CEO Energy‐Power Conference Stronger. Safer. Better.
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FTSI At A Glance Large, Pure-Play Pressure Pumper with unwavering attention to safety and service quality Imagine Proactive, Large Scale with More Dedicated Pure-Play nimble broad geographic Customer Model Focus on Frac footprint mGMT Team Internal Manufacturing Disciplined ~$2.5 mm 50%+ Savings ~$200 MM FCF Benefits from Capital Maint Capex per Fleet on Consumables over TTM vs. 3 rd Parties Deployment ~1/2 peer Average 45% FCF Conversion 19% FCF Yield 19% ROIC $195 mm reduction in in 1H19 over TTM over TTM net debt over TTM 1.8 x next closest peer 3 | Note: See Appendix for a reconciliations and calculations of FTSI’s TTM Free Cash Flow, TTM Free Cash Flow Yield, 1H19 Free Cash Flow Conversion, TTM ROIC, and Net Debt. TTM as of June 30, 2019.
Best-in-Class Through-Cycle Free Cash Flow FTSI Business Model is Structurally Advantaged to produce superior Free cash flow Imagine More 50%+ ~$2.5 mm Zero Savings on Maintenance Capex Low per Fleet Consumables Overhead Effective Federal Tax Rate ($ in millions) $600 20% Free Cash Flow TTM Free Cash Flow Yield 15% $400 10% $200 5% $- 0% (25%) (5%) $(200) (10%) (50%) FTSI Peer B Peer D Peer A Peer E Peer C Peer F $(400) 2017A 2018A 2019E Est. Through-Cycle FTSI Peer A Peer B Peer C Peer D Peer E Peer F Note: Free cash flow is defined as cash flow from operations less capital expenditures. 2019E utilizes reported figures for 1H19 and consensus estimates for 2H19. Est. Through‐Cycle calculated by adding the preceding 2017A, 2018A and 2019E figures. Peer group includes FRAC, LBRT, PUMP, RES, SPN and USWS. Data sourced from FactSet. TTM as of June 30, 2019. Consensus estimates as of August 30, 2019. See 4 | Appendix for a reconciliations and calculations of FTSI’s Free Cash Flow and Free Cash Flow Yield.
Liquidity & Capital Management maintaining liquidity while Deleveraging the Balance Sheet remains A top priority Imagine ($ in millions) More Three Pillars of Liquidity Strategy $1,400 Reduced gross Debt by over $730 mm since 1Q17; $1,200 more than $425 mm Preserve ample 1 liquidity to outlast $1,000 beyond our IPO proceeds prolonged downturn $800 $600 Continue to deleverage 2 ahead of refinancing 2022 debt maturities $400 $200 Opportunistically 3 $- repurchase shares 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Kicked off share repurchase program in May Gross Debt Net Debt diverting $4.6 MM of deleveraging to buybacks in 2Q 5 | Note: See Appendix for a reconciliations and calculations of FTSI’s Gross Debt (defined as Principal Amount of Debt) and Net Debt.
Geographic Reach with Scale where it counts Broad footprint and plug-and-play equipment allow us to quickly go where the work is Imagine More Active Fleets by Location Marcellus / Utica Shale Permian Midcontinent 10 /Delaware Haynesville Shale Eagle Ford 3 Permian Basin Eagle Ford Shale Marcellus 3 / Utica Midcontinent 3 Legend Corporate Headquarters (Fort Worth, TX) Manufacturing Facility (Fort Worth, TX) Maintenance & Refurb Facility (Aledo, TX) Haynesville 1 District Locations 6 |
Raising the bar in efficiency & reliability We are relentless in our pursuit of efficiency, and unapologetic for our attention to quality and detail Imagine More 682 stages per fleet Recent Customer Feedback 26% increase in 1H19; run‐rate in pumping hours “FTSI is very proactive in solving operational problems. implies 2019 will be per day since 2Q18 They keep the train rolling down the tracks with great strongest year yet support of the crews on location from the maintenance shop, operations group, etc. ” 54% reduction >90% pump “FTSI is dependable and easy to work with . Their in pump & blender operations, field and sales personnel show a level of efficiency in 2Q19 related non‐productive enthusiasm for a sustainable partnership. ” time per fleet since 2Q18 “FTSI shows strong business ethics and response from 35% increase .23 TRIR & .06 LTIR account management team exceeds expectations . FTSI is very thorough with completing pad reviews which some Industry Leading in fluid end life other service companies don't offer or schedule as timely. Safety Scores over past two years 7 |
Our equipment has a heartbeat and soon, a brain Providing a more consistent service experience through technology Imagine More 2018 | Stage 3 | Change Behavior 2019+ | Automation Using machine learning Enable computer assisted we are now able to operations to ensure remotely diagnose consistent service quality and 2017 | Stage 2 | Reduce Damage most equipment optimal problem resolution on problems and perform Utilized vibration every single job targeted (conditional) signatures to augment maintenance before operations and reduce 2016 | Stage 1 | Catch Failures failure damage accumulation Began monitoring vibration signatures of our equipment to provide insight into the operating health of equipment in service 8 |
Meeting Demand for Gas burning Fleets Operators showing strong interest in natural gas burning fleets but unwilling to support investment Imagine More 2018 / 2019 Future CAT Tier 4 Dual Fuel Engine Current economics do not support the capital investment for an electric fleet; however, we are Deployed Tier 2 dual fuel evaluating all options that capture the fuel savings that fleet in the Permian Basin E&Ps are looking for with overwhelming success Envision upgrading a portion of our fleet to either tier 2 or tier 4 dual fuel • Tier 4 engines’ expected diesel displacement is Shown as example. ~75%, while the cost to upgrade one of our diesel Achieving average diesel fleets is expected to be ~$10 million displacement rate of ~50% • Paying ~20% of the cost of an electric fleet to on Tier 2 Dual Fuel capture ~75% of the expected fuel savings looks to be very attractive option No plan in place yet, but we believe building out dual Reduce Fuel Currently testing fuel capacity could be advantageous to us while the Costs CO 2 performance and industry transitions to more natural gas burning fleets diesel displacement If all goes well with tier 4 testing, plan would be to seek Reduced Flaring & Emissions of Tier 4 Dual fuel how we can lower the expected capital required to upgrade with our internal manufacturing capabilities 9 |
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