Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (October 2013)
40 slides from Npk International's investor presentation, Oct 30, 2013
Slide 1: Newpark Resources Presentation October 2013
NEWPARK RESOURCES PRESENTATION OCTOBER 2013 carann
Slide 2: Forward Looking Statements
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. All statements that address expectations or projections about the future
Slide 3: Company Overview
Company Overview First Nine Months 2013 Revenue - $845 million 10% 5% 85% Il Fluids Systems and Engineering Il Mats and integrated Services I Environmental Services First Nine Months 2013 Segment Operating Income - $105 million* 12% “Excludes corporate overhead > Specialized provider of: > Fluids Sy
Slide 4: Strategic Drivers — Technology
Strategic Drivers — Technology > Driving to be the recognized technology leader in each of our business units > Drilling Fluids > New worldwide technology center opened in June 2013 > Evolution” (patent pending) our family of high- performance water based systems introduced in 2010 > Mats & Integrat
Slide 5: Total Fluids Market
Total Fluids Market — $12B Drilling & Completion Fluids* Current Fluid The Newpark Vision-Invert Demographics the Pyramid Water Based| applications, Water Based @ 5%-10% applications, @ 65%-70% Synthetics, |@ 20%-25%, ypically off- shore Price/Margin synthetics, 20%-25%, | NEWPARK Low margin diesel
Slide 6: Why Evolution is a Technology Driver
Why Evolution is a Technology Driver > Historically, water based fluids have had lubricity coefficients in the range of 0.20-0.25 (the higher the coefficient, the less lubricating efficiency) > synthetic fluids were better, registering coefficients in the 0.09-0.14 range > Diesel oil based fluids’ l
Slide 7: Why Dura-Base is a Technology Driver
Why Dura-Base is a 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 > US Patents: Manufacturing Process & Product Design > FOUNDATION from which we will launch new products > Spill Containment and others > Capabl
Slide 8: Strategic Drivers — International Expansion
Strategic Drivers — International Expansion > International expansion is a key element of our strategy > Stability of revenue > Longer term contracts > Mostly |OC’s and NOC’s > Fewer Competitors > Recent Contract Awards > Total, multi-year deepwater Brazil contract > Kuwait National Oil Company, mul
Slide 9: Strategic Drivers - Customer Support
Strategic Drivers - Customer Support > Focused on backing our leading technology with superior customer support > Over 600 fluids technicians customize and deliver our technology worldwide > Advancedtraining programs for fluid technicians continueto enhance product and service knowledge > Newpark re
Slide 10: Fluid Systems & Engineering Update
FLUID SYSTEMS & ENGINEERING UPDATE F sswran
Slide 11: Overview
Overview >3" Largest drilling fluids company in North America, perhaps globally (based on company data) > Differentiation through Service Quality and Technology >Employs approximately 1800 people worldwide — half domestic, half international > Operates on 5 continents F esnrann rt
Slide 12: Strategic Drivers — Global Expansion
Strategic Drivers — Global Expansion 2002 > Acquired AVAS.p.A, establishing presence in EMEA region 2006 2007 2011 2013 > Expanded the Algerian and Tunisian business > Expanded throughout Eastern Europe > Expanded into Libya International expansion identified as key element of long-term strategy Org
Slide 13: Strategic Drivers - Global Expansion
USD (millions) Strategic Drivers - Global Expansion Revenue Trend ( North Americavs. International) 2002 2003-2008. 2005 200520072008 2009 20102011202 Fist Nine Months Ginternational North America ances 2002 2013 Int'l - 12% Int'l - 30% NA - 88% iy NA-70% 43
Slide 14: Global Presence - Current
Global Presence - Current First Nine Months 2013 Segment Revenues - $714 million canada GEMEA (latinAmerica MAPAC OU.S. F esnrann 14
Slide 15: Strategic Drivers — Deepwater Market
Strategic Drivers — Deepwater Market Penetration 2007 2013 > > > > > > > > Start-up of operations in Brazil Awarded “Lot B” contract (30%) by Petrobras Awarded Deepwater contract with ExxonMobil in Brazil Anadarko Total Starfish Repsol Awarded contract by super major in Black Sea; work to begin in Q
Slide 16: Strategic Drivers - Deepwater Market
Strategic Drivers - Deepwater Market _ Opportuni = North America 4 Middle East NGF South America BiNewpark — [MMlactive Deepwater Rigs Source: Rigzone =
Slide 17: Strategic Drivers — Evolution
