Investor Presentation MAY 2017

Similar documents
U.S. Silica. Investor Presentation November 2012

Investor Presentation. August 2017

Bank of America Merrill Lynch

Third Quarter 2017 Conference Call

TriNet Group, Inc. William Blair Growth Company Conference June 2017

Bemis Company, Inc. KeyBanc Capital Markets Basic Materials & Packaging Conference

Genesee & Wyoming. September, Genesee & Wyoming Inc.

GATX Corporation Investor Relations - Press Release

TriNet Group, Inc. Investor Presentation November 2017

Oil Price Adjustments

Cautionary Note Regarding Forward Looking Statements

Dan Kelly. June 14, 2013

Letter to Shareholders Q2 FY18

Financial Objectives. Forward Looking Statements. Symantec 2012 Financial Analyst Day 5/24/2012. James Beer. EVP & Chief Financial Officer

SILVERCORP REPORTS SILVER PRODUCTION OF 5.0 MILLION OUNCES, CASH FLOWS FROM OPERATIONS OF $31.9 MILLION, OR $0

Financial and other information related to the intended combination of Intrum Justitia and Lindorff published by Intrum Justitia

IBM 4Q 2016 Earnings. January 19, ibm.com/investor

STEVEN ILKAY MANAGING DIRECTOR Steven Ilkay, Angle Capital ,

Las Vegas Sands Corp. Reports Landmark Fourth Quarter and Full Year 2011 Results

Logitech Q1 Fiscal Year 2015 Preliminary Financial Results Management s Prepared Remarks (July 23, 2014)

Morgan Stanley Conference. November 15, 2017

Avery Dennison Investor Presentation August 2014

Making the Switch to Natural Quartz and Resin Coated Proppant. Fabian Ros & Joey Chbeir

ENERGY SLIDESHOW. Federal Reserve Bank of Dallas

SILVERCORP REPORTS Q3 RESULTS: NET INCOME OF $12.7 MILLION, $0.08 PER SHARE AND PROVIDES FISCAL 2019 PRODUCTION AND CASH COSTS GUIDANCE

Luc Gregoire Chief Financial Officer. Drexel Hamilton Annual Telecom, Media and Technology Conference September 6, 2017

Brightcove Inc. Investor Presentation. May 2017

Pacific Ethanol, Inc.

Management Presentation. November 2017

Trex Company Investor Presentation. May 2017

TECHNOLOGY INNOVATION SOLUTIONS. Investor Presentation

Revenue for chemical manufacturers

Monotype. Investor Update September 2017

WILLIAM BLAIR GROWTH STOCK CONFERENCE. June 14, 2017

Oil & Gas Update. December 2014 Oil & Gas Update

Heritage - Crystal Clean, Inc. Investor Presentation Q1 2017

Accounting for Manufacturing

Forward looking statements and non-gaap measures

ARRIS Announces Acquisition of BigBand Networks. Building Leadership in Video Networking October 11, 2011

Rockwell Automation Company Overview January 2017

Successful Completion Optimization of the Eagle Ford Shale

FedEx Corporation Investor Relations February 12, 2018

Health, Safety, and Environmental Building Collaboration and Culture

CB&I Investor Presentation March 2017

Unleashing the Full Potential of Services

SPE Copyright 2012, Society of Petroleum Engineers

Supplemental Financial Schedules May 19, 2015

ready for change? REVENUE RECOGNITION Private Equity and their Portfolio Companies

Airgain A leading provider of advanced antenna technologies

Annual General Meeting Element Fleet Management Corp. JUNE 6, 2017

TEEKAY LNG PARTNERS Q EARNINGS AND BUSINESS OUTLOOK PRESENTATION February 18, 2016

Hewlett Packard Enterprise SEC Form 10 Filing

Better, Faster Decisions through Contracting Analytics. From: By: Taylor Smith Supply Chain Supervisor of Technology Enablement

PBF Energy. State College, PA. North East Association of Rail Shippers Fall Conference. October 1, 2014

Securities Analyst Meeting 2017 PRINTING. Enrique Lores President, Imaging and Printing Business

Energy Outlook. Kurt Barrow Vice President, Oil Markets, Midstream and Downstream Insights, IHS Markit

Thank you, and welcome to The New York Times Company s second-quarter 2015 earnings conference call.

