Newpark Resources Reports Net Income Of $0.17 Per Diluted Share For The Second Quarter 2013

Jul 25, 2013, 16:15 ET from Newpark Resources, Inc.

THE WOODLANDS, Texas, July 25, 2013 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its second quarter ended June 30, 2013.  Total revenues for the second quarter of 2013 increased 13% to $276.6 million compared to $245.8 million in the second quarter of 2012.  Net income for the second quarter of 2013 increased 8% to $15.7 million, or $0.17 per diluted share, compared to $14.5 million, or $0.15 per diluted share, in the second quarter of 2012.

The second quarter 2013 results include a pre-tax charge of approximately $1.8 million in Brazil ($0.02 per diluted share) associated with adjustments to previously estimated margins on unbilled sales to Petrobras.  In addition, the second quarter 2013 results include a $1.1 million operating loss from our U.S. completion services and equipment rental business.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are pleased with the revenue growth in our drilling fluids segment, which rose 16% on a worldwide basis compared to last year's second quarter.  North American revenues increased approximately 8% from a year ago but were down 9% sequentially due to Spring break-up in Canada.  International revenues grew 38% from a year ago and 4% sequentially, largely driven by strength in our EMEA region.  Margins in our U.S. drilling fluids business continued to strengthen in the quarter. For the segment, however, our margins were negatively impacted by the charge in Brazil, a challenging Spring break-up in Canada, and continued weakness in our completion services business.  Despite our ongoing efforts to rationalize the cost structure of the completion services business unit, we are evaluating strategic alternatives for this business.     

"In our mats segment, we are particularly pleased by the strengthening rental activity as we prepare for anticipated demand for our spill containment system.  Rental revenues increased 14% from a year ago and 22% sequentially, while mat sales were down from the prior year but improved 28% sequentially.  As we discussed previously, we remain focused on the strategic expansion of our rental fleet, which is limiting mat sales activity.  In the meantime, while we have initiated the sale process for our Environmental Services business, this segment continued to post strong operating results, benefiting from the strength in the Gulf of Mexico," concluded Howes.

SEGMENT RESULTS The Fluids Systems and Engineering segment generated revenues of $234.0 million in the second quarter of 2013 compared to $202.4 million in the second quarter of 2012, a 15.6% increase.  Segment operating income was $17.7 million (7.6% operating margin) in the second quarter of 2013 compared to $13.5 million (6.7% operating margin) in the second quarter of 2012.

The Mats and Integrated Services segment generated revenues of $25.4 million in the second quarter of 2013 compared to $30.1 million in the second quarter of 2012, a 15.5% decrease.  Segment operating income was $10.3 million (40.7% operating margin) in the second quarter of 2013 compared to $13.1 million (43.5% operating margin) in the second quarter of 2012. 

The Environmental Services segment generated revenues of $17.2 million in the second quarter of 2013 compared to $13.3 million in the second quarter of 2012, a 29.7% increase.  Segment operating income was $5.3 million (30.9% operating margin) in the second quarter of 2013 compared to $3.5 million (26.4% operating margin) in the second quarter of 2012.

CONFERENCE CALL Newpark has scheduled a conference call to discuss second quarter 2013 results, which will be broadcast live over the Internet, on Friday, July 26, 2013 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 2, 2013 and may be accessed by dialing (303) 590-3030 and using pass code 4627648#.  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, 2012, as well as others, could cause results to differ materially from those stated. These risk factors include, but are not limited to, our ability to execute our business strategy and make successful business acquisitions and capital investments, our customers' activity levels in exploration and drilling, operating hazards inherent  in the oil and natural gas industry, particularly offshore, our international operations, the availability of raw materials and skilled personnel, our customer concentration and cyclical nature of our industry, our market competition, the cost and continued availability of borrowed funds, legal and regulatory matters, including environmental regulations, inherent limitations in insurance coverage, potential impairments of long-lived intangible assets, technological developments in our industry, and the impact of severe weather, particularly in the U.S. Gulf Coast. 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.

Contacts:

Gregg Piontek, VP & CFO

Newpark Resources, Inc.

281-362-6800

Ken Dennard, Managing Partner

Karen Roan, SVP

Dennard ▪ Lascar Associates

713-529-6600

 

 

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)

2013

2013

2012

2013

2012

Revenues

$ 276,622

$  282,518

$ 245,756

$ 559,140

$ 508,092

Cost of revenues

225,244

230,406

201,534

455,650

416,436

Selling, general and administrative expenses

24,662

24,182

19,944

48,844

41,257

Other operating income, net

(201)

(439)

(477)

(640)

(491)

Operating income 

26,917

28,369

24,755

55,286

50,890

Foreign currency exchange loss (gain)

475

(368)

461

107

231

Interest expense, net

2,802

2,520

2,553

5,322

4,921

Income from operations before income taxes

23,640

26,217

21,741

49,857

45,738

Provision for income taxes

7,976

8,842

7,278

16,818

15,641

Net income 

$   15,664

$    17,375

$   14,463

$   33,039

$   30,097

Income per common share -basic:

