Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (May 2019)
25 slides from Cactus, Inc. Class A Common Stock's investor presentation, May 7, 2019
Slide 1: Investor Presentation Cactus, Inc. May 2019
Investor Presentation Cactus, Inc. (NYSE: WHD) May 2019
Slide 2: Non-GAAP Measures and Forward-Looking Statements
2 Non-GAAP Measures This presentation includes references to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, 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
Slide 3: Executive Team
3 Executive Team Mr. Bender has served as President and CEO since co-founding Cactus Wellhead, LLC (“Cactus LLC”) in 2011. Mr. Bender previously was President of Wood Group Pressure Control from 2000 to 2011. Mr. Bender successfully built and monetized Ingram Cactus Company (sold to Cameron in
Slide 4: Investment Highlights
4 Investment Highlights Highly Experienced Management and Operating Team with Strong Industry Relationships Innovative and Differentiated Products with Presence Across Major Basins A Leading Pure Play Wellhead and Pressure Control Equipment Solutions Provider for U.S. Onshore Returns Focused with Su
Slide 5: Company Overview: Revenue and Adjusted EBITDA
5 Revenue ($ in millions) Product 54%Rental 24% Field Service and Other 22% $221.4 $155.0 $341.2 $544.1 $587.9 2015 2016 2017 2018 LTM Q1 2019 $63.1 $32.2 $112.1 $212.6 $228.9 2015 2016 2017 2018 LTM Q1 2019 28.5% 20.8% 32.9% 39.1% 38.9% LTM Q1 2019 Revenue by Type Bakken Eagle Ford Permian Co
Slide 6: Proprietary Equipment Across Drilling, Completion, and Production Phases
6 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
Slide 7: Market Leader with Strong Growth
7 15 47 75 100 119 158 179 119 99 68 129 220 245 275 295 297 0.8% 2.5% 4.3% 5.9% 7.0% 8.9% 9.8% 14.4% 14.5% 17.5% 21.5% 24.4% 27.0% 26.6% 28.2% 29.1% Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Q1 2019 Cactus Rigs Followed Market Share Mar
Slide 8: Historical Margin Sustainability Through the Cycle
8 34% 25% 23% 23% 22% 16% 15% 12% 11% 0% 5% 10% 15% 20% 25% 30% 35% WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H (20%) (10%) 0% 10% 20% 30% 40% 2014 2015 2016 2017 2018 WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Historical Margin Sustainability Through the Cycle Histo
Slide 9: Technologically Advanced Pad Drilling Wellhead Systems
9 Technologically Advanced Pad Drilling Wellhead Systems SafeDrill® Advantages Eliminates time consuming BOP manipulation No waiting on cement after running casing strings Quick connect BOP adaptors for initial installs Mandrel hangers, pack offs run and set through BOPs Fewer trips into confin
Slide 10: Well Counts and Pad Drilling Drive Our Product Business
10 22% 35% 39% 55% 64% 0% 25% 50% 75% 100% 2014 2015 2016 2017 2018 Pct 2.2 2.3 2.4 2.4 2.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 2014 2015 2016 2017 2018 Avg. Pad Size DJ / Niobrara Powder River Basin Bakken SCOOP / STACK Haynesville Eagle Ford Utica Gulf Coast Bossier City, Louisiana Manufacturing Facility
Slide 11: Focus on Completions Efficiency Drives Our Rental Business
11 Focus on Completions Efficiency Drives Our Rental Business Growth opportunity for Cactus Priced on per diem basis More wells per pad and/or stages per well generally translates into more rental equipment on location for greater periods of time Increasing market share Expanded capacity i
Slide 12: Cactus Completions Equipment Advantage
12 Cactus Completions Equipment Advantage Designs, manufactures, and rents a range of highly engineered and internally-developed products Reliable equipment providers rewarded for reducing non-productive frac time Larger pad sizes, longer laterals and more intensive fracs increase duration of rental
Slide 13: A Dynamic Manufacturing Advantage
