Newpark Resources Reports Net Income Of $0.21 Per Diluted Share For The Second Quarter Of 2014

Fluids segment posts 14% sequential revenue growth and segment margin improves to double-digits

24 Jul, 2014, 16:05 ET from Newpark Resources, Inc.

THE WOODLANDS, Texas, July 24, 2014 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its second quarter ended June 30, 2014.  Total revenues for the second quarter of 2014 were $272.5 million compared to $242.8 million in the first quarter of 2014 and $259.4 million in the second quarter of 2013.  Income from continuing operations for the second quarter of 2014 was $20.3 million, or $0.21 per diluted share, compared to $11.7 million, or $0.13 per diluted share, in the first quarter of 2014, and $11.9 million, or $0.13 per diluted share, in the second quarter of 2013.  The second quarter 2014 results include $1.2 million of pre-tax gains, or $0.01 per diluted share, from the sale of real estate.       

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are very pleased with the solid performance from both our fluids and mats segments.  In the fluids business, U.S. revenues grew 20% sequentially as the momentum we experienced at the end of the first quarter continued into the second quarter, reflecting broad-based gains across most regions, along with strong demand for wholesale barite and a deepwater well in the Gulf of Mexico.  Internationally, our EMEA revenues increased sharply, including $7 million in contributions from new contract start-ups in the Black Sea and India. These revenue gains, along with our continued success in penetrating the market with new technologies, including our family of Evolution® drilling fluid systems, have helped drive our fluids segment margins back into the double-digits. 

"Meanwhile, our mats business continued to perform at a high level.  Strong rental demand and the continuing expansion of our rental fleet contributed to a 13% sequential increase in rental revenues and enabled us to maintain margins above 40%.

"We've also continued to execute on our share repurchase program, purchasing an additional $20 million of outstanding shares and bringing our total year-to-date purchases to 4.3 million shares at an average price of $11.70," concluded Howes.

SEGMENT RESULTS

The Fluids Systems segment generated revenues of $241.4 million in the second quarter of 2014 compared to $211.4 million in the first quarter of 2014 and $234.0 million in the second quarter of 2013.  Segment operating income was $27.6 million (11.4% operating margin) in the second quarter of 2014, which includes a $0.6 million gain on the sale of real estate, compared to $15.7 million (7.4% operating margin) in the first quarter of 2014 and $17.7 million (7.6% operating margin) in the second quarter of 2013.  

The Mats and Integrated Services segment generated revenues of $31.1 million in the second quarter of 2014 compared to $31.4 million in the first quarter of 2014 and $25.4 million in the second quarter of 2013.  Segment operating income was $13.7 million (43.9% operating margin) in the second quarter of 2014, which includes a $0.6 million gain on the sale of real estate, compared to $13.4 million (42.6% operating margin) in the first quarter of 2014 and $10.3 million (40.7% operating margin) in the second quarter of 2013. 

CONFERENCE CALL

Newpark has scheduled a conference call to discuss second quarter 2014 results, which will be broadcast live over the Internet, on Friday, July 25, 2014 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time.  To participate in the call, dial (719) 457-2627 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 8, 2014 and may be accessed by dialing (719) 457-0820 and using pass code 7386100#.  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 and temporary worksites and access roads for oilfield and other commercial markets.  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, 2013, 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, operating hazards inherent  in the oil and natural gas industry, our international operations, the availability of raw materials and skilled personnel, the impact of restrictions on offshore drilling activity, 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)

2014

2014

2013

2014

2013

Revenues

$ 272,466

$  242,824

$ 259,376

$ 515,290

$ 527,299

Cost of revenues

214,711

196,560

214,710

411,271

435,445

Selling, general and administrative expenses

27,981

25,523

23,248

53,504

45,699

Other operating income, net

(2,042)

(16)

(178)

(2,058)

(302)

Operating income 

31,816

20,757

21,596

52,573

46,457

Foreign currency exchange (gain) loss 

(1,805)

54

475

(1,751)

107

Interest expense, net

2,830

2,920

2,802

5,750

5,322

Income from continuing operations before income taxes

30,791

17,783

18,319

48,574

41,028

Provision for income taxes

10,462

6,041

6,460

16,503

14,302

Income from continuing operations 

20,329

11,742

11,859

32,071

26,726

Income from discontinued operations, net of tax 

-

1,152

3,805

1,152

6,313

Gain from disposal of discontinued operations, net of tax

-

22,117

-

22,117

-

Net income 

$   20,329

$    35,011

$   15,664

$   55,340

$   33,039

Income per common share -basic:

Income from continuing operations

$       0.24

$        0.14

$       0.14

$       0.38

$       0.32

Income from discontinued operations

-

0.27

0.05

0.28

0.07

Net income

$       0.24

$        0.41

$       0.19

$       0.66

$       0.39

Income per common share -diluted:

Income from continuing operations

$       0.21

$        0.13

$       0.13

$       0.34

$       0.29

Income from discontinued operations

-

0.23

0.04

0.23

0.06

Net income

$       0.21

$        0.36

$       0.17

$       0.57

$       0.35

Calculation of Diluted EPS:

