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): October 28, 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 October 28, 2010 Newpark Resources, Inc. (the “Company”) issued a press release announcing financial information for the three months ended September 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 months ended September 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 October 28, 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: October 29, 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 October 28, 2010. |
Exhibit 99.1
|
NEWS RELEASE |
| Contacts: | James E. Braun, CFO Newpark Resources, Inc. |
|||
| 281-362-6800 | ||||
FOR IMMEDIATE RELEASE
|
Ken Dennard, Managing Partner | |||
| Dennard Rupp Gray & Lascar, LLC | ||||
| ksdennard@drg-l.com | ||||
| 713-529-6600 |
NEWPARK RESOURCES REPORTS NET INCOME OF $0.09 PER DILUTED
SHARE FOR THE THIRD QUARTER 2010
SHARE FOR THE THIRD QUARTER 2010
THE WOODLANDS, TX — October 28, 2010 — Newpark Resources, Inc. (NYSE: NR) today
announced results for its third quarter ended September 30, 2010. Total revenues were $179.3
million for the third quarter of 2010 compared to $181.4 million for the second quarter of 2010 and
$118.2 million for the third quarter of 2009. Net income for the third quarter of 2010 was $8.2
million, or $0.09 per diluted share, compared to net income for the second quarter of 2010 of $10.8
million, or $0.12 per diluted share, and net income for the third quarter of 2009 of $0.2 million,
or break-even on a per share basis.
The financial results for the third quarter of 2010 included $2.2 million of other income
($1.2 million after-tax) in the Mats and Integrated Services segment, reflecting net proceeds from
the settlement of a lawsuit the Company filed in 2007 against a former raw materials vendor. The
third quarter of 2010 also included a $1.2 million charge for interest expense ($0.7 million
after-tax), resulting from the termination of interest rate swap agreements following the issuance
of $172.5 million of convertible senior notes and subsequent repayment of amounts outstanding under
the Company’s revolving and term credit facility.
Paul Howes, President and Chief Executive Officer of Newpark, stated, “The third quarter
results reflect a solid performance from our Drilling Fluids business, continued growth in Mats and
Integrated Services and better than expected results in Environmental Services. We continue to
make progress in the development of our new technology and while we expanded the use of our
Evolution product beyond the Haynesville shale, we did experience a sequential revenue decline in
the Haynesville and other keys markets from a strong second quarter.
“Revenues from areas of the Gulf of Mexico affected by drilling restrictions were down $3.0
million sequentially, which is consistent with our most recent public estimate,” added Howes.
“Meanwhile, we continue to make inroads into the Northeast U.S. region in both the Drilling Fluids
and Mats and Integrated Services businesses. In addition, our previously announced $172.5 million
convertible senior notes offering completed earlier this month serves to strengthen our balance
sheet and provide increased financial flexibility going forward.”
SEGMENT RESULTS
The Fluids Systems and Engineering segment generated revenues of $148.1 million in the third
quarter of 2010 compared to $150.5 million in the second quarter of 2010 and $99.4 million in the
third quarter of 2009. Segment operating income was $11.8 million in the third quarter of 2010
compared to $15.2 million in the second quarter of 2010 and $2.5 million in the third quarter of
2009. North American revenues were flat with the second quarter of 2010 as a 3% decline in U.S.
revenues was offset by seasonal improvements in Canada. International revenues decreased 6% from
the second quarter of 2010 as revenues in the Mediterranean and Brazil were both down from the
prior quarter. Compared to the third quarter of 2009, North American revenues increased 79%, while
international revenues increased 2%.
The Mats and Integrated Services segment generated revenues of $18.2 million in the third
quarter of 2010 compared to $17.0 million in the second quarter of 2010 and $7.6 million in the
third quarter of 2009. Segment operating income was $8.6 million in the third quarter of 2010,
inclusive of the $2.2 million legal settlement gain, compared to operating income of $5.0 million
in the second quarter of 2010 and an operating loss of $0.9 million in the third quarter of 2009.
Revenues were up 7% from the second quarter of 2010, driven by a $2.3 million increase in rental
activity in the Northeast U.S. region. Compared to the third quarter of 2009, segment revenues
were up 140%.
