Revenues and net income improve sequentially from second quarter
2009 THE WOODLANDS, Texas, Oct. 29 /PRNewswire-FirstCall/ --
Newpark Resources, Inc. (NYSE:NR) today announced results for its
third quarter ended September 30, 2009. Total revenues were $118.2
million for the third quarter of 2009 compared to $109.6 million
for the second quarter of 2009 and $226.2 million for the third
quarter of 2008. The Company reported net income of $0.2 million,
break-even on a per share basis, for the third quarter of 2009
compared to a net loss of $8.8 million, or $0.10 per share, in the
second quarter of 2009 and net income of $10.4 million, or $0.12
per diluted share, for the third quarter of 2008. Operating results
in the third quarter of 2009 included $2.3 million of other income
($1.5 million after-tax) in the Environmental Services segment,
reflecting proceeds from the settlement of business interruption
insurance claims related to hurricanes and storms in 2008.
Operating results in the second quarter of 2009 included $4.8
million of pre-tax charges ($3.1 million after-tax) related to
employee termination and related costs associated with North
American workforce reductions, the non-renewal of barge leases and
asset write-downs. Paul Howes, President and Chief Executive
Officer of Newpark, stated, "Our third quarter revenues and net
income improved nicely from the second quarter of this year. After
sharp declines earlier in the year, we have seen U.S. drilling
activity stabilize and improve during the third quarter. As a
result of these improving market conditions and our cost cutting
programs executed earlier this year, our Fluids Systems and
Engineering segment returned to profitability in the third quarter.
In addition, the Mats and Integrated Services segment generated
improved operating results, while our Environmental Services
segment continued to perform well. "We remain focused on
aggressively managing costs and reducing our debt levels as our
total debt was reduced by an additional $10 million during the
quarter," added Howes. "Meanwhile, we continued to be encouraged by
our international businesses as Brazil activity continues to
ramp-up and our Mediterranean operations remain stable." Segment
Results The Fluids Systems and Engineering segment generated
revenues of $99.4 million in the third quarter of 2009 compared to
$89.6 million in the second quarter of 2009 and $189.0 million in
the third quarter of 2008. Segment operating income was $2.5
million in the third quarter of 2009 compared to an operating loss
of $1.7 million in the second quarter of 2009 and operating income
of $25.6 million in the third quarter of 2008. North American
revenues increased 8% from the second quarter of 2009 primarily due
to higher drilling activity, market share gains and a seasonal
rebound in Canada, while international revenues increased 16%,
primarily due to the ramp-up of activity in Brazil. Compared to the
third quarter of 2008, North American revenues decreased 60%, while
international revenues increased 3%. The Mats and Integrated
Services segment generated revenues of $7.6 million in the third
quarter of 2009 compared to $8.6 million in the second quarter of
2009 and $22.6 million in the third quarter of 2008. Segment
operating loss was $0.9 million in the third quarter of 2009
compared to an operating loss of $4.8 million in the second quarter
of 2009 and an operating profit of $1.1 million in the third
quarter of 2008. Revenues were down 12% from the second quarter of
2009, as declines in mat sales were partially offset by an increase
in well site construction activities. Compared to the third quarter
of 2008, revenues were down 66%. The Environmental Services segment
generated revenues of $11.2 million in the third quarter of 2009
compared to $11.3 million in the second quarter of 2009 and $14.6
million in the third quarter of 2008. Segment operating income was
$4.1 million in the third quarter of 2009, including $2.3 million
of other income associated with the settlement of business
interruption insurance claims, compared to operating income of $1.4
million in the second quarter of 2009 and $1.9 million in the third
quarter of 2008. Compared to the third quarter of 2008, revenues
were down 23%. Corporate office expenses were $3.5 million in the
third quarter of 2009, compared to $4.8 million in the second
quarter of 2009 and $10.4 million in the third quarter of 2008.
Compared to both prior periods, the decrease in expenses is
attributable to lower legal and related expenses, along with lower
personnel and related costs following the 2009 cost cutting
programs. The third quarter of 2008 also included $3.5 million of
legal and selling costs associated with the abandoned sale of the
Environmental Services business. CONFERENCE CALL In conjunction
with this release, Newpark has scheduled a conference call, which
will be broadcast live over the Internet, on Friday, October 30,
2009 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To
participate in the call, dial (480) 629-9770 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
http://www.newpark.com/. For those who cannot listen to the live
call, a replay will be available through November 6, 2009 and may
be accessed by dialing (303) 590-3030 and using pass code 4160781#.
