North America s Oil and Gas Drilling Fluids Distribution & Blending Company

Transcription

1 North America s Oil and Gas Drilling Fluids Distribution & Blending Company Don Caron, Chief Executive Officer Jason Theiss, Chief Financial Officer Company Overview 2017 Annual Meeting TSX:BRY June 2017

2 Certain statements set forth in this presentation are forward looking statements. Although Bri-Chem Corp. management believe their expectations are based on reasonable assumptions, they give no assurance that expected results will be achieved. There are numerous risks and uncertainties that can effect the outcome and timing of such events, including many factors beyond the control of Bri-Chem Corp. s management. These factors include, but are not limited to, economic and political conditions, government regulation, commodity prices for oil and gas, fluctuations in the level of oil and gas, the need to effectively integrate acquired businesses, uncertainties as to Bri- Chem s ability to implement its business strategy effectively in Canada and the United States, Bri-Chem s ability to attract and retain key personnel, currency fluctuations and other factors that affect demand for the Company s product. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the actual results and plans for fiscal 2017 and beyond could differ materially from those expressed in the forward looking statements. Additional information on these and other factors and uncertainties are described under the heading Risk Factors in the Company s most recent Annual Information Form ( AIF ) and other continuous disclosure materials filed by the Company with Canadian securities regulators, which are available to the public at Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed. The Company does not undertake to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Furthermore, certain measures we use are not recognized measures under International Financial Reporting Standards ( IFRS ). Specific measures used are earnings before interest, taxes, depreciation, amortization and non-cash stock based compensation ( EBITDA ). We strongly recommend the participants review the discussion of these statements in the Management s Discussion and Analysis Non-IFRS Measures and Reconciliations section of our 2016 Annual Report. Forward-Looking Statement 2

3 Our History Founded in 1985 Originally Alberta, Canada based only Went Public on the Toronto Stock Exchange in January 2007 Grew significantly through organic geographic growth and through six strategic acquisitions making Bri-Chem the largest wholesale distributor of oilfield chemicals in North America Financial Review 3

4 Our Business Today The Bri-Chem Strategic Advantage Vital Link in the Drilling & Well Completion Supply Chain North American Customer Base 28 Warehouses Supply & Blend Over 100 Drilling Fluids, Completion Fluids and Stimulation Products to the Oil & Gas Industry Drilling Fluid Service Companies 7 Blending & Packaging Facilities Operate 24/7 365 days per year Well Service Companies We provide national infrastructure together with technical expertise to ensure a seamless drilling fluid supply process. For over 30 years we have proven our ability to combine strategic drilling fluid supplier relationships and expert logistics making us the premier supplier of drilling fluid chemicals to the North American oil and gas industry. 4

5 Our Divisions Canadian Fluids Distribution & Blending Divisions USA Fluids Distribution & Blending Divisions North America 32 Employees generating $46.3M TTM in Revenue 34 Employees generating $34.9M TTM in Revenue 66 Employees generating $81.2M TTM in Revenue 12 Warehouse locations 2 Bulk Dry Blending & Packaging Facilities 1 Specialty Liquid Blending Facility 2 Invert Blending Facilities 16 Warehouse locations 1 bulk trans-loading rail facility 1 Specialty Oilfield Cement Blending Facility 4 Invert Blending facilities 2016 Consolidated Revenue $62.1M CDN Fluids Dist CDN Blend/Pack 40% 6% Most comprehensive Inventory & Warehouse Coverage in North America No other national independent drilling fluids wholesaler in USA at present 18% 36% USA Fluids Dist USA Blend/Pack 5

6 Our Strategic Locations 28 Distribution and Blending Facilities 22 third party owned and operated warehouses (minimize capital and operating costs) Customers pay for all transportation costs to and from rig sites Strategic relationship with transportation companies 6

7 Q1 Financial Highlights Q1 Consolidated revenues up 129% to $33.9 million; Q1 Revenue increased by 200% and 68% in the Canadian fluids distribution and blending divisions respectively; USA fluids distribution division revenue was up 148%; Operating income was $1.8 million, representing a 253% increase; EBITDA was $2.0 million versus negative $1.4 million in Q1 2016, representing a 246% increase Net income of $0.7 million or $0.03 per share, representing a 132% increase; 7

8 Company Information Capitalization as of June 13, 2017 Exchange Toronto Stock Exchange Shares Outstanding 23.6M/FD25M Share Price $ Week High/Low $0.79/$0.17 Market Capitalization $16.1M Enterprise Value (1) $28.1M Shareholder Breakdown Retail 33% Management Directors and Insiders 26% Balance Sheet Summary as at March 31, 2017 Total Assets $70.4M Working capital $15.0M Operating Line Availability $7.0M Long-term debt $9.2M Net debt (2) $12.0M Book Value $26.4M Book Value per share $1.10 Institutional 41% (1) Enterprise Value = Market capitalization, plus net debt (2) Debt is calculated as net debt operating line, plus long-term debt, less working capital 8

9 Industry Outlook 2017 Industry Outlook Oil & Gas Prices Have Stabilized But Headwinds Still Prevail PSAC forecasts 6,660 wells to be drilled in Western Canada (64% increase -2016) CAODC forecasts 199 average active rigs (77% increase ) USA average active rig count up 124% YOY USA support for energy independence has resulted in drilling activity in the Permian basin nearing a return to 2014 levels. Rig count (as of June 13, 2017) CA 143 rigs USA 927 rigs 9

10 A Forward Look Growth Initiatives Restructure sub-debt to achieve $1M of interest savings Maximize capacity for all existing Dry & Liquid Chemical Blending facilities Additional distribution warehouse to service Northern Alberta Rail location for bulk commodities Target satellite locations for Specialty Chemical Blending operations Expand Warehouse locations in West Texas Expand technical lab in Bakersfield USA Seek platform acquisition for Speciality Chemical Blending expansion Additional invert blending facilities in Central Rockies region 10

11 Thank you Don Caron Chief Executive Officer Jason Theiss Chief Financial Officer 11