Newpark Resources Reports Net Income of $0.12 per Diluted Share for the Second Quarter 2010
THE WOODLANDS, Texas, July 29, 2010 /PRNewswire via COMTEX/ --
Newpark Resources, Inc. (NYSE: NR) today announced results for its second quarter ended June 30, 2010. Total revenues were $181.4 million for the second quarter of 2010 compared to $160.8 million for the first quarter of 2010 and $109.6 million for the second quarter of 2009. Net income for the second quarter of 2010 was $10.8 million, or $0.12 per diluted share, compared to net income for the first quarter of 2010 of $7.8 million, or $0.09 per diluted share, and a net loss for the second quarter of 2009 of $8.8 million, or a loss of $0.10 per share.
Paul Howes, President and Chief Executive Officer of Newpark, stated, "We continue to be pleased with the ongoing sequential improvement in all of our operating segments. Our domestic revenues rose 21% from the first quarter of 2010. This was driven by a 13% increase in U.S. drilling activity, along with our expansion in the Northeast U.S. region and continued growth in the Haynesville shale, due in part to the success of our new high performance water-based fluids. In addition, waste disposals and product sales associated with the Deepwater Horizon oil spill contributed $2.7 million of revenue to the second quarter. Our international revenues increased as our Mediterranean region rebounded nicely from the first quarter. Also, on a sequential basis, operating income improved by $6.2 million, or 45%, on a $20.6 million increase in revenues, reflecting a strong incremental margin of 30%."
Segment Results
The Fluids Systems and Engineering segment generated revenues of $150.5 million in the second quarter of 2010 compared to $136.3 million in the first quarter of 2010 and $89.6 million in the second quarter of 2009. Segment operating income was $15.2 million in the second quarter of 2010 compared to $12.4 million in the first quarter of 2010 and an operating loss of $1.7 million in the second quarter of 2009. North American revenues increased 10% from the first quarter of 2010, which included an 18% improvement in the U.S., partially offset by the seasonal decline in Canada. Meanwhile, international revenues increased 11% from the first quarter of 2010, driven by a rebound in activity in North Africa and Europe. Compared to the second quarter of 2009, North American revenues increased 93%, while international revenues increased 26%.
The Mats and Integrated Services segment generated revenues of $17.0 million in the second quarter of 2010 compared to $13.6 million in the first quarter of 2010 and $8.6 million in the second quarter of 2009. Segment operating income was $5.0 million in the second quarter of 2010 compared to operating income of $2.7 million in the first quarter of 2010 and an operating loss of $4.8 million in the second quarter of 2009. Revenues were up 25% from the first quarter of 2010, driven by a $3.5 million increase in rental activity in the Northeast U.S. region. Compared to the second quarter of 2009, segment revenues were up 97%.
The Environmental Services segment generated revenues of $13.8 million in the second quarter of 2010 compared to $10.9 million in the first quarter of 2010 and $11.3 million in the second quarter of 2009. Segment operating income was $4.2 million in the second quarter of 2010, compared to operating income of $2.7 million in the first quarter of 2010 and $1.4 million in the second quarter of 2009. The second quarter of 2010 includes $2.0 million of revenue from waste disposals associated with the Deepwater Horizon oil spill.
CONFERENCE CALL
Newpark has scheduled a conference call to discuss the second quarter 2010 results, which will be broadcast live over the Internet, on Friday, July 30, 2010 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To participate in the call, dial 480-629-9692 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 August 6, 2010 and may be accessed by dialing (303) 590-3030 and using pass code 4313117#. 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, 2009, as well as others, could cause results to differ materially from those stated. These risk factors include, but are not limited to, our customer concentration and cyclical nature of our industry, the availability of raw materials and skilled personnel, our market competition, the cost and continued availability of borrowed funds, our international operations, legal and regulatory matters, including environmental regulations, inherent limitations in insurance coverage, potential impairments of long-lived intangible assets, technological developments in our industry, the impact of severe weather, particularly in the U.S. Gulf Coast, and restrictions on offshore drilling activity in the Gulf of Mexico. 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: James E. Braun, CFO
Newpark Resources, Inc.
281-362-6800
Ken Dennard, Managing Partner
Dennard Rupp Gray & Easterly, LLC
ksdennard@drg-e.com
713-529-6600
Newpark Resources, Inc.
Consolidated Statements of Operations
(Unaudited) Three Months Ended
------------------
June March June
(In thousands, except per share 30, 31, 30,
data) 2010 2010 2009
------------------------------- ---- ---- ----
Revenues $181,352 $160,798 $109,599
Cost of revenues 145,299 133,518 103,906
Selling, general and administrative
expenses 16,360 14,413 15,652
Other income, net (203) (842) (37)
---- ---- ---
Operating income (loss) 19,896 13,709 (9,922)
Foreign currency exchange gain (1,213) (611) (590)
Interest expense 2,228 2,148 1,600
----- ----- -----
Income (loss) from operations
before income taxes 18,881 12,172 (10,932)
Provision for income taxes 8,041 4,390 (2,145)
----- ----- ------
Net income (loss) $10,840 $7,782 $(8,787)
======= ====== =======
Basic weighted average common
shares outstanding 88,818 88,654 88,514
Diluted weighted average common
shares outstanding 89,392 88,867 88,514
Income (loss) per common share -
basic $0.12 $0.09 $(0.10)
Income (loss) per common share -
diluted $0.12 $0.09 $(0.10)
Newpark Resources, Inc.
