Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Investor Presentation (February 2015)
26 slides from Npk International's investor presentation, Feb 23, 2015
Slide 1: Newpark Resources Presentation February 2015
Newpark Resources Presentation February 2015 NYSE: NR
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. Allstatements that address expectations or projections about the future,
Slide 3: Operating Segments and Customer Markets
> Operating Segments: > Fluids Systems > Mats and Integrated Services > Customer markets: > Oil and Gas Industry > Recent expansion into utilities market (Mats) 2012 RevenuebySegment* Operating Income by Segment* > Key geographic markets: 14% . > North America 42% 86% = > EMEA ° > Latin America Bi F
Slide 4: Global Presence: 2014 Revenue by Region
1 or: — Sa GLOBAL PRESENCE 2014 Revenue by Region - $1.1 billion Canada GEMEA OlatinAmerica MAPAC U.S.
Slide 5: Strategic Drivers — Technology
Vi NEWPARK STRATEGIC DRIVERS — TECHNOLOGY > Driving to be the recognized technology leader in each of our business units > Fluids Systems > Our Evolution” family of high-performance water-based systems introduced in 2010 > New worldwide technology center opened in June 2013 > Mats & Integrated Servi
Slide 6: Strategic Drivers — International Expansion
NEWPARK STRATEGIC DRIVERS — INTERNATIONAL EXPANSION > International expansion is key to our strategy > Stability of revenue; longer term contracts > Mostly lOC’s and NOC’s >Fewer Competitors > Key contract start-ups in 2014: > Kuwait Oil Company > Black Sea deepwater contract > Cairn (India) > Multi
Slide 7: Strategic Drivers — Customer Support
NEWPARK STRATEGIC DRIVERS — CUSTOMER SUPPORT om st Rated Total Satisfaction OILFIELD SERVICES T-\ Drilling roppants > Focused on backing our leading technology with superior customer support > Advanced training programs for fluid technicians continue to enhance product and service knowledge Strength
Slide 8: Fluids Systems Revenues
Revenues($ millions) > Largest independent drilling fluids Total Segment Revenues provider $1,200 > 3° largest drillingfluids $1,000 company worldwide > Leading the industry in the development of new fluids technology > Expanding activities with 10C’s/NOC’s > Leveraging relationships globally 2009 =
Slide 9: North American Revenues
North American Revenues seis 9654 $585 = "g $400 é 2009 ©2010» 2011S 2012-2013 Market Share % by Region - 2014(0) 2014 sicakatahre e98e8 —; g mp | 3 mi al 3 = Vv FF PF SF FSF és» es & & & - é 1 Basedoncompany data nad. f Scogresources q FE AFR rae EL|P AED. = ‘Al aur outa f\ encana’ Sache ft af Ches
Slide 10: EMEA Core Markets
> Core Markets > Algeria, Romania, Italy, Tunisia, Libya > > 2014 benefited from new contracts in the Black Sea, Kuwait and India yg N > Recent contract awards in Algeria, offshore Libya and Egypt to begin in 2015 $180 $160 $140 $120 $100 EMEA Revenues $116 gi31 $113. $117 Revenues($ millions) 228 E
Slide 11: Latin America Revenues
> 2007 entry in Brazil helped establish Newpark in Deepwater market > Focus on proprietary products such as DeepDrill°, water-based technology > Selectively reducing exposure to Petrobras while preserving ability to pursue IOC opportunities longer-term Latin America Revenues $120 $99 $100 $87 cas Re
Slide 12: Fluids Systems — Asia Pacific
NEWPARK FLUIDS SYSTEMS — ASIA PACIFIC > 2011 acquisition provided entry in the APAC region > Looking to further penetrate market with Evolution System > Activity levels soft in 2014, expecting Revenues ($ millions) modest recovery in 2015 Asia Pacific Revenues $45 $42 $36 $35 $28 $20 $25 $25 $20 $15
Slide 13: Evolution System
5 “ Evolution Ri > Evolution system continues to Eee demonstrate superior drilling performance > Patent covering Evolution System issued in January 2014 Revenues ($ millions) > Premium margin compared to 2010 © 2011«-2012-S «20182014 traditional fluid systems Evolution by Revenue Mix - 2014 Region -
Slide 14: Expansion into Deepwater