Acquisition of Amplify Snack Brands, Inc. December 18, 2017

Thoughts on US Oil Production

EMEA MARKET MARKETING HEIDI ARKINSTALL CMO. RENE OEHLERKING Jaybird. UJESH DESAI GM, Gaming

Las Vegas Sands Corp. Reports First Quarter 2011 Results

I n t e r i m R e p o r t

Nord Anglia Education Second Quarter Fiscal 2014 Results Presentation. April 23, 2014

SRF Limited Q4 & FY17 Results Presentation

Adobe Investor Presentation

Fresenius Investor News

Fresenius Investor News

CYPRESS ENERGY PARTNERS. MLPA Investor Presentation June 1 st, NYSE: CELP Essential Midstream Services

QAD Inc. Corporate Update March 2015

Q1 Fiscal 2016 Statistics

Las Vegas Sands Corp. Reports Third Quarter 2010 Results

Johnston Press plc. Interim unaudited results for the 26 week period ended 1 July Strong i performance and further digital revenue growth

Highlights. » EBT in the first half-year 11/12 amounts to 346 million ( 358 million in the previous year)

Las Vegas Sands Corp. Reports Fourth Quarter and Full Year 2010 Results

2017 Annual Shareholders Meeting. May 22, 2017 San Francisco, CA

Implementation Tips for Revenue Recognition Standards. June 20, 2017

JINPAN INTERNATIONAL LTD.

A Leading Global Health Care Group

Stericycle, Inc. Q NASDAQ: SRCL

COMPANY OVERVIEW JOHN MORIKIS CHAIRMAN, PRESIDENT & CHIEF EXECUTIVE OFFICER FINANCIAL COMMUNITY PRESENTATION OCTOBER 3, 2017

TSYS to Acquire Cayan

May 2013 NASDAQ: HSKA Heska Corporation. All Rights Reserved.

A LEADING GLOBAL HEALTH CARE GROUP. Frankfurt stock exchange (DAX30): FRE US ADR program (OTC): FSNUY

First Quarter FY18 First Fiscal Quarter Financial Results FY18 Financial Results May 31, 2017

APTIV SUPPLEMENTAL HISTORICAL FINANCIAL RESULTS

CenterPoint Energy Services. Current Market Fundamentals June 27, 2013

September Investor Presentation. Jerry Richards Vice President & Chief Financial Officer. Investor Presentation

Net Operating Revenue (NOR) in the 1Q09 reached R$ million, practically the same value reported in the same period of 2008

Investor Presentation. Santander Conference January 12 14, 2016

INNOVATION DRIVING GROWTH. Winter 2018

IAF Advisors Energy Market Outlook Kyle Cooper, (713) , October 31, 2014

Inventergy Global, Inc. (NASDAQ: INVT), Target Price: $10.30)

Oil and natural gas: market outlook and drivers

Financial results Q3 2017

Pacific Ethanol, Inc. (Nasdaq: PEIX) June 2016

2016 half year results August 10 th 2016

Performance Improvement

FAIRMOUNT SANTROL/UNIMIN MERGER. Moderator: Jenniffer Deckard. December 12, :30 a.m. ET

IP Networks & Applications

Transcription:

Investor Presentation MAY 2017

Forward-Looking Statements FORWARD LOOKING INFORMATION This presentation contains forward-looking statements. These statements can be identified by the use of forward-looking terminology including will, may, believe, expect, anticipate, estimate, continue, or other similar words. These statements discuss future expectations including company growth expectations, demand for our products, expectations regarding future prices, capacity expansion plans, market trends, liquidity, transportation services, commercial product launches and research and development plans and may contain projections of financial condition or of results of operations, or state other forward-looking information. These forward-looking statements involve risks and uncertainties. Many of these risks are beyond management s control. When considering these forward-looking statements, you should keep in mind the risk factors, Management s Discussion and Analysis of Financial Condition and Results of Operations, and other cautionary statements in the company s SEC filings. Forward-looking statements are not guarantees of future performance or an assurance that our current assumptions or projections are valid. Our actual results and plans could differ materially from those expressed in any forwardlooking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information or future events, except as required by law. NON-GAAP FINANCIAL MEASURES This presentation includes certain non-gaap financial measures, including EBITDA and Adjusted EBITDA. These non-gaap financial measures are used as supplemental financial measures by our management to evaluate our operating performance and compare the results of our operations from period to period without regard to the impact of our financing methods, capital structure or non-operating income and expenses. Adjusted EBITDA is also used by our lenders to evaluate our compliance with covenants. We believe that these measures are meaningful to our investors to enhance their understanding of our financial performance. These measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP and may differ from similarly titled measures used by other companies. For a reconciliation of such measures to the most directly comparable GAAP term, please see the appendix of this presentation. 1