The Environmental Services segment generated revenues of $13.0 million in the third quarter of
2010 compared to $13.8 million in the second quarter of 2010 and $11.2 million in the third quarter
of 2009. Segment operating income was $3.9 million in the third quarter of 2010 compared to
operating income of $4.2 million in the second quarter of 2010 and $4.1 million in the third
quarter of 2009. The third quarter of 2010 includes $5.4 million of revenue from waste disposals
associated with the Deepwater Horizon oil spill compared to $2.0 million in the second quarter of
2010.
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CONFERENCE CALL
Newpark has scheduled a conference call to discuss the third quarter 2010 results, which will
be broadcast live over the Internet, on Friday, October 29, 2010 at 10:00 a.m. Eastern Time / 9:00
a.m. Central Time. To participate in the call, dial 480-629-9724 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
November 5, 2010 and may be accessed by dialing (303) 590-3030 and using pass code 4366142#. 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.
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Newpark Resources, Inc.
Consolidated Statements of Operations
Consolidated Statements of Operations
| Three Months Ended | ||||||||||||
| (Unaudited) | September 30, | June 30, | September 30, | |||||||||
| (In thousands, except per share data) | 2010 | 2010 | 2009 | |||||||||
Revenues |
$ | 179,278 | $ | 181,352 | $ | 118,208 | ||||||
Cost of revenues |
145,224 | 145,299 | 103,985 | |||||||||
Selling, general and administrative expenses |
16,662 | 16,360 | 14,676 | |||||||||
Other income, net |
(2,140 | ) | (203 | ) | (2,691 | ) | ||||||
Operating income |
19,532 | 19,896 | 2,238 | |||||||||
Foreign currency exchange loss (gain) |
1,184 | (1,213 | ) | (1,011 | ) | |||||||
Interest expense |
3,278 | 2,228 | 3,361 | |||||||||
Income (loss) from operations before income taxes |
15,070 | 18,881 | (112 | ) | ||||||||
Provision for income taxes |
6,836 | 8,041 | (314 | ) | ||||||||
Net income |
$ | 8,234 | $ | 10,840 | $ | 202 | ||||||
Basic weighted average common shares outstanding |
89,334 | 88,818 | 88,544 | |||||||||
Diluted weighted average common shares outstanding |
90,557 | 89,392 | 88,655 | |||||||||
Income per common share — basic |
$ | 0.09 | $ | 0.12 | $ | — | ||||||
Income per common share — diluted |
$ | 0.09 | $ | 0.12 | $ | — | ||||||
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Newpark Resources, Inc.
Operating Segment Results
Operating Segment Results
| Three Months Ended | ||||||||||||
| (Unaudited) | September 30, | June 30, | September 30, | |||||||||
| (In thousands) | 2010 | 2010 | 2009 | |||||||||
Revenues |
||||||||||||
Fluids systems and engineering |
$ | 148,140 | $ | 150,534 | $ | 99,421 | ||||||
Mats and integrated services |
18,186 | 16,981 | 7,578 | |||||||||
Environmental services |
12,952 | 13,837 | 11,209 | |||||||||
Total revenues |
$ | 179,278 | $ | 181,352 | $ | 118,208 | ||||||
Operating income (loss) |
||||||||||||
Fluids systems and engineering |
$ | 11,845 | $ | 15,164 | $ | 2,541 | ||||||
Mats and integrated services |
8,592 | (1) | 5,036 | (879 | ) | |||||||
Environmental services |
3,944 | 4,224 | 4,070 | (2) | ||||||||
Corporate office |
(4,849 | ) | (4,528 | ) | (3,494 | ) | ||||||
Total operating income |
$ | 19,532 | $ | 19,896 | $ | 2,238 | ||||||
Segment operating margin |
||||||||||||
Fluids systems and engineering |
8.0 | % | 10.1 | % | 2.6 | % | ||||||
Mats and integrated services |
47.2 | % | 29.7 | % | (11.6 | %) | ||||||
Environmental services |
30.5 | % | 30.5 | % | 36.3 | % | ||||||
| (1) | Includes $2.2 million of income reflecting proceeds from the settlement of a lawsuit. |
|
| (2) | Includes $2.3 million of income reflecting proceeds from the settlement of business interruption insurance claims. |
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Newpark Resources, Inc.
