Newpark Resources Reports Net Income Of $0.20 Per Diluted Share For The Third Quarter 2012

Oct 25, 2012, 16:05 ET from Newpark Resources, Inc.

THE WOODLANDS, Texas, Oct. 25, 2012 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its third quarter ended September 30, 2012.  Total revenues for the third quarter of 2012 were $259.6 million compared to $245.8 million for the second quarter of 2012 and $261.2 million for the third quarter of 2011.  Net income for the third quarter of 2012 was $18.7 million, or $0.20 per diluted share, compared to $14.5 million, or $0.15 per diluted share, for the second quarter of 2012, and $23.0 million, or $0.23 per diluted share, for the third quarter of 2011.

The third quarter 2012 provision for income taxes was $7.4 million, reflecting an effective tax rate of 28.3%.  The provision included a $1.0 million benefit ($0.01 per diluted share) associated with increased U.S. tax deductions identified for prior years, along with an increase in estimated U.S. tax deductions available for the 2012 fiscal year.  

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are pleased with our performance in the third quarter, which was achieved despite a softening market in North America.  In particular, the results in our Mats and Integrated Services segment were outstanding, achieving record levels in both revenue and operating income during the quarter.  Operating results in our fluids business also improved sequentially, driven by strengthening in our international operations as all international regions posted sequential improvements in both revenues and operating income.  Meanwhile, not unlike other service companies, our North American fluids business is facing dual headwinds of the declining U.S. rig count and a slow seasonal recovery in Canada.  While our profit improvement initiatives in this business have continued, their impact has been somewhat muted by the North American market conditions. 

"In the last few quarters, we have also focused on reducing customer receivables in our U.S. fluids business, and we are pleased to report that receivables in this business declined by $34 million during the third quarter, contributing to a $38 million reduction in long-term debt during the period.

"Looking ahead, we remain focused on introducing differentiating technologies in both our fluids and mats businesses.  To that end, we expect to complete our first Evolution® well outside of North America, and we also anticipate having our spill containment system ready for deployment in the field by the end of the year," concluded Howes.

SEGMENT RESULTS The Fluids Systems and Engineering segment generated revenues of $211.5 million in the third quarter of 2012 compared to $202.4 million in the second quarter of 2012 and $216.2 million in the third quarter of 2011.  Segment operating income was $14.8 million (7.0% operating margin) in the third quarter of 2012 compared to $13.5 million in the second quarter of 2012 (6.7% operating margin) and $25.6 million (11.9% operating margin) in the third quarter of 2011. 

The Mats and Integrated Services segment generated revenues of $35.1 million in the third quarter of 2012 compared to $30.1 million in the second quarter of 2012 and $30.2 million in the third quarter of 2011.  Segment operating income was $16.0 million (45.6% operating margin) in the third quarter of 2012 compared to $13.1 million in the second quarter of 2012 (43.5% operating margin) and $14.5 million (48.1% operating margin) in the third quarter of 2011. 

The Environmental Services segment generated revenues of $13.1 million in the third quarter of 2012 compared to $13.3 million in the second quarter of 2012 and $14.9 million in the third quarter of 2011.  Segment operating income was $3.1 million (23.6% operating margin) in the third quarter of 2012 compared to $3.5 million in the second quarter of 2012 (26.4% operating margin) and $5.0 million (33.4% operating margin) in the third 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 a total of 1,640,458 outstanding shares of Newpark common stock at an average cost of $6.62 per share during the third quarter.  Combined with purchases completed earlier in the year, the Company has repurchased a total of 5.2 million outstanding shares at an average cost of $6.80 through the end of the third quarter 2012.

CONFERENCE CALL Newpark has scheduled a conference call to discuss third quarter 2012 results, which will be broadcast live over the Internet, on Friday, October 26, 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 November 9, 2012 and may be accessed by dialing (303) 590-3030 and using pass code 4567351#.  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.

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

 

Newpark Resources, Inc.

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Nine Months Ended

(In thousands, except per share data)

September 30,

2012

June 30,

2012

September 30,

2011

September 30,

2012

September 30,

2011

Revenues

$ 259,599

$ 245,756

$ 261,193

$ 767,691

$ 694,666

Cost of revenues

210,276

201,534

201,272

626,712

539,185

Selling, general and administrative expenses

20,878

19,944

20,802

62,135

57,770

Other operating income, net

(311)

(477)

(60)

(802)

(1,012)

Operating income 

28,756

24,755

39,179

79,646

98,723

Foreign currency exchange loss 

185

461

485

416

340

Interest expense, net

2,416

2,553

2,464

7,337

6,821

Income from operations before income taxes

26,155

21,741

36,230

71,893

91,562

Provision for income taxes

7,413

7,278

13,233

23,054

33,431

Net income 

$   18,742

$   14,463

$   22,997

$   48,839

$   58,131

Income per common share -basic:

$       0.22

$       0.16

$       0.25

$       0.55

$       0.65

Income per common share -diluted:

