ex99-1.htm

EX-99 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm

Exhibit 99.1

NEWPARK RESOURCES REPORTS NET INCOME OF $0.21 PER DILUTED SHARE FOR THE SECOND QUARTER OF 2014

Fluids segment posts 14% sequential revenue growth and

segment margin improves to double-digits

THE WOODLANDS, TX – JULY 24, 2014 – Newpark Resources, Inc. (NYSE: NR) today announced results for its second quarter ended June 30, 2014. Total revenues for the second quarter of 2014 were $272.5 million compared to $242.8 million in the first quarter of 2014 and $259.4 million in the second quarter of 2013. Income from continuing operations for the second quarter of 2014 was $20.3 million, or $0.21 per diluted share, compared to $11.7 million, or $0.13 per diluted share, in the first quarter of 2014, and $11.9 million, or $0.13 per diluted share, in the second quarter of 2013. The second quarter 2014 results include $1.2 million of pre-tax gains, or $0.01 per diluted share, from the sale of real estate.

Paul Howes, Newpark’s President and Chief Executive Officer, stated, “We are very pleased with the solid performance from both our fluids and mats segments. In the fluids business, U.S. revenues grew 20% sequentially as the momentum we experienced at the end of the first quarter continued into the second quarter, reflecting broad-based gains across most regions, along with strong demand for wholesale barite and a deepwater well in the Gulf of Mexico. Internationally, our EMEA revenues increased sharply, including $7 million in contributions from new contract start-ups in the Black Sea and India. These revenue gains, along with our continued success in penetrating the market with new technologies, including our family of Evolution® drilling fluid systems, have helped drive our fluids segment margins back into the double-digits.

“Meanwhile, our mats business continued to perform at a high level. Strong rental demand and the continuing expansion of our rental fleet contributed to a 13% sequential increase in rental revenues and enabled us to maintain margins above 40%.

“We’ve also continued to execute on our share repurchase program, purchasing an additional $20 million of outstanding shares and bringing our total year-to-date purchases to 4.3 million shares at an average price of $11.70,” concluded Howes.

SEGMENT RESULTS

The Fluids Systems segment generated revenues of $241.4 million in the second quarter of 2014 compared to $211.4 million in the first quarter of 2014 and $234.0 million in the second quarter of 2013. Segment operating income was $27.6 million (11.4% operating margin) in the second quarter of 2014, which includes a $0.6 million gain on the sale of real estate, compared to $15.7 million (7.4% operating margin) in the first quarter of 2014 and $17.7 million (7.6% operating margin) in the second quarter of 2013.

The Mats and Integrated Services segment generated revenues of $31.1 million in the second quarter of 2014 compared to $31.4 million in the first quarter of 2014 and $25.4 million in the second quarter of 2013. Segment operating income was $13.7 million (43.9% operating margin) in the second quarter of 2014, which includes a $0.6 million gain on the sale of real estate, compared to $13.4 million (42.6% operating margin) in the first quarter of 2014 and $10.3 million (40.7% operating margin) in the second quarter of 2013.

CONFERENCE CALL

Newpark has scheduled a conference call to discuss second quarter 2014 results, which will be broadcast live over the Internet, on Friday, July 25, 2014 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To participate in the call, dial (719) 457-2627 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 8, 2014 and may be accessed by dialing (719) 457-0820 and using pass code 7386100#. 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 and temporary worksites and access roads for 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, 2013, 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 execute our business strategy and make successful business acquisitions and capital investments, operating hazards inherent in the oil and natural gas industry, our international operations, the availability of raw materials and skilled personnel, the impact of restrictions on offshore drilling activity, our customer concentration and cyclical nature of our industry, our market competition, the cost and continued availability of borrowed funds, 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.

Newpark Resources, Inc.

Consolidated Statements of Operations

(Unaudited)	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(In thousands, except per share data)	2014			2014			2013			2014			2013

Revenues	$	272,466		$	242,824		$	259,376		$	515,290		$	527,299

Cost of revenues		214,711			196,560			214,710			411,271			435,445

Selling, general and administrative expenses		27,981			25,523			23,248			53,504			45,699
Other operating income, net		(2,042	)		(16	)		(178	)		(2,058	)		(302	)

Operating income		31,816			20,757			21,596			52,573			46,457

Foreign currency exchange (gain) loss		(1,805	)		54			475			(1,751	)		107
Interest expense, net		2,830			2,920			2,802			5,750			5,322

Income from continuing operations before income taxes		30,791			17,783			18,319			48,574			41,028
Provision for income taxes		10,462			6,041			6,460			16,503			14,302
Income from continuing operations		20,329			11,742			11,859			32,071			26,726
Income from discontinued operations, net of tax		-			1,152			3,805			1,152			6,313
Gain from disposal of discontinued operations, net of tax		-			22,117			-			22,117			-

