 EnerCom,
Inc. Oil & Services Conference VII February 19, 2009 San Francisco, CA This prior presentation has been made available on WelcometoCameron.com Filed by NATCO Group Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: NATCO Group Inc. Commission File No.: 001-15603 |
 Safe
Harbor Disclosure Statements made in this presentation that are
forward-looking in nature are intended to be "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. When used in this presentation, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” and similar other expressions are intended to be among the statements that identify forward- looking statements. In addition, references to “opportunities,” “guidance,” and “bookings” are forward looking in nature. Although we believe that expectations reflected in these forward-looking statements are reasonable, these kinds of statements involve risks and uncertainties, and there is no guarantee that these expectations will result. Readers are referred to documents filed by NATCO Group Inc. with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which identify significant risk factors that could cause actual
results to differ from those contained in the forward-looking statements.
2 |
 ² Our Business • Wellhead processing solutions – Oil, gas, water and contaminants need to be separated at virtually every producing
well – Products range from small onshore separation equipment to large, complex offshore process systems – Marketed through North American distribution network (standard and traditional
equipment) and global marketing, direct sales and agency relationships (complex
process systems) – Integrated instrumentation and electrical controls – Metering/measurement Storage, Transportation & Downstream Processing SEPARATION SOLUTIONS And related production equipment, parts, controls and services Onshore & Offshore Wellheads Hydrocarbon Stream Oil Gas NGLs NATCO Equipment, Systems & Services Water, Sand, CO & Other Contaminants • Penetration of downstream market accelerating 3 |
 Our
Strategy • Our technology provides improved IRR to customers through: – Higher hydrocarbon recovery rates – Higher throughput (new and retrofits) – Reduced downtime and lower cost of operation – Space and weight savings – Environmental advantages • Gain market share through competitive advantages: – Technology leadership – Investment in R&D and New Product Development (Tulsa lab move) – Global Footprint – Distribution network (equipment sales and aftermarket) – Experience of key personnel – Excellence in Execution • Additions of product lines and services 4 |
 Execution • Manage Risk & Maximize Returns – Process-oriented risk management drives predictable results – Lean management minimizes inefficiencies – Greater sophistication brings better execution/profits • Global Marketing Organization – North American Branches – Global Sales & Marketing Staff – Low risk/cost expansion strategy – Flexible allocation of global resources • Proprietary NATCO technologies combined with regional partners – Accelerates market penetration – Drives additional project scope – Strengthens customer relationships – Helps satisfy local-content requirements • Opportunistic Acquisitions – Technology Adds: ConSepT – Service & Product Line/Geographic Expansion: Linco/Connor Sales 5 |
 Organization, Technology, Markets 6 NATCO Key Technologies & Products: • Standard and traditional oil, gas and water separation equipment • Metering & custody transfer • Aftermarket parts sales & services Key Technologies & Products: • Built-to-order oil, gas & water processing solutions • CO processing in W. Texas • Membrane replenishment • H S biodesulphurization Key Technologies & Products: • Control panels • Field services • Packaged systems Key Markets: • US • Canada • Mexico • Latin America • Export Key Markets: • SE Asia • Middle East • The Americas • FPSO • North Sea • Other • Export Key Markets: • Gulf of Mexico • West Africa • United States • Other • Export Standard & Traditional Integrated Engineered Solutions Automation & Controls 2 2 |
 Standard
& Traditional Strategically Positioned in Key Producing Basins • Provides smaller, standardized processing equipment for sale or lease • Four major manufacturing locations permit timely delivery • Presence in all major producing regions makes NTG a “first-call” supplier • Flexible after-market sales & service support • Well positioned for Canadian oil sands development/unconventional gas/oil plays • Metering/custody transfer 7 Field Service Distribution Network Producing Basin NATCO Location |
