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| 8-K - FORM 8-K - NEWPARK RESOURCES INC | c23711e8vk.htm |
Exhibit 99.1
 For Immediate Release |
NEWS RELEASE |
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| Contacts: | Paul L. Howes, President and CEO Newpark Resources, Inc. 281-362-6800 Ken Dennard, Managing Partner Dennard Rupp Gray & Lascar, LLC ksdennard@drg-l.com 713-529-6600 |
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NEWPARK RESOURCES REPORTS NET INCOME OF
$0.23 PER DILUTED SHARE FOR THE THIRD QUARTER 2011
$0.23 PER DILUTED SHARE FOR THE THIRD QUARTER 2011
THE WOODLANDS, TX — October 27, 2011 — Newpark Resources, Inc. (NYSE: NR) today announced
results for its third quarter ended September 30, 2011. Total revenues were $261.2 million for the
third quarter of 2011 compared to $230.8 million for the second quarter of 2011 and $179.3 million
for the third quarter of 2010. Net income for the third quarter of 2011 was $23.0 million, or
$0.23 per diluted share, compared to net income for the second quarter of 2011 of $19.3 million, or
$0.19 per diluted share, and net income for the third quarter of 2010 of $8.2 million, or $0.09 per
diluted share.
For the first nine months of 2011, total revenues were $694.7 million compared to $521.4
million for the first nine months of 2010. Net income for the first nine months of 2011 was $58.1
million, or $0.58 per diluted share, compared to net income of $26.9 million, or $0.30 per diluted
share, in the first nine months of 2010.
Paul Howes, Newpark’s President and Chief Executive Officer, stated, “The third quarter of
2011 was yet another record quarter for Newpark as we achieved new high marks in both quarterly
revenues and profit. Strong performance in all of our operating segments contributed to growth of
13% in consolidated revenues and 19% in consolidated net income, when compared to the prior
quarter. In our Fluids Systems and Engineering segment, strength in U.S. drilling activity and
market share gains in Canada contributed to a 12% sequential increase in North American revenues.
The roll-out of our Evolutiontm drilling fluid system continued, generating $17
million of revenues in the third quarter, while improving the geographic and customer reach.
Internationally, revenues were up 17%, benefitting from improvements in the Mediterranean region,
along with the impact of our first full quarter with our recently-acquired Asia Pacific business
unit.
“In addition, revenues from our Mats and Integrated Services segment increased 9%
sequentially, while our Environmental Services revenues rose 26% during this period,” concluded
Howes.
SEGMENT RESULTS
The Fluids Systems and Engineering segment generated revenues of $216.2 million in the third
quarter of 2011 compared to $191.2 million in the second quarter of 2011 and $148.1 million in the
third quarter of 2010. North American revenues increased 12% sequentially in the third quarter of
2011, including a 5% improvement in the U.S. and a $9.9 million increase in Canadian revenues.
International revenues increased $8.4 million, or 17%, from the second quarter of 2011, including a
$1.9 million increase in revenue from the Asia Pacific region, as the third quarter is the first
full quarter with this acquired business unit. Compared to the third quarter of 2010, revenues
increased 44% in North America and 51% in the Company’s international operations. Segment operating income
was $25.6 million (11.9% margin) in the third quarter of 2011 compared to $20.8 million (10.9%
margin) in the second quarter of 2011 and $11.8 million (8.0% margin) in the third quarter of 2010.
The Mats and Integrated Services segment generated revenues of $30.2 million in the third
quarter of 2011 compared to $27.8 million in the second quarter of 2011 and $18.2 million in the
third quarter of 2010. Revenues for the segment were up 9% from the second quarter of 2011, as a
$3.7 million decline in rental revenues in the Northeast was more than offset by a $4.8 million
increase in composite mat sales, along with increased rental and service revenues in the Rockies
and Gulf Coast. Compared to the third quarter of 2010, segment revenues were up 66%. Segment
operating income was $14.5 million (48.1% margin) in the third quarter of 2011 compared to
operating income of $14.7 million (53.0% margin) in the second quarter of 2011 and $8.6 million
(47.2% margin) in the third quarter of 2010.