Two Complementary Business Segments 2016 VOLUMES (million tons) Industrial & Recreational (I&R) Proppant Solutions Foundry, Glass, Sports & Recreation, Building and Filtration Markets Resin-Coated Sand Custom Blending High-Purity Sand Enhanced Resin 2.5 28% 6.4 72% Oil & Gas Markets Resin-Coated Proppants Propel SSP Tier 1 Northern White Sand Tier 2 Texas Gold Sand Complementary markets throughout business cycles Complementary products to leverage asset base 2

Core Differentiators for Long-Term Value Creation

FAIRMOUNT SANTROL Core Differentiators for Long-Term Value Creation FAIRMOUNT SANTROL Core Differentiators for Long-Term Value Creation Technology & Innovation Broad Product Portfolio Operational Scale & Efficiencies Extensive Distribution and Unit Train Capabilities Commitment to People, Planet & Prosperity 4

FAIRMOUNT SANTROL Staying True to All 3 Pillars of Sustainable Development 1.2 Total Case Incident Rate 4% reduction Safety 973 Course offerings completed Empower U 9,826 Total hours paid volunteer time Social Resp. Team 334 Connections profiles completed AI / Communications 27 Zerowaste-tolandfill facilities, 3R Team 5

TECHNOLOGY & INNOVATION Innovation Throughout Our Organization PRODUCT PORTFOLIO Deliver value to most technically demanding customers Patented & proprietary resins Innovative and cost-effective coated products to address downhole completion challenges OPERATIONS Leveraging proprietary manufacturing processes ADMINISTRATION & TECHNICAL SERVICES Using innovation across both Proppant Solutions and I&R Proprietary coating processes for Resin- Coated Sands and Propel SSP Proprietary mining & sand processing Vertical integration enabling manufacturing of proprietary resins Continuous improvement and tech support of existing products Origin-destination pairing optimization to reduce logistics costs, including the utilization of unit trains Continual innovation in all aspects of organization is core to Fairmount Santrol 6

TECHNOLOGY & INNOVATION Propel SSP Enhanced Productivity Driven by Design Optimization Field Trial Stats 100+ wells 20+ E&Ps Canadian Bakken Field Trial Areas Case Study Pinedale Bakken/ Three Forks Months +21% Uinta Codell/ Niobrara Mississippian Lime Utica Marcellus Months +45% Future Growth via Propel SSP 350 (brackish & produced water markets) Permian Escondido 7 Eagle Ford

Percentage Savings TECHNOLOGY & INNOVATION Propel SSP Operational Efficiency and Flexibility Significant operational efficiency and flexibility compared to traditional well designs: 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100% Water Usage Pumping Time Additive Usage Water Heating Screenouts -20% -20% -20% 0% -50% -50% -80% Slickwater Crosslinked Gel -100% -100% -100% Allows service companies to increase utilization of their own resources; important as completion resources tighten Propel SSP 350 product line extension allows for flexibility in water usage, including brackish and produced water 8

BROAD PRODUCT PORTFOLIO INDUSTRIAL & RECREATIONAL Only Integrated I&R Sand and Resin Solutions Provider HIGHER VALUE-ADD HIGH-PURITY SANDS CUSTOM BLENDING HIGH-PERFORMANCE RESIN SYSTEMS ENGINEERED RESIN-COATED SANDS PRODUCTS/ CHARACTERISTICS 99.9% pure silica Expert custom blends of minerals, aggregates, colorants, epoxies and polymers High-quality traditional foundry resin systems and proprietary resin development for advanced resin-coated proppants +200 engineered sandbased resin products Construction Foundries Construction Specialty products Foundries Construction Foundries TARGET MARKETS Glass manufacturing Sports & recreation Golf courses Colored play sand Sports turf Water filtration 9

BROAD PRODUCT PORTFOLIO PROPPANT SOLUTIONS Products to Address All Well Environments HIGHER CRUSH STRENGTH HIGHER PRODUCTIVITY Texas Gold Frac Sand RAW SAND High-Purity Northern White Silica Sands RESIN-COATED SAND Curable Resin- Coated Sand Precured Resin- Coated Sand TRANSPORT TECHNOLOGY Propel SSP PRODUCTS/ CHARACTERISTICS Tier 2 regional sand Tier 1 99.8% pure silica Highest flowback protection Increased strength Highest strength Increased flowback protection Proppant coating that enhances well productivity and operational efficiency through improved proppant transport and frac geometry optimization APPLICATIONS Lower-cost, API-certified sand applications Medium cost, delivers higher productivity versus regional sands Wells where flowback is a challenge High-temperature / high-pressure wells where the proppant needs extra strength & fines encapsulation In any well to optimize water, chemical and horsepower required to place the targeted proppant volume and mesh size WELL PRESSURE¹ Up to 6,000 psi Up to 9,000 psi Up to 14,000 psi Up to 16,000 psi Dependent on underlying proppant (1) Based on 40/70 substrate 10

