Klx Energy Services Holdings, Inc. · NASDAQ:KLXE
Klx Energy Services — Investor Presentation (May 2024)
31 slides from Klx Energy Services's investor presentation, May 23, 2024
Slide 1: Investor Presentation May 2024
May 2024 1 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements Cautionary Statement on Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. This presentation includes forward- looking statements
Slide 3: Next Level Readiness
3 NEXT LEVEL READINESS KLX Energy Services is a leading U.S. onshore provider of value-added, technologically-differentiated oilfield services focused on completion, intervention and production activities for the most technically demanding wells. NASDAQ KLXE Headquartered in Houston, TX Employees ~1
Slide 4: Key Investment Highlights
KLX Energy Services 4 Key Investment Highlights Attractive underlying fundamentals drive strong financial performance with conservative capital structure1 Strong footprint in key energy producing basins 2 Differentiated services and market position generate superior profit margins and accelerate fin
Slide 5: Macro, customer consolidation and market outlook
Extended reach laterals greater than three miles becoming more common and KLX is well positioned to participate in and lead this evolution KLX Energy Services 5 Macro Customer Consolidation > $200B of customer consolidation in 2023 Top 20 operators are leading consolidation wave Favorable Mark
Slide 6: Rig Count and Commodity Prices
KLX Energy Services 6 Rig Count and Commodity Prices As of May 17, 2024 Sources: Baker Hughes, Primary Vision, and Bloomberg. Indexed to 100 as of July 1, 2022 0 25 50 75 100 125 150 175 Total Rig Count WTI Natural Gas Frac Fleet Count (26%) (19%) (8%) (54%)
Slide 7: Strategic Focus
7 KLX Energy Services Strategic Focus Provide market leading onsite job execution and safety Drive margin enhancing utilization Focus on pricing and cost structure to drive margins Expand share of wallet with top customers Continue to de-lever through a combination of EBITDA growth, free c
Slide 8: Areas of Operation
Rockies 26% Southwest 40% Northeast/Mid-Con 34% Headquarters Technology Center Southwest Operation Facilities Rockies Operation Facilities Northeast / Mid-Con Operation Facilities AREAS OF OPERATION Revenue contribution as of Q1 2024.
Slide 9: Diversified Product Offering
Drilling Completion KLX Energy Services 9 110 measurement-while-drilling kits Over 400 latest generation mud motors Leading team of Directional Drillers and MWD techs 23 modern, large-diameter Coiled Tubing Units 60+ Wireline Units (split with Production) 120+ Frac Trees and 50 Guardian Isolation To
Slide 10: Diversified & Complementary Product Service Offering
KLX Energy Services 10 Diversified & Complementary Product Service Offering Diversified product service offering positions KLX to capture a larger percentage of customer spending across the lifecycle Refocused product service offering across core geographies to improve scale, utilization and ret
Slide 11: Well construction equipment and proprietary tools
Wide range of well construction equipment spanning a variety of sizes and configurations HPHT float equipment Latch-in plugs and wiper plugs Centralizers 2-stage cement tools and annular casing packers Liner hanger systems Proprietary MWD tool design and packaging Proprietary surface
Slide 12: Continuous Advancement in Research & Development
Top ball and bottom set design with zero presets Tested and qualified up to 10,000psi and 350°F Available in both Saltwater Alloy and Fresh Water Alloy 100% traceability and QA/QC throughout manufacturing 4.5”, 5.5” and 6.0” designs 100% USA designed and manufactured R&D facility in Hou
Slide 13: Strategic fit, people, efficiencies and synergies
Strong management team with proven operational track record and deep M&A experience Retention of key employees Strong Board and corporate governance Premier provider of drilling, completion, production and intervention solutions with a returns-driven strategy Minimal customer overlap with
Slide 14: A Transformed KLX
Performance culture KPI tracking / data-driven decision making Veteran operators Technical expertise Alignment of incentives KLX Energy Services 14 Rigorous maintenance program Minimize downtime Ensure equipment integrity Comprehensive suite of equipment and tool sizes across all PSLs Employees valu
