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
Newpark Resources Reports 2013 Fourth Quarter And Full Year Results
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