$       0.20

$       0.15

$       0.23

$       0.50

$       0.58

Calculation of Diluted EPS:

Net income 

$   18,742

$   14,463

$   22,997

$   48,839

$   58,131

Assumed conversion of Senior Notes 

1,396

1,283

1,236

3,944

3,674

Adjusted net income 

$   20,138

$   15,746

$   24,233

$   52,783

$   61,805

Weighted average number of common shares outstanding-basic

86,423

88,600

90,212

88,491

89,877

Add:  Dilutive effect of  stock options and restricted stock awards

695

457

1,025

756

883

           Dilutive effect of Senior Notes 

15,682

15,682

15,682

15,682

15,682

Diluted weighted average number of common shares outstanding

102,800

104,739

106,919

104,929

106,442

Income per common share - diluted

$       0.20

$       0.15

$       0.23

$       0.50

$       0.58

 

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)

Three Months Ended

September 30,

June 30,

September 30,

(In thousands)

2012

2012

2011

Revenues

Fluids systems and engineering

$ 211,457

$ 202,388

$ 216,160

Mats and integrated services

35,067

30,071

30,179

Environmental services

13,075

13,297

14,854

Total revenues

$ 259,599

$ 245,756

$ 261,193

Operating income (loss) 

Fluids systems and engineering

$  14,798

$  13,480

$  25,648

Mats and integrated services

15,992

13,075

14,509

Environmental services

3,089

3,514

4,958

Corporate office

(5,123)

(5,314)

(5,936)

Total operating income 

$  28,756

$  24,755

$  39,179

Segment operating margin

Fluids systems and engineering

7.0%

6.7%

11.9%

Mats and integrated services

45.6%

43.5%

48.1%

Environmental services

23.6%

26.4%

33.4%

 

Newpark Resources, Inc.

Consolidated Balance Sheets

(Unaudited)

September 30,

December 31,

(In thousands, except share data)

2012

2011

ASSETS

Cash and cash equivalents

$   35,457

$   25,247

Receivables, net

312,040

328,590

Inventories

181,188

175,929

Deferred tax asset

14,438

13,224

Prepaid expenses and other current assets

11,361

10,828

Total current assets

554,484

553,818

Property, plant and equipment, net 

247,329

231,055

Goodwill

75,796

71,970

Other intangible assets, net 

18,317

20,850

Other assets

8,529

9,144

Total assets

$ 904,455

$ 886,837

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt

$        799

$     2,232

Accounts payable

95,670

97,168

Accrued liabilities

36,767

47,443

Total current liabilities

133,236

146,843

Long-term debt, less current portion

200,838

189,876

Deferred tax liability

43,501

46,844

Other noncurrent liabilities

13,821

5,428

Total liabilities

391,396

388,991

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

and 95,652,486 and 94,497,526 shares issued, respectively

957

945

Paid-in capital

482,886

477,204

Accumulated other comprehensive (loss) income

(3,042)

789

Retained earnings 

83,822

34,983

Treasury stock, at cost; 8,035,100 and 2,803,987 shares, respectively 

(51,564)

(16,075)

Total stockholders' equity

513,059

497,846

Total liabilities and stockholders' equity

$ 904,455

$ 886,837

 

Newpark Resources, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

(In thousands)

2012

2011

Cash flows from operating activities:

Net income 

$  48,839

$ 58,131

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

Depreciation and amortization

24,406

21,162

Stock-based compensation expense

5,027

3,396

Provision for deferred income taxes

(4,654)

16,363

Net provision for doubtful accounts

1,282

1,165

 Loss on sale of assets

512

22

Change in assets and liabilities:

Decrease (increase) in receivables

11,964

(57,603)

Increase in inventories

(6,446)

(27,921)

Increase in other assets

(98)

(5,226)

Increase in accounts payable

2,905

28,893

Decrease in accrued liabilities and other

(3,085)

(3,655)

Net cash provided by operating activities

80,652

34,727

Cash flows from investing activities:

Capital expenditures

(34,858)

(28,136)

Business acquisition, net of cash acquired

-

(26,775)

Proceeds from sale of property, plant and equipment

823

434

Net cash used in investing activities

(34,035)

(54,477)

Cash flows from financing activities:

Borrowings on lines of credit

222,868

5,891

Payments on lines of credit

(213,221)

(5,754)

Proceeds from employee stock plans

1,007

1,768

Purchase of treasury stock

(35,698)

(599)

Post-closing payment for business acquisition

(11,892)

(2,055)

Other financing activities

(48)

(147)

Net cash used in financing activities

(36,984)

(896)

Effect of exchange rate changes on cash

577

538

Net increase (decrease) in cash and cash equivalents

10,210

(20,108)

Cash and cash equivalents at beginning of year

25,247

83,010

Cash and cash equivalents at end of period

$  35,457

$ 62,902

 

SOURCE Newpark Resources, Inc.



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http://www.newpark.com