Newpark Resources Reports 2014 First Quarter Results

             Newpark Resources Reports 2014 First Quarter Results

Mat rentals up 24% sequentially and 66% year over year

PR Newswire

THE WOODLANDS, Texas, April 24, 2014

THE WOODLANDS, Texas, April 24, 2014 /PRNewswire/ --Newpark Resources, Inc.
(NYSE: NR) today announced results for its first quarter ended March 31,
2014. Total revenues for the first quarter of 2014 were $242.8 million
compared to $246.9 million in the fourth quarter of 2013 and $267.9 million in
the first quarter of 2013. Income from continuing operations for the first
quarter of 2014 was $11.7 million, or $0.13 per diluted share, compared to
$10.5 million, or $0.11 per diluted share, in the fourth quarter of 2013, and
$14.9 million, or $0.16 per diluted share, in the first quarter of 2013.

Discontinued operations in the first quarter of 2014 included a $22.1 million
gain, or $0.22 per diluted share, from the March 2014 sale of the
Environmental Services business. Net income for the first quarter of 2014 was
$35.0 million, or $0.36 per diluted share, which includes the gain on the
sale.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We
continue to see extremely strong demand in our mats rental business in the
first quarter, with rental revenues reaching another quarterly record, up 24%
sequentially and 66% year over year. In response to the strong demand, we
continue to focus on expanding our mats rental fleet, including in the UK. The
construction of our previously announced capacity expansion to meet the
increasing demand is now underway. Revenues from our fluids systems segment
were down slightly on a sequential basis, as the seasonal strength in Canada
and recovery in the EMEA region were offset by declines in the U.S. market and
Brazil. The majority of the U.S. decline was attributable to our December
2013 sale of our completions services business and lower proppant sales in
West Texas. We continue to make significant progress with our Evolution®
system, posting a record $48 million of revenues in the first quarter,
surpassing the 2013 fourth quarter's record by 40%, marking a meaningful shift
from oil-based mud to water-based fluids and helping to improve our fluids
margins.

"Looking forward, with the sale of our Environmental Services business now
complete, we believe we are well positioned to capitalize on growth
opportunities in both our global drilling fluids markets and our mats markets
and enhance shareholder value," concluded Howes.

SEGMENT RESULTS

The Fluids Systems segment generated revenues of $211.4 million in the first
quarter of 2014 compared to $212.1 million in the fourth quarter of 2013 and
$247.3 million in the first quarter of 2013. Segment operating income was
$15.7 million (7.4% operating margin) in the first quarter of 2014 compared to
$15.2 million (7.1% operating margin) in the fourth quarter of 2013, which
included a $2.7 million gain on the sale of completion services business, and
$22.6 million (9.1% operating margin) in the first quarter of 2013.

The Mats and Integrated Services segment generated revenues of $31.4 million
in the first quarter of 2014 compared to $34.9 million in the fourth quarter
of 2013 and $20.6 million in the first quarter of 2013. Segment operating
income was $13.4 million (42.6% operating margin) in the first quarter of 2014
compared to $15.2 million (43.7% operating margin) in the fourth quarter of
2013 and $8.5 million (41.2% operating margin) in the first quarter of 2013.