OPERATIONAL SCALE & EFFICIENCIES Broad Asset Base Provides Flexibility and Efficiency 14.0 12.0 10.0 8.0 6.0 FAIRMOUNT SANTROL STATED ANNUAL RAW FRAC SAND CAPACITY (in millions of tons) 13.9 Idled Facilities (3 plants) Brewer Maiden Rock Menomonie Voca Nearly 750 million tons of proven reserves, allowing for long-term organic growth Locations, grade mixes and logistic capabilities provide flexibility Low-cost Wedron facility represents over 60% of active frac sand capacity Ability to reopen idled facilities quickly and with minimal investment to add roughly 2 million tons of annual frac sand capacity 4.0 2.0 - Wedron Total Stated Capacity 11 1.6 million tons of active annual coating capacity Evaluating options to add capacity through either greenfield or brownfield expansion

OPERATIONAL SCALE & EXTENSIVE DISTRIBUTION Logistics Footprint in All Key Basins Canada FMSA Terminal Unit Train Destination FMSA Mining & Processing Unit Train Origin (Mining & Processing) Coating Operation 10 unit train capable terminals Over 40 terminals in heart of completions activity Terminals closer to wells reduce last-mile costs 12

EXTENSIVE DISTRIBUTION AND UNIT TRAIN CAPABILITIES Leveraging Our Unit Train Capabilities 10 unit-train capable terminals One additional unit train terminal in process Unit trains can lower delivered cost by $6-$10/ton and increase delivery speed Unit trains increase rail car turns and overall efficiency of rail car fleet 80% PERCENTAGE OF NORTHERN WHITE SAND SHIPPED VIA UNIT TRAIN 60% 40% 20% 0% 2014 2015 2016 1Q 2017 13

EXTENSIVE DISTRIBUTION AND UNIT TRAIN CAPABILITIES Rail Car Update Currently less than 800 cars in storage Expect all cars to be out of storage by end of 2Q 2017; excess rail car costs expected to be zero in 3Q 2017 Deliveries deferred until 2020 and 2021 can be pulled forward if necessary Will leverage customer cars and unit trains to increase efficiency of fleet $8 EXCESS RAIL CAR COSTS PER TON $6 $6.29 $4 $3.99 $3.16 $2 $2.01 $0 2Q 2016 3Q 2016 4Q 2016 1Q 2017 14

Performance Update

PERFORMANCE UPDATE Strong Start to 2017 for I&R INDUSTRIAL & RECREATIONAL VOLUMES REVENUES GROSS PROFIT In Millions of Tons 0.8 +1% In Millions $35 $30 +13% 31.6 In Millions $14 $12 +30% 13.5 0.5 0.6 0.6 $25 28.0 $10 10.4 $20 $8 $15 $6 0.3 $10 $4 $5 $2 0.0 1Q-16 $0 1Q-17 1Q-16 1Q-17 1Q-16 1Q-17 $0 Focus on value-added products led to strong year-over-year profitability growth 16

PERFORMANCE UPDATE Good Proppant Solutions Growth in 1Q Despite Capacity Constraints VOLUMES PROPPANT SOLUTIONS REVENUES GROSS PROFIT In Millions of Tons 2.2 1.7 In Millions In Millions $150 $28 +13% +24% +60% 2.1 141.0 1.8 $21 113.4 $100 27.3 1.1 $14 17.1 0.6 $50 $7 0.0 4Q-16 $0 1Q-17 4Q-16 1Q-17 4Q-16 1Q-17 $0 Capacity constraints limited volume growth, but pricing improvements and mix shift to coated proppants contributed to strong profitability growth 17

