Profrac Holding Corp. · NASDAQ:ACDC
Profrac — Investor Presentation (April 2023)
31 slides from Profrac's investor presentation, Apr 11, 2023
Slide 1: ProFrac Holdings Investor Presentation April 2023
ProFrac Holdings Investor Presentation April 2023 www.PFHoldingsCorp.com April 2023
Slide 2: Cautionary Statements
Cautionary Statements Forward-Looking Statements Certain statements in this presentation may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. In some cases, the reader can identify forward-looking s
Slide 3: Snapshot of ProFrac
Snapshot of ProFrac $2.1B Market Cap (4/6/23) $3.4B Pro Forma TEV (4/6/23)(1) $1.7B Illustrative Annual Run-Rate Adjusted EBITDA(2)(3) 25 NextGen Fleets (Q1 2023)(4) $1.1B Q4 2022A Annualized Adjusted EBITDA (3)(5) 40.7 Avg. Active Fleets (Q1 2023)(4) Pro forma for recently closed Performance acquis
Slide 4: The Premier Growth-Oriented, Vertically-Integrated Energy Services Company
The Premier Growth-Oriented, Vertically-Integrated Energy Services Company Our Products, Services and Capabilities: Pressure Pumping Proppant Manufacturing Investments & Technology 40.7 active frac fleets Leading portfolio of next-generation (Tier IV DGB and Electric) frac fleets Operations in major
Slide 5: Attractively Positioned with Diversification Across Customer Base and Basin
Attractively Positioned with Diversification Across Customer Base and Basin Minimal long-term frac contracts enables ProFrac to position its resources to work for the most economic customers & in most active areas Add pie charts from other page here. Revise text on left. ACDC Totals March 2023 (1) (
Slide 6: 2022 Was a Banner Year for ProFrac
2022 Was a Banner Year for ProFrac Revenue: $2.4 billion Adj. EBITDA: $835.5 million(2) Adj. EBITDA / Fleet: $27.9 million(2) Adj. EBITDA Margin: 35.0%(2) Active Fleets: 29.9 Sand Sold (tons): 4.1 million Year-Over-Year Growth Revenue: 216% Adj. EBITDA: 520% Adj. EBITDA / Fleet: 190% Adj. EBITDA Mar
Slide 7: ProFrac's Performance, Technology and Execution are Rewarded by Our Customers
ProFrac’s Performance, Technology and Execution are Rewarded by Our Customers Best-in-Class Fleet Product Integration Proven Track Record Modern, fuel-efficient fleet Industry leading portfolio of Tier 4 dual-fuel and electric fleets offering significant fuel-cost savings Standardized equipment, des
Slide 8: Integrated Services Model Aggregates Existing Customer Spend
Integrated Services Model Aggregates Existing Customer Spend Completion Services Sand and Chemicals Logistics Efficient and high-spec equipment allows for premium horsepower pricing relative to its competition Ensures quality and availability of critical inputs while offering additional value add to
Slide 9: Significant Incremental Earnings Potential in ProFrac Fully-Integrated Fleets
Significant Incremental Earnings Potential in ProFrac Fully-Integrated Fleets This is a non-GAAP financial measure. Please refer to the appendix to this Presentation for a reconciliation to the nearest GAAP measure and the information under “Non-GAAP Financial Measures” at the beginning of this Pres
Slide 10: Key Elements of ProFrac's Proppant Vertical Integration Strategy
Key Elements of ProFrac’s Proppant Vertical Integration Strategy Acquire Best-in-Class Assets Optimize Plant Efficiency and Logistics Capture Logistics Margin Strategic geographic positioning High reserve volumes with low-cost production Ability to produce high-quality, in-demand product Fit-for-pur
Slide 11: Materials Pull-Through Is Massive Opportunity
Materials Pull-Through Is Massive Opportunity ProFrac supplied only 30% of the sand pumped by its fleets in 2022 and 38% in March 2023; increased penetration of materials integration should drive expansion in profitability and continued relative outperformance ProFrac Sand Supplied vs. Total Sand Pu
Slide 12: Internal Proppant Supply Enhances Margin Capture Opportunity
Internal Proppant Supply Enhances Margin Capture Opportunity Illustrative Potential Margin Capture Opportunity by Basin ($/ton)(1) As of Q1 2023 Permian Eagle Ford(2) Haynesville(2) Total ProFrac(2) Nameplate Capacity (MMTPY) 8.3 3.9 10.4 22.6 Active Fleet Count 13 9 8 30 Annual Consumption at 500 M
Slide 13: Benefits of Internal Manufacturing Capabilities
Benefits of Internal Manufacturing Capabilities Equipment Assembly Internal manufacturing capabilities to build new fleets and upgrade legacy fleets to next-generation technology More cost efficient than purchasing from third-party manufacturers In-House-Refurbishment Reduces capital spend Cisco fac
Slide 14: Future Demand for Fuel-Efficient Fleets Is Significant
Future Demand for Fuel-Efficient Fleets Is Significant U.S. Pressure Pumping Fleet Composition(1) Source: Rystad Energy as of March 2023. Figures may not sum to 100% due to rounding. Source: ProFrac internal estimates for fuel consumption and displacement statistics. Source: Rystad Energy as of Marc
Slide 15: Haynesville Will Be a Significant Source of Future Opportunity
Haynesville Will Be a Significant Source of Future Opportunity Baseload frac service provider – ~25% historical market share in the Haynesville should benefit from commercial synergies from Performance Proppants acquisition Large portfolio of premium, natural gas-powered fleets – we can offer superi
