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Newpark Resources Reports Net Income Of $0.17 Per Diluted Share For The Second Quarter 2013



Newpark Resources Reports Net Income Of $0.17 Per Diluted Share For The Second
                                 Quarter 2013

PR Newswire

THE WOODLANDS, Texas, July 25, 2013

THE WOODLANDS, Texas, July 25, 2013 /PRNewswire/ -- Newpark Resources, Inc.
(NYSE: NR) today announced results for its second quarter ended June 30,
2013.  Total revenues for the second quarter of 2013 increased 13% to $276.6
million compared to $245.8 million in the second quarter of 2012.  Net income
for the second quarter of 2013 increased 8% to $15.7 million, or $0.17 per
diluted share, compared to $14.5 million, or $0.15 per diluted share, in the
second quarter of 2012.

The second quarter 2013 results include a pre-tax charge of approximately $1.8
million in Brazil ($0.02 per diluted share) associated with adjustments to
previously estimated margins on unbilled sales to Petrobras.  In addition, the
second quarter 2013 results include a $1.1 million operating loss from our
U.S. completion services and equipment rental business.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are
pleased with the revenue growth in our drilling fluids segment, which rose 16%
on a worldwide basis compared to last year's second quarter.  North American
revenues increased approximately 8% from a year ago but were down 9%
sequentially due to Spring break-up in Canada.  International revenues grew
38% from a year ago and 4% sequentially, largely driven by strength in our
EMEA region.  Margins in our U.S. drilling fluids business continued to
strengthen in the quarter. For the segment, however, our margins were
negatively impacted by the charge in Brazil, a challenging Spring break-up in
Canada, and continued weakness in our completion services business.  Despite
our ongoing efforts to rationalize the cost structure of the completion
services business unit, we are evaluating strategic alternatives for this
business.     

"In our mats segment, we are particularly pleased by the strengthening rental
activity as we prepare for anticipated demand for our spill containment
system.  Rental revenues increased 14% from a year ago and 22% sequentially,
while mat sales were down from the prior year but improved 28% sequentially. 
As we discussed previously, we remain focused on the strategic expansion of
our rental fleet, which is limiting mat sales activity.  In the meantime,
while we have initiated the sale process for our Environmental Services
business, this segment continued to post strong operating results, benefiting
from the strength in the Gulf of Mexico," concluded Howes.

SEGMENT RESULTS
The Fluids Systems and Engineering segment generated revenues of $234.0
million in the second quarter of 2013 compared to $202.4 million in the second
quarter of 2012, a 15.6% increase.  Segment operating income was $17.7 million
(7.6% operating margin) in the second quarter of 2013 compared to $13.5
million (6.7% operating margin) in the second quarter of 2012.

The Mats and Integrated Services segment generated revenues of $25.4 million
in the second quarter of 2013 compared to $30.1 million in the second quarter
of 2012, a 15.5% decrease.  Segment operating income was $10.3 million (40.7%
operating margin) in the second quarter of 2013 compared to $13.1 million
(43.5% operating margin) in the second quarter of 2012. 

The Environmental Services segment generated revenues of $17.2 million in the
second quarter of 2013 compared to $13.3 million in the second quarter of
2012, a 29.7% increase.  Segment operating income was $5.3 million (30.9%
operating margin) in the second quarter of 2013 compared to $3.5 million
(26.4% operating margin) in the second quarter of 2012.

CONFERENCE CALL
Newpark has scheduled a conference call to discuss second quarter 2013
results, which will be broadcast live over the Internet, on Friday, July 26,
2013 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 August 2, 2013 and may be accessed by dialing
(303) 590-3030 and using pass code 4627648#.  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                Six Months Ended
                        June 30,   March 31,   June 30,   June 30,   June 30,
(In thousands, except   2013       2013        2012       2013       2012
per share data)
Revenues                $ 276,622  $  282,518  $ 245,756  $ 559,140  $ 508,092
Cost of revenues        225,244    230,406     201,534    455,650    416,436
Selling, general and
administrative          24,662     24,182      19,944     48,844     41,257
expenses
Other operating         (201)      (439)       (477)      (640)      (491)
income, net
Operating income        26,917     28,369      24,755     55,286     50,890
Foreign currency        475        (368)       461        107        231
exchange loss (gain)
Interest expense, net   2,802      2,520       2,553      5,322      4,921
Income from operations  23,640     26,217      21,741     49,857     45,738
before income taxes
Provision for income    7,976      8,842       7,278      16,818     15,641
taxes
Net income              $          $           $          $          $  
                        15,664      17,375     14,463     33,039     30,097
Income per common       $          $           $          $          $      
share -basic:           0.19        0.21       0.16       0.39       0.34
Income per common       $          $           $          $          $      
share -diluted:         0.17        0.18       0.15       0.35       0.31
Calculation of Diluted
EPS:
Net income              $          $           $          $          $  
                        15,664      17,375     14,463     33,039     30,097
Assumed conversion of   1,279      1,266       1,283      2,544      2,539
Senior Notes 
Adjusted net income     $          $           $          $          $  
                        16,943      18,641     15,746     35,583     32,636
Weighted average
number of common        84,813     84,100      88,600     84,459     89,536
shares
outstanding-basic
Add:  Dilutive effect
of  stock options
and restricted stock    1,810      1,572       457        1,727      561
awards
           Dilutive
effect of Senior        15,682     15,682      15,682     15,682     15,682
Notes 
Diluted weighted
average number of       102,305    101,354     104,739    101,868    105,779
common shares
outstanding
Income per common       $          $           $          $          $      
share - diluted         0.17        0.18       0.15       0.35       0.31

