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.
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Contacts:
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Gregg Piontek, VP & CFO
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Newpark Resources, Inc.
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281-362-6800
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Ken Dennard, Managing Partner
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Karen Roan, SVP
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Dennard - Lascar Associates
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713-529-6600
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Newpark Resources, Inc.
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Consolidated Statements of Operations
|
|
|
|
|
|
|
|
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(Unaudited)
|
|
Three Months Ended
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
(In thousands, except per share data)
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ 242,824
|
|
$ 246,925
|
|
$ 267,923
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
196,560
|
|
204,158
|
|
220,735
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
25,523
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|
24,112
|
|
22,451
|
|
Other operating income, net
|
|
(16)
|
|
(3,688)
|
|
(124)
|
|
|
|
|
|
|
|
|
Operating income
|
|
20,757
|
|
22,343
|
|
24,861
|
|
|
|
|
|
|
|
|
Foreign currency exchange loss (gain)
|
|
54
|
|
737
|
|
(368)
|
|
Interest expense, net
|
|
2,920
|
|
3,229
|
|
2,520
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
17,783
|
|
18,377
|
|
22,709
|
|
Provision for income taxes
|
|
6,041
|
|
7,912
|
|
7,842
|
|
Income from continuing operations
|
|
11,742
|
|
10,465
|
|
14,867
|
|
Income from discontinued operations, net of tax
|
|
1,152
|
|
3,059
|
|
2,508
|
|
Gain from disposal of discontinued operations, net of tax
|
|
22,117
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
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
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|
$ 0.16
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|
$ 0.21
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|
|
|
|
|
|
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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
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|
|
|
|
|
|
|
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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 operations
|
|
$ 13,003
|
|
$ 11,575
|
|
$ 16,117
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding-basic
|
|
84,743
|
|
85,669
|
|
84,100
|
|
Add: Dilutive effect of stock options and
|
|
|
|
|
|
|
|
restricted stock awards
|
|
1,674
|
|
1,738
|
|
1,572
|
|
Dilutive effect of Senior Notes
|
|
15,682
|
|
15,682
|
|
15,682
|
|
|
|
|
|
|
|
|
Diluted weighted average number of common shares outstanding
|
|
102,099
|
|
103,089
|
|
101,354
|
|
|
|
|
|
|
|
|
Diluted income from continuing operations per common share
|
|
$ 0.13
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|
$ 0.11
|
|
$ 0.16
|
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Newpark Resources, Inc.
|
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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
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|
$ 15,158
|
|
$ 22,622
|
|
Mats and integrated services
|
|
13,373
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|
15,228
|
|
8,480
|
|
Corporate office
|
|
(8,356)
|
|
(8,043)
|
|
(6,241)
|
|
Total operating income
|
|
$ 20,757
|
|
$ 22,343
|
|
$ 24,861
|
|
|
|
|
|
|
|
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|
Segment operating margin
|
|
|
|
|
|
|
|
Fluids systems
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7.4%
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|
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 issued, respectively
|
|
980
|
|
980
|
|
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 shares, respectively
|
(88,315)
|
|
(75,455)
|
|
|
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 equipment
|
|
754
|
|
213
|
|
Proceeds from sale of a business
|
|
89,167
|
|
-
|
|
Net cash provided by (used in) investing activities
|
|
71,412
|
|
(15,914)
|
|
|
|
|
|
|
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 equivalents
|
|
64,347
|
|
(5,136)
|
|
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, except per share data)
|
|
March 31,
2013
|
|
June 30,
2013
|
|
September 30,
2013
|
|
December 31,
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 expenses
|
|
22,451
|
|
23,248
|
|
23,846
|
|
24,112
|
|
Other operating income, net
|
|
(124)
|
|
(178)
|
|
(223)
|
|
(3,688)
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
24,861
|
|
21,596
|
|
25,645
|
|
22,343
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange (gain) loss
|
|
(368)
|
|
475
|
|
975
|
|
737
|
|
Interest expense, net
|
|
2,520
|
|
2,802
|
|
2,728
|
|
3,229
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
22,709
|
|
18,319
|
|
21,942
|
|
18,377
|
|
Provision for income taxes
|
|
7,842
|
|
6,460
|
|
6,511
|
|
7,912
|
|
Income from continuing operations
|
|
14,867
|
|
11,859
|
|
15,431
|
|
10,465
|
|
Income from discontinued operations, net of tax
|
|
2,508
|
|
3,805
|
|
3,329
|
|
3,059
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 17,375
|
|
$ 15,664
|
|
$ 18,760
|
|
$ 13,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share -basic:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$ 0.18
|
|
$ 0.14
|
|
$ 0.18
|
|
$ 0.12
|
|
Income from discontinued operations
|
|
0.03
|
|
0.05
|
|
0.04
|
|
0.04
|
|
Net income
|
|
$ 0.21
|
|
$ 0.19
|
|
$ 0.22
|
|
$ 0.16
|
|
|
|
|
|
|
|
|
|
|
Income per common share -diluted:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$ 0.16
|
|
$ 0.13
|
|
$ 0.16
|
|
$ 0.11
|
|
Income from discontinued operations
|
|
0.02
|
|
0.04
|
|
0.04
|
|
0.03
|
|
Net income
|
|
$ 0.18
|
|
$ 0.17
|
|
$ 0.20
|
|
$ 0.14
|
SOURCE Newpark Resources, Inc.