Strategic Drivers — Evolution > Evolution system continues to demonstrate superior drilling performance > Higher lubricity > Environmentally friendly > Reduced circulating temperatures > Increased ROP > Published SPE paper co- authored with Occidental > System roll-out expanding into international m
Slide 18: Strategic Drivers — Water Based Technology
Strategic Drivers — Water Based Technology Near term opportunities for growth: »>Continued penetration of U.S. market > EMEA > Asia Pacific * China * Australia ¢ New Zealand > Latin America * Peru * Chile carann 18
Slide 19: Newpark Technology Center
Newpark Technology Center > Major investment in our future > Promotes Newpark as a technology leader > Attracts top technical expertise in our segment > Enhances deepwater capabilities > Reinforces that Drilling Fluids is our core business carann 19
Slide 20: Newpark Mats & Integrated Services Update
NEWPARK MATS & INTEGRATED SERVICES UPDATE F sswran
Slide 21: NMIS History
NMIS History Pre- 2005 2005 Vv 2007 v 2009 2010 LA 2013 > > Vv Historically provided wood mats and related services in U.S. Gulf region and Western Canada Completed acquisition which included Durabase composite mat technology and manufacturing facility Established long-term strategy focusing on diff
Slide 22: NMIS Financial Performance
NMIS Financial Performance lm Mat Sales mmm Rental & Services ~f™#+Operating Margin $140 > 60% am ox 40% $100 + 30% $80 a $60 | 10% | 0% $40 10% 320 . 20% $0 : : : 30% 2005 2006 2007 2008 2009 2010 2011 2012 First Nine Months 2013, ‘Annualized F esnrann 2
Slide 23: NMIS Strategy
NMIS Strategy > Build upon our leadership position and developa sustainable global business > Expanding rental business is primary focus > Global expansion >New market segments >Focus on technology (new products) > Investments to increase capacity F esnrann 23
Slide 24: Facility Expansion
Facility Expansion > Investment required to support growth objectives >Investment of $40 underway; facility expansion to be completed Q1 2015 > Production capacity will double from current level > Expansion includes a building dedicated to new product development F esnrann 24
Slide 25: Facility Expansion
_ Facility Expansion — ELNEWPARK
Slide 26: Research & Development Center
Research & Development Center F enranx
Slide 27: Dura-Base Defender
Dura-Base Defender purse “DEFENDER ~ THE LINER-FREE SPL CONTAINMENT SYST! . p WiTH x4 SEALING i NEWPARK
Slide 28: Successful Containment
SA REF A= ~ Successful Containment = Tinvranc 28
Slide 29: Improving Operational Efficiency - Systems Approach
Improving Operational Efficiency - _ Systems Approach —— a DURA-BASE Ce T-REX MAT CLEANING SYSTEM cars
Slide 30: Improving Operational Efficiency — Mat Delivery System
Improving Operational Efficiency — Mat Delivery System Trewranx
Slide 31: Improving Operational Efficiency - Mat Delivery System
Improving Operational Efficiency - Mat Delivery System F esnrann Bt
Slide 32: Improving Operational Efficiency - Mat Delivery System
Improving Operational Efficiency - Mat Delivery System , aor 32
Slide 33: Product Line Extensions/Safety Enhancements - EPZ Mock-up
Product Line Extensions/Safety Enhancements - EPZ Mock-up F esnranx
Slide 34: Product Line Extensions/Safety Enhancements — Lighting Project
Product Line Extensions/Safety Enhancements — Lighting Project on & b a anne
Slide 35: Product Line Extensions/Safety Enhancements — Barrier System
Product Line Extensions/Safety _ Enhancements — Barrier System carann
Slide 36: Financials
FINANCIALS wt, EL NEWPARK
Slide 37: Company Revenue & EBITDA
Company Revenue & EBITDA Revenues EBITDA* [1 First ‘Nine Months | i $162 ‘s160 $1,000 $10 | $000 | sx20 | Bst00 | = sso $60 - $40 + $200 $20 $0 - so 2006 2007 2008 2009 2010 2011 2012 ‘First 2006 2007 2008 2009 2010 2011. 2012 First Nine Nine Months Months 2013 2083 FP carann ‘netecsreprted operatin
Slide 38: Capital Structure
Capital Structure Debt to Capitalization $300 aK ‘; sme Total Debt (let) —w=Debt to Capital (ht) na a | 35% B s200 | 30% 2012 32013, Diluted Share Count & EPS from Continuing Operations Diluted shares mmmConvert “EPS 2006 2007-2008 «20092010201 2012—FestNine Months 2013, NOTE: The annuslizedEPS or t
Slide 39: Focus on Return on Net Capital Employed
Focus on Return on Net Capital Employed mc Net Capital Employed and RONCE mm AverageNet Capital Employed —M@=AfterTax RONCE 16% | a [mt 12% 10% 2007 2008-2009 201020112012, YTD 2013 Annwated Components of Net Capital Employed MAR inventory PP&E_S GW/ntangibles © AP_MAll Other 201.2012 39 a3 2013 >»
Slide 40: Gas to Oil transition
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Newpark Resources — Investor Presentation (October 2013) on 6ix