Klx Energy Services Holdings, Inc. · NASDAQ:KLXE
Klx Energy Services — Investor Presentation (July 2024)
36 slides from Klx Energy Services's investor presentation, Jul 22, 2024
Slide 1: Investor Presentation July 2024
July 2024 1 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements Cautionary Statement on Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. This presentation includes forward-looking statements
Slide 3: Disclaimer on Non-GAAP Financial Measures
KLX Energy Services 3 Disclaimer on Non-GAAP Financial Measures This presentation includes adjusted EBITDA, adjusted EBITDA margin, levered free cash flow, net debt and net leverage ratio measures. Each of the metrics are “non-GAAP financial measures” as defined in Regulation G of the Securities Exc
Slide 4: Leading U.S. onshore provider of technologically-differentiated oilfield services
4 NEXT LEVEL READINESS KLX Energy Services is a leading U.S. onshore provider of value-added, technologically-differentiated oilfield services focused on completion, intervention and production activities for the most technically demanding wells. NASDAQ KLXE Headquartered in Houston, TX Employees ~1
Slide 5: Company Overview
5 COMPANY OVERVIEW
Slide 6: KLX at a glance
KLX Energy Services 6 KLX Energy Services at a glance As of Q2E 2024. Company disclosure. FactSet as of July 17, 2024. Facility listing and product offering detail include facilities and tools acquired via the March 8, 2023 acquisition of Greene’s Energy Group, LLC (“Greene’s”). 1 Adjusted EBITDA is
Slide 7: Strategic priorities: operations, growth and consolidation
7 ▪ Provide market leading onsite job execution and safety ▪ Drive margin enhancing utilization ▪ Focus on pricing and cost structure to drive margins ▪ Expand share of wallet with top customers ▪ Continue to de-lever through a combination of EBITDA growth, free cash flow generation, debt reduction
Slide 8: Greene's and QES integration: strategic fit and synergies
▪ Strong management team with proven operational track record and deep M&A experience ▪ Retention of key employees ▪ Strong Board and corporate governance ▪ Premier provider of drilling, completion, production and intervention solutions with a returns-driven strategy ▪ Minimal customer overlap with
Slide 9: Recent Acquisition Case Study
9 Recent Acquisition Case Study In March 2023, KLX and Greene’s formed a strong partnership based on a common culture focused on safety, execution, customer service and returns. The combined company is a leading provider of wellhead protection, flowback and well testing services. The acquisition of
Slide 10: A Transformed KLX
Performance culture KPI tracking / data-driven decision making Veteran operators Technical expertise Alignment of incentives KLX Energy Services 10 Rigorous maintenance program Minimize downtime Comprehensive suite of equipment and tool sizes across all PSLs Employees value safe, professional field
Slide 11: Credit Overview
11 CREDIT OVERVIEW
Slide 12: Key Investment Highlights
KLX Energy Services 12 Key Investment Highlights Attractive underlying fundamentals drive strong financial performance with conservative capital structure1 Strong footprint in key energy producing basins 2 Differentiated services and market position generate superior profit margins and accelerate fi
Slide 13: Macro Overview
Source: 1 Enverus, Baker Hughes, Equity Research; 2 Spears & Associates Oilfield Market Report; 3 Wood Mackenzie; 4 Enverus; Based on announcement date; Includes announced deals that have either closed or not yet been terminated; Excludes JV, royalty and VPP transactions and those < $20mm; Asset dea
Slide 14: Areas of Operation
KLX Energy Services 14 Areas of Operation2 Revenue contribution based on Q2E 2024 expected results. Facility listing and product offering detail include facilities and tools acquired via the March 8, 2023 Greene’s acquisition. 1 Gas contribution includes Haynesville and Marcellus activity as primary
Slide 15: Diversified & Complementary Product Service Offering
KLX Energy Services 15 Diversified & Complementary Product Service Offering ▪ Diversified product service offering positions KLX to capture a larger percentage of customer spending across the lifecycle ▪ Refocused product service offering across core geographies to improve scale, utilization and ret
Slide 16: Proprietary products by service line
▪ Wide range of well construction equipment spanning a variety of sizes and configurations ❑ HPHT float equipment ❑ Latch-in plugs and wiper plugs ❑ Centralizers ❑ 2-stage cement tools and annular casing packers ❑ Liner hanger systems ▪ Proprietary MWD tool design and packaging ▪ Proprietary surface
Slide 17: PhantM Dissolvable Plug and Oracle Smart Reach Tool
▪ Top ball and bottom set design with zero presets ▪ Tested and qualified up to 10,000psi and 350°F ▪ Available in both Saltwater Alloy and Fresh Water Alloy ▪ 100% traceability and QA/QC throughout manufacturing ▪ 4.5”, 5.5” and 6.0” designs ▪ 100% USA designed and manufactured▪ R&D facility in Hou