Consolidated Balance Sheets
Consolidated Balance Sheets
| (Unaudited) | September 30, | December 31, | ||||||
| (In thousands, except share data) | 2010 | 2009 | ||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 12,102 | $ | 11,534 | ||||
Receivables, net |
175,078 | 122,386 | ||||||
Inventories |
117,629 | 115,495 | ||||||
Deferred tax asset |
23,315 | 7,457 | ||||||
Prepaid expenses and other current assets |
13,398 | 11,740 | ||||||
Total current assets |
341,522 | 268,612 | ||||||
Property, plant and equipment, net |
212,382 | 224,625 | ||||||
Goodwill |
62,029 | 62,276 | ||||||
Other intangible assets, net |
13,648 | 16,037 | ||||||
Other assets |
4,202 | 13,564 | ||||||
Total assets |
$ | 633,783 | $ | 585,114 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Foreign bank lines of credit |
$ | 3,028 | $ | 6,901 | ||||
Current maturities of long-term debt |
10,192 | 10,319 | ||||||
Accounts payable |
68,584 | 62,992 | ||||||
Accrued liabilities |
37,320 | 25,290 | ||||||
Total current liabilities |
119,124 | 105,502 | ||||||
Long-term debt, less current portion |
86,549 | 105,810 | ||||||
Deferred tax liability |
22,525 | 2,083 | ||||||
Other noncurrent liabilities |
5,029 | 3,697 | ||||||
Total liabilities |
233,227 | 217,092 | ||||||
Common stock, $0.01 par value, 200,000,000 shares authorized
93,099,069 and 91,672,871 shares issued, respectively |
931 | 917 | ||||||
Paid-in capital |
467,026 | 460,544 | ||||||
Accumulated other comprehensive income |
7,629 | 8,635 | ||||||
Retained deficit |
(59,804 | ) | (86,660 | ) | ||||
Treasury stock, at cost; 2,695,095 and 2,727,765 shares, respectively |
(15,226 | ) | (15,414 | ) | ||||
Total stockholders’ equity |
400,556 | 368,022 | ||||||
Total liabilities and stockholders’ equity |
$ | 633,783 | $ | 585,114 | ||||
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Newpark Resources, Inc.
Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows
| (Unaudited) | Nine Months Ended September 30, | |||||||
| (In thousands) | 2010 | 2009 | ||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ | 26,856 | $ | (20,589 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operations: |
||||||||
Non-cash impairment charges |
225 | 1,091 | ||||||
Depreciation and amortization |
20,382 | 20,890 | ||||||
Stock-based compensation expense |
2,899 | 2,262 | ||||||
Provision for deferred income taxes |
13,551 | (7,718 | ) | |||||
Provision for doubtful accounts |
602 | 2,357 | ||||||
Gain on sale of assets |
(183 | ) | (752 | ) | ||||
Change in assets and liabilities: |
||||||||
(Increase) decrease in receivables |
(54,568 | ) | 103,397 | |||||
(Increase) decrease in inventories |
(3,100 | ) | 28,179 | |||||
Increase in other assets |
(1,458 | ) | (551 | ) | ||||
Increase (decrease) in accounts payable |
6,638 | (44,911 | ) | |||||
Increase (decrease) in accrued liabilities and other |
14,264 | (13,890 | ) | |||||
Net cash provided by operating activities |
26,108 | 69,765 | ||||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(7,412 | ) | (17,219 | ) | ||||
Proceeds from sale of property, plant and equipment |
1,161 | 1,255 | ||||||
Net cash used in investing activities |
(6,251 | ) | (15,964 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings on lines of credit |
133,121 | 114,742 | ||||||
Payments on lines of credit |
(155,726 | ) | (168,763 | ) | ||||
Principal payments on notes payable and long-term debt |
(342 | ) | (299 | ) | ||||
Proceeds from employee stock plans |
3,559 | 104 | ||||||
Purchase of treasury stock |
(153 | ) | (212 | ) | ||||
Net cash used in financing activities |
(19,541 | ) | (54,428 | ) | ||||
Effect of exchange rate changes on cash |
252 | (1,326 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
568 | (1,953 | ) | |||||
Cash and cash equivalents at beginning of period |
11,534 | 8,252 | ||||||
Cash and cash equivalents at end of period |
$ | 12,102 | $ | 6,299 | ||||
###
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