NSION INTO DEEPWATER Foundation established in Brazil > Recently expanded into Black Sea Looking to leverage our experience globally, starting in Gulf of Mexico > Approximately $800M drilling fluids market* > Expected growth over the next 3-5 years > Limited presence historically Investing $30M in i
Slide 15: Mats and Integrated Services: Composite Matting
> Leading provider in composite matting products > Reduces operator’s costs and improves environmental protection during drilling and completion phase > Patented technology has elevated barriers to entry > Seeking to accelerate growth by expanding into new markets > Manufacturing expansion coming on
Slide 16: Mats Revenues by Type
> Revenues include rentals and sale of DURA-BASE composite mats > Mat sales targeted to international E&P s1s0 Revenues by Type customers and domestic customers ie #Rental and series outside of the oil and gas industry hn, > Manufacturing capacity limited until ia expansion completed : eo > Allocati
Slide 17: Financial Summary
Revenues ($ mi z 8 ‘$1,000 NEWPARK FINANCIAL SUMMARY Revenue and EBITDA Margin* 1,200 goa $4118 P $800 £ Z $600 é 3 $400 “ §200 $o 2010 2011 2012 2013 2014 *Reflectsreported operating income plus depreciation and amortization expense, a a percent of consolidetedrevenues Capital Structure $300 ; MEEI
Slide 18: U.S. Drilling Activity and Response
U.S. Drillit Horizontal LEPEERE EPEC ETEE: Rigs by Type” —Vertical = —Directional Oil vs Gas Rig Mix” * Source: Baker Hughes 18 jing cautious approach until g activity stabilizes Continue to execute on longer- term strategic investments Reduce other discretionary spending and capital investments Bal
Slide 19: Appendix
APPENDIX
Slide 20: Consolidated Statements of Income
(Unaudited) ‘Three Months Ended ‘Twelve Months Ended December 31, September 30, December31, December 31, December 31, thousands. emept per share data 2014 2014 2013, 2014 2013 Revenues S 306162 $ 296964 S$ 245925 S$ LIIRHIG S$ 100,356 Cost ofrevenues 237,067 228661 204,158 876999 858,467 Selling. ge
Slide 21: Segment Revenues and Operating Income
(Unaudited) Three Months Ended December 31, | September 30, December 31, (in thousands) 2014 2014 2013 Revenues Fluids systems S$ 261029 $ )=—-251.234 «$212,069 Mats and integrated services Total revenues Operating income (loss) Fluids systems Mats and integrated services Corporate office Total oper
Slide 22: Balance Sheet
ASSES (Cashiand cash equivalent Recefrable, nat vents Deferadeaxaneets Preps expenses and othercoment assets ‘Asses ofdecomtinoed operons ‘Dalcomatsse Property plaatand equipment set Goer Otherinangbe asses,set Onarassets Asse of dcontinoed operons “Dalasste [LIABILITIES AND STOCKEDLDERS EQUIY ‘Shor
Slide 23: Cash Flow Statement
“Twebw Mouths Ended Decemt a thousands 2018 2013 (Cashflow fam operating ates: ‘Netincome Som $ 65n3 ‘Adjustments to concile net income to aatcath povided by operons: Iovatment charges 3 ve Deveeinton and smonizaon 42050 44108 ‘Stock-based compensation sense 34 200 Provisioner defemedincome tes cen)
Slide 24: Management Team
Paul Howes Gregg Piontek Mark Airola Bruce Smith Jeff Juergens President & CEO VP & CFO SVP, GC & Admin Officer President Fluids Systems President Mats & Integrated Services 24
Slide 25: Management Biographies
Paul L. Howes, President & CEO: Paul joined Newpark’s Board of Directors and was appointed its Chief Executive Officer in March 2006. In June 2006, Mr. Howes also was appointed as Newpark’s President. Mr. Howes’ career has included experience in the defense industry, chemicals and plastics manufactu
Slide 26: Management Biographies (continued)
Bruce C. Smith, Executive VP and President Fluids Systems: Bruce joined Newpark in April 1998 as Vice President, International. Since October 2000, he has served as President of its subsidiary Newpark Drilling Fluids, L.P. Prior to joining Newpark, Mr. Smith was the Managing Director of the U.K. ope
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