KLX Energy Services KLX ENERGY SERVICES ACQUISITION OF MOTLEY SERVICES October 22, 2018
Non-GAAP Financial Measures This presentation uses non-GAAP financial measures, including but not limited to, Adjusted EBITDA, Adjusted EBITDA margin, Pro Forma Adjusted EBITDA and Adjusted operating earnings. These non-GAAP financial…
Executive Summary KLX Energy Services Holdings, Inc. (KLXE or the Company) intends to issue 250mm of 7-year Senior Secured Notes (the Notes) KLXE spun out from KLX Inc. on September 14, 2018 as an independent, publicly-traded Company,…
Company Overview
KLX Energy Services - A New Publicly Traded Company 1 Scalable platform, well-positioned to participate in sector consolidation Differentiated services and market position generates superior profit margins 2 3 Rapid organic…
Management Overview Amin Khoury Tom McCaffrey Gary Roberts Chairman, Chief Executive Officer Senior Vice President and Chief Vice President and General Manager Financial Officer Founded B/E Aerospace in 1987 Served as President…
Building Businesses: Long History of Successful Strategic Acquisitions and Integrations Leading to Value Creation Executive Management of KLX Energy Services has a proven track record of building industry-leading businesses through…
Key Investment Highlights Attractive Long-Term Financial Growth Prospects with Superior Growth Rate, Margin Profile and 1 Return on Investment 2 Strong Footprint in Key Energy Producing Geographies Totally Integrated, Metrics…
KLX Energy Services at a Glance Business Overview Revenue Breakdown by Leading provider of completion, intervention and Region production services and products in the major onshore oil and gas producing regions of the United States…
Broad Range of KLX Services and Certified Specialized Equipment Create Competitive Advantage Completion Intervention Production (52% of Q218 revenues) (25% of Q218 revenues) (23% of Q218 revenues) Pump Down Wireline Services Fishing…
Actively Managed KLXE Through the Cycle and Now Well Positioned to Benefit from Recovery 2015 2013 - 2014 2016 - 2018 Oil and Gas Prices KLXE Founded Positioned for Growth Collapse Expansion into the energy services Integrated the…
Acquisitions Have Been Fully Integrated, Driving Efficiencies Across the Business The seven previously acquired companies have been completely integrated One operational control system, with company-wide KPIs to drive business…
Strong Footprint in Key Energy Producing Regions Full product and service offering focused on well completion, intervention and production with a presence in major North American onshore energy producing shale basins H118…
Southwest Region Region Overview Top Clients Top 10 accounts responsible for 28% of the active rigs in the Permian basin (137 of 490 rigs) Comprised of Permian Basin and Eagle Ford Shale High quality, state of the art assets…
Rocky Mountains Region Region Overview Top Clients Generated 40% of Q2 2018 revenues Comprised of the Bakken formation, Williston, DJ, Uinta and Piceance Basins and Niobrara Shale Strong brand recognition and substantial market…
Northeast/Mid-Con Region Region Overview Top Clients Generated 25% of Q2 2018 revenues Comprised of the Marcellus and Utica shales as well as the Mid- Continent STACK and SCOOP and Haynesville Strong brand recognition High…
Differentiated Technical Experience and Aptitude Creates Competitive Advantages Next level readiness brought to every project driven by dedicated 24 / 7 experienced field professionals Experienced operating management team (averaging…
In-House R&D Capability Supports Continuous Improvement by Aligning New Tools with Field Engineers Requirements Next Generation Products Market Monitoring Minimize non- productive time and Applications Group maximize…
