Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (November 2014)
27 slides from Npk International's investor presentation, Nov 12, 2014
Slide 1: Newpark Resources Presentation
Newpark Resources Presentation November 2014 NYSE: NR
Slide 2: Forward Looking Statements
NEWPARK ~ 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. Allstatements that address expectations or projections about t
Slide 3: Consolidated Revenues
Consolidated Revenues $1,400 z i is weno [Wh Fist Nine Months got ons 3984 $1,042 ruil Year "2 $1,000 ry $667 g $600 = $400 $200 $0 + 2010 2011 2014 RevenuebySegment* OperatingIncome by Segment* 13% 40% 87% 60% I Fluids systems 2012 2013 [i Mats and integrated Services *Firstnine months 2014, exclud
Slide 4: Global Presence
GLOBAL PRESENCE 2014 Revenue by Region - $812 million Gicanada EMEA (latinAmerica IAPAC MIU.S.
Slide 5: Strategic Drivers — Technology
Vi NEWPARK STRATEGIC DRIVERS — TECHNOLOGY > Driving to be the recognized technology leader in each of our business units > Fluids Systems > Our Evolution” family of high-performance water-based systems introduced in 2010 > New worldwide technology center opened in June 2013 > Mats & Integrated Servi
Slide 6: Strategic Drivers — International Expansion
NEWPARK STRATEGIC DRIVERS — INTERNATIONAL EXPANSION > International expansion is key to our strategy > Stability of revenue; longer term contracts > Mostly lOC’s and NOC’s >Fewer Competitors > Key contract start-ups in 2014: > Kuwait Oil Company > Black Sea contract with a Super Major > Cairn in Ind
Slide 7: Strategic Drivers — Customer Support
NEWPARK STRATEGIC DRIVERS — CUSTOMER SUPPORT > Focused on backing our leading technology with superior customer support > Advanced training programs for fluid technicians continue to enhance product and service knowledge > Strengthens customer relationships > Consistently recognized by EnergyPoint R
Slide 8: Total Segment Revenues (Fluids Systems)
Total Segment Revenues (0 ist ine months $799 $926 rut vear $598 $409 | 2009 ©2010 *Based on company data 2011 $862 (2012 2013 2014 > Largest independent drilling fluids provider > 3° largest drilling fluids company worldwide* > Leading the industry in the development of new fluids technology > Expa
Slide 9: North America Fluids Market Share
ee Arn. ar Ei = 3 é Progress: 2009-2010 2014. 2012 20132014 > Serves most North American Market Share % by Region (First Nine Months 2014)(®) basins 2% seg > Approximately 13%") share of total U.S. market in 2014 > First half 2014 revenue negatively impacted by two key customers and exit of completi
Slide 10: Core Markets (EMEA)
> Core Markets > Algeria, Romania, Italy, Tunisia, Libya > 2014 benefiting from new contracts in the Black Sea, Kuwait and India > Recent contract awards in offshore Libya and Egypt to begin in 2015 EMEA Revenues $160 - MM First Nine Months $140 | Full Year $137 $116 gia. $113 $117 $120 $100 $80 $60
Slide 11: Latin America: 2007 entry in Brazil
> 2007 entry in Brazil helped establish Newpark in Deepwater market > Focus on proprietary products such as DeepDrill°, water-based technology > Selectively reducing exposure to Petrobras while preserving ability to pursue IOC opportunities longer-term Latin America Revenues $120 (0) First nine Mont
Slide 12: Asia Pacific: 2011 acquisition
> 2011 acquisition provided entry in the APAC region > Looking to further penetrate market with Evolution System > Activity levels soft in 2014, expecting modest recovery in 2015 Santos TRGOW y Asia adie Revenues Nobama sone v yd Fst nine months $26 rater Dr “earch , a contact [ origin 2011" 2013 *B
Slide 13: Evolution system performance
> Evolution system continues to demonstrate superior drilling performance > Patent covering Evolution System issued in January 2014 > Premium margin compared to traditional fluid systems > Investing in new chemical blend plant and distribution warehouse for Evolution and other proprietary products 1
Slide 14: Gulf of Mexico expansion
