Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (March 2021)
32 slides from Cactus, Inc. Class A Common Stock's investor presentation, March 2021
Slide 1: Investor Presentation
Investor Presentation Cactus, Inc. (NYSE: WHD) March 2021
Slide 2: Important Disclosures
Important Disclosures 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 EBIT
Slide 3: Experienced Executive Team
Experienced 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. Scott Bender ◼ Mr. Bender successfully built and monetized Ingram Cactus Comp
Slide 4: Investment Highlights
Investment Highlights A Leading Pure Play Wellhead and Pressure Control 1 Equipment Solutions Provider for Onshore Markets Innovate & Differentiated Products & Services That 2 Drive Relative Margin Stability Through the Cycle Through-Cycle 3 Dynamic Operating and Manufacturing Capabilities Outperfor
Slide 5: Company Overview
Company Overview Cactus designs, manufactures, sells and rents highly engineered products which generate improved drilling and completions efficiencies while enhancing safety 2020 Revenue by Type Revenue ($ in millions) $628.4 $544.1 Field $341.2 $348.6 Service and $155.0 Other 22% Rental Product 20
Slide 6: Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well
Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well Technologically advanced wellhead and frac solutions deliver greater reliability and time savings ◼ Designed for pad drilling and intense completion environments ◼ Principal products: SafeDrill® wellheads, frac relate
Slide 7: Market Leader with Strong Market Share Growth
Market Leader with Strong Market Share Growth Historical U.S. Onshore Market Share(1) 400 50.0% 45.0% 350 43.1% Cactus Rigs Followed (1) 40.0% Market Share 295 300 275 276 32.7% 35.0% 250 245 240 30.0% 220 30.9% 29.3% 28.2% 200 26.6% 25.0% 179 21.5% 27.0% 158 24.4% 17.5% 20.0% 150 129 127 119 119 14
Slide 8: Differentiated Margin Profile Through the Cycle
Differentiated Margin Profile Through the Cycle Historical Adjusted EBITDA Margins (2014 – YTD 2020) (1)(2) Adjusted EBITDA Margin (2014 – YTD 2020) (1)(2) 35% 34% 40% 35% 30% 27% 30% 25% 23% 25% 20% 20% 18% 15% 15% 15% 14% 14% 14% 10% 10% 5% 5% 0% 2014 2015 2016 2017 2018 2019 2020 0% WHD Peer A Pe
Slide 9: Cactus is Well Prepared for a Recovery
Cactus is Well Prepared for a Recovery Highlights 2017 Incremental EBITDA Margins(1)(2) ◼ Greater operating leverage provides benefits as activity levels increase 80% ◼ Incremental EBITDA margins were strong during the last market recovery (2017) ◼ Slower activity environment 45% 43% provided opport
Slide 10: Technologically Advanced Pad Drilling Wellhead Systems
Technologically Advanced Pad Drilling Wellhead Systems Cactus SafeDrill® SafeDrill® Advantages Safety Time Savings Fewer trips into Eliminates time confined space (cellar) consuming BOP - manipulation No BOP manipulation No waiting on cement after intermediate after running casing casing has
Slide 11: Innovations Enhance Rental Business Value Proposition
Innovations Enhance Rental Business Value Proposition Complement & enhance legacy rental offerings without additional personnel ◼ Additional product introductions awaiting more constructive pricing environment ◼ Significantly reduce non-productive time (“NPT”) by increasing reliability and automatio
Slide 12: Differentiated Offerings Enable Customers to Meet ESG Goals
Differentiated Offerings Enable Customers to Meet ESG Goals Faster Safer Cleaner ◼ Cactus enables customers to ◼ Cactus’ equipment increases ◼ In late-stage development of drill and complete wells faster employee safety by enabling: equipment allowing for: ◼ Translates to fewer rigs, frac ◼ Automati
Slide 13: Small Expenditures Can Have a Big Impact on Operators
Small Expenditures Can Have a Big Impact on Operators Cactus Value Proposition Components of Onshore Well Costs(1) ◼ Cactus offerings make up a Other relatively small portion of the 15% overall cost to drill & complete a well Completion 54% ◼ Efficiency and reliability can cause a disproportionate a
Slide 14: Flexible and Scalable Operating Footprint
Flexible and Scalable Operating Footprint U.S. Operations United States ◼ Service centers support field services and provide repair services Bakken Bossier City, Louisiana Powder Manufacturing Facility River ◼ Spread across all key producing basins Basin Marcellus Utica ◼ Flexible cost structure at
Slide 15: A Dynamic Manufacturing Advantage; Responsive, Highly Scalable and Lower Cost
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 ◼ Rapid-response manufacturing of equipment ◼ Less time-sensitive, high-volume wellhead equipment ◼
Slide 16: Experienced and Well Aligned Management Team with Strong Industry Relationships
