Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Q1 2022 Earnings Presentation
27 slides from Npk International's earnings presentation, May 5, 2022
Slide 1: Newpark Resources May 2022
Newpark Resources May 2022
Slide 2: Forward-looking statements
2 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,” “may,” “could,” “would,” “should,” “anticip
Slide 3: Non-GAAP Financial Measures
3 This presentation includes references to financial measurements that are supplemental to the Company’s financial performance as calculated in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures include earnings before interest, taxes, depreciation a
Slide 4: Company Overview: Two operating segments
Two operating segments: Industrial Solutions We are a leading provider of temporary worksite access solutions, with a diversified customer base • Power transmission and renewable energy • Oil and gas exploration • Construction and other general access Industrial Solutions has historically been the p
Slide 5: Strategic Priorities
5 Strategic Priorities Prioritize investment into high returning growth markets, including markets aligned to energy transition & sustainability tailwinds, while continuing to transform Fluids Systems to a capital-light cash generator Leverage extensive experience & credibility to expand sustainable
Slide 6: Key Execution Pillars
6 Key Execution Pillars Rightsize for New Market Realities • Evaluating options for underperforming operations within portfolio while continuing to streamline support structure • Pursue asset monetization of non-core assets, as market conditions support Drive Variable Cost Structure to Enhance Cash
Slide 7: Environmentally focused product offering and high social standards
ENVIRONMENTALLY FOCUSED PRODUCT OFFERING Environmentally-Focused Drilling Fluids Technologies • Water-based and synthetic-based fluids, replacing oil-based mud • Lower environmental impact • Lower risk to people & environment • Offering includes TerraThermTM system, designed specifically for geother
Slide 8: Industrial Solutions - Overview
Strategic Course Unchanged • While 2020 reflected meaningful COVID-19 impact, 2021 performance more in line with 2019 results, benefitting from growth in power transmission sector • Industrial end-market growth remains primary focus, while presence maintained in key E&P markets Industrial End-Market
Slide 9: U.S. Electrical Transmission Investment
U.S. Electrical Transmission Investment* $20 $21 $21 $22 $22 $24 $25 $28 $27 $27 $0 $5 $10 $15 $20 $25 $30 $35 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ($ b ill io ns ) Taking Strategic Actions to Support Expansion • Energy Infrastructure expansion remains the highest priority for capital d
Slide 10: Site and Access Solutions Environmental Commitment
Our fully recyclable composite matting program prevents the deforestation associated with production of timber alternatives Lighter weight mats require fewer truckloads, thereby reducing GHG emissions with every load eliminated Fewer truckloads mean less miles driven and safer conditions for the com
Slide 11: Fluids Systems Overview
$90 $44 NAM Land U.S. GOM Europe, Middle East, Africa Rest of World Q1 2022 Revenues By Region ($MIL) Drilling Fluids Completion & Reservoir Fluids Stimulation Fluids • Non-aqueous • Water-based • Specialty Systems • Industrial Minerals • Solids Control and Waste Management • Drill-In Fluids • Engin
Slide 12: Fluids Systems – North America Asset Base
12 $325 $308 $214 $220 $226 $0 $100 $200 $300 $400 2018 2019 2020 2021 Q1 2022 North America Net Capital Employed ($MIL) (end of period) North America • Unprecedented market collapse in 2020, with market rig count declining 70%, before recovering; market remains >25% below 2019 level • Swift actions
Slide 13: Fluids Systems - International
13 $24 $24 Q1 2022 Revenues by Customer Type ($MIL) IOC/NOC Regional Independent All Other Markets • Selective geographic expansion that meet appropriate qualifications: • Non-commoditized market • Stability in long-term outlook • Limited capital investment EMEA • Historical stability in region driv
Slide 14: Flexible Balance Sheet and Modest Debt Capital Structure
14* Free Cash Flow is a non-GAAP financial measure. See reconciliation to the most comparable GAAP measure in the Appendix to this presentation. ** Net Debt is a non-GAAP financial measure. See reconciliation to the most comparable GAAP measure in the Appendix to this presentation. Flexible Balance
