Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (March 2018)
21 slides from Cactus, Inc. Class A Common Stock's investor presentation, Mar 27, 2018
Slide 1: Important Disclosures
Important Disclosures Non-GAAP Measures This presentation includes references to EBITDA and Adjusted EBITDA, which are not measures calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For more information on the non-GAAP financial measures
Slide 2: Investment Highlights
Investment Highlights Contributing to Leading Market Share and Strong Growth Profile 3 Highly Experienced Management and Operating Team with Strong Industry Relationships Substantial Cash Flow Generation Dynamic Manufacturing Capabilities Product Innovations and Execution Leading Pure Play Wellhead
Slide 3: Company Overview
Company Overview Year Ended December 31, 2017 Operations Snapshot Revenue by Type Selected Active Basins Permian SCOOP / STACK Marcellus / Utica Eagle Ford Bakken Field Service & Other,* 22% Product, 55% Rental, 23% Q3 YTD Actual $236.4 Q3 YTD Actual $77.1 *Product Revenue Includes Drilling and Prod
Slide 4: Continued Market Share Expansion
Continued Market Share Expansion Historical U.S. Onshore Market Share(1) 35% 30% 25% 20% 15% 10% 5% 0% 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 Source: Baker Hughes Rig Count Data, as published on the Friday immediately preceding the 15th day of each
Slide 5: Cactus Has Outperformed Peer Group on Margins and Returns
Cactus Has Outperformed Margins 2017 EBITDA Margin (%) Peer Group on Returns and ROCE(1) (2015 –2017) (%) (10.0%) (30.0%) Source: Company filings and Factset. Market Data as of 3/20/2018. 6 1) 2) ROCE reflects average of 2015, 2016 and 2017 ROCEs. ROCE = EBIT / (Average of the current and previous y
Slide 6: Differentiated Equipment Across Drilling, Completion, and Production Phases of a Well
Differentiated Equipment Across Drilling, Completion, and Production Phases of a Well We believe we have gained market share due to our differentiated and feature-rich wellhead systems Our principal products include our Cactus SafeDrill™ wellhead systems, frac stacks, zipper manifolds, and productio
Slide 7: Increasing Well Counts Drive Our Product Business
Increasing Well Counts Drive Our Product Business Total U.S. Onshore Wells Drilled Bakken Powder River Basin 27,140 Marcellus Utica DJ / Niobrara SCOOP / STACK Permian Haynesville Gulf Coast Eagle Ford 2016A 2017A 2018E Source: Spears and Associates March Report. Average Active U.S. Onshore Rigs Ope
Slide 8: Technically Advanced Pad Drilling Wellhead Systems
Technically Advanced Pad Drilling Wellhead Systems Conventional Wellhead SafeDrillTM Advantage Safety Reduced leak paths due to elimination of lock screws Time Savings Eliminates BOP Nipple up & Nipple down No waiting on cement No “hot work” required to cut casing with torch Quick connect BOP adapto
Slide 9: Increasing Completion Intensity Drives Our Rental Business
Increasing Completion Intensity Rental Business Proppant / Well (millions of pounds) Drives Our 20 15 10 5 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Increasing Stages Pumped in the US 250,000 200,000 150,000 100,000 50,000 0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Slide 10: Cactus Pressure Control Equipment Advantage
Cactus Pressure Control Equipment Advantage SB Series Frac Valves Designs, manufactures, and rents a range of highly engineered and internally-developed products Built-for-purpose frac valve Designed for high-intensity frac applications Redundant sealing at pressure exposure Reduced price sensitivit
Slide 11: A Dynamic Manufacturing Advantage
A Dynamic Manufacturing Advantage; Responsive, Highly Scalable and Lower Cost Responsive manufacturing in the U.S. supplemented by high volume production in China U.S. Facility China Facility Industry Leading Product Quality (API 6A / ISO 9001) Highly Engineered Products Cactus Employees HSE Focus R
Slide 12: Clean Balance Sheet & Low Capital Intensity
Clean Balance Sheet & Low Capital Intensity Strong balance sheet with track record of cash flow generation EBITDA – Capex ($ in millions)(1) $81.5 2015 2016 2017 Net Capital Expenditures ($ in millions)(1) $30.7 2015 2016 2017 13 1) 2) Capital expenditures less asset sale proceeds and excluding capi
Slide 13: 2017 was a Breakout Year for Cactus
2017 was a Breakout Year for Cactus Revenues up 120% Adjusted EBITDA rose 248% Generated free cash flow U.S. onshore wellhead market share increased from 21.2% during Q4 2016 to 26.0% during Q4 2017 Commercialized frac rental innovations to reduce repair time and enhance reliability Expanded Suzhou,
Slide 14: Entering 2018 with Significant Momentum
Entering 2018 with Significant Momentum Drivers that Support our Growth and Positive Continuing to innovate Accelerating investment in large-bore frac rental equipment Expanding Bossier City facility to accommodate products manufactured in China Expanding West Texas and New Mexico service centers Ex
Slide 15: Entering 2018 with Significant Momentum and Positive Drivers
Entering 2018 with Significant Momentum and Positive Drivers that Support our Growth = Continuing to innovate = Accelerating investment in large-bore frac rental equipment = Expanding Bossier City facility to accommodate products manufactured in China = Expanding West Texas and New Mexico service ce
Slide 16: Highly Experienced and Well Incentivized Team with Strong Industry Relationships
Highly Experienced and Well Incentivized Team with Strong Industry Relationships Management team is well incentivized as it owns ~33% of the business Track record of building & successfully monetizing similar business Strength of leadership is attested by management and operating teams that joined f
Slide 17: Building a Leading Equipment Company
Building a Leading Equipment Company Management team has built the foundation of this company over four decades with a proven track record of success. GE Oil and Gas (2011) Company (“ICC”) become President Rental Business Manager 1959 1975 1980 1985 1990 1995 2000 2005 2010 2018 Bender found with 18
Slide 18: Cactus Equipment Positioned on a 4-Well Pad
Cactus Equipment Positioned on a 4-Well Pad Product Sold Product Rented Product Rented Services Provided Wellheads are required by each well over production life One of the first pieces of equipment to be installed Cactus wellheads installed below surface Frac stacks are connected to the wellhead fo
Slide 19: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation Predecessor Historical Year Ended ($ in thousands) December 31, 2017 December 31, 2016 December 31, 2015 Net income (loss) Interest expense, net Income tax expense Depreciation and amortization EBITDA (Gain) loss on debt extinguishment Stock-based compensati
Slide 20: Investor Relations Contact
Investor Relations Contact Stephen Tadlock VP and Chief Administrative 713-396-5748 IR@CactusWHD.com Officer 21
Slide 21: Stephen Tadlock
Stephen Tadlock VP and Chief Administrative Officer 713-396-5748 IR@CactusWHD.com 2