The Environmental Services segment generated revenues of $14.9 million in the third quarter of
2011 compared to $11.8 million in the second quarter of 2011 and $13.0 million in the third quarter
of 2010. The sequential improvement in revenues is primarily attributable to increased market
share gains in oilfield waste disposals from state water and inland locations as activity in the
federal waters in the Gulf of Mexico continues to be impacted by permitting issues. Compared to
the third quarter of 2010, segment revenues were up 15%. Segment operating income was $5.0 million
(33.4% margin) in the third quarter of 2011 compared to operating income of $3.0 million (25.2%
margin) in the second quarter of 2011 and $3.9 million (30.5% margin) in the third quarter of 2010.
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CONFERENCE CALL
Newpark has scheduled a conference call to discuss the third quarter 2011 results, which will
be broadcast live over the Internet, on Friday, October 28, 2011 at 10:00 a.m. Eastern Time / 9:00
a.m. Central Time. To participate in the call, dial 480-629-9771 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 4, 2011 and may be accessed by dialing (303) 590-3030 and using pass code 4472417#. 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, 2010, 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 successfully integrate the business acquired from Rheochem
and to realize the anticipated benefits from the acquisition, the impact of restrictions on
offshore drilling activity in the Gulf of Mexico, 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, 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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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) | 2011 | 2011 | 2010 | |||||||||
Revenues |
$ | 261,193 | $ | 230,822 | $ | 179,278 | ||||||
Cost of revenues |
201,272 | 178,911 | 145,224 | |||||||||
Selling, general and administrative expenses |
20,802 | 21,150 | 16,662 | |||||||||
Other operating income, net |
(60 | ) | (835 | ) | (2,140 | ) | ||||||
Operating income |
39,179 | 31,596 | 19,532 | |||||||||
Foreign currency exchange loss (gain) |
485 | (468 | ) | 1,184 | ||||||||
Interest expense, net |
2,464 | 2,100 | 3,278 | |||||||||
Income from operations before income taxes |
36,230 | 29,964 | 15,070 | |||||||||
Provision for income taxes |
13,233 | 10,684 | 6,836 | |||||||||
Net income |
$ | 22,997 | $ | 19,280 | $ | 8,234 | ||||||
Income per common share — basic |
$ | 0.25 | $ | 0.21 | $ | 0.09 | ||||||
Income per common share — diluted |
$ | 0.23 | $ | 0.19 | $ | 0.09 | ||||||
Calculation of Diluted EPS: |
||||||||||||
Net income |
$ | 22,997 | $ | 19,280 | $ | 8,234 | ||||||
Assumed conversion of Senior Notes |
1,236 | 1,241 | — | |||||||||
Adjusted net income |
$ | 24,233 | $ | 20,521 | $ | 8,234 | ||||||
Weighted average number of common shares
outstanding-basic |
90,212 | 89,791 | 89,334 | |||||||||
Add: Dilutive effect of stock options and
restricted stock awards |
1,025 | 1,061 | 1,223 | |||||||||
Dilutive effect of Senior Notes |
15,682 | 15,682 | — | |||||||||
Diluted weighted average number of common
shares outstanding |
106,919 | 106,534 | 90,557 | |||||||||
Income per common share — diluted |
$ | 0.23 | $ | 0.19 | $ | 0.09 | ||||||
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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) | 2011 | 2011 | 2010 | |||||||||
Revenues |
||||||||||||
Fluids systems and engineering |
$ | 216,160 | $ | 191,205 | $ | 148,140 | ||||||
Mats and integrated services |
30,179 | 27,793 | 18,186 | |||||||||
Environmental services |
14,854 | 11,824 | 12,952 | |||||||||
Total revenues |
$ | 261,193 | $ | 230,822 | $ | 179,278 | ||||||
Operating income (loss) |
||||||||||||
Fluids systems and engineering |
$ | 25,648 | $ | 20,792 | $ | 11,845 | ||||||
Mats and integrated services |
14,509 | 14,730 | 8,592 | (1) | ||||||||
Environmental services |
4,958 | 2,980 | 3,944 | |||||||||
Corporate office |
(5,936 | ) | (6,906 | ) | (4,849 | ) | ||||||
Total operating income |
$ | 39,179 | $ | 31,596 | $ | 19,532 | ||||||
Segment operating margin |
||||||||||||
Fluids systems and engineering |
11.9 | % | 10.9 | % | 8.0 | % | ||||||
Mats and integrated services |
48.1 | % | 53.0 | % | 47.2 | % | ||||||
Environmental services |
33.4 | % | 25.2 | % | 30.5 | % | ||||||
| (1) | Includes $2.2 million of income reflecting proceeds from the settlement of a lawsuit. |
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Newpark Resources, Inc.