Slide 18: KLX – The Choice of Top Operators
18 KLX Energy Services KLX – The Choice of Top Operators Revenue driven by top 10 customers in YTD 2024 Significant leverage to the most active operators and industry consolidators in the United States ~680 48% Unique customers serviced in 2023 with no one customer accounting for more than 10% of 20
Slide 19: Steadily Gaining Market Share
Source: Company & Baker Hughes. Note that the Company changed its fiscal year-end from January 31 to December 31, effective beginning with the year ended December 31, 2021. As such, quarterly data for Q1’21 includes results for three months ended April 30, 2021, and quarterly data for Q2’21 includes
Slide 20: Deeply Experienced Leadership Team
KLX Energy Services 20 Deeply Experienced Leadership Team Chris Baker CEO 25+ years of industry experience Co-founded and COO of QES Managing Director – Oilfield Services for Quintana Energy Partners Citigroup Global Markets Inc. BS in Mechanical Engineering from Louisiana State University MBA from
Slide 21: Enhanced Capitalization & Leverage Profile
21 Enhanced Capitalization & Leverage Profile As of Q2E 2024. Company disclosure. Replacement value, also current replacement cost, defined as the amount that would be required currently to replace the service capacity of an asset, per FASB ASC 820. Analysis performed pursuant to ASC 805 by Third Pa
Slide 22: KLX Financial Policy
KLX Energy Services 22 KLX Financial Policy6 Liquidity Leverage and dividend policy Investment / M&A Strategy ▪ Strong liquidity and cash flow generation with moderate capex requirements sets the stage for opportunistic net debt reduction going forward ▪ With Q2E 2024 liquidity of approximately $126
Slide 23: Financial Overview
23 FINANCIAL OVERVIEW
Slide 24: Q2E 2024 Summary
KLX Energy Services 24 Q2E 2024 Summary Q2E’24 is an estimate and subject to change. Assumes mid point of estimated range. ▪ $180MM of Revenue increased 3% sequentially, despite 3% decline in average count over the same period ▪ Enacted approximately $16 million of annualized cost reductions in the
Slide 25: KLX Financial Summary
$202 $194 $172 $200 $198 1.3x 1.3x 1.3x 1.8x 2.0x 0.0x 1.0x 2.0x 3.0x 4.0x $0 $50 $100 $150 $200 $250 Q2'23 Q3'23 Q4'23 Q1'24 Q2E'24 Net debt LTM net leverage ratio $17 $23 $13 $5 $15 $12 $9 $7 $18 $12 $11 $10 ($10) ($10) ($9) ($10) $40 $37 $23 $12 $26 Q2'23 Q3'23 Q4'23 Q1'24 Q2E'24 Rockies Southwes
Slide 26: Enhanced Capitalization & Leverage Profile
KLX Energy Services 26 Enhanced Capitalization & Leverage Profile HIGHLIGHTS CURRENT CAPITALIZATION As of Q2E 2024 Company disclosure. FactSet as of July 17, 2024. 1 Preliminary Q2 2024 financial results assuming midpoint of estimates. 2Adjusted EBITDA and net leverage ratio are non-GAAP measures. F
Slide 27: Corporate Headquarters and Investor Relations
27 Corporate Headquarters 3040 POST OAK BLVD 15th Floor Houston, TX 77056 Investor Relations Keefer M. Lehner, EVP & CFO (832) 930-8066 IR@klxenergy.com
Slide 28: Appendix
Appendix 28
Slide 29: Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA
KLX Energy Services 29 Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA (Loss) *Previously announced quarterly numbers may not sum to the year-end total due to rounding. (1) Quarterly cost of sales includes $2.1 million of lease expense associated with five coiled tubing unit leas
Slide 30: Consolidated Net (Loss) Income Margin and Adjusted EBITDA Margin Reconciliations
KLX Energy Services 30 Consolidated Net (Loss) Income Margin and Consolidated Adjusted EBITDA Margin Reconciliations (dollar amounts in millions)
Slide 31: Reconciliation of Segment Operating (Loss) Income to Adjusted EBITDA
KLX Energy Services 31 Reconciliation of Segment Operating (Loss) Income to Adjusted EBITDA (1) One-time costs are defined in the Reconciliation of Consolidated Net Loss to Adjusted EBITDA (loss) table above. For purposes of segment reconciliation, one-time costs also includes impairment and other c
Slide 32: Segment Operating Income (Loss) Margin Reconciliation
KLX Energy Services 32 Segment Operating Income (Loss) Margin Reconciliation (dollar amounts in millions)
Slide 33: Segment Adjusted EBITDA Margin Reconciliation
KLX Energy Services 33 Segment Adjusted EBITDA Margin Reconciliation (dollar amounts in millions)
Slide 34: Adjusted SG&A Margin Reconciliation
KLX Energy Services 34 Adjusted SG&A Margin Reconciliation (dollar amounts in millions)
Slide 35: Free Cash Flow Reconciliation
KLX Energy Services 35 Free Cash Flow Reconciliation (dollar amounts in millions)
Slide 36: Net Debt and Net Leverage Ratio Reconciliations
KLX Energy Services 36 Net Debt and Net Leverage Ratio Reconciliations (dollar amounts in millions)
KLX Energy Services Holdings — Investor Presentation (July 2024) on 6ix