Experienced and Well Aligned Management Team with Strong Industry Relationships ◼ Management team is well incentivized as it owns more than 25% of the business ◼ Over 80% of executive compensation deemed “at risk” ◼ Performance-based stock compensation tied to Return on Capital Employed (“ROCE”) ◼ M
Slide 17: Well Established Relationships with Recently Increasing Representation by Private Operators
Well Established Relationships with Recently Increasing Representation by Private Operators 2020 Total Revenue by Customer Type 2020 Product Revenue by Customer Type 2020 Rental Revenue by Customer Type Other Majors Other Majors Other 1% 7% 1% 3% Private 0% Majors Private Private 19% 18% 19% 20% SMI
Slide 18: Recent Success With Private Operators
Recent Success With Private Operators Cactus’ Onshore Rigs Followed (Private Operators)(1) 40 30 21 18 Q2 2020 Q3 2020 Q4 2020 QTD Q1 2021 Cactus’ Onshore Rigs Followed with Private Operators Has More Than Doubled Since Q2 2020 Note: Private operators are firms that are not listed on a publicly trad
Slide 19: Returns & Margins Have Outperformed Peers
Returns & Margins Have Outperformed Peers YTD 2020 Adjusted EBITDA Margin (%) 40.0% (1) 30.0% NCSM SBO 20.0% FTI OIS WEIR NOV FET HTG 10.0% ROCE(2) 0.0% DRQ (2016 – YTD 2020) (%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Source: Company filings and Factset. Note: Adj. EBITDA Margins based on latest publi
Slide 20: Execution Has Driven Equity Outperformance
Execution Has Driven Equity Outperformance Share Price Performance of Cactus vs. the OSX since IPO 68% 0% (61%) WHD OSX Cactus Share Price Outperformed the OSX in 2018, 2019 and 2020 Note: Data based on share price performance from 2/7/2018 to 2/26/2021.Cactus 2/7/2018 price set as IPO price of $19
Slide 21: History of Prudent Investment Strategy
History of Prudent Investment Strategy Goodwill, Intangible, Long-Lived & Other Asset Impairment Expenses ($mm) (2015 – YTD 2020) ($mm) $10,597 $7,661 $1,000 $750 $664 $648 $500 $250 $180 $133 $37 $0 $- WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Cactus Has Recorded Zero Impairment Charges
Slide 22: Clean Balance Sheet & Low Capital Intensity
Clean Balance Sheet & Low Capital Intensity Adjusted EBITDA(1) – Net Capital Expenditures(2) ($ in Balance Sheet & Capital Summary millions) ◼ Year-end 2020 cash balance of approximately $173.1 $289 million $144.4 ◼ Cash balance grew by over $86 million $102.9 during 2020 despite approximately $25 $
Slide 23: Recent Performance & Outlook
Recent Performance & Outlook Fourth Quarter 2020 Performance ◼ Grew revenues by 14% sequentially ◼ Generated Adjusted EBITDA margins of 29% ◼ Increased Product market share(1) to 43% ◼ Generated over $20 million in free cash flow(2) Outlook & Recent Developments ◼ Q1 2021 revenues expected to improv
Slide 24: Positive Developments with Limited Capital Required
Positive Developments with Limited Capital Required ◼ Product ◼ Continued increases in rig efficiency as operators improve processes (more wells drilled per rig) ◼ Rental ◼ Rental innovations potentially drive market share gains ◼ Introduction of additional completion technologies currently in devel
Slide 25: Cactus Is Committed to ESG
Cactus Is Committed to ESG Environmental Social ◼ Cactus, Inc. is committed to reducing its impact on the ◼ Cactus, Inc. is dedicated to improving lives and protecting human environment. We will continue to strive to improve our rights. We seek to make the world a better place by encouraging environ
Slide 26: Strong & Improving Track Record of Safety
Strong & Improving Track Record of Safety HSE Highlights Total Recordable Incident Rate ◼ Comprehensive and formal company- 2.0 wide HSE management program for the safety of Associates ◼ Committed to the well-being and protection of individuals at all field and company locations ◼ Adhere to our own
Slide 27: Appendix
\ i gafety Stro, r co ‘ “Year tong Appendix
Slide 28: Company Organizational Structure
Company Organizational Structure Company Profile Organizational Structure(1) Ticker WHD (NYSE) Class A Shares Outstanding(1) 47.9mm CW Unit Public Class B Shares Outstanding(1) 27.7mm Holders Investors Total Shares Outstanding(1) 75.5mm Market Capitalization(2) ~$2.4bn Class B Common Stock Class A C
Slide 29: Cactus Equipment Positioned on a Multi-Well Pad
Cactus Equipment Positioned on a Multi-Well Pad 1 2 3 4 1 4 3 1 1 Product Sold 2 Equipment Rented 3 Equipment Rented 4 Services Provided ▪ Wellheads are required ▪ Frac stacks are ▪ Zipper manifolds, mono- ▪ Assist with the by each well over connected to the bore flowline and remote installation, ma
Slide 30: Non-GAAP Reconciliation
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 financia
Slide 31: Non-GAAP Reconciliation
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 financia
Slide 32: Investor Relations Contact
Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com 32