Newpark Resources Reports 2013 Fourth Quarter And Full Year Results

     Newpark Resources Reports 2013 Fourth Quarter And Full Year Results  Reports fourth quarter 2013 net income of $0.14 per diluted share  Increases share repurchase authorization from $50 million to $100 million  PR Newswire  THE WOODLANDS, Texas, Feb. 13, 2014  THE WOODLANDS, Texas, Feb. 13, 2014 /PRNewswire/ --Newpark Resources, Inc. (NYSE: NR) today announced results for its fourth quarter and year ended December 31, 2013. Total revenues for the fourth quarter of 2013 were $262.5 million compared to $270.3 million in the fourth quarter of 2012. Net income for the fourth quarter of 2013 was $13.5 million, or $0.14 per diluted share, compared to $11.2 million, or $0.12 per diluted share, in the fourth quarter of 2012.  Fourth quarter 2013 results include a pre-tax gain of $2.7 million ($0.02 per diluted share) associated with the sale of assets within the U.S.-based completion services business. In addition, the fourth quarter was negatively impacted by a tax rate of 40%, primarily driven by operating losses generated in Brazil during the quarter, for which the recording of a tax benefit is not permitted. Brazil's fourth quarter results also include $1.0 million ($0.01 per diluted share) of charges for value added tax assessments and restructuring charges.  For the full year 2013, total revenues were $1.107 billion compared to $1.038 billion in 2012. Net income for 2013 was $65.3 million, or $0.69 per diluted share, compared to $60.0 million, or $0.62 per diluted share, in 2012.  Paul Howes, Newpark's President and Chief Executive Officer, stated, "We produced a record year in terms of revenues and cash flow, in spite of challenges we faced in our drilling fluids segment during the fourth quarter. Fourth quarter results were negatively impacted primarily by reduced activity with four key customers across three regions. In the U.S, we also experienced a slowdown in customer activity in November and December, partly due to difficult weather conditions, as well as year-end budget constraints by some customers. Outside of the U.S., Canada experienced the anticipated seasonal improvement, while the temporary weakness in the EMEA region this quarter was expected. Brazil's unfavorable sales mix was unexpected in the fourth quarter, and we are taking steps to manage through a tougher environment there.  "Moving to the operational highlights, we recently signed a new four year contract with Cairn Energy valued at approximately $40 million to deliver drilling fluids products and solids control equipment into India starting in the second half of 2014. Also, we are pleased with our progress on Evolution, with fourth quarter revenues reaching a new record of $34 million, bringing full year Evolution revenues to $120 million. Our Evolution products are experiencing success both domestically and internationally, and we have completed several successful wells in the international arena.  "Additionally, our mats segment produced another strong performance, with rental revenues reaching another quarterly record, benefitting from increased usage of our mats through all phases of exploration. Rental revenues increased nearly 50% from a year ago and 5% sequentially. We also completed an acquisition in the U.K. during the fourth quarter, a significant step in our strategy to expand our mat rental business in the international market. This acquisition brings us a base of operations from which to expand into the European market. As we have stated previously, we desire to diversify our mats business outside the U.S. market where we see growth opportunities. This acquisition is also important as it will serve to help fill the capacity of our new manufacturing facility that is nearing the construction phase.  "In summary, we are pleased to report another record revenue and cash flow year, while at the same time returning capital to shareholders to enhance shareholder value," concluded Howes.  ACQUISITIONS AND DIVESTITURES  The Company announced the acquisition of Terrafirma Roadways ("Terrafirma"), a provider of temporary roadways and worksites based in the United Kingdom. The acquisition was completed in December 2013 for total cash consideration of $6.8 million. Prior to the acquisition, Terrafirma had been operating as a partner to Newpark since 2008 in developing a rental business with Durabase® composite mats, primarily focused in the utility industry in the U.K.  The Company also announced that the divesture of the U.S.-based completion services business was completed during the fourth quarter. The completion services business generated $3.3 million of revenues and $2.6 million of operating income during the fourth quarter of 2013, including a $2.7 million gain on the sale of assets.  As previously announced, subsequent to the fourth quarter, Newpark entered into a definitive agreement to sell its Environmental Services business to ecoserv, LLC. Under the terms of the agreement, Newpark will receive $100 million in cash, subject to adjustment based on working capital conveyed at closing.  