Slide 15: Appendix
APPENDIX NEWPARK
Slide 16: Consolidated Statements of Operations (Unaudited)
16 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Financial Report (In thousands, except per share data) March 31, 2022 December 31, 2021 March 31, 2021 Revenues 176,438$ 179,563$ 141,172$ Cost of revenues 150,988 153,182 119,991 Selling, general and administrative expenses 24,433 26,690 20,911 O
Slide 17: Operating Segment Results (Unaudited)
17 OPERATING SEGMENT RESULTS (UNAUDITED) Financial Report (In thousands) March 31, 2022 December 31, 2021 March 31, 2021 Revenues Fluids Systems 141,014$ 127,892$ 87,849$ Industrial Solutions 35,424 51,671 53,323 Total revenues 176,438$ 179,563$ 141,172$ Operating income (loss) Fluids Systems (1) 3,
Slide 18: Consolidated Balance Sheets (Unaudited)
18 CONSOLIDATED BALANCE SHEETS (UNAUDITED) Financial Report (In thousands, except share data) March 31, 2022 December 31, 2021 ASSETS Cash and cash equivalents 21,307$ 24,088$ Receivables, net 187,609 194,296 Inventories 169,968 155,341 Prepaid expenses and other current assets 14,305 14,787 Total c
Slide 19: Consolidated Statements of Cash Flows (Unaudited)
19 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Financial Report (In thousands) 2022 2021 Cash flows from operating activities: Net income (loss) 2,521$ (5,362)$ Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization 10,452 10,830 Stock-base
Slide 20: Non-GAAP Financial Measures (Unaudited)
20 NON-GAAP FINANCIAL MEASURES (UNAUDITED) Financial Report Consolidated (In thousands) 2018 2019 2020 2021 2021 2022 Net income (loss) (GAAP) (1) 32,281$ (12,946)$ (80,696)$ (25,526)$ (5,362)$ 2,521$ Interest expense, net 14,864 14,369 10,986 8,805 2,408 1,206 Provision (benefit) for income taxes 1
Slide 21: Non-GAAP Financial Measures: Fluids Systems and Industrial Solutions
21 NON-GAAP FINANCIAL MEASURES (UNAUDITED) Financial Report Fluids Systems (In thousands) 2018 2019 2020 2021 2021 2022 Operating income (loss) (GAAP) (1) 40,337$ 3,814$ (66,403)$ (19,012)$ (6,767)$ 3,374$ Depreciation and amortization 20,922 21,202 20,555 17,877 4,627 4,057 EBITDA (non-GAAP) (1) 61
Slide 22: Non-GAAP Financial Measures: Free Cash Flow and Net Debt
22 NON-GAAP FINANCIAL MEASURES (UNAUDITED) Financial Report Consolidated (In thousands) 2018 2019 2020 2021 2021 2022 Net cash provided by (used in) operating activities (GAAP) 63,403$ 72,286$ 55,791$ (3,013)$ 27,773$ 2,790$ Capital expenditures (45,141) (44,806) (15,794) (21,793) (8,649) (7,621) Pr
Slide 23: Experienced Leadership: Executive Management
Matthew Lanigan President and Chief Executive Officer Gregg Piontek Senior Vice President & Chief Financial Officer Chip Earle Vice President, General Counsel, Chief Administrative Officer, Chief Compliance Officer & Corporate Secretary David Paterson President Fluids Systems Lori Briggs President I
Slide 24: Matthew Lanigan, President and Chief Executive Officer
Matthew Lanigan, President and Chief Executive Officer: Matthew joined Newpark in April 2016, as President of Newpark Mats & Integrated Services. In September 2021, was appointed to the role of Newpark’s President and Chief Operating Officer and effective March 2022, transitioned to the role of Pres
Slide 25: Edward "Chip" Earle, Vice President and General Counsel
Edward “Chip” Earle, Vice President, General Counsel, Chief Administrative Officer, Chief Compliance Officer & Corporate Secretary: Chip joined Newpark in August 2018 as Vice President and Executive Advisor as part of a succession plan to become the Vice President, General Counsel, Corporate Secreta
Slide 26: Lori Briggs, President Industrial Solutions
Lori Briggs, President Industrial Solutions: Lori joined Newpark in October 2017 as Senior Director, Business Transformation & Integration, was promoted to the position of Vice President, Marketing for Newpark Industrial Services in January 2021, and then promoted to her current role of President, I
Slide 27: Board of Directors
Our Board members represent a desirable mix of diverse backgrounds, skills and experiences and we believe they all share the personal attributes of effective directors. They each hold themselves to the highest standards of integrity and are committed to the long-term interests of our stockholders. A