Income from continuing operations

$   20,329

$    11,742

$   11,859

$   32,071

$   26,726

Assumed conversion of Senior Notes 

1,253

1,261

1,251

2,514

2,501

Adjusted income from continuing operations

$   21,582

$    13,003

$   13,110

$   34,585

$   29,227

Weighted average number of common shares outstanding-basic

83,010

84,743

84,813

83,872

84,459

Add:  Dilutive effect of  stock options and restricted stock awards

1,743

1,674

1,810

1,705

1,727

          Dilutive effect of Senior Notes 

15,682

15,682

15,682

15,682

15,682

Diluted weighted average number of common shares outstanding

100,435

102,099

102,305

101,259

101,868

Diluted income from continuing operations per common share

$       0.21

$        0.13

$       0.13

$       0.34

$       0.29

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)

Three Months Ended

June 30,

March 31,

June 30,

(In thousands)

2014

2014

2013

Revenues

Fluids systems 

$ 241,386

$  211,400

$ 233,964

Mats and integrated services

31,080

31,424

25,412

Total revenues

$ 272,466

$  242,824

$ 259,376

Operating income (loss) 

Fluids systems 

$  27,571

$    15,740

$  17,684

Mats and integrated services

13,653

13,373

10,341

Corporate office

(9,408)

(8,356)

(6,429)

Total operating income 

$  31,816

$    20,757

$  21,596

Segment operating margin

Fluids systems 

11.4%

7.4%

7.6%

Mats and integrated services

43.9%

42.6%

40.7%

Newpark Resources, Inc.

Consolidated Balance Sheets

(Unaudited)

June 30,

December 31,

(In thousands, except share data)

2014

2013

ASSETS

Cash and cash equivalents

$   56,753

$          65,840

Receivables, net

315,267

268,529

Inventories

199,129

189,680

Deferred tax asset

11,597

11,272

Prepaid expenses and other current assets

18,313

11,016

Assets of discontinued operations

-

13,103

Total current assets

601,059

559,440

Property, plant and equipment, net 

257,244

217,010

Goodwill

94,218

94,064

Other intangible assets, net 

21,254

25,900

Other assets

9,326

6,086

Assets of discontinued operations

-

65,917

Total assets

$ 983,101

$        968,417

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt

$   20,463

$          12,867

Accounts payable

102,755

88,586

Accrued liabilities

51,836

46,341

Liabilities of discontinued operations

-

5,957

Total current liabilities

175,054

153,751

Long-term debt, less current portion

172,754

172,786

Deferred tax liability

25,523

27,060

Other noncurrent liabilities

11,001

11,026

Liabilities of discontinued operations

-

22,740

Total liabilities

384,332

387,363

Commitments and contingencies 

Common stock, $0.01 par value, 200,000,000 shares authorized and 98,883,253 and 98,030,839 shares issued, respectively

989

980

Paid-in capital

512,010

504,675

Accumulated other comprehensive loss

(7,904)

(9,484)

Retained earnings 

215,678

160,338

Treasury stock, at cost; 14,781,353 and 10,832,845 shares, respectively 

(122,004)

(75,455)

Total stockholders' equity

598,769

581,054

Total liabilities and stockholders' equity

$ 983,101

$        968,417

Newpark Resources, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Six Months Ended June 30,

(In thousands)

2014

2013

Cash flows from operating activities:

Net income

$ 55,340

$  33,039

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

Depreciation and amortization

20,301

21,836

Stock-based compensation expense

5,906

4,289

Provision for deferred income taxes

(13,788)

(278)

Net provision for doubtful accounts

438

220

Gain on sale of a business

(33,974)

-

Gain on sale of assets

(1,230)

(323)

Excess tax benefit from stock-based compensation

(903)

-

Change in assets and liabilities:

Increase in receivables

(38,919)

(18,442)

(Increase) decrease in inventories

(8,480)

4,055

Increase in other assets

(6,813)

(199)

Increase (decrease) in accounts payable

12,029

(1,237)

Increase in accrued liabilities and other

4,783

935

Net cash (used in) provided by operating activities

(5,310)

43,895

Cash flows from investing activities:

Capital expenditures

(56,727)

(37,417)

Proceeds from sale of property, plant and equipment

2,526

590

Proceeds from sale of a business

89,167

-

Net cash provided by (used in) investing activities

34,966

(36,827)

Cash flows from financing activities:

Borrowings on lines of credit

51,787

159,612

Payments on lines of credit

(45,170)

(158,679)

Other financing activities

(30)

(39)

Proceeds from employee stock plans

922

6,928

Purchase of treasury stock

(47,450)

(2,010)

Excess tax benefit from stock-based compensation

903

-

Net cash (used in) provided by financing activities

(39,038)

5,812

Effect of exchange rate changes on cash

295

(1,681)

Net (decrease) increase in cash and cash equivalents

(9,087)

11,199

Cash and cash equivalents at beginning of year

65,840

46,846

Cash and cash equivalents at end of period

$ 56,753

$  58,045

SOURCE Newpark Resources, Inc.



RELATED LINKS

http://www.newpark.com