Foundation established in Brazil > Recently expanded into Black Sea Looking to leverage our experience globally, starting in Gulf of Mexico > Approximately $800M drilling fluids market* > Expected growth over the next 3-5 years > Limited presence historically Investing $30M in infrastructure in Four
Slide 15: Composite matting leader
> Leading provider in composite matting products > Reduces operator’s costs and improves environmental protection during drilling and completion phase > Patented technology has elevated barriers to entry > Seeking to accelerate growth by expanding into new markets > Manufacturing expansion coming on
Slide 16: Mats revenues and rental expansion
> Revenues include rentals and sale of DURA-BASE composite mats > Mat sales targeted to international E&P customers and domestic customers outside of the oil and gas industry > Manufacturing capacity limited until expansion completed > Allocation for mat sales has been limited by strong demand in re
Slide 17: DURA-BASE Spill Containment System
Vi NEWPARK —— DURA-BASE SPILL CONTAINMENT SYSTEM > Enhancement of the DURA-BASE technology introduces sealing technology to contain spills on the mat surface > Applications include drilling and completions phase > Formal launch in November 2014 v7
Slide 18: Improvements in EBITDA and share repurchases
> Recent improvements in EBITDA —_ 14% margin driven by ongoing efforts hee n% & . = ss00 sae i to improve sales and product “3 $600 ma mix 2 6% EF on m & @& $200 2% aes $0 | 0% > uti izing share repurchase 20a: 20e: ante 2013 “201k programs to reduce outstanding *Reflects reported operating income
Slide 19: Differentiating through technology and operational efficiency
> Differentiating through technology and driving operational efficiency > Evolution family of high-performance water based fluid systems > DURA-BASE composite mat systems > Investing in future growth > Fluids deepwater market penetration > Mats manufacturing expansion > Expanding global footprint >
Slide 20: Appendix
APPENDIX
Slide 21: Consolidated Statements of Income
(Unaudited) ‘Three Months Ended ‘Nine Months Ended September30, June 30, September 30, September 30, September 30, (Gn thousands, except per share data) 2014 2014 2013, 2014 2013, Revenues S 2696 S$ T2466 S$ RID SINS WHA Costofrevenves 28.661 21471 219.964 6992 654300 Seling, general and administrat
Slide 22: Segment revenues and operating income
(Unaudited) Three Months Ended September 30, ‘June 30, September 30, (In thousands) 2014 2014 2013 Revenues Fluids systems $ 281,234 241,386 $ 233,020 Mats and integrated services 45,730 31,080 35,112 Total revenues $296,964 272466 $268,132 Operating income (loss) Fluids systems 8 27,756 27571 $ 17,
Slide 23: Consolidated Balance Sheets
Gaausied) September30, December 31, a thousands, axceot share data aos 2013 ASSETS ‘Cashand cash equivabes sso Recehablet ast 265528 Inventories 180880 Defrag tnassets nz Preps expenses and ofhercuant assets ups Assets ofciscomtiued opemtions 13105 ‘Toraleurantassets ase0 Proper, plat and squipment,
Slide 24: Cash Flow Statement
‘Ga thousands) ‘Cash flows from operating actiiti Netincome 8 78.882 “Adjustments to meoncile net income to-net cash provided by operations: Depreciation and amortization Stock-based compensation expense Provision for daferrad income tare Net provision for doubtful accounts Gain on sale ofa business
Slide 25: Management team
Paul Howes Gregg Piontek Mark Airola Bruce Smith Jeff Juergens President & CEO VP & CFO SVP, GC & Admin Officer President Fluids Systems President Mats & Integrated Services 25
Slide 26: Executive 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 and plastics manufactu
Slide 27: Executive biographies (continued)
Bruce C. Smith, Executive VP and President Fluids Systems: Bruce joined Newpark in April 1998 as Vice President, International. Since October 2000, he has served as President of its subsidiary Newpark Drilling Fluids, LP. Prior to joining Newpark, Mr. Smith was the Managing Director of the U.K. oper
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