Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Barclays CEO Energy-Power Conference 2018
24 slides from Cactus, Inc. Class A Common Stock's conference presentation, Sep 4, 2018
Slide 1: Barclays CEO Energy-Power Conference 2018
Barclays CEO Energy-Power Conference 2018 Cactus, Inc. (NYSE: WHD) September 5-6, 2018
Slide 2: Important Disclosures
Important Disclosures Non-GAAP Measures This presentation includes references to EBITDA, Adjusted EBITDA and EBIT, which are not measures calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of EBITDA, Adjusted EBITDA and E
Slide 3: Executive Team
Executive Team from the University of Texas at Austin in 2010 with a Master of Business Administration. 3 Mr. Tadlock has served as Vice President and Chief Administrative Officer since March 2018 and as VP of Corporate Services from June 2017 to March 2018. He has worked with Cactus LLC since its
Slide 4: Investment Highlights
Investment Highlights Delivering Significant Growth Across All Businesses In 2018 And Poised For Growth In 2019 4 Highly Experienced Management and Operating 5Team with Strong Industry Relationships 4Substantial Cash Flow Generation 3Dynamic Manufacturing Capabilities Innovative Products with Exposu
Slide 5: Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well
Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well Designed for pad drilling and intense completion environments Principal products: SafeDrill™ wellheads, frac stacks, zipper manifolds, and production trees Time savings can exceed 30 hours of rig time per well C
Slide 6: Company Snapshot
Company Snapshot Revenue ($ in millions) LTM Q2 2018 Revenue by Type $454.5 $138.5 $221.4 $155.0 2014 2015 2016 2017 LTM Q2 2018 Adjusted EBITDA (1) ($ in millions) 37.1% 33.4% $167.0 (1) $55.1 $63.1 $32.2 *Product Revenue Includes Drilling and Production Consumables 2014 2015 2016 2017 LTM Q2 2018
Slide 7: Market Leader with Strong Growth
Market Leader with Strong Growth Historical U.S. Onshore Market Share(1) Initiatives to Drive Growth Cactus Rigs Followed Market Share(1) Continuing new product development, innovation and investment including: SafeDrill™ 4T wellhead system for additional casing strings Cactus Completions 2.0 –
Slide 8: Differentiated Business Model with Exposure to Favorable Industry Dynamics
Differentiated Business Model with Exposure to Favorable Industry Dynamics Attractive Underlying Fundamentals Complement Strong Industry Position 8 More favorable Less favorable Cactus Oilfield Equipment Pressure Pumping Proppant & Logistics Land Drilling Offshore Services Differentiated Offerings M
Slide 9: Increasing Well Counts Drive Our Product Business
Increasing Well Counts Drive Our Product Business Total U.S. Onshore Wells Drilled Bakken Powder River Basin 24,679 22,051 Marcellus Utica DJ / Niobrara SCOOP / STACK Barnett Permian Haynesville Gulf Coast Eagle Ford 2016A 2017A 2018E Source: Spears and Associates June Report. Average Active U.S. On
Slide 10: Technically Advanced Pad Drilling Wellhead Systems
Technically Advanced Pad Drilling Wellhead Systems SafeDrillTM Advantages Conventional Wellhead Safety Reduced leak paths due to elimination of lock screws Time Savings Eliminates BOP Nipple up & Nipple down No waiting on cement No “hot work” required to cut casing with torch Quick connect BOP
Slide 11: Increasing Completions Intensity Drives Our Rental Business
Increasing Completions Intensity Rental Business Drives Our Largest growth opportunity for Cactus Priced on per diem basis Market share currently less than 10%(1) In the aggregate, less than 50% share of frac rentals for top 10 rental customers in Q1 and Q2 2018(1) Expanded capacity in Q1 an
Slide 12: Cactus Completions Equipment Advantage
Cactus Completions Equipment Advantage SB Series Frac Valves Designs, manufactures, and rents a range of highly engineered and internally-developed products ▪ Built-for-purpose frac valve ▪ Designed for high-intensity frac applications ▪ Redundant sealing at pressure exposure Reliable equipment prov
