Newpark Resources Reports 2012 Fourth Quarter And Full Year Results PR Newswire THE WOODLANDS, Texas, Feb. 14, 2013 THE WOODLANDS, Texas, Feb. 14, 2013 /PRNewswire/ --Newpark Resources, Inc. (NYSE: NR) today announced results for its fourth quarter ended December 31, 2012. Total revenues for the fourth quarter of 2012 were $270 million compared to $260 million for the third quarter of 2012 and $264 million for the fourth quarter of 2011. Net income for the fourth quarter of 2012 was $11.2 million, or $0.12 per diluted share, compared to net income of $18.7 million, or $0.20 per diluted share, for the third quarter of 2012, and $21.9 million, or $0.22 per diluted share, for the fourth quarter of 2011. As set forth in the attached Non-GAAP Earnings Reconciliation, excluding the items discussed below, adjusted net income for the fourth quarter of 2012 was $15.9 million, or $0.17 per diluted share. The fourth quarter 2012 provision for income taxes included a $3.9 million charge associated with a tax audit assessment and related tax rate increase for the period of 2006 through 2012 in a North African subsidiary. In addition, the fourth quarter of 2012 included $0.9 million of charges ($0.6 million after-tax) associated with asset impairments and employee termination costs in our mid-continent completion services and equipment rental business, along with $0.4 million of transaction expenses ($0.2 million after-tax) associated with the Company's December 2012 acquisition of Alliance Drilling Fluids. For the full year 2012, total revenues were $1.038 billion compared to $958 million for 2011. Net income for 2012 was $60.0 million, or $0.62 per diluted share, compared to net income of $80.0 million, or $0.80 per diluted share, in 2011. Paul Howes, Newpark's President and Chief Executive Officer, stated, "We produced solid operating results in the fourth quarter and are extremely pleased to have reached a significant milestone in 2012, passing the $1 billion annual revenue mark for the first time in the company's history. For the fourth quarter, our worldwide Fluids revenues increased 8% sequentially and 4% year over year, also posting a quarterly record. Our international operations continued to strengthen, with all regions showing sequential and year-over-year increases in revenues. In North America, our Canadian operations improved seasonally, outpacing that region's sequential rig count increase. While the U.S. land market continued to be challenging in the fourth quarter, our Fluids revenues benefitted from work on a deepwater well in the Gulf of Mexico and therefore were relatively flat, despite a 5% sequential decline in U.S. rig count. "Our Mats and Integrated Services segment again posted solid performance, despite the expected sequential decline in mat sales following a large sale into the utility industry during the third quarter," added Howes. "Meanwhile, our Environmental Service business continued to deliver consistent results, benefitting from the strengthening activity levels in the Gulf region." SEGMENT RESULTS The Fluids Systems and Engineering segment generated revenues of $229.3 million in the fourth quarter of 2012 compared to $211.5 million in the third quarter of 2012 and $221.1 million in the fourth quarter of 2011. Segment operating income was $17.7 million (7.7% operating margin) in the fourth quarter of 2012 compared to $14.8 million in the third quarter of 2012 (7.0% operating margin) and $25.0 million (11.3% operating margin) in the fourth quarter of 2011. The Mats and Integrated Services segment generated revenues of $26.6 million in the fourth quarter of 2012 compared to $35.1 million in the third quarter of 2012 and $29.4 million in the fourth quarter of 2011. Segment operating income was $10.8 million (40.8% operating margin) in the fourth quarter of 2012 compared to $16.0 million (45.6% operating margin) in the third quarter of 2012 and $11.7 million (39.7% operating margin) in the fourth quarter of 2011. The Environmental Services segment generated revenues of $14.4 million in the fourth quarter of 2012 compared to $13.1 million in the third quarter of 2012 and $13.0 million in the fourth quarter of 2011. Segment operating income was $3.4 million (23.9% operating margin) in the fourth quarter of 2012 