Slide 15: Recent Acquisition Case Study
15 Recent Acquisition Case Study In March 2023, KLX and Greene’s formed a strong partnership based on a common culture focused on safety, execution, customer service and returns. The combined company is a leading provider of wellhead protection, flowback and well testing services. The acquisition of
Slide 16: KLX – The Choice of Top Operators
16 KLX Energy Services KLX – The Choice of Top Operators Revenue driven by top 10 customers in 2023 Significant leverage to the most active operators in the United States ~680 40% Unique customers serviced in 2023 with no one customer accounting for more than 10% of 2023 revenue 90% of 2023 Top 10 C
Slide 17: Steadily Gaining Market Share
Steadily Gaining Market Share US Land Rig Count and KLX Quarterly Revenue per Rig Count Source: Company & Baker Hughes. Note that the Company changed its fiscal year-end from January 31 to December 31, effective beginning with the year ended December 31, 2021. As such, quarterly data for Q1’21 inclu
Slide 18: Recent History of Strong Profitability & Free Cash Flow
KLX Energy Services 18 Recent History of Strong Profitability & Free Cash Flow Rapidly improving financial results as KLX has grown back into the capital structure Q1 2024 Revenue and Adj EBITDA of $175MM and $12MM, respectively Full year 2023 Revenue and Adj EBITDA of approximately $888MM and
Slide 19: Enhanced Capitalization & Leverage Profile
19 Enhanced Capitalization & Leverage Profile Dollar amounts in millions. As of Q1 2024. Company disclosure. Cash $85M Liquidity $128M Net Debt $200M 2023 Net Leverage Ratio 1.2x LTM Net Leverage Ratio 1.8x Maturity Nov. 2025
Slide 20: Deeply Experienced Leadership Team
KLX Energy Services 20 Deeply Experienced Leadership Team Chris Baker CEO 25+ years of industry experience Co-founded and COO of QES Managing Director – Oilfield Services for Quintana Energy Partners Citigroup Global Markets Inc. BS in Mechanical Engineering from Louisiana State University MBA from
Slide 21: KLX And Small Cap Peers Valued at a Discount
KLX And Small Cap Peers Continue to be Valued at a Discount Relative to Larger Peers Source: Capital IQ as of May 17, 2024 Small Cap Peers is the mean of PHX, OIS, STEP, SOI, NINE, CET, RNGR, DTI, SND and NCSM. Mid Cap Peers is the mean of ACDC, PDS, SLCA, RES and PUMP. Large Cap Peers is the mean o
Slide 22: Corporate Headquarters and Investor Relations
22 Corporate Headquarters 3040 POST OAK BLVD 15th Floor Houston, TX 77056 Investor Relations ir@klx.com
Slide 23: Appendix
APPENDIX 23
Slide 24: Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA
KLX Energy Services 24 Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA (Loss) *Previously announced quarterly numbers may not sum to the year-end total due to rounding. (1) Quarterly cost of sales includes $2.1 million of lease expense associated with five coiled tubing unit leas
Slide 25: Net Income Margin and Adjusted EBITDA Margin Reconciliations
KLX Energy Services 25 Consolidated Net (Loss) Income Margin and Consolidated Adjusted EBITDA Margin Reconciliations (dollar amounts in millions)
Slide 26: Reconciliation of Segment Operating Income to Adjusted EBITDA
KLX Energy Services 26 Reconciliation of Segment Operating (Loss) Income to Adjusted EBITDA (1) One-time costs are defined in the Reconciliation of Consolidated Net Loss to Adjusted EBITDA (loss) table above. For purposes of segment reconciliation, one-time costs also includes impairment and other c
Slide 27: Segment Operating Income (Loss) Margin Reconciliation
KLX Energy Services 27 Segment Operating Income (Loss) Margin Reconciliation (dollar amounts in millions)
Slide 28: Segment Adjusted EBITDA Margin Reconciliation
KLX Energy Services 28 Segment Adjusted EBITDA Margin Reconciliation (dollar amounts in millions)
Slide 29: Adjusted SG&A Margin Reconciliation
KLX Energy Services 29 Adjusted SG&A Margin Reconciliation (dollar amounts in millions)
Slide 30: Free Cash Flow Reconciliation
KLX Energy Services 30 Free Cash Flow Reconciliation (dollar amounts in millions)
Slide 31: Net Debt and LTM Net Leverage Ratio Reconciliations
KLX Energy Services 31 Net Debt and LTM Net Leverage Ratio Reconciliations (dollar amounts in millions)
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