Newpark Resources Reports Net Income Of $0.20 Per Diluted Share For The Third Quarter 2013

Company announces plans to expand mat manufacturing facility

Oct 24, 2013, 16:15 ET from Newpark Resources, Inc.

THE WOODLANDS, Texas, Oct. 24, 2013 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its third quarter ended September 30, 2013.  Total revenues for the third quarter of 2013 increased 10% to $285.7 million compared to $259.6 million in the third quarter of 2012.  Net income for the third quarter of 2013 was $18.8 million, or $0.20 per diluted share, compared to $18.7 million, or $0.20 per diluted share, in the third quarter of 2012.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are pleased with our continued growth, setting another quarterly revenue record in the third quarter.   Revenues in our drilling fluids segment rose 10% on a worldwide basis compared to last year's third quarter.  North American revenues increased 9% from a year ago and rose 2% sequentially.  International revenues in this segment grew 13% from a year ago, but declined 5% sequentially largely due to expected declines in our EMEA and Asia Pacific regions.  Fluid margins were negatively impacted by continued operating losses in completions services, as well as lower margins in the U.S., EMEA and Asia Pacific regions.  As previously announced, we have been considering strategic alternatives for our completion services business and are now planning to exit this business.  Subsequent to the end of the third quarter, we completed the sale of a portion of the assets associated with that business and are currently evaluating offers for the remaining parts of that business.  

"Our mats segment had an extremely strong quarter, setting a new record for quarterly revenues.  Rental revenues increased 30% from a year ago and 5% sequentially, while mat sales, which were down 21% from the prior year period, roughly doubled on a sequential basis from the prior quarter.  Additionally, we are pleased to announce a $40 million expansion of our mats manufacturing facility in Louisiana, which reflects a critical element of our long-term strategy for this business, as we seek to provide innovative solutions to meet our customers' needs," added Howes. 

SEGMENT RESULTS

The Fluids Systems and Engineering segment generated revenues of $233.0 million in the third quarter of 2013 compared to $211.5 million in the third quarter of 2012, a 10% increase.  Segment operating income was $17.1 million (7.4% operating margin) in the third quarter of 2013 compared to $14.8 million (7.0% operating margin) in the third quarter of 2012.

The Mats and Integrated Services segment generated revenues of $35.1 million in the third quarter of 2013 and the third quarter of 2012.  Segment operating income was $15.3.million (43.7% operating margin) in the third quarter of 2013 compared to $16.0 million (45.6% operating margin) in the third quarter of 2012. 

The Environmental Services segment generated revenues of $17.6 million in the third quarter of 2013 compared to $13.1 million in the third quarter of 2012, a 34% increase.  Segment operating income was $4.7 million (26.5% operating margin) in the third quarter of 2013 compared to $3.1 million (23.6% operating margin) in the third quarter of 2012.

EXPANSION OF MAT MANUFACTURING FACILITY

The Company announced plans to expand its mat manufacturing facility, located in Carencro, Louisiana.  The $40 million expansion project is expected to be completed in early 2015.  Upon completion, the project will significantly increase our production capacity and support expansion into new markets, both domestically and internationally.  The new facility will also include a research and development center, intended to drive continued new product development efforts.

LEADERSHIP ANNOUNCEMENT

The Company announced that Phil Vollands has been appointed to the role of President, North America, Fluids Systems and Engineering, reporting to Bruce Smith, President, Fluids Systems and Engineering.  Most recently, Mr. Vollands served as Vice President, Tubular Running Services for Weatherford International.  Prior to that, Mr. Vollands served in a variety of sales and operational leadership positions for National Oilwell Varco and brings years of global oilfield service leadership experience.

CONFERENCE CALL

Newpark has scheduled a conference call to discuss third  quarter 2013 results, which will be broadcast live over the Internet, on Friday, October 25, 2013 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time.  To participate in the call, dial 480-629-9835 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 8, 2013 and may be accessed by dialing (303) 590-3030 and using pass code 4641682#.  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

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

(In thousands, except per share data)

2013

2013

2012

2013

2012

Revenues

$        285,708

$        276,622

$        259,599

$        844,848

$        767,691

Cost of revenues

230,206

225,244

210,276

685,856

626,712

Selling, general and administrative expenses

25,433

24,662

20,878

74,277

62,135

Other operating income, net

(232)

(201)

(311)

(872)

(802)

Operating income 

30,301

26,917

28,756

85,587

79,646

Foreign currency exchange loss 

975

475

185

1,082

416

Interest expense, net

2,728

2,802

2,416

8,050

7,337

Income from operations before income taxes

26,598

23,640

26,155

76,455

71,893

Provision for income taxes

7,838

7,976

7,413

24,656

23,054

Net income 

$          18,760

$          15,664

$          18,742

$          51,799

$          48,839

Income per common share -basic:

$              0.22

$              0.19

$              0.22

$              0.61

$              0.55

Income per common share -diluted:

$              0.20

$              0.17

$              0.20

$              0.54

$              0.50

Calculation of Diluted EPS:

Net income 

$          18,760

$          15,664

$          18,742

$          51,799

$          48,839

Assumed conversion of Senior Notes 

1,374

1,279

1,396

3,921

3,944

Adjusted net income 

$          20,134

$          16,943

$          20,138

$          55,720

$          52,783

Weighted average number of common shares outstanding-basic

85,775

84,813

86,423

84,902

88,491

Add:  Dilutive effect of  stock options and restricted stock awards

1,503

1,810

695

1,718

756

           Dilutive effect of Senior Notes 

15,682

15,682

15,682

15,682

15,682

Diluted weighted average number of common shares outstanding

102,960

102,305

102,800

102,302

104,929

Income per common share - diluted

$              0.20

$              0.17

$              0.20

$              0.54

$              0.50

 

 

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)

Three Months Ended

September 30,

June 30,

September 30,

(In thousands)

2013

2013

2012

Revenues

Fluids systems and engineering

$         233,020

$ 233,964

$         211,457

Mats and integrated services

35,112

25,412

35,067

Environmental services

17,576

17,246

13,075

Total revenues

$         285,708

$ 276,622

$         259,599

Operating income (loss) 

Fluids systems and engineering

$           17,140

$  17,684

$           14,798

Mats and integrated services

15,345

10,341

15,992

Environmental services

4,656

5,321

3,089

Corporate office

(6,840)

(6,429)

(5,123)

Total operating income 

$           30,301

$  26,917

$           28,756

Segment operating margin

Fluids systems and engineering

7.4%

7.6%

7.0%

Mats and integrated services

43.7%

40.7%

45.6%

Environmental services

26.5%

30.9%

23.6%

 

 

Newpark Resources, Inc.

Consolidated Balance Sheets

(Unaudited)

September 30,

December 31,

(In thousands, except share data)

2013

2012

ASSETS

Cash and cash equivalents

$           69,409

$          46,846

Receivables, net

316,276

323,439

Inventories

203,926

209,734

Deferred tax asset

9,972

11,596

Prepaid expenses and other current assets

11,889

12,441

Total current assets

611,472

604,056

Property, plant and equipment, net 

279,298

253,990

Goodwill

89,360

87,388

Other intangible assets, net 

30,771

41,018

Other assets

6,985

8,089

Total assets

$      1,017,886

$        994,541

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt

$           12,242

$            2,599

Accounts payable

99,863

114,377

Accrued liabilities

50,603

42,620

Total current liabilities

162,708

159,596

Long-term debt, less current portion

219,795

256,832

Deferred tax liability

44,115

46,348

Other noncurrent liabilities

20,805

18,187

Total liabilities

447,423

480,963

Common stock, $0.01 par value, 200,000,000 shares authorized and 97,777,995 and 95,733,677 shares issued, respectively

978

957

Paid-in capital

501,319

484,962

Accumulated other comprehensive loss 

(8,247)

(734)

Retained earnings 

146,814

95,015

Treasury stock, at cost; 10,413,402 and 10,115,951 shares, respectively 

(70,401)

(66,622)

Total stockholders' equity

570,463

513,578

Total liabilities and stockholders' equity

$      1,017,886

$        994,541

 

 

Newpark Resources, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

(In thousands)

2013

2012

Cash flows from operating activities:

Net income 

$  51,799

$  48,839

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

Depreciation and amortization

33,138

24,406

Stock-based compensation expense

6,954

5,027

Provision for deferred income taxes

(311)

(4,654)

Net provision for doubtful accounts

221

1,282

(Gain) loss on sale of assets

(437)

512

Excess tax benefit from stock-based compensation

(2,020)

-

Change in assets and liabilities:

   Decrease in receivables

1,210

11,964

   Decrease (increase) in inventories

2,964

(6,446)

   Decrease (increase) in other assets

828

(98)

   (Decrease) increase in accounts payable

(11,832)

2,905

   Increase (decrease) in accrued liabilities and other

13,175

(3,085)

Net cash provided by operating activities

95,689

80,652

Cash flows from investing activities:

Capital expenditures

(52,550)

(34,858)

Proceeds from sale of property, plant and equipment

1,248

823

Net cash used in investing activities

(51,302)

(34,035)

Cash flows from financing activities:

Borrowings on lines of credit

215,994

222,868

Payments on lines of credit

(243,141)

(213,221)

Proceeds from employee stock plans

8,102

1,007

Post-closing payment for business acquisition

-

(11,892)

Purchase of treasury stock

(4,227)

(35,698)

Excess tax benefit from stock-based compensation

2,020

-

Other financing activities

(25)

(48)

Net cash used in financing activities

(21,277)

(36,984)

Effect of exchange rate changes on cash

(547)

577

Net increase in cash and cash equivalents

22,563

10,210

Cash and cash equivalents at beginning of year

46,846

25,247

Cash and cash equivalents at end of period

$  69,409

$  35,457

 

SOURCE Newpark Resources, Inc.



RELATED LINKS

http://www.newpark.com