compared to $3.1 million in the third quarter of 2012 (23.6% operating margin) and $2.4 million (18.1% operating margin) in the fourth quarter of 2011. SHARE REPURCHASE PROGRAM In the fourth quarter, the Company completed its previously-announced $50 million share repurchase program, which was executed in accordance with a trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934. During the fourth quarter, the Company repurchased a total of 2.1 million outstanding shares of Newpark common stock at an average cost of $7.24 per share. Combined with purchases completed earlier in the year, the Company repurchased a total of 7.2 million outstanding shares at an average cost of $6.92 through the end of 2012. CONFERENCE CALL Newpark has scheduled a conference call to discuss fourth quarter 2012 results, which will be broadcast live over the Internet, on Friday, February 15, 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 March 1, 2013 and may be accessed by dialing (303) 590-3030 and using pass code 4587015#. 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, our ability to successfully integrate the acquisition of Alliance Drilling Fluids and to realize the anticipated benefits of the acquisition, 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-Lascar Associates 713-529-6600 Newpark Resources, Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Twelve Months Ended December September December December December 31, 30, 31, 31, 31, (In thousands, except 2012 2012 2011 2012 2011 per share data) Revenues $ 270,328 $ 259,599 $ 263,514 $ $ 958,180 1,038,019 Cost of revenues 219,817 210,276 204,991 846,529 744,176 Selling, general and administrative 24,217 20,878 23,902 86,352 81,672 expenses Other operating 43 (311) 580 (759) (432) income, net Operating income 26,251 28,756 34,041 105,897 132,764 Foreign currency 333 185 182 749 522 exchange loss Interest expense, net 2,403 2,416 2,405 9,740 9,226 Income from operations 23,515 26,155 31,454 95,408 123,016 before income taxes Provision for income 12,322 7,413 9,568 35,376 42,999 taxes Net income $ $ 18,742 $ $ $ 11,193 21,886 60,032 80,017 Income per common $ $ $ $ $ share -basic: 0.13 0.22 0.24 0.69 0.89 Income per common $ $ $ $ $ share -diluted: 0.12 0.20 0.22 0.62 0.80 Calculation of Diluted EPS: Net income $ $ 18,742 $ $ $ 11,193 21,886 60,032 80,017 Assumed conversion of 927 1,396 1,356 4,868 4,969 Senior Notes Adjusted net income $ $ 20,138 $ $ $ 12,120 23,242 64,900 84,986 Weighted average number of common 84,602 86,423 90,454 87,522 90,022 shares outstanding-basic Add: Dilutive effect of stock options andrestricted stock 903 695 1,026 876 965 awards Dilutive effect of Senior 15,682 15,682 15,682 15,682 15,682 Notes Diluted weighted average number of 101,187 102,800 107,162 104,080 106,669 common shares outstanding Income per common $ $ $ $ $ share - diluted 0.12 0.20 0.22 0.62 0.80 Newpark Resources, Inc. Operating Segment Results (Unaudited) Three Months Ended December 31, September 30, December 31, (In thousands) 2012 2012 2011 Revenues Fluids systems and engineering $ 229,329 $ 211,457 $ 221,125 Mats and integrated services 26,612 35,067 29,376 Environmental services 14,387 13,075 13,013 Total revenues $ 270,328 $ 259,599 $ 263,514 Operating income (loss) Fluids systems and engineering $ 17,714 $ 14,798 $ 25,044 Mats and integrated services 10,845 15,992 11,655 Environmental services 3,444 3,089 2,351 Corporate office (5,752) (5,123) (5,009) Total operating income $ 26,251 $ 28,756 $ 34,041 Segment operating margin Fluids systems and engineering 7.7% 7.0% 11.3% Mats and integrated services 40.8% 45.6% 39.7% Environmental services 23.9% 23.6% 18.1% Newpark Resources, Inc. Consolidated Balance Sheets (Unaudited) December 31, December 31, (In thousands, except share data) 2012 2011 ASSETS Cash and cash equivalents $ $ 46,846 25,247 Receivables, net 323,439 328,590 Inventories 209,734 175,929 Deferred tax asset 11,596 13,224 Prepaid expenses and other current assets 12,441 10,828 Total current assets 604,056 553,818 Property, plant and equipment, net 253,990 231,055 Goodwill 87,388 71,970 Other intangible assets, net 41,018 20,850 Other assets 8,089 9,144 Total assets $ $ 994,541 886,837 LIABILITIES AND STOCKHOLDERS' EQUITY Short-term debt $ $ 2,599 2,232 Accounts