2017 Q2 Results Supplemental Information Slides August 4, 2017 - PowerPoint PPT Presentation

2017 Q2 Results Supplemental Information Slides August 4, 2017

Forward-Looking Statements This presentation, and its commentary, may contain forward-looking statements, including, without limitation, statements containing the words "should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions. These statements constitute “forward -looking information” within the meaning of applicable Canadian securities laws. These statements are based on the Company’s current expectations, estimates, forecasts and assumptions. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other important factors that could cause the Company’s actual performance to be materially different from that projected. Examples of these statements would include those where the Company forecasts the timing of new and existing projects and the success of the Company’s new technologies and entering new markets. The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to market changes, the Company’s ability to deliver services in a timely and cost effective manner, technological change, changes in general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in the Company’s Annual Information Form, which filings can be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise. Unless otherwise stated, all dollar amounts are expressed as CAD$. 2

Financial Performance Overview For the period ended Three Three Six Six Change Change June 30 (000s except per months months months months Q2: $ % $ % shr and %) 2017 2016 2017 2016 • Total Revenue up Revenue 33,740 29,189 4,551 16 62,946 54,310 8,636 16 16% to $33.7 7,370 5,159 2,211 43 12,725 11,408 1,317 12 Direct costs million Gross Profit 2 26,370 24,030 2,340 10 50,221 42,902 7,319 17 • Gross margin (%) 78 82 80 79 Adj. EBITDA up Operating Expenses 1 23,962 23,132 830 4 46,451 44,243 2,208 5 34% to $6.1 million Adjusted EBITDA 2 6,101 4,552 1,549 34 11,001 5,660 5,341 94 YTD: Adjusted EBITDA 2 (%) 18 16 17 10 • Total Revenue up Net income (loss) for the 1,311 967 344 36 1,610 (1,491) 3,101 na 16% to $62.9 period Per share – basic 0.02 0.02 0.03 (0.03) million Per share – diluted 0.02 0.02 0.03 (0.03) • Adj. EBITDA up Cash Flow from 94% to $11.0 Operations Before 6,170 3,997 2,173 54 10,619 5,116 5,503 108 million Working Capital Changes 2 Adjusted Income (Loss) 1,501 141 1,360 965 1,886 (1,347) 3,233 na for the period 2 Total assets 3 143,935 143,578 357 - 143,935 143,578 357 - 1. Excludes direct costs and loss or gains on asset disposals, includes depreciation 3 2. See Non-GAAP Measures 3.Comparative figure is as at December 31 .

Q2 & H1 Performance Summary Water Division Oil & Gas Division Q2: Q2: • • 74% of total revenue 26% of total revenue • • Revenue up 11% to $25.0 million Revenue up 30% to $8.7 million • • Adj. EBITDA up 40% to $6.5 million Adj. EBITDA consistent at $2.8 million YTD: YTD: • • 78% of total revenue 22% of total revenue • • Revenue up 14% to $49.0 million Revenue up 22% to $13.9 million • • Adj. EBITDA up 71% to $13.5 million Adj. EBITDA down 13% to $3.6 million • • 18% FY Revenue CAGR (2013 - 2016) 73% FY Revenue CAGR (2013 - 2016) 4

Water Division Americas Segment • • Q2 revenue up 12% and Adj. EBITDA up 20% H1 revenue up 6% and Adj. EBITDA up 12%, in line with expectations • Driven by increased inspection and consulting • activity and projects previously delayed H2 activity expected to increase based on new clients and current scheduling 5

Water Division International Segment • • Q2 revenue down 14% and Adj. EBITDA down 6% H1 revenue up 35% and Adj. EBITDA up 137% due to high Q1 activity and cost controls • Segment driven by large projects leading to inter- • quarter volatility Moderate growth expected for 2017; Xylem partnership expected to increase sales in 2018 6

Water Division Wachs Water Services Segment • • Q2 revenue up 32% and Adj. EBITDA increased by H1 revenue up 27% and Adj. EBITDA increased by $1.2M $2.4M • • Both periods reflect increased productivity and Significant progress made towards returning to pre- higher sales acquisition revenue levels by 2019 7

Oil and Gas Division PureHM Segment • • Q2 revenue up 30% (incl. $1.4M from E-MAC) and H1 revenue up 22% (incl. $2.1M from E-MAC) and Adj. EBITDA flat compared to prior year Adj. EBITDA down 13%, in line with expectations • • Reflects lower than expected U.S. activity H2 traditionally busiest for E-MAC; growing acceptance of PureHM technologies and solutions 8

Corporate and Other General and Administration Expenses • Adj. G&A expenses down 3% for Q2 and 6% YTD due to completion of cost Three Three Six Six Change Change optimization activities, ERP For the period ended months months months months $ % $ % implementation June 30 2017 2016 2017 2016 • General and administration 3,097 3,315 (218) (7) 6,125 6,690 (565) (8) G&A levels expected to be similar for (453) (499) 46 (9) (830) (790) (40) 5 Stock based compensation H2 Training costs - (100) 100 - - (280) 280 - • R&D expenses increased in Q2 and 2,644 2,716 (72) (3) 5,295 5,620 (325) (6) Adjusted general and YTD reflecting a lower proportion of administration 1 capitalized development costs compared to 2016, which is variable Research and Development (R&D) Expenses based on project mix and time spent on operations during busier periods Three Three Six Six • Change Change R&D initiatives are focused on For the period ended months months months months $ % $ % increasing the capability and efficiency June 30 2017 2016 2017 2016 of its technology platforms in both the Research & development 546 186 360 194 893 793 100 13 water and oil and gas sectors Stock based compensation (47) (37) (10) 27 (76) (58) (18) 31 Working capital efficiency • DSO consistent with YE at 108 days Net research & 499 149 350 235 817 735 82 11 development 1 • $5.8 million cash on hand at June 30, 2017 9

Summary Oil & Gas Division Water Division • First half consistent with expectations with • Higher activity expected for back half of 2017 increasing activity expected for back half of 2017 from new client activity and current project scheduling in the Americas • E-MAC integration complete; second half of year is traditionally the busiest • Investment in sales personnel in the Americas expected to positively impact the year ahead • Additional $1.5M investment to support continued growth in remote pig tracking business in 2018 • Ongoing and new work Internationally, including the first condition assessment project in SE Asia • Large addressable market with growing acceptance of PureHM technologies and • Xylem partnership to expand presence solutions internationally while controlling costs • Continued WWS progress; Q2 was fourth consecutive quarter showing improved revenue and profitability 10

Paul Moon +1 (403) 537-3244 Paul.Moon@puretechltd.com Director, Investor Relations and Corporate Communications