Also, an archive of the webcast will be available shortly after the
call at http://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 http://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, 2008, as
well as others, could cause results to differ materially from those
stated. These factors include, but are not limited to, the
instability and effect of the credit and capital markets on the
economy in general and the oil and gas industry in particular; the
access to the credit markets by both Newpark and Newpark's
customers; the outlook for drilling activity in North America and
the rest of the world; compliance with our debt covenants; the
investigation of certain accounting matters by the Securities and
Exchange Commission; changes in the laws, regulations, policies and
economic conditions, including inflation, interest and foreign
currency exchange rates, of countries in which Newpark does
business; competitive pressures; successful integration of
structural changes, including restructuring plans, acquisitions,
divestitures and alliances; cost of raw materials, research and
development of new products, including regulatory approval and
market acceptance; and seasonality of sales of Newpark products and
services. Newpark's filings with the Securities and Exchange
Commission can be obtained at no charge at http://www.sec.gov/, as
well as through our website at http://www.newpark.com/. Contacts:
James E. Braun, CFO Newpark Resources, Inc. 281-362-6800 Ken
Dennard, Managing Partner Dennard Rupp Gray & Easterly, LLC
713-529-6600 Newpark Resources, Inc. Consolidated Statements of
Operations (Unaudited) Three Months Ended Nine Months Ended
----------- ------------------ ----------------- (In thousands,
except per share Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
data) 2009 2009 2008 2009 2008 ----------------- ---- ---- ----
---- ---- Revenues $118,208 $109,599 $226,184 $354,745 $631,417
Cost of revenues 103,985 103,906 184,401 332,442 514,695 Selling,
general and administrative expenses 14,676 15,652 23,849 45,519
60,194 Other (income) expense, net (2,691) (37) (305) (2,753) (342)
------ --- ---- ------ ---- Operating income (loss) 2,238 (9,922)
18,239 (20,463) 56,870 Foreign currency exchange (gain) loss
(1,011) (590) 36 (1,572) 133 Interest expense, net 3,361 1,600
2,499 6,611 8,375 ----- ----- ----- ----- ----- (Loss) income from
continuing operations before income taxes (112) (10,932) 15,704
(25,502) 48,362 Provision for income taxes (314) (2,145) 5,115
(4,913) 16,291 ---- ------ ----- ------ ------ Income (loss) from
continuing operations 202 (8,787) 10,589 (20,589) 32,071 Loss from
discontinued operations, net of tax - - (171) - (300) --- --- ----
--- ---- Net income (loss) $202 $(8,787) $10,418 $(20,589) $31,771
==== ======= ======= ======== ======= Basic weighted average common
shares outstanding 88,544 88,514 88,682 88,469 89,227 Diluted
weighted average common shares outstanding 88,655 88,514 89,109
88,469 89,569 Income (loss) per common share - basic: Income (loss)
from continuing operations $- $(0.10) $0.12 $(0.23) $0.36 Loss from
discontinued operations - - - - - --- --- --- --- --- Net income
(loss) per common share $- $(0.10) $0.12 $(0.23) $0.36 === ======
===== ====== ===== Income (loss) per common share - diluted: Income
(loss) from continuing operations $- $(0.10) $0.12 $(0.23) $0.36
Loss from discontinued operations - - - - (0.01) --- --- --- ---
----- Net income (loss) per common share $- $(0.10) $0.12 $(0.23)
$0.35 === ====== ===== ====== ===== Newpark Resources, Inc.
