Attached files
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| 8-K - 8-K - RigNet, Inc. | d505669d8k.htm |
 1 Investor Presentation MARCH 2018 ALWAYS CONNECTED Exhibit 99.1 |
 FORWARD-LOOKING STATEMENTS
ALWAYS CONNECTED
Certain statements made in this presentation may constitute
"forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 — that is, statements related to the future, not past, events. Forward-looking
statements are based on current expectations and include any
statement that does not directly relate to a current or historical fact.
In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "anticipate," "believe," "intend," "expect," "plan" or other
similar words. Forward-looking statements in this presentation include, without limitation, statements regarding projected revenue, Adjusted EBITDA and Unlevered Free Cash Flow (UFCF) for RigNet, the timing of the closing of
future acquisitions, if at all, or the benefits provided by
such acquisitions. These forward-looking statements involve certain risks and uncertainties that ultimately may not prove to be accurate. Actual results and future events
could differ materially from those anticipated in such statements.
Factors that could cause actual results to differ materially from those contemplated in our forward-looking statements include, among others: adverse changes in economic conditions in the markets we operate; the extent, timing and overall effects of
competition in our industry; the impact of new, emerging or
competing technologies; material changes in the communications industry that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; unfavorable results of litigation or intellectual property infringement claims
asserted against us; unanticipated increases or other changes
in our future cash requirements; the effects of federal and state legislation, and rules and regulations governing the communications industry; the impact of equipment failure, natural disasters or terrorist acts; and those additional factors set forth under the caption “Risk Factors” and other
factors described in our filings with the SEC, including under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K for
the fiscal period December 31, 2017, which is incorporated by reference herein. RigNet undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances
occurring after this presentation. You are
cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. All forward-looking statements are qualified in their entirety by this cautionary statement.
In addition to U.S. GAAP financials, this presentation includes certain
non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. Definitions of these non-GAAP measures and reconciliations
between certain GAAP and non-GAAP measures are included in
the appendix to this presentation. 2 |
 ALWAYS CONNECTED
TODAY’S PRESENTERS
Steve Pickett
CHIEF EXECUTIVE OFFICER & PRESIDENT
Joined May 2016
3 |
 ALWAYS CONNECTED
4 Steve Pickett CEO & President Joined May 2016 Jay Hilbert SVP, Global Sales & Marketing Joined November 2016 Ed Traupman VP, Systems Integration & Global Customer Care Joined November 2016 Brendan Sullivan SVP, CTO Joined May 2017 Egbert Clarke VP, Operations Joined July 2017 Lance Smith VP, Engineering & Product Development Joined May 2017 Brad Eastman SVP, General Counsel Joined November 2017 EXECUTIVE MANAGEMENT |
 MANAGED SERVICES Network communication services, telephony and technology for remote sites on land or at sea APPS & IoT IoT/SCADA, data protection and other applications and services that work “over-the- top” of our Managed Services networks SYSTEMS INTEGRATION Design, engineering, procurement, installation and project management for processing facilities and industrial sites RigNet is a global technology company providingWe
are a customized communications services, applications and cybersecurity solutions enhancing customer decision making and business performance. Our solutions range from fully-managed voice and data networks to more advanced networks and applications that include video conferencing, asset and weather monitoring, real-time data services and cybersecurity primarily under a multi-service recurring revenue model. 5 ALWAYS CONNECTED WHO IS RIGNET? |
 6 ALWAYS CONNECTED WHY RIGNET? It’s simple: industrial transformation is driving higher volumes of information and the demand for faster connection speeds to accommodate real-time communication of voice, video and data RigNet is partnering with leading businesses to transform their operations by providing secure networks and tools to help collect, connect and protect critical information and support employees in the field Mobile data traffic has skyrocketed with a 70% increase between Q1 2016 and Q1 2017 Mobile Data Traffic Connection Speed The average U.S. connection speed has increased 22% YoY in 2017, with an average of 18.7 Mbps Tools & Applications ERP applications, video collaboration, data analytics and security are requiring
more sophisticated networks with higher throughput and lower
latency Source: Akamai State of the Internet
Q1 2017 Report; Ericson Mobility Report, June 2017; Company
data |
 7 WHAT DO WE OFFER? ALWAYS CONNECTED › Supervisory Control and Data Acquisition (SCADA) › Asset Monitoring (IoT) › Meteorological and Oceanographic data (MetOcean) › Adaptive Video Intelligence (AVI) › Security and Emergency Response › CyphreLink › Cyphre Encryption Gateway › Cyphre Secure Storage › Cyphre Secure IoT › Video surveillance › Industrial security systems › CrewConnect™ Wi-Fi › CrewConnect™ Infotainment › CrewConnect™ Hotspot › 24/7 Global Customer Care › End-to-end managed services over globally deployed networks › Technology agnostic, utilizing satellite, fiber, microwave and cellular backhaul › Self Acquiring Satellite Box (SASB) with push-to-start installation › Systems integration capital projects COLLECT CONNECT PROTECT SUPPORT |
 ALWAYS CONNECTED 8
WHERE DO WE WORK?
