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

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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