Newpark Resources Reports Net Income Of $0.15 Per Diluted Share For The Second Quarter 2012

26 Jul, 2012, 16:05 ET from Newpark Resources, Inc.

THE WOODLANDS, Texas, July 26, 2012 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its second quarter ended June 30, 2012.  Total revenues for the second quarter of 2012 were $245.8 million compared to $262.3 million for the first quarter 2012 and $230.8 million for the second quarter of 2011.  Net income for the second quarter of 2012 was $14.5 million, or $0.15 per diluted share, compared to $15.6 million, or $0.16 per diluted share, for the first quarter of 2012, and $19.3 million, or $0.19 per diluted share, for the second quarter of 2011.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are pleased with the progress made in our U.S. fluids business, which showed a marked improvement, generating a sequential operating income increase of more than $5 million, while revenue remained flat.  Our Evolution® drilling fluid system generated revenues of $27 million in the second quarter, up from the $23 million in the first quarter of 2012 and $18 million in the second quarter of last year.  These results were largely offset by events in other regions, including the seasonal reduction in activity in our Canadian operations from the Spring break-up, and delays in North Africa due to the timing of customer projects and the transition to a new contract with Sonatrach in Algeria.  Combined, Canada and our EMEA region experienced a $16 million sequential decline in revenue, which negatively impacted operating margins in the segment. 

"Our Mats and Integrated Services segment continued to generate exceptional results, driven by strong demand for composite mat sales internationally and the diversification of our rental activity in the U.S.  Our composite mats continue to demonstrate superior performance for our expanding customer base, and we remain focused on further enhancements to our product offering, aimed at improving environmental protection on the well site.  The Environmental Services segment also continued to generate solid results, and we are becoming increasingly optimistic about a recovery in the Gulf of Mexico in the near future," concluded Howes.

SEGMENT RESULTS The Fluids Systems and Engineering segment generated revenues of $202.4 million in the second quarter of 2012 compared to $218.5 million in the first quarter of 2012 and $191.2 million in the second quarter of 2011.  Segment operating income was $13.5 million (6.7% operating margin) in the second quarter of 2012 compared to $14.0 million in the first quarter of 2012 (6.4% operating margin) and $20.8 million (10.9% operating margin) in the second quarter of 2011. 

The Mats and Integrated Services segment generated revenues of $30.1 million in the second quarter of 2012 compared to $30.5 million in the first quarter of 2012 and $27.8 million in the second quarter of 2011.  Segment operating income was $13.1 million (43.5% operating margin) in the second quarter of 2012 compared to $14.3 million in the first quarter of 2012 (47.0% operating margin) and $14.7 million (53.0% operating margin) in the second quarter of 2011. 

The Environmental Services segment generated revenues of $13.3 million in the second quarter of 2012 compared to $13.3 million in the first quarter of 2012 and $11.8 million in the second quarter of 2011.  Segment operating income was $3.5 million (26.4% operating margin) in the second quarter of 2012 compared to $3.6 million in the first quarter of 2012 (26.9% operating margin) and $3.0 million (25.2 % operating margin) in the second quarter of 2011.

SHARE REPURCHASE PROGRAM Consistent with its previously announced program and in accordance with a trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, the Company repurchased an additional $15 million of outstanding shares of Newpark common stock at an average cost of $5.74 per share, reducing common shares outstanding by approximately 2.6 million shares.  Combined with $15 million in share repurchases completed earlier in the year, the Company has repurchased a total of $30 million of outstanding shares at an average cost of $6.71, reducing common shares outstanding by approximately 4.5 million shares since the beginning of 2012.

CONFERENCE CALL Newpark has scheduled a conference call to discuss second quarter 2012 results, which will be broadcast live over the Internet, on Friday, July 27, 2012 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time.  To participate in the call, dial 480-629-9692 and ask for the Newpark Resources conference call at least 10 minutes prior to the start time, or access it live over the Internet at www.newpark.com.  For those who cannot listen to the live call, a replay will be available through August 10, 2012 and may be accessed by dialing (303) 590-3030 and using pass code 4548732#.  Also, an archive of the webcast will be available shortly after the call at www.newpark.com for 90 days.

Newpark Resources, Inc. is a worldwide provider of drilling fluids, temporary worksites and access roads for oilfield and other commercial markets, and environmental waste treatment solutions.  For more information, visit our website at www.newpark.com.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including Newpark's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Newpark, particularly its Annual Report on Form 10-K for the year ended December 31, 2011, as well as others, could cause results to differ materially from those stated. These risk factors include, but are not limited to, the availability of raw materials and skilled personnel, the impact of restrictions on offshore drilling activity in the Gulf of Mexico, our customer concentration and cyclical nature of our industry, our market competition, the cost and continued availability of borrowed funds, our international operations, legal and regulatory matters, including environmental regulations, inherent limitations in insurance coverage, potential impairments of long-lived intangible assets, technological developments in our industry, the impact of severe weather, particularly in the U.S. Gulf Coast, and our ability to execute our business strategy and make successful capital investments and business acquisitions.  Newpark's filings with the Securities and Exchange Commission can be obtained at no charge at www.sec.gov, as well as through our website at www.newpark.com.

 

Newpark Resources, Inc.