CONFERENCE CALL

Newpark has scheduled a conference call to discuss first quarter 2014 results,
which will be broadcast live over the Internet, on Friday, April 25, 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 May 9, 2014 and may be accessed by dialing (303) 590-3030
and using pass code 4676373#. 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 and
temporary worksites and access roads for oilfield and other commercial
markets. 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, 2013, 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, operating hazards
inherent in the oil and natural gas industry, our international operations,
the availability of raw materials and skilled personnel, the impact of
restrictions on offshore drilling activity, 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
                                      March 31,     December 31,  March 31,
(In thousands, except per share       2014          2013          2013
data)
Revenues                              $ 242,824     $ 246,925     $ 267,923
Cost of revenues                      196,560       204,158       220,735
Selling, general and administrative   25,523        24,112        22,451
expenses
Other operating income, net           (16)          (3,688)       (124)
Operating income                     20,757        22,343        24,861
Foreign currency exchange loss        54            737           (368)
(gain)
Interest expense, net                 2,920         3,229         2,520
Income from continuing operations     17,783        18,377        22,709
before income taxes
Provision for income taxes            6,041         7,912         7,842
Income from continuing operations    11,742        10,465        14,867
Income from discontinued operations,  1,152         3,059         2,508
net of tax
Gain from disposal of discontinued    22,117        -             -
operations, net of tax
Net income                           $  35,011    $  13,524    $  17,375
Income per common share -basic:
Income from continuing operations     $    0.14  $    0.12  $    0.18
Income from discontinued operations   0.27          0.04          0.03
Net income                            $    0.41  $    0.16  $    0.21
Income per common share -diluted:
Income from continuing operations     $    0.13  $    0.11  $    0.16
Income from discontinued operations   0.23          0.03          0.02
Net income                            $    0.36  $    0.14  $    0.18
Calculation of Diluted EPS:
Income from continuing operations     $  11,742    $  10,465    $  14,867
Assumed conversion of Senior Notes   1,261         1,110         1,250
Adjusted net income from continuing   $  13,003    $  11,575    $  16,117
operations
Weighted average number of common     84,743        85,669        84,100
shares outstanding-basic
Add: Dilutive effect of stock
options and
 restricted stock awards    1,674         1,738         1,572
 Dilutive effect of Senior  15,682        15,682        15,682
Notes
Diluted weighted average number of    102,099       103,089       101,354
common shares outstanding
Diluted income from continuing        $    0.13  $    0.11  $    0.16
operations per common share



Newpark Resources, Inc.
Operating Segment Results
(Unaudited)                    Three Months Ended
                               March 31,  December 31,  March 31,
(In thousands)                 2014       2013          2013
Revenues
 Fluids systems               $ 211,400  $ 212,069     $ 247,339
 Mats and integrated services  31,424     34,856        20,584
 Total revenues                $ 242,824  $ 246,925     $ 267,923
Operating income (loss)
 Fluids systems               $ 15,740  $ 15,158     $ 22,622
 Mats and integrated services  13,373     15,228        8,480
 Corporate office              (8,356)    (8,043)       (6,241)
 Total operating income       $ 20,757  $ 22,343     $ 24,861
Segment operating margin
 Fluids systems               7.4%       7.1%          9.1%
 Mats and integrated services  42.6%      43.7%         41.2%



Newpark Resources, Inc.
Consolidated Balance Sheets
(Unaudited)
                                                      March 31,   December 31,
(In thousands, except share data)                     2014        2013
ASSETS
 Cash and cash equivalents                            $ 130,187   $  65,840
 Receivables, net                                     276,082     268,529
 Inventories                                          199,565     189,680
 Deferred tax asset                                   11,750      11,272
 Prepaid expenses and other current assets            15,034      11,016
 Assets of discontinued operations                    -           13,103
        Total current assets                          632,618     559,440
 Property, plant and equipment, net                  227,050     217,010
 Goodwill                                             93,781      94,064
 Other intangible assets, net                        23,870      25,900
 Other assets                                         9,813       6,086
 Assets of discontinued operations                    -           65,917
        Total assets                                  $ 987,132   $ 968,417
LIABILITIES AND STOCKHOLDERS' EQUITY
 Short-term debt                                      $  15,759  $  12,867
 Accounts payable                                     88,328      88,586
 Accrued liabilities                                  65,196      46,341
 Liabilities of discontinued operations               -           5,957
        Total current liabilities                     169,283     153,751
 Long-term debt, less current portion                 172,771     172,786
 Deferred tax liability                               26,235      27,060
 Other noncurrent liabilities                         11,288      11,026
 Liabilities of discontinued operations               -           22,740
        Total liabilities                             379,577     387,363
 Commitments and contingencies
 Common stock, $0.01 par value, 200,000,000 shares
 authorized
        and 98,032,555 and 98,030,839 shares          980         980
        issued, respectively
 Paid-in capital                                      507,820     504,675
 Accumulated other comprehensive loss                 (8,279)     (9,484)
 Retained earnings                                   195,349     160,338
 Treasury stock, at cost; 11,904,275 and 10,832,845   (88,315)    (75,455)
 shares, respectively
        Total stockholders' equity                    607,555     581,054
 Total liabilities and stockholders' equity           $ 987,132   $ 968,417