$       0.19

$        0.21

$       0.16

$       0.39

$       0.34

Income per common share -diluted:

$       0.17

$        0.18

$       0.15

$       0.35

$       0.31

Calculation of Diluted EPS:

Net income 

$   15,664

$    17,375

$   14,463

$   33,039

$   30,097

Assumed conversion of Senior Notes 

1,279

1,266

1,283

2,544

2,539

Adjusted net income 

$   16,943

$    18,641

$   15,746

$   35,583

$   32,636

Weighted average number of common shares outstanding-basic

84,813

84,100

88,600

84,459

89,536

Add:  Dilutive effect of  stock options and restricted stock awards

1,810

1,572

457

1,727

561

           Dilutive effect of Senior Notes 

15,682

15,682

15,682

15,682

15,682

Diluted weighted average number of common shares outstanding

102,305

101,354

104,739

101,868

105,779

Income per common share - diluted

$       0.17

$        0.18

$       0.15

$       0.35

$       0.31

 

 

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)

Three Months Ended

June 30,

March 31,

June 30,

(In thousands)

2013

2013

2012

Revenues

Fluids systems and engineering

$ 233,964

$  247,339

$ 202,388

Mats and integrated services

25,412

20,584

30,071

Environmental services

17,246

14,595

13,297

Total revenues

$ 276,622

$  282,518

$ 245,756

Operating income (loss) 

Fluids systems and engineering

$  17,684

$    22,622

$  13,480

Mats and integrated services

10,341

8,480

13,075

Environmental services

5,321

3,508

3,514

Corporate office

(6,429)

(6,241)

(5,314)

Total operating income 

$  26,917

$    28,369

$  24,755

Segment operating margin

Fluids systems and engineering

7.6%

9.1%

6.7%

Mats and integrated services

40.7%

41.2%

43.5%

Environmental services

30.9%

24.0%

26.4%

 

 

Newpark Resources, Inc.

Consolidated Balance Sheets

(Unaudited)

June 30,

December 31,

(In thousands, except share data)

2013

2012

ASSETS

Cash and cash equivalents

$      58,045

$          46,846

Receivables, net

335,176

323,439

Inventories

202,053

209,734

Deferred tax asset

10,354

11,596

Prepaid expenses and other current assets

12,800

12,441

Total current assets

618,428

604,056

Property, plant and equipment, net 

273,323

253,990

Goodwill

88,320

87,388

Other intangible assets, net 

33,745

41,018

Other assets

7,325

8,089

Total assets

$ 1,021,141

$        994,541

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt

$        9,335

$            2,599

Accounts payable

110,553

114,377

Accrued liabilities

38,167

42,620

Total current liabilities

158,055

159,596

Long-term debt, less current portion

250,798

256,832

Deferred tax liability

44,582

46,348

Other noncurrent liabilities

20,773

18,187

Total liabilities

474,208

480,963

Commitments and contingencies 

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

and 97,585,862 and 95,733,677 shares issued, respectively

976

957

Paid-in capital

497,310

484,962

Accumulated other comprehensive loss 

(11,053)

(734)

Retained earnings 

128,054

95,015

Treasury stock, at cost; 10,249,304 and 10,115,951 shares, respectively 

(68,354)

(66,622)

Total stockholders' equity

546,933

513,578

Total liabilities and stockholders' equity

$ 1,021,141

$        994,541

 

 

Newpark Resources, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Six Months Ended June 30,

(In thousands)

2013

2012

Cash flows from operating activities:

Net income 

$  33,039

$  30,097

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

  Depreciation and amortization

21,836

15,808

  Stock-based compensation expense

4,289

3,003

  Provision for deferred income taxes

(278)

178

  Net provision for doubtful accounts

220

1,073

   (Gain) loss on sale of assets

(323)

104

  Change in assets and liabilities:

  Increase in receivables

(18,442)

(10,793)

  Decrease (increase) in inventories

4,055

(870)

  Increase in other assets

(199)

(2,826)

  Decrease in accounts payable

(1,237)

(8,705)

  Increase (decrease) in accrued liabilities and other

935

(11,247)

Net cash provided by operating activities

43,895

15,822

Cash flows from investing activities:

  Capital expenditures

(37,417)

(26,315)

  Proceeds from sale of property, plant and equipment

590

371

Net cash used in investing activities

(36,827)

(25,944)

Cash flows from financing activities:

  Borrowings on lines of credit

159,612

173,846

  Payments on lines of credit

(158,679)

(126,233)

  Proceeds from employee stock plans

6,928

468

  Post-closing payment for business acquisition

-

(11,892)

  Purchase of treasury stock

(2,010)

(24,825)

  Other financing activities

(39)

(53)

Net cash provided by financing activities

5,812

11,311

Effect of exchange rate changes on cash

(1,681)

2,396

Net increase in cash and cash equivalents

11,199

3,585

Cash and cash equivalents at beginning of year

46,846

25,247

Cash and cash equivalents at end of period

$  58,045

$  28,832

 

SOURCE Newpark Resources, Inc.



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http://www.newpark.com