Cactus, Inc. Class A Common Stock · NYSE:WHD
Cactus, Inc. Class A Common Stock — Investor Presentation (December 2018)
25 slides from Cactus, Inc. Class A Common Stock's investor presentation, Dec 10, 2018
Slide 1: Investor Presentation Cactus, Inc. December 2018
Investor Presentation Cactus, Inc. (NYSE: WHD) December 2018
Slide 2: Non-GAAP Measures and Forward-Looking Statements
2 Non-GAAP Measures This presentation includes references to EBITDA, Adjusted EBITDA and EBIT, which are not measures calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of EBITDA, Adjusted EBITDA and EBIT to net income, t
Slide 3: Executive Team
3 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. Mr. Bender successfully built and monetized Ingram Cactus Company (sold to Cameron in
Slide 4: Investment Highlights
4 Investment Highlights Highly Experienced Management and Operating Team with Strong Industry Relationships Innovative Products with Exposure Across Major Basins Leading Pure Play Wellhead and Pressure Control Equipment Solutions Provider for U.S. Onshore Substantial Cash Flow Generation Dynamic Man
Slide 5: Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well
5 Proprietary Equipment Across Drilling, Completion, and Production Phases of a Well Designed for pad drilling and intense completion environments Principal products: SafeDrill® wellheads, frac stacks, zipper manifolds, and production trees Time savings can exceed 30 hours of rig time per well
Slide 6: Company Snapshot
6 $259.5 $221.4 $155.0 $341.2 $509.1 2014 2015 2016 2017 LTM Q3 2018 NA 17.9% 9.6% 23.9% 25.6% 2014 2015 2016 2017 LTM Q3 2018 $90.1 $63.1 $32.2 $112.1 $194.1 2014 2015 2016 2017 LTM Q3 2018 LTM Q3 2018 Revenue by Type Revenue ($ in millions) Q3 2018 $61.3 Bakken Eagle Ford Permian DJ / Powd
Slide 7: Market Leader with Strong Growth
7 15 47 75 100 119 158 179 119 99 68 129 220 245 275 292 0.8% 2.5% 4.3% 5.9% 7.0% 8.9% 9.8% 14.4% 14.5% 17.5% 21.5% 24.4% 27.0% 26.6% 27.6% 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 Jun-18 Nov-18 Cactus Rigs Followed Market Share 1,931 1,899 1,729 1,6
Slide 8: Differentiated Business Model with Exposure to Favorable Industry Dynamics
8More favorable Less favorable Cactus Oilfield Equipment Pressure Pumping Proppant & Logistics Land Drilling Offshore Services Differentiated Offerings Margin Sustainability Through Cycle Minimal Capex Requirements Leverage to Well Count & Completion Intensity Low Personnel Requirements Strong Free
Slide 9: Increasing Well Counts Drive Our Product Business
9 15,018 20,163 22,705 2016A 2017A 2018E 483 853 1,013 2016A 2017A 2018E DJ / Niobrara Powder River Basin Bakken SCOOP / STACK HaynesvillePermian Eagle Ford Utica Marcellus Gulf Coast Bossier City, Louisiana Manufacturing Facility Increasing Well Counts Drive Our Product Business Total U.S. Onshore
Slide 10: Technically Advanced Pad Drilling Wellhead Systems
10 Technically Advanced Pad Drilling Wellhead Systems SafeDrill® Advantages Eliminates BOP Nipple up & Nipple down No waiting on cement Quick connect BOP adaptors for initial installs Entire system may be run through rotary table or riser Mandrel hangers allow casing to be rotated through the l
Slide 11: Increasing Completion Intensity Drives Our Rental Business
11 Increasing Completion Intensity Drives Our Rental Business Growth opportunity for Cactus Priced on per diem basis Market share increasing In the aggregate, less than 50% share of frac rentals for top 10 rental customers in 2018(1) Expanded capacity in 2018 Attractive payback on new eq
Slide 12: Cactus Completions Equipment Advantage
12 Cactus Completions Equipment Advantage Designs, manufactures, and rents a range of highly engineered and internally-developed products Reliable equipment providers rewarded for reducing non-productive frac time Larger pad sizes, longer laterals and more intensive fracs increase duration of rental