SHARE REPURCHASE PROGRAM AUTHORIZATION INCREASED TO $100 MILLION  Subject to completion of the Environmental Services divestiture, the Company's Board of Directors has amended the previously announced $50 million share repurchase program, doubling the repurchase authorization to $100 million. Since the program's original authorization in April of 2013, a total of 1.4 million outstanding shares of Newpark common stock have been repurchased to date, at an average cost of $12.00 per share.  SEGMENT RESULTS  The Fluids Systems segment generated revenues of $212.1 million in the fourth quarter of 2013 compared to $229.3 million in the fourth quarter of 2012. Segment operating income was $15.2 million (7.1% operating margin), which includes the $2.7 million gain from the divestiture of the completion services business, in the fourth quarter of 2013 compared to $17.7 million (7.7% operating margin) in the fourth quarter of 2012.  The Mats and Integrated Services segment generated revenues of $34.9 million in the fourth quarter of 2013 compared to $26.6 million in the fourth quarter of 2012. Segment operating income was $15.2 million (43.7% operating margin) in the fourth quarter of 2013 compared to $10.8 million (40.8% operating margin) in the fourth quarter of 2012.  The Environmental Services segment generated revenues of $15.6 million in the fourth quarter of 2013 compared to $14.4 million in the fourth quarter of 2012. Segment operating income was $4.3 million (27.5% operating margin) in the fourth quarter of 2013 compared to $3.4 million (23.9% operating margin) in the fourth quarter of 2012.  CONFERENCE CALL  Newpark has scheduled a conference call to discuss fourth quarter 2013 results, which will be broadcast live over the Internet, on Friday, February 14, 2014 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 February 28, 2014 and may be accessed by dialing (303) 590-3030 and using pass code 4663753#. 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                Twelve Months Ended                         December   September   December   December   December                         31,        30,         31,        31,        31, (In thousands, except   2013       2013        2012       2013       2012 per share data) Revenues                $       $       $       $        $                           262,509   285,708     270,328   1,107,357  1,038,019 Cost of revenues        214,313    230,206     219,817    900,169    846,529 Selling, general and administrative          25,253     25,433      24,217     99,530     86,352 expenses Other operating         (3,688)    (232)       43         (4,560)    (759) income, net Operating income       26,631     30,301      26,251     112,218    105,897 Foreign currency        736        975         333        1,818      749 exchange loss Interest expense, net   3,229      2,728       2,403      11,279     9,740 Income from operations  22,666     26,598      23,515     99,121     95,408 before income taxes Provision for income    9,142      7,838       12,322     33,798     35,376 taxes Net income             $      $       $      $      $                             13,524     18,760    11,193    65,323    60,032 Income per common       $      $       $      $      $     share -basic:             0.16     0.22    0.13    0.77    0.69 Income per common       $      $       $      $      $     share -diluted:           0.14     0.20    0.12    0.69    0.62 Calculation of Diluted EPS: Net income             $      $       $      $      $                             13,524     18,760    11,193    65,323    60,032 Assumed conversion of   1,162      1,374       927        5,098      4,868 Senior Notes Adjusted net income    $      $       $      $      $                             14,686     20,134    12,120    70,421    64,900 Weighted average number of common        85,669     85,775      84,602     85,095     87,522 shares outstanding-basic Add: Dilutive effect of stock options andrestricted stock    1,738      1,503       903        1,767      876 awards  Dilutive effect of Senior        15,682     15,682      15,682     15,682     15,682 Notes Diluted weighted average number of       103,089    102,960     101,187    102,544    104,080 common shares outstanding Income per common       $      $       $      $      $     share - diluted           0.14     0.20    0.12    0.69    0.62      Newpark Resources, Inc. Operating Segment Results (Unaudited)                Three Months Ended                            December 31,      September 30,     December 31, (In thousands)             2013              2013              2012 Revenues  Fluids systems           $    212,069  $             $                                                 233,020           229,329  Mats and integrated       34,856            35,112            26,612  services  Environmental services    15,584            17,576            14,387  Total revenues            $    262,509  $             $                                                 285,708           270,328 Operating income (loss)  Fluids systems           $             $            $                                15,158           17,140            17,714  Mats and integrated       15,228            15,345            10,845  services  Environmental services    4,288             4,656             3,444  Corporate office          (8,043)           (6,840)           (5,752)  Total operating income   $             $            $                                26,631           30,301            26,251 Segment