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Newpark Resources Reports Net Income Of $0.18 Per Diluted Share For The First Quarter 2013

April 25, 2013
Company announces new $50 million share repurchase program

THE WOODLANDS, Texas, April 25, 2013 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its first quarter ended March 31, 2013.  Total revenues for the first quarter of 2013 increased 7.7% to $283 million compared to $262 million in the first quarter of 2012.  Net income for the first quarter of 2013 increased 11.1% to $17.4 million, or $0.18 per diluted share, from $15.6 million, or $0.16 per diluted share, in the first quarter of 2012.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are pleased with the strong start to 2013, achieving another record level of revenue in the first quarter.  Revenues from our fluids segment grew 13% worldwide over last year's first quarter.  North American fluids revenues increased 10% over last year's first quarter to $178 million, despite an 11% reduction in rig count, benefitting from our December 2012 acquisition of Alliance Drilling Fluids.   International revenues from the fluids business were up 21% year-over-year, reflecting strong gains across all regions. 

"Revenues in our mats segment declined in the first quarter, as we allocated the majority of the quarter's composite mat production toward the expansion of our rental fleet, in preparation for the launch of our new spill containment system," added Howes. "Meanwhile our Environmental Service business continued to deliver consistent results, benefitting from the strengthening activity levels in the Gulf of Mexico." 

SEGMENT RESULTS
The Fluids Systems and Engineering segment generated revenues of $247.3 million in the first quarter of 2013 compared to $218.5 million in the first quarter of 2012, a 13% increase.  Segment operating income rose 62% to $22.6 million (9.1% operating margin) in the first quarter of 2013 compared to $14.0 million (6.4% operating margin) in the first quarter of 2012. 

The Mats and Integrated Services segment generated revenues of $20.6 million in the first quarter of 2013 compared to $30.5 million in the first quarter of 2012, a 33% decrease.  Segment operating income declined 41% to $8.5 million (41.2% operating margin) in the first quarter of 2013 compared to $14.3 million (47.0% operating margin) in the first quarter of 2012. 

The Environmental Services segment generated revenues of $14.6 million in the first quarter of 2013 compared to $13.3 million in the first quarter of 2012, a 10% increase.  Segment operating income was $3.5 million (24.0% operating margin) in the first quarter of 2013 compared to $3.6 million (26.9% operating margin) in the first quarter of 2012.

SHARE REPURCHASE PROGRAM
The Company's Board of Directors has authorized a second $50 million share repurchase program, following the $50 million repurchase program completed in the fourth quarter of 2012.  Purchases under the new program will be funded with a combination of cash generated from operations and borrowings under the Company's revolving credit facility, and the repurchase program has no specific term.  The Company may repurchase shares in the open market or as otherwise determined by management, subject to market conditions, business opportunities and other factors.  The Company's management has been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as part of the share repurchase program.

CONFERENCE CALL
Newpark has scheduled a conference call to discuss first quarter 2013 results, which will be broadcast live over the Internet, on Friday, April 26, 2013 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 10, 2013 and may be accessed by dialing (303) 590-3030 and using pass code 4610050#.  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




March 31,


December 31,


March 31,


(In thousands, except per share data)


2013


2012


2012










Revenues


$  282,518


$        270,328


$  262,336










Cost of revenues


230,406


219,817


214,902










Selling, general and administrative expenses


24,182


24,217


21,313


Other operating income, net


(439)


43


(14)










Operating income 


28,369


26,251


26,135










Foreign currency exchange (gain) loss 


(368)


333


(230)


Interest expense, net


2,520


2,403


2,368










Income from operations before income taxes


26,217


23,515


23,997


Provision for income taxes


8,842


12,322


8,363










Net income 


$    17,375


$          11,193


$    15,634


















Income per common share -basic:


$        0.21


$              0.13


$        0.17


Income per common share -diluted:


$        0.18


$              0.12


$        0.16










Calculation of Diluted EPS:








Net income 


$    17,375


$          11,193


$    15,634


Assumed conversion of Senior Notes 


1,266


927


1,257


Adjusted net income 


$    18,641


$          12,120


$    16,891










Weighted average number of common shares outstanding-basic


84,100


84,602


90,473


Add:  Dilutive effect of  stock options and 








           restricted stock awards


1,572


903


1,198


           Dilutive effect of Senior Notes 


15,682


15,682


15,682










Diluted weighted average number of common shares outstanding


101,354


101,187


107,353










Income per common share - diluted


$        0.18


$              0.12


$        0.16


 

Newpark Resources, Inc.