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

(In thousands, except per share data)

2012

2012

2011

2012

2011

Revenues

$ 245,756

$  262,336

$ 230,822

$ 508,092

$ 433,473

Cost of revenues

201,534

214,902

178,911

416,436

337,913

Selling, general and administrative expenses

19,944

21,313

21,150

41,257

36,968

Other operating income, net

(477)

(14)

(835)

(491)

(952)

Operating income 

24,755

26,135

31,596

50,890

59,544

Foreign currency exchange loss (gain) 

461

(230)

(468)

231

(145)

Interest expense, net

2,553

2,368

2,100

4,921

4,357

Income from operations before income taxes

21,741

23,997

29,964

45,738

55,332

Provision for income taxes

7,278

8,363

10,684

15,641

20,198

Net income 

$   14,463

$    15,634

$   19,280

$   30,097

$   35,134

Income per common share -basic:

$       0.16

$        0.17

$       0.21

$       0.34

$       0.39

Income per common share -diluted:

$       0.15

$        0.16

$       0.19

$       0.31

$       0.35

Calculation of Diluted EPS:

Net income 

$   14,463

$    15,634

$   19,280

$   30,097

$   35,134

Assumed conversion of Senior Notes 

1,283

1,257

1,241

2,539

2,438

Adjusted net income 

$   15,746

$    16,891

$   20,521

$   32,636

$   37,572

Weighted average number of common shares outstanding-basic

88,600

90,473

89,791

89,536

89,707

Add:  Dilutive effect of  stock options and 

           restricted stock awards

457

1,198

1,061

561

739

           Dilutive effect of Senior Notes 

15,682

15,682

15,682

15,682

15,682

Diluted weighted average number of common shares outstanding

104,739

107,353

106,534

105,779

106,128

Income per common share - diluted

$       0.15

$        0.16

$       0.19

$       0.31

$       0.35

 

 

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)

Three Months Ended

June 30,

March 31,

June 30,

(In thousands)

2012

2012

2011

Revenues

Fluids systems and engineering

$ 202,388

$  218,496

$ 191,205

Mats and integrated services

30,071

30,533

27,793

Environmental services

13,297

13,307

11,824

Total revenues

$ 245,756

$  262,336

$ 230,822

Operating income (loss) 

Fluids systems and engineering

$  13,480

$    13,995

$  20,792

Mats and integrated services

13,075

14,339

14,730

Environmental services

3,514

3,575

2,980

Corporate office

(5,314)

(5,774)

(6,906)

Total operating income 

$  24,755

$    26,135

$  31,596

Segment operating margin

Fluids systems and engineering

6.7%

6.4%

10.9%

Mats and integrated services

43.5%

47.0%

53.0%

Environmental services

26.4%

26.9%

25.2%

 

 

 

Newpark Resources, Inc.

Consolidated Balance Sheets

(Unaudited)

June 30,

December 31,

(In thousands, except share data)

2012

2011

ASSETS

Cash and cash equivalents

$   28,832

$          25,247

Receivables, net

333,976

328,590

Inventories

174,820

175,929

Deferred tax asset

13,211

13,224

Prepaid expenses and other current assets

12,427

10,828

Total current assets

563,266

553,818

Property, plant and equipment, net 

247,856

231,055

Goodwill

75,166

71,970

Other intangible assets, net 

19,077

20,850

Other assets

10,217

9,144

Total assets

$ 915,582

$        886,837

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt

$        792

$            2,232

Accounts payable

84,161

97,168

Accrued liabilities

28,327

47,443

Total current liabilities

113,280

146,843

Long-term debt, less current portion

238,843

189,876

Deferred tax liability

47,034

46,844

Other noncurrent liabilities

13,906

5,428

Total liabilities

413,063

388,991

Common stock, $0.01 par value, 200,000,000 shares authorized 

and 95,496,604 and 94,497,526 shares issued, respectively

955

945

Paid-in capital

480,414

477,204

Accumulated other comprehensive income

(3,133)

789

Retained earnings 

65,080

34,983

Treasury stock, at cost; 6,407,673 and 2,803,987 shares, respectively 

(40,797)

(16,075)

Total stockholders' equity

502,519

497,846

Total liabilities and stockholders' equity

$ 915,582

$        886,837

 

 

 

Newpark Resources, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Six Months Ended June 30,

(In thousands)

2012

2011

Cash flows from operating activities:

Net income 

$  30,097

$ 35,134

Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization

15,808

13,575

Stock-based compensation expense

3,003

2,065

Provision for deferred income taxes

178

9,997

Net provision for doubtful accounts

1,073

699

 Loss (gain) on sale of assets

104

(117)

Change in assets and liabilities:

Increase in receivables

(10,793)

(32,334)

Increase in inventories

(870)

(1,981)

Increase in other assets

(2,826)

(5,729)

(Decrease) increase in accounts payable

(8,705)

5,091

Decrease in accrued liabilities and other

(11,247)

(5,273)

Net cash provided by operating activities

15,822

21,127

Cash flows from investing activities:

Capital expenditures

(26,315)

(16,842)

Business acquisition, net of cash acquired

-

(25,601)

Proceeds from sale of property, plant and equipment

371

280

Net cash used in investing activities

(25,944)

(42,163)

Cash flows from financing activities:

Borrowings on lines of credit

173,846

2,256

Payments on lines of credit

(126,233)

(2,629)

Proceeds from employee stock plans

468

1,543

Purchase of treasury stock

(24,825)

(598)

Post-closing payment for business acquisition

(11,892)

-

Other financing activities

(53)

(22)

Net cash provided by financing activities

11,311

550

Effect of exchange rate changes on cash

2,396

1,780

Net increase (decrease) in cash and cash equivalents

3,585

(18,706)

Cash and cash equivalents at beginning of year

25,247

83,010

Cash and cash equivalents at end of period

$  28,832

$ 64,304

 

 

 

Contacts:

Gregg Piontek, VP & CFO

Newpark Resources, Inc.

281-362-6800

Ken Dennard, Managing Partner

Karen Roan, SVP

Dennard Rupp Gray & Lascar, LLC

713-529-6600

SOURCE Newpark Resources, Inc.



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http://www.newpark.com