Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (May 2023)
32 slides from Npk International's investor presentation, May 3, 2023
Slide 1: May 2023 Investor Presentation
May 2023 Investor Presentation Positioned for Sustainable Growth Through the Energy Transition
Slide 2: Notice to Investors: Forward Looking Statements
Notice to Investors 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 other than statements of historical facts are forward-looking statements. Words such as “will,
Slide 3: Agenda
Agenda Introduction End-Market Overview Summary of Key Financial Data 3
Slide 4: Introduction
4 Introduction
Slide 5: Aligning Portfolio to Maximize Value Creation Through Accelerated Growth in Power Infrastructure
Aligning Portfolio to Maximize Value Creation Through Accelerated Growth in Power Infrastructure Markets Disciplined Strategy Aligned with Long-Term Global Megatrends
Slide 6: Company Overview
O&G Exploration & ProductionMidstream Company Overview Newpark Resources, Inc. is a global company supporting energy and infrastructure markets. We built a reputation for innovating and adapting to the changing needs of our customers, delivering sustainable technologies that enable society to prospe
Slide 7: Leader in Energy and Power Infrastructure Solutions
Leader in Energy and Power Infrastructure Solutions INDUSTRIAL SOLUTIONS Power Infrastructure, O&G, Construction and Renewables Leading provider of specialty rental and services, redefining safety & efficiency standards of the temporary worksite access market Unique business model includes integrate
Slide 8: Invest & Grow Segment Approach Supports Growth & Shareholder Return
Invest & Grow Segment Approach Supports Growth & Shareholder Return 8 ApproachTTM ADJ EBITDA**Net Capital Employed* Fl ui ds S ys te m s $74M $29M * Net Capital Employed represents segment net assets excluding cash and debt. ** Adjusted EBITDA is a non-GAAP financial measure. See earnings release an
Slide 9: Key Operational Highlights Aligned with Strategy
79% YoY growth in Adjusted EBITDA* providing strong liquidity 20% YoY TTM revenue growth from power infrastructure and industrial markets Key Opera onal Highlights Aligned with Strategy 9 Disciplined Execu on Delivering Shareholder Value Crea on 20% reduction in balance sheet exposure from more vola
Slide 10: Well Positioned in Substantial Energy Megatrends
Well Positioned in Substantial Energy Megatrends 10 Multi-Trillion Dollar Markets Provide Long-Term Opportunities $14T+ Electrification $1T+ Renewables $12T+ Global Oil & Gas Investment in global electrical grid to enable “electrification of everything” Renewable Generation tie- ins and grid hardeni
Slide 11: Differentiated Model Exploiting Competitive Advantages
Differentiated Model Exploiting Competitive Advantages • Self-funding organic expansion in high-growth, high-returning infrastructure markets • Focused capital light Fluid Systems positioned to generate cash through cycles • Technology, scale, and service drive customer loyalty and productivity • Gl
Slide 12: Expanding EBITDA as we reposition the Company
2019 Q1 2023 Change Expanding EBITDA as we reposition the Company $82M Adjusted EBITDA** $84M Adjusted EBITDA** (Annualized) +2% Increasing EBITDA generation from more stable utilities and industrial end-markets 34% Segment Adj. EBITDA* generated from utilities and industrials 54% Segment Adj. EBITD
Slide 13: End-Market Overview
13 End-Market Overview
Slide 14: Utilities Infrastructure Megatrend Powering Growth
Utilities Infrastructure Megatrend Powering Growth The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) is investing significantly over next decade, including ~ $70B for electric grid and hardened energy infrastructure $300B federal clean energy tax package over next 10 years from Inflati
Slide 15: Industrial Solutions: Specialty Rental and Services Supporting Infrastructure Megatrends
• Strategic investments in technology, scale, and service to drive specialty rental differentiation • Expansion of specialty rental fleet to meet long-term infrastructure build-out • Leverage R&D to launch higher-margin products focused on driving operating efficiency and sustainability • 10%+ CAGR
Slide 16: Global Demand for Oil and Gas Remains Resilient
Global Demand for Oil and Gas Remains Resilient $12T+ Investment in Oil & Gas projected to meet global demand in Sustainable Development Scenario over next 30 years Access to affordable and reliable energy critical for developing economies Geopolitical instability heightens global focus on energy se
Slide 17: Fluids Systems: Agile, Capital-Light Technology & Services
NAM EMEA Other • Global footprint aligned to long-term, strategic markets • Reshaping balance sheet to drive “Capital-Light” model, and reduce return cyclicality • Strong focus on margin expansion through technology, service differentiation, and working capital discipline • FCF generation to support
Slide 18: Simplifying Business and Driving Efficiency
$0 $10 $20 $30 $40 2019 TTM Q1 '23 $0 $4 $8 $12 $16 2019 TTM Q1 '23 INTEREST EXPENSE 6% Average Borrowing Rate on Outstanding Debt • Leveraging asset-based lending to drive reductions in borrowing cost • Primary bank facility matures in May ‘27 Simplifying Business and Driving Efficiency 18 $0 $100
Slide 19: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy 19 Disciplined Approach Balances Growth Investments with Return of Capital Maintain Target Leverage Invest in Growth Return Excess Cash to Investors Organic M&A• Target net leverage range of 0.5x–1.5x • Net leverage*: 0.9x • Total liquidity**: $109M • Maintainin
Slide 20: Sustainability Embedded in Our DNA
Sustainability Embedded in Our DNA Environmental Social Governance 20 2022 Sustainability Report Including SASB & TCFD Disclosures Available on Website Shareholder Approval Rate of Executive Compensation * Reflects internal estimates of impact of DURA-BASE® Composite Matting System. Board Independen
Slide 21: Why Invest in Newpark Resources?