PERFORMANCE UPDATE Improving Financial Results in 1Q 2017 FMSA TOTAL VOLUMES In Millions of Tons 2.8 2.2 1.7 1.1 0.6 +10% 2.7 2.4 REVENUES GROSS PROFIT In Millions In Millions $180 172.6 $42 +23% +44% 140.5 $120 $28 28.3 $60 $14 40.8 ADJUSTED EBITDA In Millions $20 +85% $15 11.7 $10 $5 21.7 0.0 4Q-16 $0 1Q-17 4Q-16 1Q-17 4Q-16 1Q-17 $0 $0 4Q-16 1Q-17 Increased value-added sales across both segments along with improved pricing in Proppant Solutions contributed to strong revenue and profitability growth 18

PERFORMANCE UPDATE Lower Net Debt as Free Cash Flow Increases All significant debt matures in Sep. 2019 Ability to take advantage of improving market conditions Improved free cash flow in 1Q 2017 reduced net debt Recent actions by debt ratings agencies: Moody s Caa1 rating affirmed with revised outlook to positive from negative S&P B- rating affirmed with revised outlook to neutral from negative Fitch initial rating of B- with stable outlook Capitalization Summary ($ in Millions) Dec. 31, 2016 Mar. 31, 2017 Cash $194.1 $210.7 Debt 2015 B-1 Extended Due Sept. 2019 $117.6 $117.3 B-2 Due Sept. 2019 $719.6 $717.9 Other, net $5.8 $9.9 Total Long Term Debt $843.0 $845.1 Net Debt $648.9 $634.4 19

Looking Ahead

LOOKING AHEAD Positive Tailwinds for the Proppant Market 750 700 650 600 550 500 450 400 350 300 U.S. HORIZONTAL LAND RIG COUNT (1) AVERAGE PROPPANT TONS PER U.S. HORIZONTAL WELL (2) 3,600-4,000 ~ +30% 4,600-5,000 ~ +20% 5,600-6,000 2015 2016 2017 Est. Improving proppant market with continued positive tailwinds Current rig count roughly 75% above 2016 average Increasing proppant intensity per well, driven by longer laterals and more proppant per stage In addition to industry tailwinds, FMSA also experiencing: Higher demand for coated proppants, driven by higher rig counts and increased focus on flowback control and operational efficiency Increasing demand for coarser grade sands Sources: (1) Baker Hughes (2) FMSA estimates based on public E&P presentations and internal estimates + PacWest Consulting Partners 21

PERFORMANCE UPDATE Financial Outlook Second-quarter 2017 outlook Total expected volumes of 3.2 million to 3.5 million tons Proppant Solutions volumes expected to be driven by continued strong demand and additional capacity coming online at Brewer and Maiden Rock locations Proppant solutions volumes to shift moderately toward FOB mine due to contract structure for Maiden Rock and Brewer volumes and customer preference I&R volumes expected to increase moderately over 2Q 2016 levels Raw frac sand pricing expected to increase $7 to $9 per ton on average Further pricing increases expected in 3Q 2017 Proppant Solutions cost per ton in 2Q 2017 expected to remain relatively flat to up slightly from 1Q 2017 levels Improved fixed cost leverage and lower excess rail car costs are expected to offset increased production costs from Maiden Rock and Brewer 22

WHY INVEST IN FMSA? Industry Leader Well-Positioned for Growth STRONG MARKET DRIVERS KEY LONG-TERM DIFFERENTIATORS AND VALUE CREATORS Higher rig counts Increased proppant intensity per well More focus on flowback protection and operational efficiency Continued solid demand in I&R Technology & innovation Broad product portfolio Operational scale & efficiencies Distribution & unit train capabilities Commitment to People, Planet & Prosperity 23

Appendix

Appendix: Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA Three Months Ended, (in thousands) Mar. 31, 2017 Dec. 31, 2016 Net loss $(11,588) $(19,905) Interest expense, net 12,537 15,324 Provision (benefit) for income taxes (1,148) (655) Depreciation, depletion, and amortization expense 19,442 17,875 EBITDA $19,243 $12,639 Non-cash stock compensation expense 2,416 1,504 Asset Impairments 0 2,494 Write-off of deferred financing costs 0 2,618 Gain on repurchase of debt 0 (8,178) Transaction expenses associated with term loan repurchases 0 450 Other impairment charges 0 180 Adjusted EBITDA $21,659 $11,707 25

Appendix: Total Facility Map U.S. OPERATIONS Mining & Processing Unit Train Origin Coating Operations Headquarters Administrative/Sales Offices Research & Development Specialty Products Resin Manufacturing LOGISTICS NETWORK Oil & Gas Terminals Unit Train Destination Industrial & Recreational Terminals On Demand Terminals 26