Earnings Call. December 19, 2017

Transcription

1 Earnings Call December 19,

2 Safe Harbor This document contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements concerning expectations regarding future operating performance and economic and market conditions. The forward looking statements made are neither promises nor guarantees, and are subject to risk and uncertainties that could cause our actual results to differ materially from those anticipated or indicated, including, without limitation, risks and uncertainties relating to our current operation in, as well as entry into, new markets; changes in general economic and business conditions; fluctuations in foreign currency rates; fluctuations in sales volume, timing and sales cycles; our ability to retain our employees in light of competition for agents; our ability to make payments required under our outstanding indebtedness; delays in obtaining new clients or sales from existing clients; delays or interruptions of service as a result of power loss, fire, natural disasters, security breaches, civil unrest or political upheaval, and other similar events; litigation; intense competition in the marketplace from competitors; future acquisitions, joint ventures or other strategic investments; and our ability to obtain necessary financing in the future. BakerCorp International does not intend, and disclaims any obligation, to update any forwardlooking information contained in this document, even if its estimates change. The required reconciliations and other disclosures for all non-gaap measures used by the Company are set forth in a schedule attached to this management financial overview.

3 Business Updates Introduction of Mike Henricks, CFO Improving Macro Environment Higher Oil Prices Improving financial performance Higher production utilization across industries Strong Financial Performance 3Q results showed strong growth over prior year First growth in oil & gas in 10 quarters Strong momentum heading into the 4 th quarter Positive trends into the new year

4 Driving Utilization Driving YTY revenue improvement of 8.0% for Q3 Improving Utilization 60.0% 55.0% 50.0% 45.0% 40.0% 35.0% Oct 2016 Nov 2016 Dec 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct

5 Diversifying Revenue Base 120.0% Diversifying Revenue Base 100.0% Full Year Full Year YTD 5.2% 5.7% 6.6% 11.8% 13.3% 12.1% 80.0% 16.3% 18.8% 18.5% 60.0% 15.7% 8.8% 8.4% 40.0% 20.0% 50.9% 53.9% 54.5% 0.0% Maintenance Oil and Gas Construction Environmental Diversification As revenue has recovered, Baker Corp has continued to focus on broadening its base of revenue. Maintenance and construction has continued to grow even as oil and gas has recovered.

6 Inflection Point in Results 20.0% YTY Revenue Performance 15.0% 10.0% 5.0% 0.0% -5.0% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul * Aug Sep Oct -10.0% -15.0% -20.0% -25.0% The second quarter was an infliction point for revenue performance with YTY growth produced in the quarter. The third quarter and forth quarter results will show an acceleration of this trend. The driver behind the improved revenue production is: improved equipment readiness, more consistent sales product and improving marker conditions. * Impacted by abnormal weather events in Gulf Coast.

7 A Deeper Look at 3Q results Revenue Split by End Market Q3 B/(W) Actual % to PY % Rental Revenue $ % $ % Rebill Revenue % % Rerent Revenue % % Total Revenue $ % $ % EXPENSES Employee related expenses % (1.2) -5.0% Rental Expense % (0.8) -8.8% Repair & Maintenance % (0.7) -24.1% Cost of Goods Sold % (0.1) -2.5% Facility Expenses % (0.8) -12.2% Professional fees % (2.4) % Other Operating Expenses % (1.0) -29.1% Depreciation and amortization % % Gain on sale of equipment (1.0) -1.3% (0.0) -3.9% Impairment of Goodwill and Other Intangibles - 0.0% - 0.0% Impairment % % Total operating expenses % (3.9) -5.9% Adjusted EBITDA $ % $ % YTD 3Q18 3Q17 Maintenance 54.4% 53.9% 52.0% Oil and Gas 8.4% 9.1% 8.2% Construction 18.5% 18.4% 21.0% Environmental 12.1% 12.1% 13.3% Diversification 6.6% 6.5% 5.4% 3Q17 results produced strong YTY results. Revenue continued to grow as refiners and industrials spent more capital and construction spending remained strong. Margins in the third quarter beat last year, but was muted slightly by onetime costs related to fleet positioning. The Company is positioned for a strong 4Q as it completes its FY19 plan.

8 YTD Comparative Results Q3 B/(W) Actual % to PY % Rental Revenue $ % $ % Rebill Revenue % % Rerent Revenue % % Total Revenue $ % $ % EXPENSES Employee related expenses % (1.2) -1.6% Rental Expense % (4.0) -17.2% Repair & Maintenance % (2.1) -26.2% Cost of Goods Sold % (1.3) -16.1% Facility Expenses % (0.9) -4.3% Professional fees % (2.3) -76.3% Other Operating Expenses % (1.6) -15.5% Depreciation and amortization % % Gain on sale of equipment (2.7) -1.3% % Impairment of Goodwill and Other Intangibles % % Impairment % % Total operating expenses % % Adjusted EBITDA $ % $ (0.7) -1.2% On a YTD basis, revenue is up by 4.4% driven by increased volumes. The first quarter of the year was sluggish, but in the second and third quarters of the year the Company produced both top and bottom line growth. The follow-through to EBITDA has been slightly muted by costs related to re-positioning the fleet.

9 Regional Results $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 YTY Regional Revenue Performance $28.0 $30.7 $168.5 $174.5 YTD17 YTD18 NA Europe Revenue in the European segment increased YTY by 9.4% driven by expansion of the client base. North American revenue increased by 3.5% driven by improving end market demand in the second and third quarters.

10 Cash Position and Working Capital 3Q17 4Q17 3Q18 Cash $40.5 $44.6 $28.6 Undrawn Revolver $40.0 $40.0 $40.0 Accounts Receivable $59.9 $52.5 $69.2 DSO Cash balance is driven lower by capital spent on growth and increase in working capital. The Company has adequate liquidity to fund growth and maintain a cushion.

11 Priorities Operate from a position of strength in the liquid containment, transfer and treatment solutions market Invest smartly in the fleet Manage liquidity Reduce leverage