Operating Segment Results (Unaudited) Three Months Ended
----------- ------------------ September 30, June 30, September 30,
(In thousands) 2009 2009 2008 -------------- ---- ---- ----
Revenues Fluids systems and engineering $99,421 $89,642 $188,975
Mats and integrated services 7,578 8,638 22,593 Environmental
services 11,209 11,319 14,616 ------ ------ ------ Total revenues
$118,208 $109,599 $226,184 ======== ======== ======== Operating
income (loss) Fluids systems and engineering $2,541 $(1,722)
$25,601 Mats and integrated services (879) (4,774) 1,131
Environmental services 4,070 (1) 1,385 1,874 Corporate office
(3,494) (4,811) (10,367) ------ ------ ------- Total operating
income (loss) $2,238 $(9,922) $18,239 ====== ======= =======
Segment operating margin Fluids systems and engineering 2.6% (1.9%)
13.5% Mats and integrated services (11.6%) (55.3%) 5.0%
Environmental services 36.3% 12.2% 12.8% (1) Includes $2.3 million
of income reflecting proceeds from the settlement of business
interruption insurance claims. Newpark Resources, Inc. Consolidated
Balance Sheets ------------------- ------------- ------------ (In
thousands, September 30, December 31, except share data) 2009 2008
------------------- ---- ---- (Unaudited) ASSETS Cash and cash
equivalents $6,299 $8,252 Receivables, net 108,287 211,366
Inventories 123,299 149,304 Deferred tax asset 8,887 22,809 Prepaid
expenses and other current assets 10,365 11,062 ------ ------ Total
current assets 257,137 402,793 Property, plant and equipment, net
228,875 226,627 Goodwill 62,186 60,268 Deferred tax asset, net
7,126 707 Other intangible assets, net 16,995 18,940 Other assets
5,493 4,344 ----- ----- Total assets $577,812 $713,679 ========
======== LIABILITIES AND STOCKHOLDERS' EQUITY Foreign bank lines of
credit $8,437 $11,302 Current maturities of long-term debt 10,593
10,391 Accounts payable 45,412 89,018 Accrued liabilities 25,984
38,946 ------ ------ Total current liabilities 90,426 149,657
Long-term debt, less current portion 115,885 166,461 Deferred tax
liability 715 15,979 Other noncurrent liabilities 3,507 3,700 -----
----- Total liabilities 210,533 335,797 Common stock, $0.01 par
value, 100,000,000 shares authorized 91,659,870 and 91,139,966
shares issued, respectively 917 911 Paid-in capital 459,331 457,012
Accumulated other comprehensive income 9,065 1,296 Retained deficit
(86,676) (66,087) Treasury stock, at cost; 2,710,133 and 2,646,409
shares, respectively (15,358) (15,250) ------- ------- Total
stockholders' equity 367,279 377,882 ------- ------- Total
liabilities and stockholders' equity $577,812 $713,679 ========
======== Newpark Resources, Inc. Consolidated Statements of Cash
Flows Nine Months Ended (Unaudited) September 30, -----------
------------- (In thousands) 2009 2008 -------------- ---- ----
Cash flows from operating activities: Net (loss) income $(20,589)
$31,771 Adjustments to reconcile net (loss) income to net cash
provided by operations: Net loss from discontinued operations - 300
Non-cash impairment charges 1,091 - Depreciation and amortization
20,890 21,784 Stock-based compensation expense 2,262 4,034
Provision for deferred income taxes (7,718) 12,157 Provision for
doubtful accounts 2,357 1,752 Gain on sale of assets (752) (345)
Change in assets and liabilities: Decrease (increase) in
receivables 103,397 (50,712) Decrease (increase) in inventories
28,179 (6,913) Increase in other assets (551) (3,462) (Decrease)
increase in accounts payable (44,911) 10,270 (Decrease) increase in
accrued liabilities and other (13,890) 14,024 ------- ------ Net
operating activities of continuing operations 69,765 34,660 Net
operating activities of discontinued operations - 2,352 --- -----
Net cash provided by operating activities 69,765 37,012 Cash flows
from investing activities: Capital expenditures (17,219) (16,937)
Proceeds from sale of property, plant and equipment 1,255 522 -----
--- Net cash used in investing activities (15,964) (16,415) Cash
flows from financing activities: Net (payments) borrowings on lines
of credit (54,021) (1,625) Principal payments on notes payable and
long-term debt (299) (2,116) Proceeds from employee stock plans 104
1,897 Purchase of treasury stock (212) (15,093) ---- ------- Net
financing activities of continuing operations (54,428) (16,937) Net
financing activities of discontinued operations - (63) --- --- Net
cash used in financing activities (54,428) (17,000) Effect of
exchange rate changes on cash (1,326) 1,578 ------ ----- Net
(decrease) increase in cash and cash equivalents (1,953) 5,175 Cash
and cash equivalents at beginning of period 8,252 5,741 ----- -----
Cash and cash equivalents at end of period $6,299 $10,916 ======
======= DATASOURCE: Newpark Resources, Inc. CONTACT: James E.
Braun, CFO of Newpark Resources, Inc., +1-281-362-6800; or Ken
Dennard, Managing Partner of Dennard Rupp Gray & Easterly, LLC,
+1-713-529-6600, , for Newpark Resources, Inc. Web Site:
http://www.newpark.com/
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