition as of July 31, 2023 ◼ Approximately $223 million availability on $202
Slide 21: Third Quarter Updates
Third Quarter Updates Recent Developments ◼ As of July 31, 2023, Cactus has repaid all of the $155 million of bank debt raised to finance the FlexSteel acquisition Outlook ◼ Pressure Control Q3 2023 ◼ Revenue expected to be down approximately 10% versus Q2 2023 on lower activity levels ◼ Expected Ad
Slide 22: Cactus Is Committed to ESG
Cactus Is Committed to ESG Environmental Social ◼ Cactus, Inc. is committed to reducing its and its industry’s impact on the ◼ Cactus, Inc. is dedicated to improving lives of our employees and the communities environment. We will continue to strive to improve our products over time and to where they
Slide 23: Appendix
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Slide 24: Company Organizational Structure
Company Organizational Structure Company Profile Organizational Structure(1) Ticker WHD (NYSE) Class A Shares Outstanding(1) 65mm CC Unit Public Class B Shares Outstanding(1) 14mm Holders Investors Total Shares Outstanding(1) 79mm Market Capitalization(2) ~$4.1bn Class B Common Stock Class A Common
Slide 25: FlexSteel Met Cactus' Acquisition Criteria
FlexSteel Met Cactus’ Acquisition Criteria Manufacturer of a Unique Highly Engineered Product Products Sold Directly to End-Users Variable Cost Business With A Strong Margin Profile Modest Capital Requirements Enhance Free Cash Flow Leverages Cactus’ Infrastructure & Customer Base Attractive Growth
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Important Disclosure Regarding Non-GAAP Measures EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP. EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and external users of our consolidated financia
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Important Disclosure Regarding Non-GAAP Measures Segment EBITDA, Adjusted Segment EBITDA and Adjusted Segment EBITDA margin are not measures of net income as determined by GAAP but are supplemental non-GAAP financial measures that are used by management and external users of
Slide 28: Investor Relations Contact
Investor Relations Contact Alan Boyd Director of Corporate Development & Investor Relations 713-904-4669 IR@CactusWHD.com 28