Slide 13: A Dynamic Manufacturing Advantage
13 A Dynamic Manufacturing Advantage; Responsive, Highly Scalable and Lower Cost Bossier City Facility Suzhou Facility Industry Leading Product Quality (API 6A / ISO 9001) Highly Engineered Products Cactus Employees HSE Focus Rapid 48 Hour Order Turnaround 5-Axis CNC Machining Customer Respon
Slide 14: Management Track Record 1986 to Current
14 1986 Current Scott and Joel Bender found Cactus Wellhead LLC Scott and Joel Bender appointed President and SVP, respectively, of Wood Group Pressure Control Scott and Joel Bender become President and VP Operations, respectively, of Ingram Cactus Company QA Director Chief Wellhead Engineer C
Slide 15: Returns & Margins Have Outperformed Peers
15 Cactus FTI DRQ WEIR NCSM SBO OIS HTG FETNOV 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% Returns & Margins Have Outperformed Peers Source: Company filings and Factset. Note: EBITDA Margins and ROCE for WHD, DRQ, FET, FTI, NCSM, NOV, OIS and SBO as of Q3 2018. EBITDA Mar
Slide 16: Continued to Build on the Success of 2017
16 $55.1 $61.3 Q2 2018 Q3 2018 $34.1 $61.3 Q3 2017 Q3 2018 $53.7 $79.4 $21.2 $38.1 $21.1 $33.2 $96.0 $150.7 Q3 2017 Q3 2018 $73.3 $79.4 $34.9 $38.1 $30.3 $33.2 $138.5 $150.7 Q2 2018 Q3 2018 U.S. onshore rigs followed(2) increased by 17% from December 2017 to September 2018 Significant investment
Slide 17: Clean Balance Sheet & Low Capital Intensity
17 $23.4 $17.4 $30.7 $63.7 2015 2016 2017 LTM Q3 2018 $39.7 $14.8 $81.4 $130.4 2015 2016 2017 LTM Q3 2018 Q3 2018 cash balance of $42.0 million; no borrowings Liquidity and strong cash flows support future growth Closed new five-year, $75.0 million asset-based revolving facility in August 2018
Slide 18: Strong 2018 Results Expected; Positioned for 2019
18 Strong 2018 Results Expected; Positioned for 2019 Wellhead Product business resilient Near term slow down in Rental business driven by budget exhaustion and fourth quarter holidays Completion delays likely to push production tree orders to the right Current Performance Outlook Anticipate
Slide 19: Appendix
Appendix
Slide 20: Building a Leading Equipment Company
20 1959 19801975 1985 1990 1995 2000 2005 2010 ICC sold to Cooper Cameron Corporation (1996) 2018 Scott Bender appointed President of Cactus Wellhead Equipment (“CWE”), a subsidiary of Cactus Pipe (1977) Cactus Pipe founded (1959) CWE Merges with Ingram Petroleum Services, forming Ingram Cactus Comp
Slide 21: Quarterly Financial Performance
21 $39.5 $38.2 Q2 2018 Q3 2018 $28.6 $38.2 Q3 2017 Q3 2018 $34.1 $61.3 Q3 2017 Q3 2018 $55.1 $61.3 Q2 2018 Q3 2018 $96.0 $150.7 Q3 2017 Q3 2018 $138.5 $150.7 Q2 2018 Q3 2018 Quarterly Financial Performance Total Revenue ($ in millions) Adj. EBITDA(1) ($ in millions) & Adj. EBITDA(1) as % of Revenue
Slide 22: Annual Financial Performance
22 34.7% 28.5% 20.8% 32.9% 38.1% 2014 2015 2016 2017 LTM Q3 2018 NA $39.7 $14.8 $81.4 $130.4 2014 2015 2016 2017 LTM Q3 2018 $90.1 $63.1 $32.2 $112.1 $194.1 2014 2015 2016 2017 LTM Q3 2018 $259.5 $221.4 $155.0 $341.2 $509.1 2014 2015 2016 2017 LTM Q3 2018 Annual Financial Performance Total Revenue (
Slide 23: Cactus Equipment Positioned on a 4-Well Pad
23 Cactus Equipment Positioned on a 4-Well Pad 2 4 3 4 1 1 4 ▪ Wellheads are required by each well over production life ▪ One of the first pieces of equipment to be installed ▪ Cactus wellheads installed below surface Product Sold1 ▪ Frac stacks are connected to the wellhead for the fracturing phase
Slide 24: Non-GAAP Reconciliation
24 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 finan
Slide 25: Investor Relations Contact
25 Investor Relations Contact John Fitzgerald Director of Corporate Development & Investor Relations 713-904-4655 IR@CactusWHD.com