Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Q2 2024 Earnings Presentation
32 slides from Npk International's earnings presentation, Aug 6, 2024
Slide 1: Investor Presentation: Positioned for Sustainable Growth
August 2024 Investor Presentation Positioned for Sustainable Growth
Slide 2: Notice to Investors
Notice to Investors Disclaimers Forward Looking Statements 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 s
Slide 3: Agenda
Agenda Introduction End-Market Overview Summary of Key Financial Data 3
Slide 4: Introduction
1) Introduction
Slide 5: Transformation Strategy Aligning Portfolio to Maximize Value Creation
Transformation Strategy Aligning Portfolio to Maximize Value Creation Through Accelerated Growth in Power & Infrastructure Markets Disciplined Strategy Aligned with Long-Term Global Megatrends
Slide 6: Company Overview
Company Overview Specialty Rental & Services Company Supporting Power and Infrastructure Markets Newpark Resources, Inc. headquartered in The Woodlands, TX, is a global company operating NEWPARK RESOURCES GLOBAL FOOTPRINT two independent business units, Industrial Solutions and Fluids Systems, suppo
Slide 7: Leader in Power and Energy Infrastructure Solutions
Leader in Power and Energy Infrastructure Solutions Providing Innovative Product & Service Solutions for Power T&D and O&G Infrastructure 76% INDUSTRIAL SOLUTIONS Power Infrastructure, O&G, 92% 24% FLUID SYSTEMS 8% OF SEGMENT ADJ. OF SEGMENT OF SEGMENT ADJ. Oil, Natural Gas, and Geothermal OF SEGME
Slide 8: Transformation Supports Growth & Shareholder Return
Transformation Supports Growth & Shareholder Return Net Assets* TTM ADJ EBITDA** Market Outlook Approach $246M Actual & Projected Transmission Investment*** Industrial Solutions $79M BILLIONS Inventory Invest & Grow AR, net of AP Rental fleet Other long-lived assets, net YEARS Actual Projected $189M
Slide 9: Key Operational Highlights Aligned with Strategy
Key Operational Highlights Aligned with Strategy Disciplined Execution Delivering Shareholder Value Creation Rental and Service Industrial Solutions Fluid Systems Weighted Average Revenue Adjusted EBITDA* Net Working Capital Shares Outstanding $160 $85 $260 96 $150 $80 $240 94 $75 $140 $220 92 $70
Slide 10: Well-Positioned in Substantial Energy Megatrends
Well-Positioned in Substantial Energy Megatrends Multi-Trillion Dollar Markets Provide Long-Term Opportunities $14T+ $1T+ $12T+ Electrification Renewables Global Oil & Gas Investment in global Renewable Generation tie- O&G Investment is projected electrical grid to enable ins and grid hardening to m
Slide 11: Differentiated Model Exploiting Competitive Advantages
Differentiated Model Exploiting Competitive Advantages Over 50 Years of Technology & Service Innovation Positioning Us for Tomorrow’s Opportunities • Self-funding organic expansion in high-growth, high-returning infrastructure markets • Focused capital light Fluid Systems positioned to generate cas
Slide 12: Meaningful Progress in our Transformation
Meaningful Progress in our Transformation Strategic Focus on Growth in More Stable, Higher-Margin Industrial Markets Key to Long-Term Value Creation 2019 Q2 2024 Change Maintaining Adjusted EBITDA as we reposition the $82M $84M +2% Company Adjusted EBITDA* TTM Adjusted EBITDA* Increasing Adjusted EB
Slide 13: End-Market Overview
End-Market Overview 13
Slide 14: Utilities Infrastructure Megatrend Powering Growth
Utilities Infrastructure Megatrend Powering Growth Significant Long-term Capital Investment in Innovation & Infrastructure Enhanced by Legislation The $1.2 trillion Infrastructure Investment and Jobs Infrastructure Investment and Jobs Act (IIJA) is investing significantly over next decade, $1.2T+ Ac
Slide 15: Positioned for Growth in Multi-Billion Dollar Temporary Access Market
Positioned for Growth in Multi-Billion Dollar Temporary Access Market Specialty Rental and Services Supporting Infrastructure Megatrends Our Footprint What We Do Leading rental provider and manufacturer of composite temporary worksite access solutions with a diversified customer base, which primaril
Slide 16: Industrial Solutions End-to-End Operating Model
Industrial Solutions End-to-End Operating Model Differentiated by Optimizing Across the Value Chain Providing Strong Results Product Engineering & Design Belief in Innovation • High performance, safety, and service-centric culture • Introduced DURA-BASE to the world over 25 years ago as the 100% re
Slide 17: Industrial Solutions
Industrial Solutions Strategic Progress Supported by Strong Infrastructure Trends • Strategic investments in technology, scale, and service to drive specialty rental differentiation • Expansion of specialty rental fleet to meet long-term infrastructure build-out in multiple industries • 15% revenue
Slide 18: Global Demand for Oil and Gas Remains Resilient
Global Demand for Oil and Gas Remains Resilient Emergence of Alternative Energy Lags Global Demand OUTLOOK BY 2050 $12T+ Investment in Oil & Gas projected to meet global demand in Sustainable Development Scenario over next 30 years 80%+ World’s Energy which comes from fossil fuels today Access to af
Slide 19: Fluids Systems
Fluids Systems Agile, Capital-Light Technology & Services Capable of Cash Generation Through Cycles • 73% of 1H 2024 revenues generated outside of U.S. • Global footprint aligned to long-term, strategic markets • Reshaping balance sheet to drive “Capital-Light” model, and reduce return cyclicality •
Slide 20: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy Disciplined Approach Balances Growth Investments with Return of Capital Maintain Target Return Excess Invest in Growth Leverage Cash to Investors • Target net leverage range Organic M&A • Committed to programmatic of 0.5x–1.5x return of capital through share • C
Slide 21: Sustainability Embedded in Our DNA
Sustainability Embedded in Our DNA 2023 Sustainability Report Including SASB & TCFD Disclosures Available on Website Environmental Social Governance Safety Drives Everything We Do 0.7 Board Independence 0.6 Independent 0.5 Board Diversity 0.4 0.3 0.2 0.1 0.0 2019 2020 2021 2022 2023 Total Company TR
Slide 22: Why Invest in Newpark Resources?
