Newpark Resources Reports Net Income Of $0.20 Per Diluted Share For The Third Quarter 2013 Company announces plans to expand mat manufacturing facility PR Newswire THE WOODLANDS, Texas, Oct. 24, 2013 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 June 30, September September September 30, 30, 30, 30, (In thousands, except 2013 2013 2012 2013 2012 per share data) 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 25,433 24,662 20,878 74,277 62,135 administrative expenses Other operating income, (232) (201) (311) (872) (802) net Operating income 30,301 26,917 28,756 85,587 79,646 Foreign currency 975 475 185 1,082 416 exchange loss Interest expense, net 2,728 2,802 2,416 8,050 7,337 Income from operations 26,598 23,640 26,155 76,455 71,893 before income taxes Provision for income 7,838 7,976 7,413 24,656 23,054 taxes 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 1,374 1,279 1,396 3,921 3,944 Senior Notes Adjusted net income $ $ $ $ $ 20,134 16,943 20,138 55,720 52,783 Weighted average number of common shares 85,775 84,813 86,423 84,902 88,491 outstanding-basic Add: Dilutive effect of stock options andrestricted stock 1,503 1,810 695 1,718 756 awards Dilutive 15,682 15,682 15,682 15,682 15,682 effect of Senior Notes Diluted weighted average number of 102,960 102,305 102,800 102,302 104,929 common shares outstanding 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 $ 233,020 $ 233,964 $ 211,457 engineering Mats and integrated 35,112 25,412 35,067 services Environmental services 17,576 17,246 13,075 Total revenues $ 285,708 $ 276,622 $ 259,599 Operating income (loss) Fluids systems and $ 17,140 $ 17,684 $ 14,798 engineering Mats and integrated 15,345 10,341 15,992 services 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 7.4% 7.6% 7.0% engineering Mats and integrated 43.7% 40.7% 45.6% services 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 authorizedand 97,777,995 and 978 957 95,733,677 shares issued, respectively 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 (70,401) (66,622) 10,115,951 shares, respectively 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 (2,020) - compensation 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 13,175 (3,085) liabilities and other 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 1,248 823 equipment 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 - (11,892) acquisition Purchase of treasury stock (4,227) (35,698) Excess tax benefit from stock-based 2,020 - compensation 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 46,846 25,247 year Cash and cash equivalents at end of period $ 69,409 $ 35,457 SOURCE Newpark Resources, Inc. Website: http://www.newpark.com
Newpark Resources Reports Net Income Of $0.20 Per Diluted Share For The Third Quarter 2013
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