Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (September 2014)
27 slides from Npk International's investor presentation, Sep 19, 2014
Slide 1: Newpark Resources Presentation September 2014
Newpark Resources Presentation September 2014 NYSE: NR
Slide 2: Forward Looking Statements
NEWPARK ~ 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. Allstatements that address expectations or projections about t
Slide 3: First Half 2014 Revenue - $515 million
First Half 2014 Revenue - $515 million 12% I Fluids Systems BB Mats and Integrated Services First Half 2014 Segment Operating Income - $70 million 38%, 62% Excludes expenses of Corporate Office > Operating Segments: > Fluids Systems > Mats and Integrated Services Customers: > Oil and Gas Industry Ke
Slide 4: Global Presence
GLOBAL PRESENCE First Half 2014 Revenue by Region Canada EMEA. OlatinAmerica GAPAC U.S.
Slide 5: Strategic Drivers — Technology
Vi NEWPARK STRATEGIC DRIVERS — TECHNOLOGY > Driving to be the recognized technology leader in each of our business units > Fluids Systems > Our Evolution” family of high-performance water-based systems introduced in 2010 > New worldwide technology center opened in June 2013 > Mats & Integrated Servi
Slide 6: International expansion is a key element of our strategy
> International expansion is a key element of our strategy > Stability of revenue > Longer term contracts > Mostly IOC’s and NOC’s > Fewer Competitors > Key Contract Awards starting in 2014: > Kuwait Oil Company, multi-year contract > Black Sea deepwater contract witha Super Major > Cairn, multiyear
Slide 7: Strategic Drivers — Customer Support
NEWPARK STRATEGIC DRIVERS — CUSTOMER SUPPORT > Focused on backing our leading technology with superior customer support > Over 600 fluids technicians customize and deliver our technology worldwide > Advanced training programs for fluid technicians continue to enhance product and service knowledge >
Slide 8: 2012 Worldwide Drilling and Completions Fluids Market
2012 Worldwide Drilling and Completions Fluids Market > 8% share of combined drilling $11 billion market size . . and completion fluids market; lm Newpark Resources 8.2% significantly higher share in mBaker Hughes 10.4% drilling fluids market = Halliburton Corp. 23.9% > 4* largest drilling fluids pr
Slide 9: North American Revenues
North American Revenues $615 $654 Revenue ($ milli 2009 © 2010S 2011S 2012S 2013S 2014 Market Share % eo 1 Source: Company estimates & & SS SS $ we Oo PF gS ExenMobil ELD mas _ ie Progress: > Serves most North American basins > Approximately 13% share of total U.S. market in the first half 2014 > Y/
Slide 10: EMEA Revenues: Core and Near-Term Growth Markets
> Core Markets > Algeria, Romania, Italy, Tunisia, Libya > Near-Term Growth Markets > India, Kuwait, Georgia, Hungary > 2014 benefiting from recent contract awards in Black Sea, Kuwait and India EMEA Revenues seo $137 (UU riest ate $140 gizo | $46 gaan gata $427 Bh cut veor $100 $80 $60 $40 $20 $0 R
Slide 11: Latin America Revenues
> 2007 entry in Brazil helped establish Newpark in Deepwater market > Focus on proprietary products such as DeepDrill°, water-based technology > Pursuing growth with IOC’s while selectively reducing work with Petrobras Latin America Revenues $120 $100 $80 $60 Revenues($ millions) $40 $20 $0 2009 201
Slide 12: Asia Pacific Revenues
> 2011 acquisition provided entry in the APAC region > Looking to further penetrate market with Evolution System Asia Pacific Revenues gag Fest TE cutveor Revenues (§ gs & we 20's 20 sas s10 4 so 2011* 2012 *Business acquired in April 2011 2014 2013 2 waco Twa Cin . 4 , DriJ|search contact e) origin
Slide 13: Evolution system continues to demonstrate superior drilling performance
> Evolution system continues to demonstrate superior drilling performance > Higher lubricity > Environmentally friendly > Reduced circulating temperatures > Increased ROP > Patent covering Evolution System issued in January 2014 > Market share expanding in both domesticand international markets > In
Slide 14: Growing Our Deepwater Presence