Serving 1,171 customer sites in over 50 countries
OFFICE TELEPORTS CORE/POP CORE CONNECTIONS |
 WHO DO WE SERVE?
ENERGY MARITIME AVIATION ENTERPRISE CHANNEL SALES MINING UTILITIES GOVERNMENT & NGO OIL & GAS DRILLING OIL & GAS OPERATORS CONTRACTORS SERVICE COMPANIES OTHER 9 |
 10 HOW ARE WE GROWING? *subject to closing OPERATORS DRILLERS SERVICES COMPANIES OIL & GAS IOT / SCADA CYBER SECURITY MACHINE LEARNING* ALWAYS CONNECTED 10 |
 ALWAYS CONNECTED 11 CYBER SECURITY RIGNET ENERGY DIVERSIFICATION IOT / SCADA MACHINE LEARNING* MIDSTREAM ENERGY MARKETS ENTERPRISE MARKETS CHANNEL SALES UPSTREAM PRODUCTION *subject to closing |
 12 WHERE ARE WE GROWING? ALWAYS CONNECTED We are investing in developing innovative application layer solutions, which will transform our customers’ businesses along with the networks we build and manage |
 RigNet
provides solutions
ranging from fully-managed
voice and data networks to
advanced services and
applications enabling video
collaboration, video
surveillance, real-time
operational monitoring, data
protection, system integration
and crew welfare.
13 ALWAYS CONNECTED HOW DO WE SUPPORT THE ENERGY INDUSTRY? UPSTREAM MIDSTREAM DOWNSTREAM DRILLING RIGS, PRODUCTION, PLATFORMS, SUPPLY VESSELS, PIPELINE NETWORKS, PROCESSING FACILITIES & REMOTE OFFICE LOCATIONS EXPLORATION | PRODUCTION PROCESSING TRANSPORTATION PIPELINE REFINING DISTRIBUTION |
 We provide fully-integrated
global services,
connecting global teams via a NIST
Cybersecurity Framework (CSF) assured
network, designed for the demands of businesses
competing in today’s digital world
Our exceptional, internationally dispersed
customer care centers provide 24/7 response
to maintain operational
productivity
and to reduce risk 14 MANAGED SERVICES ALWAYS CONNECTED Network communication services, telephony and technology for remote sites on land or at sea |
 15 ALWAYS CONNECTED WHERE IS OUR UPSTREAM ENERGY PRESENCE? As of 12/31/2017 RigNet offers global reach to support customer network requirements at drilling and production sites, allowing drillers, operators and service companies to focus on the job at hand…real- time, efficiently and safely International Land 132 Maritime 165 Offshore Production 316 Offshore Drilling Rigs 184 Other Sites 378 |
 From Supervisory Control and Data Acquisition (SCADA) and Adaptive Video Intelligence (AVI) to BlackTIE ™ , Real-time predictive analytics, MetOcean and CrewConnect ™ , our applications harness
and protect mission-critical information
to enhance performance, even in the harshest, most remote locations on the planet 16 APPS & IoT ALWAYS CONNECTED IoT/SCADA, data protection, machine learning and other applications and services that work “over-the-top” of our
Managed Services networks |
 WHAT APPS AND SERVICES DO WE OFFER?
