Corporate Presentation November 8, 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 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 ongoing 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 or 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$.
Overview: Leader in Pipeline Sustainability Solutions Serving the Water and Oil & Gas Sectors • First mover in large, under-served, water/wastewater sector with attractive secular growth drivers • Premium technology-driven services for federally mandated O&G pipeline inspections • Uniquely positioned to benefit from growing trends towards proactive asset management • Scalable platform supported by proprietary technology portfolio and high barriers to entry 3
Overview: Highly experienced Strong track record of revenue growth with EBITDA management team; >500 margin expansion following cost control initiatives Total Revenue Split employees 24% CAGR - Total Revenue Geoff Krause Jack Elliott CFO President & CEO Aug. 2017 TTM Mark Holley Executive VP & COO 4
Q3 Performance Summary (CAD$) Consolidated Water Division Oil & Gas Division Q3: Revenue up • Total Revenue up Revenue up 75% 25% 1% 9% to $30.9M 40% • Adj. EBITDA up $23.3 million $7.6 million 12% to $4.7M Total revenue Total revenue Q3 TTM: Adjusted EBITDA up Adjusted EBITDA down • Total Revenue up 12% to $5.9 million 26% to $1.6 million 11% to $126.1M • Adj. EBITDA up 18% 73% 24% to $20.9M FY Revenue FY Revenue CAGR CAGR (2013-2016) (2013-2016) 5
YTD Performance Summary (CAD$) Consolidated Water Division Oil & Gas Division • Total Revenue up 13% to $93.8M Revenue up Revenue up 77% 23% • 10% Adj. EBITDA up 28% 59% to $15.7M $72.3 million $21.5 million • Net income Total revenue Total revenue improved to $1.5M from a loss Adjusted EBITDA up Adjusted EBITDA down of $0.6M 47 % to $19.4 million 17% to $5.2 million • Busy Q4 underway 6
Financial Performance Overview For the period ended Three Three Nine Nine Change Change Sept. 30 (000s except per months months months months $ % $ % shr and %) 2017 2016 2017 2016 Revenue 30,881 28,453 2,428 9 93,827 82,763 11,064 13 Direct costs 6,968 6,415 553 9 19,693 17,823 1,870 10 Gross Profit 2 23,913 22,038 1,875 9 74,134 64,940 9,194 14 Gross margin (%) 77 77 79 78 Operating Expenses 1 23,053 21,282 1,771 8 69,504 65,525 3,979 6 Adjusted EBITDA 2 4,704 4,216 488 12 15,705 9,876 5,829 59 Adjusted EBITDA 2 (%) 15 15 17 12 Net income (loss) for the (97) 895 (992) na 1,513 (596) 2,109 na period Per share – basic (0.00) 0.02 0.03 (0.01) Per share – diluted (0.00) 0.02 0.03 (0.01) Cash Flow from Operations Before 4,536 4,192 344 8 15,155 9,308 5,847 63 Working Capital Changes 2 Adjusted Income (Loss) 401 931 (530) (57) 2,287 (413) 2,700 na for the period 2 Total assets 3 143,166 143,578 (412) (0) 143,166 143,578 (412) (0) 1. Excludes direct costs and loss or gains on asset disposals, includes depreciation 7 2. See Non-GAAP Measures 3.Comparative figure is as at December 31 .
Key Milestones: Established Growth Platform Serving Water/Wastewater & Oil and Gas Pipeline Sectors 8
Evolving Trends – Pure at the Forefront Water Industry • Technology-enabled, risk-based assessment of water networks • Assess and Address™ approach to infrastructure Assess and Address resilience and renewal for 5% to 15% of total replacement cost • Optimized capital planning • “Smart” strategies to optimize network efficiency Why replace good pipe? 70% of replaced pipe still has remaining service life 9
Water Sector Technology SmartBall Sahara II SoundPrint Acoustic Fibre Optics PureRobotics PipeDiver 10
Sustainable Growth Strategy Our technologies and data analytics , used to assess the Expanding Markets health of pipelines, are the core of Pure’s offering 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 11
Changing the Status Quo Moving Water Utilities to Information-Based Asset Management Strategies Reactive Proactive Predictive 12
Water Pipeline Integrity Sector Industry Tailwinds Annual multi-billion dollar Population growth, growing Increasingly stringent shortfall to replace or repair economic activity and high environmental regulations aging facilities water losses/use drive the need for cost effective management and maintenance programs 13
Oil & Gas Pipeline Integrity • Turnkey Solutions – industry seeking vendors who can provide solutions to both corrosion and inline inspection groups within pipeline integrity departments • Leading Technologies – 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 • Safety & Efficiency – ARMADILLO remote pig tracking solution significantly reduces number of field technicians and hours worked compared to conventional pig tracking
Armadillo Tracks PureHM’s Core Services • Pipeline Inspection & Tracking • More than 1,600 pipeline pig runs tracked on over 300 pipelines using traditional methods • Over 160 remote tracking runs using Armadillo Tracks Remote ARMADILLO Pig Tracking • More than 35,000 km of SMARTBALL surveys • Over 19,000 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 SmartBall for O&G Spectrum XLI 15 * See Company’s news release dated December 21, 2016
PureHM Coverage Excellent Proximity to Major Pipeline Infrastructure PureHM offices Pure Technologies offices Combined offices 16
Summary Oil & Gas Division Water Division • PureHM making progress on its growth strategy • ~$1.2M of projects deferred to Q4 due to weather through the E-MAC acquisition and organic events growth • Busiest quarter underway (Q4); core Americas • Market penetration and growth remains on track Segment remains on track to deliver organic in Canada; additional opportunities with first growth of between 5 to 15% for the year based commercial sale of Sentinel TM pig tracking on current scheduling equipment on pipelines, to be installed in Q4 • Ongoing and new work Internationally, including • Focus on org. structure and internal process business activity growth in Europe, Africa, South improvements underway America and China • Large addressable market with growing • Xylem partnership to expand presence acceptance of PureHM technologies and internationally while controlling costs solutions • Continued WWS progress, moving towards pre- acquisition levels 17
Maintaining a Conservative Capital Structure Unused Credit Cash on Hand Working Capital Facilities (no debt) Management $10mm revolver (unused) $8.3M as at end DSO at 105 from 108 at YE/’16 $10mm letter of of Q3 credit • Low Ongoing Capex requirements • Sustaining Capex: $5 – 7M • R&D: $3 – 4M • Office and IT: <$1M • Dividends • ~$6.5M or $0.12 per share annualized 18
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