and gas drilling fluids distribution & blending company ju… · and gas, fluctuations in the...

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


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


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


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.”


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


• 16 Warehouse locations

• 1 bulk trans-loading rail facility

• 1 Specialty Oilfield Cement

Blending Facility

• 4 Invert Blending facilities


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


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


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


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


11

Don Caron

Chief Executive Officer

[email protected]

Thank you

Jason Theiss

Chief Financial Officer

[email protected]

and gas drilling fluids distribution & blending company ju… · and gas, fluctuations in the...

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