 

 

Newpark Resources, Inc.
Operating Segment Results
(Unaudited)                      Three Months Ended
                                 June 30,   March 31,    June 30,
(In thousands)                   2013       2013         2012
Revenues
 Fluids systems and engineering  $ 233,964  $  247,339   $ 202,388
 Mats and integrated services    25,412     20,584       30,071
 Environmental services          17,246     14,595       13,297
 Total revenues                  $ 276,622  $  282,518   $ 245,756
Operating income (loss) 
 Fluids systems and engineering  $  17,684  $    22,622  $  13,480
 Mats and integrated services    10,341     8,480        13,075
 Environmental services          5,321      3,508        3,514
 Corporate office                (6,429)    (6,241)      (5,314)
 Total operating income          $  26,917  $    28,369  $  24,755
Segment operating margin
 Fluids systems and engineering  7.6%       9.1%         6.7%
 Mats and integrated services    40.7%      41.2%        43.5%
 Environmental services          30.9%      24.0%        26.4%

 

 

Newpark Resources, Inc.
Consolidated Balance Sheets
(Unaudited)
                                              June 30,        December 31,
(In thousands, except share data)             2013            2012
ASSETS
 Cash and cash equivalents                    $      58,045   $        
                                                               46,846
 Receivables, net                             335,176         323,439
 Inventories                                  202,053         209,734
 Deferred tax asset                           10,354          11,596
 Prepaid expenses and other current assets    12,800          12,441
        Total current assets                  618,428         604,056
 Property, plant and equipment, net           273,323         253,990
 Goodwill                                     88,320          87,388
 Other intangible assets, net                 33,745          41,018
 Other assets                                 7,325           8,089
        Total assets                          $ 1,021,141     $        994,541
LIABILITIES AND STOCKHOLDERS' EQUITY
 Short-term debt                              $        9,335  $          
                                                               2,599
 Accounts payable                             110,553         114,377
 Accrued liabilities                          38,167          42,620
        Total current liabilities             158,055         159,596
 Long-term debt, less current portion         250,798         256,832
 Deferred tax liability                       44,582          46,348
 Other noncurrent liabilities                 20,773          18,187
        Total liabilities                     474,208         480,963
 Commitments and contingencies 
 Common stock, $0.01 par value, 200,000,000
 shares authorized 
        and 97,585,862 and 95,733,677 shares  976             957
        issued, respectively
 Paid-in capital                              497,310         484,962
 Accumulated other comprehensive loss         (11,053)        (734)
 Retained earnings                            128,054         95,015
 Treasury stock, at cost; 10,249,304 and      (68,354)        (66,622)
 10,115,951 shares, respectively 
        Total stockholders' equity            546,933         513,578
 Total liabilities and stockholders' equity   $ 1,021,141     $        994,541

 

 

Newpark Resources, Inc.
Consolidated Statements of Cash Flows
(Unaudited)                                          Six Months Ended June 30,
(In thousands)                                       2013           2012
Cash flows from operating activities:
Net income                                           $  33,039      $  30,097
Adjustments to reconcile net income to net cash
provided by operations:
  Depreciation and amortization                      21,836         15,808
  Stock-based compensation expense                   4,289          3,003
  Provision for deferred income taxes                (278)          178
  Net provision for doubtful accounts                220            1,073
   (Gain) loss on sale of assets                     (323)          104
  Change in assets and liabilities:
  Increase in receivables                            (18,442)       (10,793)
  Decrease (increase) in inventories                 4,055          (870)
  Increase in other assets                           (199)          (2,826)
  Decrease in accounts payable                       (1,237)        (8,705)
  Increase (decrease) in accrued liabilities and     935            (11,247)
other
Net cash provided by operating activities            43,895         15,822
Cash flows from investing activities:
  Capital expenditures                               (37,417)       (26,315)
  Proceeds from sale of property, plant and          590            371
equipment
Net cash used in investing activities                (36,827)       (25,944)
Cash flows from financing activities:
  Borrowings on lines of credit                      159,612        173,846
  Payments on lines of credit                        (158,679)      (126,233)
  Proceeds from employee stock plans                 6,928          468
  Post-closing payment for business acquisition      -              (11,892)
  Purchase of treasury stock                         (2,010)        (24,825)
  Other financing activities                         (39)           (53)
Net cash provided by financing activities            5,812          11,311
Effect of exchange rate changes on cash              (1,681)        2,396
Net increase in cash and cash equivalents            11,199         3,585
Cash and cash equivalents at beginning of year       46,846         25,247
Cash and cash equivalents at end of period           $  58,045      $  28,832

 

SOURCE Newpark Resources, Inc.

Website: http://www.newpark.com
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