17 ALWAYS CONNECTED ALWAYS CONNECTED One of the largest IoT/SCADA footprints in North America operating the SkyEdge I and SkyEdge II platforms
A Tier 1 distribution partner for Inmarsat and Iridium ® L-Band M2M and message-based IoT Services with over 25 Gigabytes of M2M traffic traversing the network monthly Cyphre and BlackTIE ® Technology provides data protection and security Intelie* optimizes critical operations through technological solutions specialized in stream data analytics with high data volumes
and high data throughput
Intelie* LIVE is an operational intelligence platform that empowers clients
to make timely, data-driven decisions in mission-critical real-time operations, including drilling, and longer-term, data-intensive projects, such as well planning
AVI provides for asset protection and operational efficiency using lower
bandwidth to stream high quality video content and allows
flexibility by streaming feeds over any backhaul that can be viewed on any
device CrewConnect™ portfolio is grounded in secure and
controlled connectivity; designed to improve crew morale in remote locations and boost operational efficiency through reduced employee turnover MetOcean Systems provide accurate, reliable weather data measurement systems to the international marine, renewable and oil & gas industry to support safe and efficient operations *subject to closing |
 18 DATA PROTECTION – FOR ALL ENTERPRISE CUSTOMERS ALWAYS CONNECTED Flexible Deployment Models include cloud, hosted, on-premises, suited and priced to meet IT requirements Technology A data protection appliance based on NXP Semiconductor’s Q or IQ processor Enterprise-class Encrypted File Sync and Share Secure cloud-based collaboration at the individual, group, and enterprise levels Browser-based Interface An intuitive user experience that maximizes productivity and collaboration Key Management Controls The option to control your own keys or give Cyphre control Black Key Encryption Provides an extra layer of hardware encryption Hardware-driven Encryption Protects enterprise data even if hackers access the server Encrypted File Sync Technology Interface Black Key Encryption Deployment Controls Hardware Encryption |
 19 MACHINE LEARNING & REAL-TIME PREDICTIVE ANALYTICS* Artificial Intelligence Machine Learning Deep Learning ALWAYS CONNECTED Problems are solved through Intelie Pipes, a distributed query language with a complex event processor to aggregate and normalize real-time data from a myriad of data sources, data integration, data quality, data governance and monitoring Deep learning and artificial intelligence are rapidly developing initiatives across all industries and particularly within upstream oil & gas in areas of well development, equipment and production management and in maritime in vessel optimization and CO2 emissions monitoring Intelie LIVE is an operational intelligence platform that empowers clients to make timely, data-driven decisions in mission- critical real-time operations, including drilling, and longer-term, data-intensive projects, such as well planning *subject to closing |
 NORTH AMERICAN SCADA COVERAGE
20 ALWAYS CONNECTED ALWAYS CONNECTED |
 21 SYSTEMS INTEGRATION ALWAYS CONNECTED Design, engineering, procurement, installation and project management for processing facilities and industrial sites Solutions for world-scale capital
projects that are fully engineered, assembled and tested by
RigNet
personnel Each solution is uniquely designed and
incorporates a wide range of communication,
security and safety technologies |
 22 WORLD-SCALE PROJECTS ALWAYS CONNECTED State-of-the-Art Communications Infrastructure Internationally Dispersed Service Centers Design, Engineering, Procurement and Project Management Communications, Security and Safety Equipment Installation |
 23 ALWAYS CONNECTED WELL-POSITIONED FOR SUCCESS RigNet enables its customers to reach beyond boundaries, investing in applications and solutions designed to improve performance, provide insight and manage risk We develop and implement the technologies customers are demanding to make possibilities a reality Leader in Customer Service Global Footprint Secure Networks Applications to Enhance Performance Increasing Demand for Data and Technology Multi-year Relationships Multi-tenant Business Model |
 NEAR TERM OBJECTIVES
Maintain balance sheet flexibility
Focus on cash generation
Manage debt effectively
Manage costs through strategic
sourcing, back-office automation
and performance management
Invest opportunistically
24 ALWAYS CONNECTED ALWAYS CONNECTED Increase ARPU through commercialization of over-the-top solutions and applications Diversify our business and add scale Drive operational improvements Financial Plan Business Plan |
