Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Pritchard Capital Partners Energize 2008 Conference
30 slides from Npk International's conference presentation, Jan 8, 2008
Slide 1: New Leadership, New Focus, New Strategy
New Leadership New Focus New Strategy Newpark Pritchard Capital Partners Energize 2008 Conference January 9, 2008 Newpark Resources, Inc. James E. Braun, Vice President and CFO Exhibit 99.1
Slide 2: Company Profile
Company Profile Specialized provider of: Fluids Systems and Engineering Mat and Integrated Services Environmental Services* Customers: Oil and Gas Industry Key markets: North America North Africa South America *Environmental Services to be divested
Slide 3: Mission & Vision
Mission & Vision New leadership, new focus, new strategy Achieve best-in-class competitive positioning and performance in each business line Position for long-term growth through more disciplined approach to strategic investments Build a strong reputation with investors by delivering consistent perf
Slide 4: New Leadership
New Leadership Paul Howes, President & CEO Jim Braun, VP & CFO Mark Airola, GC & Admin Officer Bruce Smith, President Fluids Systems and Engineering Tom Eisenman, President Excalibar Minerals LLC Sean Mikaelian, President Mat & Integrated Services Sammy Cooper, President Environmental Services
Slide 5: New Focus
New Focus New leadership brought in with industry experience Spent majority of 2006 cleaning house Exited poor return businesses Worked with Board to develop strategic growth plan New strategy rolled out in March 2007 based on the principles of: Growth Focus Discipline
Slide 6: New Strategy
New Strategy Grow Fluids Systems and Engineering Organically / Acquisitions / Domestically / Internationally Expand scope and geographic position in Mat and Integrated Services Reorganized from 5 units to 1 unit; 15% headcount reduction Leverage relationships with existing customers Divest non-core
Slide 7: New Strategy Rationale – Fluids
New Strategy Rationale – Fluids Core business line – 80% of revenues Technologically advanced & unique fluid systems DeepDrill, FlexDrill, DeepDrill II and family of specialized water-based products, has performance applications for off-shore deepwater and shelf, as well as land based drilling Oppor
Slide 8: Fluids Segment Revenues
$215.5 $272.9 $384.2 $481.4 $0 $150 $300 $450 $600 Fluids Segment Revenues New Strategy Rationale – Fluids Strong Revenue Growth
Slide 9: Fluids Strong Margin Growth
New Strategy Rationale – Fluids Strong Margin Growth 5.4% 7.9% 10.6% 13.2% 0% 3% 6% 9% 12% 15% 2006* Fluids Operating Margins * 2006 margins excludes hurricane damage-related business insurance proceeds
Slide 10: New Strategy Rationale – Fluids: Revenue and Operating Margin Growth
New Strategy Rationale – Fluids Revenue Growth Operating Margin Growth *2006 margins exclude $4.3M of hurricane damage-related insurance proceeds 11.8% 12.5% 5% 10% 15% 1st Nine Months 2006* 1st Nine Months 2007 $352.3 $386.4 $200 $225 $250 $275 $300 $325 $350 $375 $400 1st Nine Months 2006 1st Nine
Slide 11: Scope of Operations: North America Stronghold
Harbor Island Port O’ Connor Galveston Venice Port Fourchon Intercoastal City Offices Barite Mills Offshore Docks Metairie Edinburg Baytown Serves major North America basins Approximately 16% share of markets serviced in North America Substantial service facilities network Growing share vis-a-vis ot
Slide 12: Scope of Operations: Expanding Internationally
Initial international market entry through acquisition of Ava, S.p.A. (Italy) Current key markets Mediterranean North Africa Eastern Europe Plans for market expansion Brazil Scope of Operations Expanding Internationally
Slide 13: Excalibar Minerals LLC
Quality processor and supplier of industrial minerals Barite, Barytes Calcium Carbonate Alumina Trihydrate (ATH) Applications Oilfield Industrial Integral to Fluids Systems and Engineering Scope of Operations Excalibar Minerals LLC
Slide 14: New Strategy Rationale – Mats
New Strategy Rationale – Mats Leverage relationship with existing customers Advantage of often being first service provider “on site” Expand product and service offerings in the well site preparation market Expansion and diversification Growth opportunities beyond current Gulf Coast region Maximize