 Integrated
Engineered Systems Markets – NATCO Near Major Producing Basins Global business with primary execution centers in Houston, UK, Calgary, Japan, Kuala
Lumpur and Saudi Arabia (being developed). 8 Market Opportunity NATCO Office/Facility Houston Farnborough, UK Kuala Lumpur Tokyo Moscow Calgary Campeche Veracruz Caracas Luanda Trondheim Jubail Bogota Abu Dhabi Dubai |
 Technology
Leadership Dual Frequency Oil Treating • Electrostatic dehydration of emulsified oil and water • 4X more efficient than conventional dehydration • Requires less chemicals and fuel 9 Application/Market Opportunities Upstream • Retrofit/debottlenecking: existing production with higher water cuts:
Mexico, South America, Middle East • New: Heavy oil production worldwide including oil sands SAGD production
• Fixed platforms or floating facilities Downstream • Lower quality opportunity crude feedstocks (downstream); U.S. and global refining markets (retrofit and new) Conventional A/C 14’ x 65’ Current State-of-the-Art Technology 12’ x 40’ Dual Frequency 10’ x 26’ Coalescing Droplets TM |
 Compact
Separator Solutions 10 Comparison of Separator Designs for Identical Throughput Retention Time and Product Quality Traditional Separator Design Inside Diameter 8’-0” Seam to Seam 20’-0” Inside Diameter 5’-6” Seam to Seam 15’-0” NATCO Separator Design with Revolution Tubes, Perforated Baffles and other Proprietary Internals Porta-Test Whirlyscrub I™ Gas Dominant Recycling Separator Porta-Test Whirlyscrub V™ Gas Dominant Recycling Separator Porta-Test Revolution™ Compact Separator Skid for the North Sea |
 New
Product Offerings ConSepT • ConSepT is a provider of efficiency gas separation solutions • Adds to NATCO portfolio of gas technologies • International gas projects – surface and subsea • Opens Norwegian market to sale of other NATCO products 11 SPINLET cyclonic inlet device jointly developed by Statoil and ConSepT ConSepT SI |
 Technology Leadership CO2 Removal with Cynara Membrane Technology • Separation of bulk produced CO2 prior to transmission • Economically and environmentally advantageous to potential alternatives, especially in offshore applications • Provides recurring membrane replacement revenue stream • Limited competition; supported by state-of-the-art laboratory 12 Application/Market Opportunities • Naturally occurring bulk CO2 in hydrocarbon production streams; SE Asia, Offshore Libya, Brazil, Alaska • Worldwide enhanced oil recovery applications utilizing CO2 floods • Potential future global market on storage side of sequestration projects CTOC II |
 Integrated Engineered Systems- SACROC Operations – West Texas CO 2 processing plant • Assets owned/operated • CO 2 flood • 20+ years of operating experience • Aggressive investment by field operator • 30” membrane with 3 years+ operating history – Minimal operating costs (including membrane replacement) – NATCO leverages SACROC operating experience into larger projects and add-on products (i.e. treaters) – Utilize SACROC for field testing new products 13 |
 SE Asia
CO 2 Opportunities 14 JDA NATCO CO 2 Membrane Project Installations UNOCAL Pailin (1999) “First” CTOC Phase I and II (2005 and 2006) “Largest” CPOC (JDA) (2008) “Delivered” TBC (2009) “Awarded” Petronas Joint Industry Partnership – Preferred technology – 30” membrane SCOMI NATCO Joint Venture – Local content – Market presence Competitive Advantage – Operating history – Superior solution – Fixed or floating Substantial Project Pipeline |
 Geographic Expansion Joint Ventures – Al Rushaid/NATCO • Partnering with Al Rushaid Group to build vessel shop in Jubail • NATCO technologies to Saudi to address retrofit, new build upstream/petrochemical opportunities • Facility will be second largest NATCO manufacturing shop • In service beginning 2009 15 Jubail Khurais Manifa |
 Automation & Controls Control panels and packaged automation systems, fabrication, and field services • Drivers – Regulatory requirements – Weather-related work – Upgrade of Brownfield systems • Competitive Advantages – Safety – Existing base of operations in key markets – Solid reputation among major customers • Key Markets – Gulf of Mexico and subsea controls – Angola (field services) 16 Control Panel |