13 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 Facility has 14 5-axis computer numerically controlled machines that facilitate rapid-response
Slide 14: Management Team Track Record
14 1986 Current Scott and Joel Bender found Cactus Wellhead LLC Scott and Joel Bender appointed President and SVP, respectively, of Wood Group Pressure Control Scott and Joel Bender become President and VP Operations, respectively, of Ingram Cactus Company QA Director Chief Wellhead Engineer V
Slide 15: Well Established Relationships with High-Quality Customer Base
15 Majors 18% Large E&P 56% SMID E&P 15% Private 10% Other 1%Majors 2% Large E&P 60% SMID E&P 19% Private 18% Other 1% Majors 7% Large E&P 59% SMID E&P 17% Private 16% Other 1% Well Established Relationships with High-Quality Customer Base Q1 2019 LTM Total Revenue by Customer Type Q1 2019 LTM Renta
Slide 16: Returns & Margins Have Outperformed Peers
16 FTI DRQ WEIR NCSM SBO OIS HTG FETNOV 0.0% 10.0% 20.0% 30.0% 40.0% (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Returns & Margins Have Outperformed Peers Source: Company filings and Factset. Note: EBITDA Margins and ROCE for WHD, APY, DRQ, FET, GDI, NOV, OIS and SBO as of Q4 2018. EBITDA Margin for HTG as
Slide 17: Clean Balance Sheet & Low Capital Intensity
17 March 31, 2019 cash balance of $88.1 million; no borrowings on revolving credit facility $75.0 million asset-based revolving credit facility ($50.0 million accordion) Liquidity and strong cash flows support future growth Disciplined growth and financial prudence Ability to quickly scale
Slide 18: Strong First Quarter Results; Well Positioned for 2019
18 Strong First Quarter Results; Well Positioned for 2019 Reported record revenue across all business lines Product market share reached all time high Customers’ completions activity witnessed a sharp rebound from year-end 2018 lows Maintained attractive margins while gaining market share an
Slide 19: Appendix
Appendix
Slide 20: Ownership Profile and Organizational Structure
20 Ownership Profile (4) Company Organizational Structure Source: Company filings. 1. As of May 1, 2019. Excludes effect of dilutive securities. 2. As of May 2, 2019 utilizing total shares outstanding. 3. As of March 31, 2019, not inclusive of operating leases. 4. As of May 1, 2019. Management and e
Slide 21: Building a Leading Equipment Company
21 1959 19801975 1985 1990 1995 2000 2005 2010 ICC sold to Cooper Cameron Corporation (1996) 2018 Scott Bender appointed President of Cactus Wellhead Equipment (“CWE”), a subsidiary of Cactus Pipe (1977) Cactus Pipe founded (1959) CWE Merges with Ingram Petroleum Services, forming Ingram Cactus Comp
Slide 22: Quarterly Financial Performance
22 $42.7 $59.0 Q1 2018 Q1 2019 $115.1 $158.9 Q1 2018 Q1 2019 $53.5 $59.0 Q4 2018 Q1 2019 $139.8 $158.9 Q4 2018 Q1 2019 Quarterly Financial Performance Total Revenue ($ in millions) Adj. EBITDA(1) ($ in millions) & Adj. EBITDA(1) as % of Revenue +38% +38% 37.1% of Total Revenue Source: Company filing
Slide 23: Cactus Equipment Positioned on a 4-Well Pad
23 Cactus Equipment Positioned on a 4-Well Pad 2 4 3 4 1 1 4 .. Wellheads are required by each well over production life .. One of the first pieces of equipment to be installed .. Cactus wellheads installed below surface Product Sold1 .. Frac stacks are connected to the wellhead for the fracturing p
Slide 24: Non-GAAP Reconciliation
24 Non-GAAP Reconciliation Important Disclosure Regarding Non-GAAP Measures EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP. EBITDA and Adjusted EBITDA are supplemental non-GAAP financial measures that are used by management and external users of our consolidated finan
Slide 25: Investor Relations Contact
25 Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com