Slide 13: A Dynamic Manufacturing Advantage
A Dynamic Manufacturing Advantage; Responsive, Highly Scalable and Lower Cost Responsive manufacturing in the U.S. supplemented by high volume production in China Bossier City Facility Suzhou Facility Industry Leading Product Quality (API 6A / ISO 9001) Highly Engineered Products Cactus Employees
Slide 14: Highly Experienced and Well Incentivized Team with Strong Industry Relationships
Highly Experienced and Well Incentivized Team with Strong Industry Relationships ▪ ▪ ▪ Management team is well incentivized as it owns greater than 30% of the business Track record of building and successfully monetizing similar businesses Strength of leadership is attested by management and operati
Slide 15: Returns & Margins Have Outperformed Peers
Returns & Margins Have Last Reported EBITDA Margin (%) Outperformed Peers (1) 40.0% 30.0% 20.0% 10.0% ROCE(2) (2015 – 1H 2018) (%) 0.0% (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Source: Company filings and Factset. Note: EBITDA Margins and ROCE for WHD, DRQ, FET, FTI, NCSM, NOV, OIS, SBO, and Weir as of
Slide 16: Continued to Execute on Our Plan
Continued to Execute on Our Plan Quarter over Quarter Performance Sequential Quarter Performance Q2 YTD 2018 Continued to Build on the Success of 2017 Revenue ($ in millions) U.S. onshore rigs followed(2) increased by 12% from December 2017 to June 2018 $138.5 $138.5 Accelerated investment in larg
Slide 17: Clean Balance Sheet & Low Capital Intensity
Clean Balance Sheet & Low Capital Intensity Strong balance sheet with track record of cash flow generation Adjusted EBITDA(1) – Net Capital Expenditures(2) ($ in millions) $120.8 2015 2016 2017 LTM Q2 2018 Net Capital Expenditures(2) ($ in millions) $46.1 2015 2016 2017 LTM Q2 2018 Source: Company f
Slide 18: Strong 2018 Results Expected; Preparing for 2019 Growth
Strong 2018 Results Expected; Preparing for 2019 Growth Current Performance Continued strong revenue performance across all business lines with sustained margin profile New frac capacity remains in high demand Robust activity levels across all service centers Outlook Customer profile and geo
Slide 19: Appendix
G@ cactus Appendix
Slide 20: Building a Leading Equipment Company
Building a Leading Equipment Company Management team has built the foundation of this company over four decades with a proven track record of success. GE Oil and Gas Company (“ICC”) become President respectively, of (2018) 1959 1975 1980 1985 1990 1995 2000 2005 2010 2018 Bender found with 18 key (2
Slide 21: Quarterly Financial Performance
Quarterly Financial Performance Adj. EBITDA(1) ($ in millions) & Adj. EBITDA(1) as % of Revenue Adjusted EBITDA(1) – Net Capital Expenditures(2) ($ in millions) Total Revenue ($ in millions) Sequential Quarters $138.5 $55.1 $39.5 Total ReTvoetnaul e Q1 2018 Q2 2018 Q1 2018 Q2 2018 Q1 2018 Q2 2018 Qu
Slide 22: Annual Financial Performance
Annual Financial Performance Total Revenue ($ in millions) Adjusted EBITDA(1) ($ in millions) $454.5 $167.0 2014 2015 2016 2017 LTM Q2 2018 2014 2015 2016 2017 LTM Q2 2018 Adj. EBITDA(2) – Net Capital Expenditures(2) ($ in millions) Adjusted EBITDA(1) as % of Revenue $120.8 36.7% 34.7% 2014 2015 201
Slide 23: Cactus Equipment Positioned on a 4-Well Pad
Cactus Equipment Positioned on a 4-Well Pad Product Sold Product Sold Equipment Rented Equipment Rented Services Provided ▪ Wellheads are required by each well over production life One of the first pieces of equipment to be installed Cactus wellheads installed below surface ▪ Frac stacks are connect
Slide 24: Investor Relations Contact
Investor Relations Contact John Fitzgerald Director of Corporate Development Investor Relations 713-904-4655 IR@CactusWHD.com & 25