Corporate Presentation January, 2017 Forward-Looking Statements - - PowerPoint PPT Presentation

Corporate Presentation

January, 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 grow the Wachs Water Services business through addition of senior business development staff, 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

• ngoing 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

• r 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$.

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About Pure

At Pure, we work to protect the critical infrastructure necessary for everyday life. We are driven by the ambition to change the way this infrastructure is managed. Our technologies and expertise are being used around the world to help manage pipeline deterioration and reduce water, wastewater and oil and gas loss. By fostering an environment that values and encourages creativity and innovation, we have become the world leader in the development and application of innovative technologies for inspection, monitoring and management of pipeline infrastructure.

Mission

To provide

• wners
• f

critical infrastructure with innovative technologies and management solutions that prevent failures, reduce capital expenditure and lost revenue, and contribute to a sustainable future.

Vision

To remain a trusted advisor for infrastructure owners around the world as they assess and renew their critical infrastructure assets; Pure will remain renowned for its engineering and technical expertise, client-first approach and ability to develop innovative technologies.

* FY 2015

Overview: Leader in Pipeline Sustainability Solutions Serving the Water and Oil & Gas Sectors

• First mover in large, under-served, water/wastewater sector with attractive secular growth drivers
• Premium technology-driven services for federally mandated O&G pipeline inspections
• Uniquely positioned to benefit from growing trends towards proactive asset management
• Scalable platform supported by proprietary technology portfolio and high barriers to entry

4 83% 15% 2%

SALES BY SEGMENT*

Water Oil & Gas Bridges/Structures 66% 21% 13%

SALES BY GEOGRAPHY*

United States Canada International

Overview:

Mark Holley Executive VP & COO

107% 3-yr CAGR for O&G sector revenue

• $113.6M Q3/’16 TTM* revenue; up 12%
• ver Q3 2015 TTM
• $16.7M Q3/’16 TTM Adjusted EBITDA; up

10% over Q3 2015 TTM

• $21.2M Q3/’16 TTM O&G Sector revenue;

107% CAGR over 3 years

Jack Elliott President & CEO Geoff Krause CFO

• Highly experienced management team
• >500 employees

Key Management

* Trailing-12-mth revenue (TTM) Q3 2016

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Key Milestones: Established Growth Platform

Serving Water/Wastewater & Oil and Gas Pipeline Sectors

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Major Market Segments

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Water & Wastewater Pipelines – 83%* Bridges and Structures – 2%* Oil & Gas Pipeline Integrity - 15%*

Premium Technology Driven Services

Condition Assessment / Cathodic Protection Pig Tracking Right of Way Surveys Optimization and Management

* FY 2015

Proprietary Technologies / Industry Leader

Condition Assessment Leak Detection Monitoring Asset Management

Industry Leader in Real-time structural monitoring

36 building and bridges world-wide Not a major focus area

Sustainable Growth Strategy

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Our technologies and data analytics, used to assess the health of pipelines, are the core

• f Pure’s offering

Expanding Markets

Through our Engineering/Asset Management capability, critical data is converted to actionable information for the proactive management of pipelines, allowing owners to optimize and safely operate these important assets Our solutions are applicable for pipeline owners within the water and oil and gas sectors. Pure will increase its distribution channels and complementary revenue streams globally

Revenue by Product Group

38% CAGR for Consulting and Inspection revenue

• $99.4M Q3/’16

TTM for core Consulting and Inspection revenue; 38% CAGR over 3 years

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Financial Performance – Q3 Overview

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1. Excludes Libya accounts receivable recovery and loss or gains on asset disposals 2. See Non-GAAP Measures.

• Q3 Adj. EBITDA

improved 9% despite 4% decline in revenue; mainly due to strong O&G sector growth

• YTD revenue and adj.

EBITDA up 12% and 54% reflecting revenue growth and operating efficiencies

For the period ended September 30 (000s except per share amounts) Three months 2016 Three months 2015 Change Nine months 2016 Nine months 2015 Change $ % $ % Revenue 28,453 29,559 (1,106) (4) 82,763 73,636 9,127 12 Cost of sales 6,415 8,142 (1,727) (21) 17,823 19,564 (1,741) (9) Gross profit 22,038 21,417 621 3 64,940 54,072 10,868 20 Gross margin (%) 77 72

• 78

73

• Operating Expenses1

21,282 20,721 561 3 65,525 58,223 7,302 13 Adjusted EBITDA2 4,216 3,883 333 9 9,876 6,393 3,483 54 Adjusted EBITDA (%) 15 13 12 9 Profit (loss) for the period 895 1,076 (181) (17) (596) (811) 215 (27) Per share – basic 0.02 0.02 (0.01) (0.02) Per share – diluted 0.02 0.02 (0.01) (0.02) Cash Flow from Operations Before Working Capital Changes2 4,192 3,507 685 20 9,308 5,747 3,561 62 Adjusted Profit (Loss) for the period2 931 808 123 15 (413) (2,638) 2,225 (84)