 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 $50.00 $55.00 $60.00 12/15/2010 7/22/2011 2/27/2012 10/4/2012 5/12/2013 12/18/2013 7/26/2014 3/3/2015 10/9/2015 5/16/2016 12/22/2016 7/30/2017 3/6/2018 Source: FactSet, as of 11272017 25 ALWAYS CONNECTED RNET SHARE PERFORMANCE 7/5/2012: Announced Nessco acquisition; RNET stock price at $16.90 per share 8/1/2013: Announced acquisition of Inmarsat Energy Broadband assets and GX commercial distribution agreement; RNET stock price at $27.93 per share 8/20/2013: KKR announced agreement to
acquire 27% of RigNet from Cubera; RNET
stock price at $33.63 per share
12/29/2014: Announced
acquisition of Munaicom; RNET
stock price at $44.23 per share
5/22/2017: Announced acquisition of Cyphre Security Solutions; RNET stock price at $17.05 per share 5/31/2016: Named Steve Pickett as CEO; RNET stock price at $12.43 per share 1/7/2016: Announced change of executive leadership; RNET stock price at $17.81 12/8/2015: Named Chip Schneider as CFO; RNET stock price at $21.78 per share 11/4/2015: Announced acquisition of Orgtec S.A. de C.V. (TECNOR); RNET stock price at $31.16 per share 12/14/2010: IPO priced at $12 per share 7/31/2017: Announced acquisition of ESS; RNET stock price at $18.95 per share 7/24/2017: Announced acquisition of DTS; RNET stock price at $18.50 per share 3/06/2018: RNET stock price at $13.55 per share |
 Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) plus interest expense, income
tax expense (benefit), depreciation and amortization,
impairment of goodwill, intangibles, property, plant and equipment, foreign exchange impact of intercompany financing activities, (gain) loss on retirement of property, plant and equipment, change in fair value of earn-outs and
contingent consideration, stock-based compensation, merger
and acquisition costs, executive departure costs, restructuring
charges and non-recurring items Unlevered Free Cash
Flow We define Unlevered Free Cash Flow as Adjusted EBITDA less
capital expenditures. Adjusted EBITDA and Unlevered Free
Cash Flow should not be considered as an alternative to net income (loss), operating income (loss) or any other measure of financial performance calculated and presented in accordance with GAAP
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES
26 ALWAYS CONNECTED |
 REVENUE ADJUSTED EBITDA UNLEVERED FREE CASH FLOW NET INCOME (LOSS) Source: Company data | Please refer to Appendix for footnotes and definitions of Non-GAAP measures
27 ALWAYS
CONNECTED QUARTERLY FINANCIAL SUMMARY ($millions) 53 51 57 4Q16 3Q17 4Q17 9 8 9 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 6 2 5 4Q16 3Q17 4Q17 (4) (5) (6) |
 16 16 (17) (11) (16) 2013 2014 2015 2016 2017 REVENUE ADJUSTED EBITDA UNLEVERED FREE CASH FLOW NET INCOME (LOSS) Source: Company data | Please refer to Appendix for footnotes and definitions of Non-GAAP measures
28 ALWAYS
CONNECTED ANNUAL FINANCIAL SUMMARY ($ millions) 221 330 271 221 205 2013 2014 2015 2016 2017 56 74 47 37 30 2013 2014 2015 2016 2017 25 33 14 22 12 2013 2014 2015 2016 2017 |
 QUARTERLY RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND UNLEVERED FREE CASH FLOW
29 APPENDIX ALWAYS CONNECTED ($ thousands) 4Q16 3Q17 4Q17 NET LOSS (3,726) (4,193) (5,807) INTEREST EXPENSE 668 689 949 DEPRECIATION AND AMORTIZATION 7,995 7,999 7,978 GAIN ON SALES OF PP&E, NET OF RETIREMENTS 11 5 0 STOCK-BASED COMPENSATION 681 1,007 754 RESTRUCTURING COSTS 579 767 0 CHANGE IN FAIR VALUE OF EARN-OUT/CONTIGENT CONSIDERATION 0 0 526 EXECUTIVE DEPARTURE COSTS 0 0 1,192 ACQUISITION COSTS 0 807 559 INCOME TAX EXPENSE 3,149 762 2,397 ADJUSTED EBITDA (NON-GAAP MEASURE) 9,357 7,843 8,548 LESS: CAPITAL EXPENDITURES 3,686 5,853 3,984 UNLEVERED FREE CASH FLOW (NON-GAAP MEASURE) 5,671 1,990 4,563 |
 30 ANNUAL RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND UNLEVERED FREE CASH FLOW
APPENDIX ALWAYS CONNECTED ($ thousands) 2013 2014 2015 2016 2017 NET INCOME (LOSS) 16,544 15,983 (16,660) (11,297) (16,197) INTEREST EXPENSE 2,283 2,185 2,054 2,708 2,870 DEPRECIATION AND AMORTIZATION 21,049 29,462 32,471 33,556 30,845 IMPAIRMENT OF GOODWILL, INTANGIBLES, AND PP&E 0 2,719 14,262 397 0 FX IMPACT OF INTERCOMPANY FINANCING ACTIVITIES 0 856 0 0 0 (GAIN) LOSS ON SALES OF PP&E, NET OF RETIREMENTS 66 (44) (41) (153) 55 STOCK BASED COMPENSATION 2,963 4,252 3,660 3,389 3,703 RESTRUCTURING COSTS 0 0 7,410 1,911 767 CHANGE IN FAIR VALUE OF EARN-OUT/CONTIGENT CONSIDERATION 0 0 0 (1,279) (320) EXECUTIVE DEPARTURE COSTS 0 0 1,000 1,884 1,192 ACQUISITION COSTS 4,115 2,922 342 240 240 INCOME TAX EXPENSE 9,158 15,400 2,409 5,825 3,472 ADJUSTED EBITDA (NON-GAAP MEASURE) 56,178 73,735 46,907 37,181 29,669 LESS: CAPITAL EXPENDITURES 31,093 40,402 32,690 15,197 17,909 UNLEVERED FREE CASH FLOW (NON-GAAP MEASURE) 25,085 33,333 14,217 21,984 11,760 |
 31 INVESTOR PRESENTATION 2017 Thank You ALWAYS CONNECTED |