payable 114,377 97,168 Accrued liabilities 42,620 47,443 Total current liabilities 159,596 146,843 Long-term debt, less current portion 256,832 189,876 Deferred tax liability 46,348 46,844 Other noncurrent liabilities 18,187 5,428 Total liabilities 480,963 388,991 Commitments and contingencies Common stock, $0.01 par value, 200,000,000 shares authorizedand 95,733,677 and 957 945 94,497,526 shares issued, respectively Paid-in capital 484,962 477,204 Accumulated other comprehensive (loss) (734) 789 income Retained earnings 95,015 34,983 Treasury stock, at cost; 10,115,951 and (66,622) (16,075) 2,803,987 shares, respectively Total stockholders' equity 513,578 497,846 Total liabilities and stockholders' equity $ $ 994,541 886,837 Newpark Resources, Inc. Consolidated Statements of Cash Flows (Unaudited) Year Ended December 31, (In thousands) 2012 2011 Cash flows from operating activities: Net income $ 60,032 $ 80,017 Adjustments to reconcile net income to net cash provided by operations: Impairment charges 443 - Depreciation and amortization 32,821 28,971 Stock-based compensation expense 7,103 4,535 Provision for deferred income taxes 1,358 26,623 Net provision for doubtful accounts 1,709 2,400 Loss on sale of assets 724 630 Change in assets and liabilities: Decrease (increase) in receivables 23,565 (135,303) Increase in inventories (28,758) (48,129) Increase in other assets (641) (434) Increase in accounts payable 13,702 30,425 Decrease in accrued liabilities and other (1,813) (3,293) Net cash provided by (used in) operating activities 110,245 (13,558) Cash flows from investing activities: Capital expenditures (43,955) (36,897) Proceeds from sale of property, plant and equipment 863 522 Business acquisitions, net of cash acquired (53,075) (26,775) Net cash used in investing activities (96,167) (63,150) Cash flows from financing activities: Borrowings on lines of credit 364,426 27,619 Payments on lines of credit (296,944) (9,951) Principal payments on notes payable and long-term (40) (219) debt Proceeds from employee stock plans 1,059 3,588 Post-closing payment for business acquisition (11,892) (2,055) Purchase of treasury stock (50,756) (644) Net cash provided by financing activities 5,853 18,338 Effect of exchange rate changes on cash 1,668 607 Net increase (decrease) in cash and cash equivalents 21,599 (57,763) Cash and cash equivalents at beginning of year 25,247 83,010 Cash and cash equivalents at end of year $ 46,846 $ 25,247 Newpark Resources, Inc. Non-GAAP Earnings Reconciliation Three Months Ending December 31, 2012 To supplement our financial results presented in accordance with generally accepted accounting pricnciples in the United States ("GAAP"), this press release contains, and the related earnings conference call will refer to, our adjusted non-GAAP net income and earnings per share for the fourth quarter of 2012. The table below presents a reconciliation of these non-GAAP measure to the most directly comparable GAAP financial measures. Non-GAAP measures of financial performance reference in this press release exclude items that the Company believes are infequent or not indicative of operating performance. Non-GAAP financials measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The Company believes these non-GAAP financial measures are helpful for an understanding of the Company's operations, and management uses them in comparing the historical results to current results and measuring operating earnings trends. (Unaudited) Three months ended December 31, 2012 (In thousands, except per share Operating Income per data) Income Net Income common share - Diluted Reported results - GAAP $ 26,251 $ 11,193 $ 0.12 Adjustments: Tax audit assessment and related tax rate increase for the period - 3,902 0.04 of 2006 to 2012 in a North African subsidiary Asset impairments and employee termination 858 558 0.01 costs - Fluids Systems and Engineering segment Transaction expenses associated with acquisition of Alliance 364 237 0.00 Drilling Fluids - Corporate office Total adjustments 1,222 4,697 0.05 Adjusted results - Non-GAAP $ 27,473 $ 15,890 $ 0.17 SOURCE Newpark Resources, Inc. Website: http://www.newpark.com
Newpark Resources Reports 2012 Fourth Quarter And Full Year Results
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