Slide 16: ProFrac is Creating Value Through M&A
ProFrac is Creating Value Through M&A Acquired Lamesa for ~$38 million in 4Q 2021(1) 6,700 acre developed into one of two mines located in the Midland Basin Acquired FTSI for ~$408 million in March 2022 14 active frac fleets and manufacturing capabilities Completed Initial Public Offering raising $3
Slide 17: M&A Strategy has Enhanced Capabilities and Resiliency
Repricing of underperforming fleets and continuing to consolidate the market Activated conventional diesel horsepower and replaced with modern, next-generation equipment Retired three fleets in early Q1 2023 from prior acquisitions Solidified and expanded geographic reach and positioning at the low-
Slide 18: ProFrac is Purpose Built to Withstand Cyclicality
ProFrac is Purpose Built to Withstand Cyclicality Demand Utilization Excess Marketed Supply Historical & Projected U.S. Frac Marketed Supply and Demand(1) (MM HHP) (% Fleet Utilization) (1) Source: Rystad Energy as of March 2023. Metrics are reflective of total U.S. market. Total marketed supply equ
Slide 19: Significant Scale with Demonstrated Profitability Through the Cycle
Significant Scale with Demonstrated Profitability Through the Cycle Positive Adjusted EBITDA throughout the cycle and COVID driven by peer-leading efficiency Significant growth post COVID driven through acquisitions, market improvements and pricing improvements ProFrac Quarterly Adjusted EBITDA ($MM
Slide 20: Disciplined Capex Deployment Strategy and Lower Maintenance Costs Relative to Peers
Disciplined Capex Deployment Strategy and Lower Maintenance Costs Relative to Peers Source: ProFrac provided information. Excluding acquisition capex (i.e. financing acquisitions). $356.2MM capital spend as in FY 2022. We believe we have the most cost advantaged construction costs in the industry gi
Slide 21: ProFrac's Fleet Profitability and Proppant Capacity Measure Favorably Against Public Peers
ProFrac’s Fleet Profitability and Proppant Capacity Measure Favorably Against Public Peers(1) Public Proppant Provider Nameplate Capacity & EV / 2023P Adjusted EBITDA Benchmarking(3)(4) Public Pressure Pumpers Adjusted EBITDA per Fleet Benchmarking(2)(3) ($ in millions) (MMTPY) Source: SEC filings,
Slide 22: Considerable Upside in ProFrac's Current Valuation
Source: SEC filings, Rystad as of December 2022 and Capital IQ as of April 6, 2023. Liberty Energy and NexTier Oilfield Solutions total fleets as of Q1 2023 per Rystad. Includes 5 mmtpy of planned annual production capacity expansion expected to be completed by year end 2023. Considerable Upside in
Slide 23: ProFrac Investment Highlights
ProFrac Investment Highlights Add something about Lowest All in Cost for the Customer – put that into #5 Diversification across customers (blue chip and high growth) for #5 Lex: Need to make these 5 – 7 words on one line Lex says maybe no boxes if it looks beter Significant scale and through the cyc
Slide 24: Appendix
Appendix
Slide 25: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA (1) During the fourth quarter of 2022, the Company identified and corrected immaterial errors related to the recognition and classification of certain repairs and maintenance expenses in the first three quarters of 2022.
Slide 26: Illustrative Annual Run-Rate Adjusted EBITDA Reconciliation
Illustrative Annual Run-Rate Adjusted EBITDA Reconciliation Source: Company disclosures and management projections as of April 2023. Reflects sum of pressure pumping and manufacturing segments Q4 2022 Adjusted EBITDA annualized and divided by 31.3 active legacy fleets. Fleets retired from previously
Slide 27: Overview of ProFrac Current Valuation and Benefits of Recent Up-C Structure Elimination
Overview of ProFrac Current Valuation and Benefits of Recent Up-C Structure Elimination ProFrac Total Enterprise Value(1) Benefits of Up-C Structure Elimination Further aligns Wilks family with common shareholders, differentiating the Company from peers that are retaining dual share classes and coul
Slide 28: Overview of Balance Sheet
Source: ProFrac provided information. Note: Metrics may not sum due to rounding. (1) Gross debt excludes Flotek convertible notes and cash excludes Flotek cash & equivalents. Term Loan Borrowings shown pro forma for January and February 2023 delayed draw loan borrowings. ABL credit facility balance
Slide 29: Summary of Terms – Term Loan
Summary of Terms – Term Loan Borrower: ProFrac Holdings II, LLC (the “Borrower”) Holdings: ProFrac Holdings, LLC Facility: $839 million Term Loan B Guarantors: All restricted subsidiaries that are named as guarantors under the Term Loan Credit Agreement Collateral: First Lien on substantially all as
Slide 30: Summary of Terms – Existing ABL Facility
Summary of Terms – Existing ABL Facility Borrower: ProFrac Holdings II, LLC (the “Borrower”) Holdings: ProFrac Holdings, LLC Facility: $400 million ABL Revolving Credit Facility Borrowing Base(1): The sum of: 85% of the book value of all eligible accounts receivable (other than eligible unbilled acc
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