2014

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

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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