Why Invest in Newpark Resources? Meaningful growth opportunity tied to the energy transition Global presence in large-scale energy markets Proven technologies with economic and ESG benefits Demonstrated ability to adapt and grow Balancing investment in growth markets with return of capital Capital s
Slide 22: Summary of Key Financial Data
22 Summary of Key Financial Data
Slide 23: Business Segment Overview
Business Segment Overview Industrial Solutions Fluids Systems 23 $0 $20 $40 $60 $80 $100 $0 $50 $100 $150 $200 $250 2021 2022 TTM Q1 '23 AD JU ST ED E BI TD A (M IL LI O N S) RE VE N U E (M IL LI O N S) Revenues Adjusted EBITDA* ($20) $0 $20 $40 $60 $80 $100 $0 $125 $250 $375 $500 $625 $750 2021 202
Slide 24: Consolidated Statements of Operations (unaudited)
Consolidated Statements of Operations (unaudited) 24 (In thousands, except per share data) March 31, 2023 December 31, 2022 March 31, 2022 Revenues 200,030$ 225,159$ 176,438$ Cost of revenues 164,738 186,980 150,988 Selling, general and administrative expenses 25,410 24,648 24,433 Other operating (i
Slide 25: Operating Segment Results (unaudited)
Operating Segment Results (unaudited) 25 (In thousands) March 31, 2023 December 31, 2022 March 31, 2022 Revenues Fluids Systems 144,174$ 167,705$ 141,014$ Industrial Solutions 55,856 57,454 35,424 Industrial Blending - - - Total revenues 200,030$ 225,159$ 176,438$ Operating income (loss) Fluids Syst
Slide 26: Impact of 2022 Divestitures (unaudited)
Impact of 2022 Divestitures (unaudited) 26 (In thousands) March 31, 2023 December 31, 2022 March 31, 2022 Revenues Excalibar -$ 11,922$ 14,346$ Gulf of Mexico - 8,011 2,694 Total revenues -$ 19,933$ 17,040$ Operating income (loss) Excalibar (77)$ 1,127$ 833$ Gulf of Mexico (2,311) (4,023) (2,617) To
Slide 27: Consolidated Balance Sheets (unaudited)
Consolidated Balance Sheets (unaudited) 27 (In thousands, except share data) March 31, 2023 December 31, 2022 ASSETS Cash and cash equivalents 23,618$ 23,182$ Receivables, net 212,694 242,247 Inventories 149,989 149,571 Prepaid expenses and other current assets 9,962 10,966 Total current assets 396,
Slide 28: Consolidated Statements of Cash Flows (unaudited)
Consolidated Statements of Cash Flows (unaudited) 28 (In thousands) 2023 2022 Cash flows from operating activities: Net income 5,620$ 2,521$ Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 7,895 10,452 Stock-based compensation expense 1,738 1,468
Slide 29: Non-GAAP Financial Measures (unaudited) Consolidated
Non-GAAP Financial Measures (unaudited) 29 Consolidated (In thousands) 2019 2020 2021 2022 2022 2023 2023 Net income (loss) (GAAP) (12,946)$ (80,696)$ (25,526)$ (20,834)$ 2,521$ 5,620$ (17,735)$ Interest expense, net 14,369 10,986 8,805 7,040 1,206 2,089 7,923 Provision (benefit) for income taxes 9,
Slide 30: Non-GAAP Financial Measures (unaudited) Fluids Systems
30 Non-GAAP Financial Measures (unaudited) Fluids Systems (In thousands) 2019 2020 2021 2022 2022 2023 2023 Revenues 620,317$ 354,608$ 420,789$ 622,601$ 141,014$ 144,174$ 625,761$ Operating income (loss) (GAAP) 3,814$ (66,403)$ (19,012)$ (15,566)$ 3,374$ 3,466$ (15,474)$ Depreciation and amortizatio
Slide 31: Non-GAAP Financial Measures: Free Cash Flow
Non-GAAP Financial Measures (unaudited) 31 Consolidated (In thousands) 2019 2020 2021 2022 2022 2023 Net cash provided by (used in) operating activities (GAAP) 72,286$ 55,791$ (3,013)$ (25,021)$ 2,790$ 29,444$ Capital expenditures (44,806) (15,794) (21,793) (28,273) (7,621) (6,972) Proceeds from sal
Slide 32: Non-GAAP Financial Measures: Debt and Capital
Non-GAAP Financial Measures (unaudited) 32 Consolidated (In thousands) 2018 2019 2020 2021 2022 2023 Current debt 2,522$ 6,335$ 67,472$ 19,210$ 22,438$ 23,158$ Long-term debt, less current portion 159,225 153,538 19,690 95,593 91,677 78,041 Total Debt 161,747 159,873 87,162 114,803 114,115 101,199 T