operating margin  Fluids systems           7.1%              7.4%              7.7%  Mats and integrated       43.7%             43.7%             40.8%  services  Environmental services    27.5%             26.5%             23.9%      Newpark Resources, Inc. Consolidated Balance Sheets (Unaudited)                                             December 31,      December 31, (In thousands, except share data)           2013              2012 ASSETS  Cash and cash equivalents                  $             $                                                 65,840           46,846  Receivables, net                           280,445           323,439  Inventories                                189,680           209,734  Deferred tax asset                         11,874            11,596  Prepaid expenses and other current assets  11,601            12,441        Total current assets                 559,440           604,056  Property, plant and equipment, net        279,342           253,990  Goodwill                                   94,064            87,388  Other intangible assets, net              29,244            41,018  Other assets                               6,327             8,089        Total assets                         $    968,417  $    994,541 LIABILITIES AND STOCKHOLDERS' EQUITY  Short-term debt                            $             $                                                  12,867           2,599  Accounts payable                           93,001            114,377  Accrued liabilities                        47,884            42,620        Total current liabilities            153,752           159,596  Long-term debt, less current portion       172,786           256,832  Deferred tax liability                     39,509            46,348  Other noncurrent liabilities               21,316            18,187        Total liabilities                    387,363           480,963  Commitments and contingencies  Common stock, $0.01 par value,  200,000,000 shares authorized        and 98,030,839 and 95,733,677        980               957        shares issued, respectively  Paid-in capital                            504,675           484,962  Accumulated other comprehensive loss       (9,484)           (734)  Retained earnings                         160,338           95,015  Treasury stock, at cost; 10,832,845 and    (75,455)          (66,622)  10,115,951 shares, respectively        Total stockholders' equity           581,054           513,578  Total liabilities and stockholders'        $    968,417  $    994,541  equity      Newpark Resources, Inc. Consolidated Statements of Cash Flows (Unaudited)                                            Year Ended December 31, (In thousands)                                         2013         2012 Cash flows from operating activities: Net income                                             $ 65,323    $ 60,032 Adjustments to reconcile net income to net cash provided by operations:  Impairment charges                                  176          443  Depreciation and amortization                       44,198       32,821  Stock-based compensation expense                    9,699        7,103  Provision for deferred income taxes                 (7,832)      1,358  Net provision for doubtful accounts                 416          1,709  (Gain) loss on sale of assets                       (3,178)      724  Excess tax benefit from stock-based compensation    (2,146)      -  Change in assets and liabilities:  Decrease in receivables                          32,172       23,565  Decrease (increase) in inventories               16,431       (28,758)  Decrease (increase) in other assets              4,574        (641)  (Decrease) increase in accounts payable          (17,733)     13,702  Increase (decrease) in accrued liabilities and   9,803        (1,813) other Net cash provided by operating activities              151,903      110,245 Cash flows from investing activities:  Capital expenditures                                (67,929)     (43,955)  Proceeds from sale of property, plant and           1,313        863 equipment  Proceeds from sale of a business                    13,329       -  Business acquisitions, net of cash acquired         (6,776)      (53,075) Net cash used in investing activities                  (60,063)     (96,167) Cash flows from financing activities:  Borrowings on lines of credit                       254,390      364,426  Payments on lines of credit                         (328,086)    (296,944)  Other financing activities                          (25)         (40)  Proceeds from employee stock plans                  8,328        1,059  Post-closing payment for business acquisition       -            (11,892)  Excess tax benefit from stock-based compensation    2,146        -  Purchase of treasury stock                          (9,281)      (50,756) Net cash (used in) provided by financing activities    (72,528)     5,853 Effect of exchange rate changes on cash                (318)        1,668 Net increase in cash and cash equivalents              18,994       21,599 Cash and cash equivalents at beginning of year         46,846       25,247 Cash and cash equivalents at end of year               $ 65,840    $ 46,846    SOURCE Newpark Resources, Inc.  Website: http://www.newpark.com