Operating Segment Results























(Unaudited)


Three Months Ended




March 31,


December 31,


March 31,

(In thousands)


2013


2012


2012









Revenues








Fluids systems and engineering


$  247,339


$        229,329


$  218,496


Mats and integrated services


20,584


26,612


30,533


Environmental services


14,595


14,387


13,307


Total revenues


$  282,518


$        270,328


$  262,336









Operating income (loss) 








Fluids systems and engineering


$    22,622


$          17,714


$    13,995


Mats and integrated services


8,480


10,845


14,339


Environmental services


3,508


3,444


3,575


Corporate office


(6,241)


(5,752)


(5,774)


Total operating income 


$    28,369


$          26,251


$    26,135









Segment operating margin








Fluids systems and engineering


9.1%


7.7%


6.4%


Mats and integrated services


41.2%


40.8%


47.0%


Environmental services


24.0%


23.9%


26.9%


 


Newpark Resources, Inc.





Consolidated Balance Sheets












(Unaudited)









March 31,


December 31,

(In thousands, except share data)


2013


2012








ASSETS






Cash and cash equivalents


$      41,710


$          46,846


Receivables, net


343,850


323,439


Inventories


210,264


209,734


Deferred tax asset


11,440


11,596


Prepaid expenses and other current assets


14,491


12,441



Total current assets


621,755


604,056









Property, plant and equipment, net 


264,399


253,990


Goodwill


88,666


87,388


Other intangible assets, net 


36,310


41,018


Other assets


8,062


8,089



Total assets


$ 1,019,192


$        994,541








LIABILITIES AND STOCKHOLDERS' EQUITY






Short-term debt


$        8,990


$            2,599


Accounts payable


121,356


114,377


Accrued liabilities


45,136


42,620



Total current liabilities


175,482


159,596









Long-term debt, less current portion


242,807


256,832


Deferred tax liability


46,523


46,348


Other noncurrent liabilities


20,573


18,187



Total liabilities


485,385


480,963









Commitments and contingencies













Common stock, $0.01 par value, 200,000,000 shares authorized 







and 96,224,385 and 95,733,677 shares issued, respectively


962


957


Paid-in capital


490,297


484,962


Accumulated other comprehensive loss 


(3,498)


(734)


Retained earnings 


112,390


95,015


Treasury stock, at cost; 10,073,767 and 10,115,951 shares, respectively 

(66,344)


(66,622)



Total stockholders' equity


533,807


513,578


Total liabilities and stockholders' equity


$ 1,019,192


$        994,541

 


Newpark Resources, Inc.






Consolidated Statements of Cash Flows













(Unaudited)

Three Months Ended March 31,


(In thousands)


2013


2012


Cash flows from operating activities:






Net income 


$ 17,375


$ 15,634


Adjustments to reconcile net income to net cash provided by operations:




Depreciation and amortization


10,954


8,018


Stock-based compensation expense


1,973


1,383


Provision for deferred income taxes


534


81


Net provision for doubtful accounts


208


414


 (Gain) loss on sale of assets


(99)


244


Change in assets and liabilities:






Increase in receivables


(20,969)


(24,439)


Increase in inventories


(1,280)


(12,144)


Increase in other assets


(2,382)


(1,755)


Increase in accounts payable


4,179


9,008


Increase (decrease) in accrued liabilities and other


4,747


(2,852)


Net cash provided by (used in) operating activities


15,240


(6,408)








Cash flows from investing activities:






Capital expenditures


(16,127)


(17,302)


Proceeds from sale of property, plant and equipment


213


8


Net cash used in investing activities


(15,914)


(17,294)








Cash flows from financing activities:






Borrowings on lines of credit


71,102


85,951


Payments on lines of credit


(78,748)


(50,632)


Proceeds from employee stock plans


3,808


234


Purchase of treasury stock


-


(7,598)


Other financing activities


(38)


10


Net cash (used in) provided by financing activities


(3,876)


27,965








Effect of exchange rate changes on cash


(586)


859








Net (decrease) increase in cash and cash equivalents


(5,136)


5,122


Cash and cash equivalents at beginning of year


46,846


25,247








Cash and cash equivalents at end of period


$ 41,710


$ 30,369


SOURCE Newpark Resources, Inc.