UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2010
NEWPARK RESOURCES,
INC.
(Exact name of registrant as
specified in its charter)
| Delaware | 1-2960 | 72-1123385 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 2700 Research Forest Drive,
Suite 100 The Woodlands, TX |
77381 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (281) 362-6800
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On July 29, 2010 Newpark Resources, Inc. (the “Company”) issued a press release announcing financial information for the three and six months ended June 30, 2010. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K and the information in the exhibit attached hereto announcing the Company’s earnings for the three and six months ended June 30, 2010 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
|
99.1
|
Press release issued by Newpark Resources, Inc. on July 29, 2010. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NEWPARK RESOURCES, INC.
Dated: July 30, 2010
By: /s/ James E. Braun
James E. Braun, Vice
President and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT INDEX
| Exhibit No. | Description | |
|
99.1
|
Press release issued by Newpark Resources, Inc. on July 29, 2010. |
Exhibit 99.1
|
Contacts: |
NEWS RELEASE James E. Braun, CFO Newpark Resources, Inc. 281-362-6800 |
||
FOR IMMEDIATE RELEASE
|
Ken Dennard, Managing Partner Dennard Rupp Gray & Easterly, LLC ksdennard@drg-e.com 713-529-6600 |
NEWPARK RESOURCES REPORTS NET INCOME OF $0.12 PER DILUTED SHARE FOR THE SECOND QUARTER 2010
Operating income up 45% from first quarter 2010
Operating income up 45% from first quarter 2010
THE WOODLANDS, TX — July 29, 2010 — 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.
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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.
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Newpark Resources, Inc.
Consolidated Statements of Operations
| Three Months Ended | ||||||||||||
| (Unaudited) | June 30, | March 31, | June 30, | |||||||||
| (In thousands, except per share 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 | ) | |||||
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Newpark Resources, Inc.
Operating Segment Results
| (Unaudited) | Three Months Ended | |||||||||||
| (In thousands) | June 30, 2010 | March 31, 2010 | June 30, 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. |
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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 | ||||
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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 | ||||
###
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