NEWPARK GROWING OUR DEEPWATER PRESENCE > Foundation established in Brazil > Investing in Gulf of Mexico infrastructure to expand presence 2 | 57 | > Approximately North America $30m in capital 45 | Middle Fast z approved to-date Africa 2 | for facility upgrades | 67 | Paco and to expand South Americ
Slide 15: Mats and Integrated Services Revenues
> New environmental applications drove Total Segment Revenues growth in recent years > Use of DURA-BASE composite mats to sat First Half $1 $110 $116 Full Year minimize adverse impacts of land drilling i S100 . & $0 $69 > Revenues include DURA-BASE rentals and |, sale of composite mats H ‘i é > Rent
Slide 16: Building Upon the DURA-BASE Technology Driver
BUILDING UPON THE DURA-BASE TECHNOLOGY DRIVER > One of the most durable large scale composite mats in the world > Size: 8 ft X 14 ft, Weighs: approximately 1,000 Ibs > Multiple patents issued and pending > FOUNDATION from which we are launching new products > Spill Containment and others > Capable o
Slide 17: DURA-BASE Spill Containment System
Vi NEWPARK DURA-BASE SPILL CONTAINMENT SYSTEM > Enhancement of the DURA-BASE technology introduces sealing technologyto contain spills on the mat surface > Applications include drilling and completions phase > Field testing on-going with formal launch expected in November 2014 v7
Slide 18: Revenue, EBITDA Margin and Shares Outstanding
Revenue ($ millions) Shares Outstanding (millions) Revenue and EBITDA Margin* $1,200 Wane 7 2% $1,000 | $09 es — Wh cuttvear f 17% 16% $800 15% $600 14% sano: B% $200 | | 12% 2011 2012 2013 2014 *Reflects reported operating income plus depreciation and ‘amortization expense, asa percent of consolida
Slide 19: Differentiating through technology and driving operational efficiency
> Differentiating through technology and driving operational efficiency > Evolution family of high-performance water based fluid systems > DURA-BASE composite mat systems > Expanding global footprint > Making investments to drive continued growth > Fluids deepwater market penetration > Mats manufact
Slide 20: Appendix
APPENDIX
Slide 21: Consolidated Statements of Income
(Unaudited) ‘Three Months Ended ‘Six Months Ended June30, March, June 30, June30, Tune 30, (Gn thousands, except per share data) 2014 2014 2013 2014 2013 Revenues S 2466 $ 28M § 936 § Ss 2729 Cost ofrevenves 214711 196560 214710 85.45 Selling, generaland administrative expenses 27981 358 DUS 45,608
Slide 22: Segment Results
(Cnaudited) Three Months Ended Tune 30, “March 31, Tune 30, (in thousands) 2014 2014 2013 Revenues Fluids systems 241386 211400 $233,964 Mats and integrated services 31,080 31424 25412 Total revenues 272,466 242824 $259,376 Operating income (loss) Fluids systems 27571 15740 S 17684 Mats and integrat
Slide 23: Consolidated Balance Sheets
Junes0, ‘December 31, Gan mousends except share dats) Dos 2013 ASSETS ‘Cash and cash equivalence Ss 5653 8 ws.8H0 Recefvables, net 315.257 268.529 Inventories 199,109 19,680 Defemedtar arset 1397 za Prepaid expenses and other current assets 18313, nos ‘Assets of dsconcinued operations = 15.03 ‘Total
Slide 24: Consolidated Statements of Cash Flows
audied) ‘Sic Months Ended June 30, Ga toveandd) 201d 2013 ‘Cash favs Som operating acts Netincome ee AAgweetments to saroncile nat income to aetcash provided by options: Deprciaios ané amortization 20301 21336 Stociebased compensation expense 4289 Provision for ceferes incon tee op Net povibion ordo
Slide 25: Management Team
Paul Howes Gregg Piontek Mark Airola Bruce Smith Jeff Juergens President & CEO VP & CFO SVP, GC & Admin Officer President Fluids Systems President Mats & Integrated Services 25
Slide 26: Management Biographies
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 27: Management Biographies (continued)
Bruce C. Smith, Executive VP and President Fluids Systems: Bruce joined Newpark in April 1998 as Vice President, International. Since October 2000, he has served as President of its subsidiary Newpark Drilling Fluids, LP. Prior to joining Newpark, Mr. Smith was the Managing Director of the U.K. oper
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