Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (September 2021)
29 slides from Cactus, Inc. Class A Common Stock's investor presentation, September 2021
Slide 1: Investor Presentation September 2021
slnvestor Presentation =.Gactus, Inc. (NYSESWE September 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 Innovative and Differentiated Products & Services 2 That Sustain Relative Margin Resilience 3 Dynamic Operating and Manufacturing Capabilities Through-Cycle Outperformance 4 Ret
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 Service $341.2 $348.6 and Other $155.0 22% Product 2016 2017
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 Cactus Rigs Followed 43.1% 42.7% (1) 41.7% 40.0% Market Share 291 300 283 264 35.0% 246 250 234 30.0% 211 30.9% 29.6% 29.4% 27.8% 200 26.0% 182 25.0% 179 26.0% 24.3% 161 158 21.2% 20.0% 150 17.5
Slide 8: Differentiated Margin Profile Through the Cycle
Differentiated Margin Profile Through the Cycle Historical Adjusted EBITDA Margins (2014 – 2020) (1)(2) Adjusted EBITDA Margin (2014 – 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 Peer A Peer B Peer C 0%
Slide 9: 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 10: Favorable Macro Trends Benefit Cactus
Favorable Macro Trends Benefit Cactus Improving Activity Environment U.S. Wells Drilled Per Rig Per Year(1) ◼ Recovery in energy demand driving increased need for oil & gas production 31.9 ◼ Depressed capital spending levels in 2020 driving 27.6 potential multi-year growth in rig and well counts 23.
Slide 11: Innovations Enhance Rental Business Value Proposition
Innovations Enhance Rental Business Value Proposition Complement & enhance legacy rental offerings without additional personnel ◼ Significantly reduce non-productive time (“NPT”) by increasing reliability and automation ◼ Increase safety and reduce costs by removing personnel from the exclusion zone
Slide 12: Differentiated Offerings Enable Customers to Meet ESG-Related Goals
Differentiated Offerings Enable Customers to Meet ESG-Related Goals Faster Safer Cleaner ◼ Cactus enables customers to ◼ Cactus’ equipment increases ◼ Recently began deploying drill and complete wells faster employee safety by enabling: equipment allowing for: ◼ Translates to fewer rig and frac ◼ Au
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 Bossier City, Louisiana Manufacturing Facility ◼ Spread across all key producing basins ◼ Flexible cost structure at branches & Bossier City ◼ Ability to scale
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 20% 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: Recent Growth with Private Operators Complements Existing Customer Relationships
Recent Growth with Private Operators Complements Existing Customer Relationships 1H21 Total Revenue by Customer Type 1H21 Product Revenue by Customer Type 1H21 Rental Revenue by Customer Type Other Majors Other Other 0% Majors 0% Majors 7% 1% Private 4% 16% Private Private 22% 24% 22% SMID SMID SMID
Slide 18: Recent Success With Private Operators
Recent Success With Private Operators Cactus’ U.S. Onshore Rigs Followed (Private Operators)(1) 62 42 29 20 17 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Cactus’ Onshore Rigs Followed with Private Operators Has More Than Tripled Since Mid-2020 Note: Private operators are firms that are not listed on a
Slide 19: Returns & Margins Have Outperformed Peers
Returns & Margins Have Outperformed Peers 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 – 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 publicly avai
Slide 20: Execution Has Driven Equity Outperformance
Execution Has Driven Equity Outperformance Share Price Performance of Cactus vs. the OSX since IPO 92% 0% (62%) WHD OSX Share Price Outperformed the OSX in Every Year Since Its IPO in 2018 Note: Data based on share price performance from 2/7/2018 to 9/3/2021.Cactus 2/7/2018 price set as IPO price of
Slide 21: History of Prudent Investment Strategy
History of Prudent Investment Strategy Goodwill, Intangible, Long-Lived & Other Asset Impairment Expenses ($mm) (2015 – 2020) ($mm) $10,597 $7,690 $1,000 $750 $664 $648 $500 $250 $180 $133 $37 $0 $- WHD Peer A Peer B Peer C Peer D Peer E Peer F Peer G Cactus Has Recorded Zero Impairment Charges Thro
Slide 22: Clean Balance Sheet & Low Capital Intensity
Clean Balance Sheet & Low Capital Intensity Adjusted EBITDA(1) – Net Capital Expenditures(2) ($ in Balance Sheet & Capital Summary millions) ◼ June 30, 2021 cash balance of approximately $173.1 $309 million $144.4 ◼ Modest maintenance capex requirements $102.9 ◼ Full year 2021 net capital expenditur
Slide 23: Recent Performance & Outlook
Recent Performance & Outlook Second Quarter 2021 Performance ◼ Revenues up 29% sequentially ◼ Adjusted EBITDA margins of approximately 27% ◼ Increased cash position by approximately $17mm during the quarter after $7mm in dividend & distribution payments ◼ Approved 11% increase in quarterly cash divi
Slide 24: 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 25: Appendix
Appendix y
Slide 26: Company Organizational Structure
Company Organizational Structure Company Profile Organizational Structure(1) Ticker WHD (NYSE) Class A Shares Outstanding(1) 58.2mm CW Unit Public Class B Shares Outstanding(1) 17.5mm Holders Investors Total Shares Outstanding(1) 75.7mm Market Capitalization(2) ~$2.9bn Class B Common Stock Class A C
Slide 27: 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 28: 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 29: Investor Relations Contact
Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com 29