Newpark Resources, Inc.
Consolidated Statements of Cash Flows
(Unaudited)                                       Three Months Ended March 31,
(In thousands)                                    2014              2013
Cash flows from operating activities:
Net income                                        $  35,011        $ 17,375
Adjustments to reconcile net income to net cash provided by
operations:
Depreciation and amortization                     10,287            10,954
Stock-based compensation expense                  2,840             1,973
Provision for deferred income taxes               (13,108)          534
Net provision for doubtful accounts               173               208
Gain on sale of a business                        (33,974)          -
Gain on sale of assets                            (362)             (99)
Change in assets and liabilities:
Increase in receivables                           (1,080)           (20,969)
Increase in inventories                           (9,229)           (1,280)
Increase in other assets                          (3,858)           (2,382)
(Decrease) increase in accounts payable           (1,248)           4,179
Increase in accrued liabilities and other         18,142            4,747
Net cash provided by operating activities         3,594             15,240
Cash flows from investing activities:
Capital expenditures                              (18,509)          (16,127)
Proceeds from sale of property, plant and         754               213
equipment
Proceeds from sale of a business                  89,167            -
Net cash provided by (used in) investing          71,412            (15,914)
activities
Cash flows from financing activities:
Borrowings on lines of credit                     47,562            71,102
Payments on lines of credit                       (45,113)          (78,748)
Other financing activities                        (13)              (38)
Proceeds from employee stock plans                34                3,808
Purchase of treasury stock                        (13,123)          -
Net cash used in financing activities             (10,653)          (3,876)
Effect of exchange rate changes on cash           (6)               (586)
Net increase (decrease) in cash and cash          64,347            (5,136)
equivalents
Cash and cash equivalents at beginning of year    65,840            46,846
Cash and cash equivalents at end of period        $ 130,187         $ 41,710



Newpark Resources, Inc
Condensed Consolidated Statements of Operations
2013 Quarterly Results
Following the first quarter 2014 sale of the Environmental Services business,
the operating results of the Environmental Services segment have been
reclassified to Discontinued Operations for all historical periods. The 2013
quarterly results below is provided for informational purposes, reflecting the
discontinued operations reclassification of this business.
(Unaudited)             Three Months Ended
(In thousands,          March 31,      June 30,      September     December
except per share        2013           2013          30,           31,
data)                                                2013          2013
Revenues                $ 267,923      $ 259,376     $ 268,132     $ 246,925
Cost of revenues        220,735        214,710       218,864       204,158
Selling, general and
administrative          22,451         23,248        23,846        24,112
expenses
Other operating         (124)          (178)         (223)         (3,688)
income, net
Operating income       24,861         21,596        25,645        22,343
Foreign currency        (368)          475           975           737
exchange (gain) loss
Interest expense,       2,520          2,802         2,728         3,229
net
Income from
continuing              22,709         18,319        21,942        18,377
operations before
income taxes
Provision for income    7,842          6,460         6,511         7,912
taxes
Income from
continuing              14,867         11,859        15,431        10,465
operations
Income from
discontinued            2,508          3,805         3,329         3,059
operations, net of
tax
Net income             $  17,375     $  15,664    $  18,760    $  13,524
Income per common
share -basic:
Income from                            $          $          $   
continuing              $    0.18   0.14          0.18          0.12
operations
Income from
discontinued            0.03           0.05          0.04          0.04
operations
Net income              $    0.21   $          $          $   
                                       0.19          0.22          0.16
Income per common
share -diluted:
Income from                            $          $          $   
continuing              $    0.16   0.13          0.16          0.11
operations
Income from
discontinued            0.02           0.04          0.04          0.03
operations
Net income              $    0.18   $          $          $   
                                       0.17          0.20          0.14



SOURCE Newpark Resources, Inc.

Website: http://www.newpark.com
 
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