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TRANSCRIPT
With Discipline Comes Reward
Company
Overview
2017 Annual
Meeting
Jason Theiss,
Chief
Financial
Officer
Don Caron,
Chief
Executive
Officer
TSX:BRYJune 2017
North America’s Oil
and Gas Drilling
Fluids Distribution &
Blending Company
With Discipline Comes Reward
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 www.sedar.com.
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
With Discipline Comes Reward
Financial Review
Our History
3
2007 2011 2012 2013 2014
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 strategicacquisitions making Bri-Chem the largest wholesale distributor of oilfieldchemicals in North America
With Discipline Comes Reward
4
The Bri-Chem Strategic
Advantage
28 Warehouses
7 Blending & Packaging Facilities
Vital Link in the
Drilling & Well Completion
Supply Chain
Supply & Blend Over 100
Drilling Fluids, Completion
Fluids and Stimulation
Products to the Oil & Gas
Industry
Operate 24/7 365 days per
year
North American
Customer Base
Drilling Fluid Service
Companies
Well Service
Companies
Our Business Today
Company Overview
“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.”
With Discipline Comes Reward
5
Our Divisions
Company Overview
Canadian Fluids Distribution & Blending Divisions
USA Fluids Distribution & Blending Divisions North America
32 Employees generating $46.3M TTM in Revenue
• 12 Warehouse locations
• 2 Bulk Dry Blending &
Packaging Facilities
• 1 Specialty Liquid Blending
Facility
• 2 Invert Blending Facilities
34 Employees generating $34.9M TTM in Revenue
• 16 Warehouse locations
• 1 bulk trans-loading rail facility
• 1 Specialty Oilfield Cement
Blending Facility
• 4 Invert Blending facilities
66 Employees generating $81.2M TTM in Revenue
Most comprehensive Inventory & Warehouse Coverage in North America
No other national independent drilling fluids wholesaler in USA at present
CDN Fluids Dist CDN Blend/Pack
USA Fluids Dist USA Blend/Pack
36%
6%
40%
18%
2016 Consolidated Revenue$62.1M
With Discipline Comes Reward
6
Our Strategic Locations
Company Overview
► 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
With Discipline Comes RewardQ1 Financial Highlights
7
Company Overview
• 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;
With Discipline Comes RewardCompany Information
Capitalization as of June 13, 2017
Exchange Toronto Stock Exchange
Shares Outstanding 23.6M/FD25M
Share Price $0.68
52 Week High/Low $0.79/$0.17
Market Capitalization $16.1M
Enterprise Value (1) $28.1M
(1) Enterprise Value = Market capitalization, plus net debt
(2) Debt is calculated as net debt – operating line, plus long-term debt, less working capital
Management Directors
and Insiders26%
Institutional41%
Retail33%
Shareholder Breakdown
Company Overview
8
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
With Discipline Comes Reward
9
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 - 2016)
▪ 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
Industry Outlook
Company Overview
With Discipline Comes Reward
10
Growth Initiatives
• 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
• 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
A Forward Look
Company Overview
With Discipline Comes Reward
11
Don Caron
Chief Executive Officer
Thank you
Jason Theiss
Chief Financial Officer