Why Invest in Newpark Resources? Leading Provider of Sustainable Technologies and Services Meaningful growth opportunity tied to the energy transition and critical infrastructure Global presence in large-scale energy markets Proven technologies with economic and environmental benefits Demonstrated a
Slide 23: Summary of Key Financial Data
Summary of Key Financial Data 23
Slide 24: Business Segment Overview
Business Segment Overview Industrial Solutions Fluids Systems $750 Revenues $60 $225 Revenues $90 Adjusted EBITDA* Adjusted EBITDA* ADJUSTED EBITDA (MILLIONS) $675 ADJUSTED EBITDA (MILLIONS) REVENUE (MILLIONS) $80 REVENUE (MILLIONS) $600 $40 $200 $525 $70 $450 $20 $175 $60 $375 $300 $0 $150 $50 2021
Slide 25: Consolidated Statements of Operations (unaudited)
Consolidated Statements of Operations (unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, (In thousands, except per share data) 2024 2024 2023 2024 2023 Revenues $ 179,009 $ 169,107 $ 183,256 $ 348,116 $ 383,286 Cost of revenues 140,084 134,587 150,170 274,6
Slide 26: Operating Segment Results (unaudited)
Operating Segment Results (unaudited) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, (In thousands) 2024 2024 2023 2024 2023 Revenues Fluids Systems $ 112,218 $ 120,140 $ 135,181 $ 232,358 $ 279,355 Industrial Solutions 66,791 48,967 48,075 115,758 103,931 Total re
Slide 27: Consolidated Balance Sheets (unaudited)
(In thousands, except share data) June 30, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 35,087 $ 38,594 Receivables, net 158,834 168,457 Inventories 127,421 141,079 Prepaid expenses and other current assets 10,284 9,094 Total current assets 331,626 357,224 Consolidated Property, plant a
Slide 28: Consolidated Statements of Cash Flows (unaudited)
Consolidated Statements of Cash Flows (unaudited) Six Months Ended June 30, Six Months Ended June 30, (In thousands) 2024 2023 (In thousands) 2024 2023 Cash flows from operating activities: Cash flows from investing activities: Net income $ 15,333 $ 7,322 Capital expenditures (20,468) (15,347) Adjus
Slide 29: Non-GAAP Financial Measures (unaudited)
Non-GAAP Financial Measures (unaudited) The following tables reconcile the Company’s net income (loss) calculated in accordance with GAAP to the non-GAAP financial measures of EBITDA and Adjusted EBITDA: Consolidated Twelve Months Ended Six Months Ended Q2 TTM Q2 (In thousands) 2019 2020 2021 2022 2
Slide 30: Non-GAAP Financial Measures (unaudited)
The following tables reconcile the Company’s segment operating income (loss) calculated in accordance with GAAP to the non-GAAP financial measures of EBITDA, Adjusted Non-GAAP EBITDA, and Adjusted EBITDA Margin: Fluids Systems Twelve Months Ended Six Months Ended Q2 TTM Q2 Financial (In thousands) 2
Slide 31: Non-GAAP Financial Measures (unaudited)
Non-GAAP Financial Measures (unaudited) The following table reconciles the Company’s net cash provided by (used in) operating activities calculated in accordance with GAAP to the non-GAAP financial measure of Free Cash Flow: Six Months Ended Consolidated Twelve Months Ended June 30, (In thousands) 2
Slide 32: Non-GAAP Financial Measures (unaudited)
Non-GAAP Financial Measures (unaudited) The following table reconciles the Company’s total debt calculated in accordance with GAAP to the non-GAAP financial measures of Net Debt and Net Leverage: Consolidated December 31, June 30, (In thousands) 2019 2020 2021 2022 2023 2024 Current debt $ 6,335 $ 6