Solid Balance Sheet and Disciplined Approach to Capital Deployment to Drive Growth Financial Annualized third quarter 2018 KLXE stand-alone guidance; revenues of 480 million and Adj. EBITDA of 106 million are expected to increase…
Key Elements of KLXE Business Strategy 1 Capitalize on the Large, Highly Fragmented and Rapidly Growing Energy Technical Services Market Increase Penetration of Services and Product Line Offerings within each Geographic 2 Region…
Acquisition Overview
Transaction Overview and Rationale KLX Energy Services Holdings, Inc. (KLX Energy Services or KLXE) to acquire Motley Services for 148 million Consideration includes 139 million in cash and 9 million in stock Represents a multiple…
Overview of Motley Services Coiled Tubing Wireline Thru-tubing A leader in large diameter, high Best-in-class performance metrics Offer broad range of thru-tubing services specification coiled tubing services Units equipped with…
Overview of Motley Footprint Purpose-Built Facility Located in the Heart of the Permian Centrally located within the Permian Basin with headquarters in Odessa, Texas Facility sits on 29 acres and includes a coil shop, a wireline shop…
Motleys Best-In-Class Large Diameter Coiled Tubing Units Five large diameter, customized, coiled tubing units and two smaller units, all 2017 or newer Reel Trailer coiled tubing capacity 20,000 to 25,000 ft. All units equipped with…
Market Drivers Increasingly Complex, Technically Demanding Longer Laterals Wells are becoming increasingly more complex and therefore more technically demanding Transition to horizontal wells Longer laterals Tighter spaces between…
Combined Results (Including Motley Acquisition)
KLXE / Motley Acquisition Combined Results The combination results in increased size and scale Diversifies the KLXE PSL offering Provides cross-selling opportunities initially in the Southwest and eventually across all KLXE…
Strong Footprint in Key Energy Producing Regions Broad range of product and service offering focused on well completion, intervention and production with a presence in major North American onshore energy producing shale basins KLXE…
Strong Balance Sheet, Substantial Liquidity, Modest Pro Forma Leverage Liquidity overview Commentary (mm) Amount 100mm ABL RC, with 72.5mm of borrowing base availability as of August 31st, 2018 Pro forma Cash on hand 50.0 History…
Best-in-class Credit Metrics Benchmarking Net Debt to 2Q18 LTM Adj. EBITDA1 2Q18 LTM Adj. EBITDA margin Median = 3.3x Median = 14.4% 5.8x 17.3% 16.4% 14.9% 3.9x 13.8% 3.7x 13.1% 3.0x 11.7% 2.5x 1.1x PF KLXE PF NINE BAS…
Appendix
Adjusted EBITDA reconciliation Year Ended January 31, Six Months Ended July 31, TTM July 31, (in millions, unaudited) 2018 2017 2018 2018 2017 2018 Adjusted operating (loss) earnings and Adjusted EBITDA reconciliation Net (loss)…
Adjusted Earnings Per Share reconciliation KLX ENERGY SERVICES HOLDINGS, INC. PRO FORMA RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS PER DILUTED SHARE (In Millions, Except Per Share Data) THIRD QUARTER 2018 THIRD…
Adjusted EBITDA reconciliation KLX ENERGY SERVICES HOLDINGS, INC. KLX ENERGY SERVICES HOLDINGS, INC. PRO FORMA RECONCILIATION OF CONSOLIDATED OPERATING EARNINGS RECONCILIATION OF OPERATING EARNINGS TO ADJUSTED OPERATING EARNINGS AND…
Return on Invested Capital (ROIC) reconciliation KLX ENERGY SERVICES HOLDINGS, INC. PRO FORMA RECONCILIATION OF CONSOLIDATED NET EARNINGS TO RETURN ON INVESTED CAPITAL (In Millions) THREE MONTHS ENDED October 31, 2018 Net…
Board of Directors 8 highly-qualified directors, of which 7 are independent, bringing with them diverse knowledge and expertise Amin J. Khoury Founded B/E Aerospace in 1987 Chairman & CEO Chairman of B/E Aerospace since 1987 and CEO…
KLX Energy Services KLX ENERGY SERVICES ACQUISITION OF MOTLEY SERVICES October 22, 2018
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