Newpark Resources Reports Net Income Of $0.20 Per Diluted Share For The Third Quarter 2012 PR Newswire THE WOODLANDS, Texas, Oct. 25, 2012 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 treatmentsolutions. 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, September30, June30, September30, September30, September30, except per share data) 2012 2012 2011 2012 2011 Revenues $ 259,599 $ $ 261,193 $ 767,691 $ 694,666 245,756 Cost of revenues 210,276 201,534 201,272 626,712 539,185 Selling, general and 20,878 19,944 20,802 62,135 57,770 administrative expenses Other operating (311) (477) (60) (802) (1,012) income, net Operating income 28,756 24,755 39,179 79,646 98,723 Foreign currency 185 461 485 416 340 exchange loss Interest expense, 2,416 2,553 2,464 7,337 6,821 net Income from operations before 26,155 21,741 36,230 71,893 91,562 income taxes Provision for 7,413 7,278 13,233 23,054 33,431 income taxes Net income $ 18,742 $ $ 22,997 $ 48,839 $ 58,131 14,463 Income per common $ 0.22 $ $ 0.25 $ 0.55 $ 0.65 share -basic: 0.16 Income per common $ 0.20 $ $ 0.23 $ 0.50 $ 0.58 share -diluted: 0.15 Calculation of Diluted EPS: Net income $ 18,742 $ $ 22,997 $ 48,839 $ 58,131 14,463 Assumed conversion of 1,396 1,283 1,236 3,944 3,674 Senior Notes Adjusted net $ 20,138 $ $ 24,233 $ 52,783 $ 61,805 income 15,746 Weighted average number of common 86,423 88,600 90,212 88,491 89,877 shares outstanding-basic Add: Dilutive effect of stock options 695 457 1,025 756 883 andrestricted stock awards Dilutive effect 15,682 15,682 15,682 15,682 15,682 of Senior Notes Diluted weighted average number of 102,800 104,739 106,919 104,929 106,442 common shares outstanding Income per common $ 0.20 $ $ 0.23 $ 0.50 $ 0.58 share - diluted 0.15 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 957 945 issued, respectively 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 (51,564) (16,075) shares, respectively 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 823 434 equipment 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 (11,892) (2,055) acquisition 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 10,210 (20,108) equivalents Cash and cash equivalents at beginning of 25,247 83,010 year Cash and cash equivalents at end of period $ 35,457 $ 62,902 SOURCE Newpark Resources, Inc. Website: http://www.newpark.com
Newpark Resources Reports Net Income Of $0.20 Per Diluted Share For The Third Quarter 2012
Press spacebar to pause and continue. Press esc to stop.