Operating Segment Results
(Unaudited) Three Months Ended
----------- ------------------
June 30, March 31, June 30,
(In thousands) 2010 2010 2009
-------------- --------- ---------- ---------
Revenues
Fluids systems and
engineering $150,534 $136,310 $89,642
Mats and integrated
services 16,981 13,620 8,638
Environmental services 13,837 10,868 11,319
------ ------ ------
Total revenues $181,352 $160,798 $109,599
======== ======== ========
Operating income (loss)
Fluids systems and
engineering $15,164 $12,414 $(1,722) (2)
Mats and integrated
services 5,036 2,714 (1) (4,774) (2)
Environmental services 4,224 2,679 1,385 (2)
Corporate office (4,528) (4,098) (4,811) (2)
------ ------ ------
Total operating income
(loss) $19,896 $13,709 $(9,922)
======= ======= =======
Segment operating margin
Fluids systems and
engineering 10.1% 9.1% (1.9%)
Mats and integrated
services 29.7% 19.9% (55.3%)
Environmental services 30.5% 24.7% 12.2%
(1) Includes $0.9 million of other income related to proceeds from
insurance claims associated with Hurricane Ike in 2008.
(2) Includes a total of $4.8 million of charges for employee
termination and related costs associated with North American
workforce reductions, the non-renewal of barge leases and asset
write-downs, including $1.0 million in fluids systems and
engineering, $2.6 million in mats and integrated services, $1.0
million in environmental services, and $0.2 million in
corporate office.
Newpark Resources, Inc.
Consolidated Balance Sheets
(Unaudited)
------------------------------------------------------------------
June 30, December 31,
(In thousands, except share data) 2010 2009
--------------------------------- ---- ----
ASSETS
Cash and cash equivalents $12,213 $11,534
Receivables, net 172,475 122,386
Inventories 116,470 115,495
Deferred tax asset 35,315 7,457
Prepaid expenses and other current assets 12,060 11,740
------ ------
Total current assets 348,533 268,612
Property, plant and equipment, net 215,336 224,625
Goodwill 60,873 62,276
Other intangible assets, net 14,350 16,037
Other assets 4,366 13,564
----- ------
Total assets $643,458 $585,114
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Foreign bank lines of credit $5,286 $6,901
Current maturities of long-term debt 10,192 10,319
Accounts payable 76,183 62,992
Accrued liabilities 31,397 25,290
------ ------
Total current liabilities 123,058 105,502
Long-term debt, less current portion 104,588 105,810
Deferred tax liability 30,378 2,083
Other noncurrent liabilities 4,224 3,697
----- -----
Total liabilities 262,248 217,092
Common stock, $0.01 par value, 200,000,000
shares authorized
92,599,210 and 91,672,871 shares issued,
respectively 926 917
Paid-in capital 463,366 460,544
Accumulated other comprehensive income 307 8,635
Retained deficit (68,038) (86,660)
Treasury stock, at cost; 2,717,363 and
2,727,765 shares, respectively (15,351) (15,414)
------- -------
Total stockholders' equity 381,210 368,022
------- -------
Total liabilities and stockholders' equity $643,458 $585,114
======== ========
Newpark Resources, Inc.
Consolidated Statements of Cash Flows
(Unaudited) Six Months Ended June 30,
----------- -------------------------
(In thousands) 2010 2009
-------------- ---- ----
Cash flows from operating
activities:
Net income (loss) $18,622 $(20,791)
Adjustments to reconcile net income (loss) to
net cash provided by operations:
Non-cash impairment charges 150 941
Depreciation and amortization 13,298 14,093
Stock-based compensation expense 1,930 1,190
Provision for deferred income
taxes 9,402 (6,256)
Provision for doubtful accounts 542 1,533
Gain on sale of assets (189) (265)
Change in assets and liabilities:
(Increase) decrease in
receivables (54,167) 111,652
(Increase) decrease in inventories (4,132) 12,658
(Increase) decrease in other
assets (558) 427
Increase (decrease) in accounts
payable 15,742 (45,083)
Increase (decrease) in accrued
liabilities and other 7,162 (12,592)
----- -------
Net cash provided by operating
activities 7,802 57,507
Cash flows from investing
activities:
Capital expenditures (5,995) (14,139)
Proceeds from sale of property,
plant and equipment 1,318 734
----- ---
Net cash used in investing
activities (4,677) (13,405)
Cash flows from financing
activities:
Borrowings on lines of credit 99,027 84,934
Payments on lines of credit (100,782) (128,701)
Principal payments on notes
payable and long-term debt (305) (195)
Proceeds from employee stock plans 902 104
Purchase of treasury stock (153) (212)
---- ----
Net cash used in financing
activities (1,311) (44,070)
Effect of exchange rate changes on
cash (1,135) (1,573)
------ ------
Net increase in cash and cash
equivalents 679 (1,541)
Cash and cash equivalents at
beginning of period 11,534 8,252
------ -----
Cash and cash equivalents at end
of period $12,213 $6,711
======= ======
SOURCE Newpark Resources, Inc.