 Key
Financial Metrics $0 $200 $400 $600 $800 2004 2005 2006 2007 2008 2009** Revenue ($-MM) $0 $20 $40 $60 $80 $100 2004 2005 2006 2007 2008* 2009** EBITDA Contribution ($-MM) $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2004 2005 2006 2007 2008* 2009** EPS Performance 17 $1.97 $2.36 $.86 $.30 CAGR = 29% CAGR = 17% CAGR = 46% * Excludes special items **Guidance as of February 17, 2009 CAGR = 30% $2.10 $2.00 |
 Financial
Flexibility • Financial Flexibility is strong $ - Millions Dec. ’05 Dec. ’06 Dec. ’07 Dec. ’08 Debt $27.4 $0.0 $0.0 $13.0 Debt to Book Capitalization 16.7% n/a n/a 4.3% Leverage Ratio (Debt/TTM EBITDA) 0.8x n/a n/a 0.2x • $13MM debt at 12/31/08; No net debt Liquidity Cash & short term investments $17.7MM Available debt capacity 110.5 Total Available Liquidity at 12/31/08 $128.2MM 18 |
 Summary
Investment Highlights • Competitive advantage supports superior growth • Geographic and product expansion underway • Opportunistic growth supported by strong cash flow and balance sheet • Highly qualified organization in place • Prudent and disciplined financial management • Management aligned with shareholders 19 |
 Forward-Looking Statements Information set forth in this document may contain forward-looking
statements, which involve a number of risks and uncertainties. NATCO cautions readers that any forward-looking information is not a
guarantee of future performance and that actual results could differ materially from those contained in the forward-looking
information. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination
transaction involving Cameron and NATCO, including future financial and operating results, the new company's plans, objectives,
expectations and intentions and other statements that are not historical facts. The following additional factors, among others, could cause actual results
to differ from those set forth in the forward-looking statements: the ability to satisfy the closing conditions of the
transaction, including obtaining regulatory approvals for the transaction and the approval of the merger agreement by the NATCO stockholders; the risk
that the businesses will not be integrated successfully; the
risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to
maintain relationships with customers, employees or suppliers; the impact of other acquisitions that Cameron or NATCO have made or may make
before the transaction; competition and its effect on pricing;
and exploration and development spending by E&P operators. Additional factors that may affect future results are contained in Cameron's and NATCO's filings with the Securities and Exchange Commission
("SEC"), which are available at the SEC's web site http://www.sec.gov. Cameron and NATCO disclaim any obligation to update and
revise statements contained in these materials based on new
information or otherwise. Additional Information and Where to Find It In connection with the proposed merger, Cameron will file with the SEC a
Registration Statement on Form S-4 and NATCO will file a proxy statement, which will be mailed to NATCO's stockholders. INVESTORS AND
SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE S-4 AND
PROXY STATEMENT REGARDING THE PROPOSED MERGER WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a
free copy of the S-4 and proxy statement (when available)
and other related documents filed by Cameron and NATCO with the SEC at the SEC's website at www.sec.gov. The S-4 and proxy statement (when it is available) and the
other documents may also be obtained for free by accessing Cameron's website at www.c-a-m.com under the heading "Investor
Relations" and then under the heading "SEC Filings" or by accessing NATCO's website at www.natcogroup.com under the tab "Investor
Relations" and then under the heading "SEC Filings." Participants in the Solicitation NATCO and its directors, executive officers and certain other members of
management and employees may be soliciting proxies from its
stockholders in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the stockholders in connection with the
proposed merger will be set forth in NATCO's proxy statement
when it is filed with the SEC. You can find information about NATCO's executive officers and directors in their definitive proxy statement filed with the SEC on March 23, 2009. You can obtain free
copies of these documents from NATCO using the contact
information above. |