Consolidated Balance Sheets
Consolidated Balance Sheets
| (Unaudited) | September 30, | December 31, | ||||||
| (In thousands, except share data) | 2011 | 2010 | ||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 62,902 | $ | 83,010 | ||||
Receivables, net |
253,595 | 196,799 | ||||||
Inventories |
156,445 | 123,028 | ||||||
Deferred tax asset |
13,230 | 27,654 | ||||||
Prepaid expenses and other current assets |
17,052 | 10,036 | ||||||
Total current assets |
503,224 | 440,527 | ||||||
Property, plant and equipment, net |
228,866 | 212,655 | ||||||
Goodwill |
74,881 | 62,307 | ||||||
Other intangible assets, net |
21,908 | 13,072 | ||||||
Other assets |
7,863 | 8,781 | ||||||
Total assets |
$ | 836,742 | $ | 737,342 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Short-term debt |
$ | 1,635 | $ | 1,606 | ||||
Accounts payable |
94,672 | 66,316 | ||||||
Accrued liabilities |
51,015 | 43,234 | ||||||
Total current liabilities |
147,322 | 111,156 | ||||||
Long-term debt, less current portion |
172,908 | 172,987 | ||||||
Deferred tax liability |
36,526 | 31,549 | ||||||
Other noncurrent liabilities |
4,332 | 4,303 | ||||||
Total liabilities |
361,088 | 319,995 | ||||||
Common stock, $0.01 par value, 200,000,000 shares authorized
93,937,660 and 93,143,102 shares issued, respectively |
939 | 931 | ||||||
Paid-in capital |
474,043 | 468,503 | ||||||
Accumulated other comprehensive income |
3,605 | 8,581 | ||||||
Retained earnings (deficit) |
13,097 | (45,034 | ) | |||||
Treasury stock, at cost; 2,798,940 and 2,766,912 shares, respectively |
(16,030 | ) | (15,634 | ) | ||||
Total stockholders’ equity |
475,654 | 417,347 | ||||||
Total liabilities and stockholders’ equity |
$ | 836,742 | $ | 737,342 | ||||
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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) | 2011 | 2010 | ||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 58,131 | $ | 26,856 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operations: |
||||||||
Impairment charges |
— | 225 | ||||||
Depreciation and amortization |
21,162 | 20,382 | ||||||
Stock-based compensation expense |
3,396 | 2,899 | ||||||
Provision for deferred income taxes |
16,363 | 13,551 | ||||||
Provision for doubtful accounts |
1,165 | 602 | ||||||
Loss (gain) on sale of assets |
22 | (183 | ) | |||||
Change in assets and liabilities: |
||||||||
Increase in receivables |
(57,603 | ) | (54,568 | ) | ||||
Increase in inventories |
(27,921 | ) | (3,100 | ) | ||||
Increase in other assets |
(5,226 | ) | (1,458 | ) | ||||
Increase in accounts payable |
28,893 | 6,638 | ||||||
(Decrease) increase in accrued liabilities and other |
(3,655 | ) | 14,264 | |||||
Net cash provided by operating activities |
34,727 | 26,108 | ||||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(28,136 | ) | (7,412 | ) | ||||
Business acquisition, net of cash acquired |
(26,775 | ) | — | |||||
Proceeds from sale of property, plant and equipment |
434 | 1,161 | ||||||
Net cash used in investing activities |
(54,477 | ) | (6,251 | ) | ||||
Cash flows from financing activities: |
||||||||
Borrowings on lines of credit |
5,891 | 133,121 | ||||||
Payments on lines of credit |
(5,754 | ) | (155,726 | ) | ||||
Proceeds from employee stock plans |
1,768 | 3,559 | ||||||
Purchase of treasury stock |
(599 | ) | (153 | ) | ||||
Post-closing payment for business acquisition |
(2,055 | ) | — | |||||
Other financing activities |
(147 | ) | (342 | ) | ||||
Net cash used in financing activities |
(896 | ) | (19,541 | ) | ||||
Effect of exchange rate changes on cash |
538 | 252 | ||||||
Net (decrease) increase in cash and cash equivalents |
(20,108 | ) | 568 | |||||
Cash and cash equivalents at beginning of period |
83,010 | 11,534 | ||||||
Cash and cash equivalents at end of period |
$ | 62,902 | $ | 12,102 | ||||
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