Release Details

THE WOODLANDS, Texas, Oct. 27, 2016 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its third quarter ended September 30, 2016. Total revenues for the third quarter of 2016 were $104.6 million compared to $115.3 million in the second quarter of 2016 and $154.2 million in the third quarter of 2015. Net loss for the third quarter of 2016 was $13.5 million, or $0.16 per share, compared to a net loss of $13.9 million, or $0.17 per share, in the second quarter of 2016, and a net loss of $4.5 million, or $0.05 per share, in the third quarter of 2015. Third quarter 2016 results included the impact of the following:

• $2.6 million of pre-tax charges ($2.5 million after-tax) in the Fluids Systems segment associated with asset demobilization and wind-down of our operations in Uruguay, following the customer decision to discontinue offshore exploration efforts in the country.
• $0.7 million of pre-tax charges ($0.4 million after-tax) in the Mats and Integrated Services segment resulting from our decision to recondition certain customer mats that were produced in 2015, as part of our initial start-up of the new manufacturing line.

Combined, the above items resulted in a $3.3 million increase to pre-tax loss ($2.9 million, after taxes).

Paul Howes, Newpark's President and Chief Executive Officer, stated, "While market conditions remain challenging in most areas, we're encouraged by the early signs of recovery in North America, where we've seen our customer activity steadily improving over the past four months. Revenues in our North American fluids business improved by 22% sequentially to $40 million in the third quarter, benefiting from the improving rig count, as well as revenues from product sales into the deepwater Gulf of Mexico.  As anticipated, international fluids revenues declined sequentially, driven primarily by the impact of the ultra-deepwater exploratory well in Uruguay, which was successfully completed in the second quarter. Our EMEA region, which has been the most resilient through the current cycle, contributed $40 million of revenues, benefiting from the continued strong activity levels in Algeria and Kuwait.

"In the mats segment, revenues declined by 19% sequentially, primarily due to the anticipated decline in mat sales. Rental and service revenues also declined modestly from the prior quarter, largely reflecting seasonal impacts in the electrical transmission and distribution segment, as infrastructure maintenance programs were delayed during periods of extreme summer heat.

"Meanwhile, our balance sheet position remains strong, as we ended the third quarter with a cash balance of $92 million," added Howes.  "Working capital reductions provided $14 million of cash in the third quarter, while we continue to fund our strategic investments, including the expansion of our Gulf of Mexico Deepwater shorebase facility. We also used $4 million during the quarter to fund the acquisition of a specialty chemicals provider in North America, which further expands our fluids technology portfolio and capabilities, as we continue the development of next-generation fluids systems."

Segment Results

The Fluids Systems segment generated revenues of $89.1 million in the third quarter of 2016 compared to $96.2 million in the second quarter of 2016 and $138.8 million in the third quarter of 2015. Segment operating loss was $9.0 million in the third quarter of 2016, compared to a $11.9 million loss in the second quarter of 2016 and a $1.2 million loss in the third quarter of 2015. Segment results for the third quarter of 2016 included $2.6 million of costs associated with the demobilization of activities following completion of the Uruguay project.

The Mats and Integrated Services segment generated revenues of $15.5 million in the third quarter of 2016 compared to $19.2 million in the second quarter of 2016 and $15.4 million in the third quarter of 2015. Segment operating income was $0.9 million in the third quarter of 2016, which included $0.7 million of costs related to the reconditioning of customer mats, compared to operating income of $4.0 million in the second quarter of 2016, and a $0.1 million loss in the third quarter of 2015. Segment operating income in 2016 is benefiting from a reduction in depreciation expense associated with our mat rental fleet, reflecting increases in estimated useful lives and residual values. This change in estimate reduced depreciation expense by $1.5 million in both the third quarter and second quarter of 2016.

CONFERENCE CALL

Newpark has scheduled a conference call to discuss third quarter 2016 results, which will be broadcast live over the Internet, on Friday, October 28, 2016 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To participate in the call, dial (412) 902-0030 and ask for the Newpark 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 November 11, 2016 and may be accessed by dialing (201) 612-7415 and using pass code 13646164#. 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 value-added drilling fluids systems and composite matting systems used in 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, 2015, as well as others, could cause results to differ materially from those expressed in, or implied by, these statements. These risk factors include, but are not limited to, risks related to the worldwide oil and natural gas industry, our customer concentration and reliance on the U.S. exploration and production market, the cost and continued availability of borrowed funds including noncompliance with debt covenants, our international operations, operating hazards present in the oil and natural gas industry, our ability to execute our business strategy and make successful business acquisitions and capital investments, the availability of raw materials and skilled personnel, our market competition, legal and regulatory matters, including environmental regulations, inherent limitations of insurance coverage, potential impairments of long-lived intangible assets, technological developments in our industry, our exposure to cybersecurity breaches or business system disruptions, 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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SOURCE Newpark Resources, Inc.