Slide 15: Mat & Integrated Services Segment Revenues
$71.7 $80.8 $92.5 $100.5 $50 $75 $100 $125 Mat & Integrated Services Segment Revenues New Strategy Rationale – Mats
Slide 16: Mats: Aiming to Expand Margins
New Strategy Rationale – Mats Aiming to Expand Margins 0.6% 7.2% 14.4% 15.2% 0% 3% 6% 9% 12% 15% 18% Mat & Integrated Services Operating Margins
Slide 17: Mats: Focusing on Higher Margin Business & Customer Mix
New Strategy Rationale – Mats Revenue Operating Margin Focusing on Higher Margin Business & Customer Mix *2006 includes $19M in low margin mats sales in Canada 15.9% 17.2% 5% 10% 15% 20% 1st Nine Months 2006 1st Nine Months 2007 $82.9 $66.6 $10 $20 $30 $40 $50 $60 $70 $80 $90 1st Nine Months 2006* 1
Slide 18: Improvements in Balance Sheet-Debt
Improvements in Balance Sheet-Debt * Includes $21M of borrowings for acquisition of SEM in Q307 $220.9 $213.3 $195.1 $177.0 $178.2 $150 $175 $200 $225 $250 3rd Qtr 2006 4th Qtr 2006 1st Qtr 2007 2nd Qtr 2007 3rd Qtr 2007*
Slide 19: Capital Structure
Capital Structure $ in millions Sept. New Credit Facility Sept. 2007 Proforma Revolver $ 35.3 $ 85.3 $ 120.6 Term Loan 133.3 (83.3) 50.0 Other 9.6 9.6 Total Debt 178.2 2.0 180.2 Equity 352.8 (2.6) 350.2 Total Capitalization $ 531.0 $ (0.6) $ 530.4 Debt/Capitalization 33.6% 34.0%
Slide 20: Investment Considerations
Investment Considerations New Leadership New management team with industry experience in place New Focus Greater discipline Focusing on improving profitability, returns and free cash flow New Strategy Growing Fluids organically and through acquisitions Growing Mats through additional products, servi
Slide 21: Thank you for your interest!
New Leadership New Focus New Strategy Newpark Thank you for your interest!
Slide 22: Appendix
New Leadership New Focus New Strategy Newpark Appendix
Slide 23: Consolidated Statements of Operations
Financials Newpark Resources, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) Revenues 153,778 $ 147,618 $ 453,024 $ 435,160 $ Cost of revenues 133,756 122,846 393,176 376,028 20,022 24,772
Slide 24: Consolidated Balance Sheets
Financials Newpark Resources, Inc. Consolidated Balance Sheets (In thousands) September 30, 2007 December 31, 2006 (Unaudited) ASSETS Current assets: Cash and cash equivalents 7,412 $ 12,736 $ Accounts receivable, net 142,141 141,790 Inventories 108,319 107,778 Deferred tax asset 20,076 23,001 Prepa
Slide 25: Restated Segment Results
Financials As previously announced, in the third quarter of 2007 Newpark completed the sale of its Batson sawmill facility which had been included in the Mat & Integrated Services segment. In October 2007, Newpark entered into an agreement to sell its U.S. Environmental Services business previously
Slide 26: Statements of Operations Restated for Discontinued Operations 2007
Financials Newpark Resources, Inc. Consolidated Statements of Operations Restated for Discontinued Operations (Unaudited) YTD (In thousands, except per share data) 03/31/07 6/30/07 9/30/07 9/30/07 Revenues 149,264 $ 149,982 $ 153,778 $ 453,024 $ Cost of revenues 128,034 131,386 133,756 393,176 21,23
Slide 27: Statements of Operations Restated for Discontinued Operations 2006
Financials Newpark Resources, Inc. Consolidated Statements of Operations Restated for Discontinued Operations (Unaudited) YTD (In thousands, except per share data) 03/31/06 6/30/06 9/30/06 12/31/06 12/31/06 Revenues 144,541 $ 143,001 $ 147,618 $ 146,748 $ 581,908 $ Cost of revenues 127,540 125,642 1
Slide 28: Paul L. Howes, President & CEO; James E. Braun, VP & CFO
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 29: Bruce C. Smith and Sean D. Mikaelian biographies
Bruce C. Smith, President Fluids Systems and Engineering: Bruce joined Newpark in April as Vice President, International. Since October 2000, he has served as President of its subsidiary Newpark Drilling Fluids, L.P. Prior to joining Newpark, Mr. Smith was the Managing Director of the U.K. operation
Slide 30: 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
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