Water Pipeline Integrity Sector

Industry Tailwinds Outlook

• Continue to lead/win multi-year programs for

water utilities

• Increased number of requests for proposals

with emphasis on comprehensive asset management solutions

• Continue to grow metallic and wastewater

pipeline markets

• International opportunities
• Pure benefits from water utility budget constraints

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Annual multi-billion dollar shortfall to replace or repair aging facilities Population growth, growing economic activity and high water losses/use drive the need for cost effective management and maintenance programs Increasingly stringent environmental regulations

Our Work Speaks Volumes

Water Sector

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*Figures are based on internal data (2014; updated in 2016)

To date, we have located more than 4,500 leaks, representing

• ver 375 billion litres* in water

savings Through over 25,700 kms of structural assessment, we have helped our clients prevent over 4,000* failures, resulting in billions of dollars in savings

Water Sector Technology

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Oil & Gas Pipeline Integrity Sector – PureHM

Competitive Advantage

• PureHM is currently Pure’s fastest growing business unit
• 107% 3-yr CAGR for O&G Sector revenue
• Completed acquisition of E-MAC Corrosion* allowing for

vertical integration of business unit

• Improved solutions portfolio and increased management

and operational capacity

• Focus on program growth with top clients
• top 4 clients have an integrity budget over $1Bln, in

aggregate

• 30 Master Service Agreements, to date, will assist in driving

future growth

• Up from 13 MSAs when PureHM was formed in Q4/’14
• Continued focus on recruitment and training and development
• f its workforce

Outlook

Integrated solutions offering – industry seeking vendors who can provide solutions to both corrosion and inline inspection groups within pipeline integrity departments SMARTBALL inline inspection technology; SPECTRUM XLI aggregates multiple pipeline inspections, including leak detection, depth of over and cathodic protection, into one secure platform; ongoing R&D Leading ARMADILLO remote pig tracking solution significantly reduces number of field technicians and hours worked compared to conventional pig tracking

14 Turnkey Solutions Technology Safety & Efficiency

* See Company’s news release dated December 21, 2016

PureHM’s Core Services

• Pipeline Inspection & Tracking
• More than 1,600 pipeline pig runs tracked on
• ver 300 pipelines using traditional methods
• Over 160 remote tracking runs using

ARMADILLO

• More than 23,000 km of SMARTBALL surveys

completed in over 200 inspections

• Over 16,000 km of direct assessment surveys

using SPECTRUM XLI

• End-to-end Pipeline Corrosion Services*
• Through recent E-MAC Corrosion acquisition,

services now include: Corrosion Consulting; System Management; Cathodic Protection Surveys; and, Product Sales

FOOT GOES HERE

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* See Company’s news release dated December 21, 2016

PureHM Coverage

Excellent Proximity to Major Pipeline Infrastructure

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PureHM offices Pure Technologies offices Combined offices

Oil & Gas Pipeline Sector Technology

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Maintaining a Conservative Capital Structure

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Cash on Hand (no debt) $7M as of Sept. 30, 2016 Working Capital Management DSO at 108 days

• vs. 124 at YE/’15

Unused Credit Facilities $10mm revolver (unused) $10mm letter of credit

• Low Ongoing Capex requirements
• Sustaining Capex: $4 – 5M
• R&D: $3 – 4M
• Office and IT: <$1M
• Dividends
• ~$6.5M or $0.12 per share annualized

Driving Sustainable Growth & Profitability

Strategic Priorities:

• Revenue and profitability growth through targeted

sales, world class execution and disciplined cost control

• Investment in complementary, new, and enhanced

technologies and services

• Investment in employee development to enhance

service and position Pure Technologies for success

• Selective and accretive acquisitions that enhance

Pure Technologies’ technology portfolio and increase market penetration

FOOT GOES HERE

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Project execution & risk management Efficient resource management Levering corporate foundation Targeted capital deployment Sales efficiency & effectiveness

Market Statistics

Firm Analyst Phone Canaccord Genuity Raveel Afzaal 416-869-3027 Cormark Securities Gavin Fairweather 416-943-6423 Echelon Wealth Partners Amr Ezzat 514-396-3614 Laurentian Bank Mona Nazir 514-350-2964 National Bank Rupert M. Merer 416-869-8008 PI Financial Jason Zandberg 604-718-7541

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TSX: PUR

Trading Symbol

54.2M

Shares Outstanding

~$270M

Market Capitalization

~12%

Directors & Officers Ownership

$4.91

as of Jan. 6/’17

~70K

• Avg. Vol. (10 day)

$0.03

Quarterly Dividend

Analyst Coverage

Paul Moon

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