Net income	$	20,329		$	35,011		$	15,664		$	55,340		$	33,039


Income per common share -basic:
Income from continuing operations	$	0.24		$	0.14		$	0.14		$	0.38		$	0.32
Income from discontinued operations		-			0.27			0.05			0.28			0.07
Net income	$	0.24		$	0.41		$	0.19		$	0.66		$	0.39

Income per common share -diluted:
Income from continuing operations	$	0.21		$	0.13		$	0.13		$	0.34		$	0.29
Income from discontinued operations		-			0.23			0.04			0.23			0.06
Net income	$	0.21		$	0.36		$	0.17		$	0.57		$	0.35

Calculation of Diluted EPS:
Income from continuing operations	$	20,329		$	11,742		$	11,859		$	32,071		$	26,726
Assumed conversion of Senior Notes		1,253			1,261			1,251			2,514			2,501
Adjusted income from continuing operations	$	21,582		$	13,003		$	13,110		$	34,585		$	29,227

Weighted average number of common shares outstanding-basic		83,010			84,743			84,813			83,872			84,459
Add: Dilutive effect of stock options and restricted stock awards		1,743			1,674			1,810			1,705			1,727
Dilutive effect of Senior Notes		15,682			15,682			15,682			15,682			15,682

Diluted weighted average number of common shares outstanding		100,435			102,099			102,305			101,259			101,868

Diluted income from continuing operations per common share	$	0.21		$	0.13		$	0.13		$	0.34		$	0.29

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)	Three Months Ended
	June 30,			March 31,			June 30,
(In thousands)	2014			2014			2013

Revenues
Fluids systems	$	241,386		$	211,400		$	233,964
Mats and integrated services		31,080			31,424			25,412
Total revenues	$	272,466		$	242,824		$	259,376

Operating income (loss)
Fluids systems	$	27,571		$	15,740		$	17,684
Mats and integrated services		13,653			13,373			10,341
Corporate office		(9,408	)		(8,356	)		(6,429	)
Total operating income	$	31,816		$	20,757		$	21,596

Segment operating margin
Fluids systems		11.4	%		7.4	%		7.6	%
Mats and integrated services		43.9	%		42.6	%		40.7	%

Newpark Resources, Inc.

Consolidated Balance Sheets

(Unaudited)
	June 30,			December 31,
(In thousands, except share data)	2014			2013

ASSETS
Cash and cash equivalents	$	56,753		$	65,840
Receivables, net		315,267			268,529
Inventories		199,129			189,680
Deferred tax asset		11,597			11,272
Prepaid expenses and other current assets		18,313			11,016
Assets of discontinued operations		-			13,103
Total current assets		601,059			559,440

Property, plant and equipment, net		257,244			217,010
Goodwill		94,218			94,064
Other intangible assets, net		21,254			25,900
Other assets		9,326			6,086
Assets of discontinued operations		-			65,917
Total assets	$	983,101		$	968,417

LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt	$	20,463		$	12,867
Accounts payable		102,755			88,586
Accrued liabilities		51,836			46,341
Liabilities of discontinued operations		-			5,957
Total current liabilities		175,054			153,751

Long-term debt, less current portion		172,754			172,786
Deferred tax liability		25,523			27,060
Other noncurrent liabilities		11,001			11,026
Liabilities of discontinued operations		-			22,740
Total liabilities		384,332			387,363

Commitments and contingencies

Common stock, $0.01 par value, 200,000,000 shares authorized and 98,883,253 and 98,030,839 shares issued, respectively		989			980
Paid-in capital		512,010			504,675
Accumulated other comprehensive loss		(7,904	)		(9,484	)
Retained earnings		215,678			160,338
Treasury stock, at cost; 14,781,353 and 10,832,845 shares, respectively		(122,004	)		(75,455	)
Total stockholders’ equity		598,769			581,054
Total liabilities and stockholders' equity	$	983,101		$	968,417

Newpark Resources, Inc.

Consolidated Statements of Cash Flows

(Unaudited)	Six Months Ended June 30,
(In thousands)	2014			2013
Cash flows from operating activities:
Net income	$	55,340		$	33,039
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		20,301			21,836
Stock-based compensation expense		5,906			4,289
Provision for deferred income taxes		(13,788	)		(278	)
Net provision for doubtful accounts		438			220
Gain on sale of a business		(33,974	)		-
Gain on sale of assets		(1,230	)		(323	)
Excess tax benefit from stock-based compensation		(903	)		-
Change in assets and liabilities:
Increase in receivables		(38,919	)		(18,442	)
(Increase) decrease in inventories		(8,480	)		4,055
Increase in other assets		(6,813	)		(199	)
Increase (decrease) in accounts payable		12,029			(1,237	)
Increase in accrued liabilities and other		4,783			935
Net cash (used in) provided by operating activities		(5,310	)		43,895

Cash flows from investing activities:
Capital expenditures		(56,727	)		(37,417	)
Proceeds from sale of property, plant and equipment		2,526			590
Proceeds from sale of a business		89,167			-
Net cash provided by (used in) investing activities		34,966			(36,827	)

Cash flows from financing activities:
Borrowings on lines of credit		51,787			159,612
Payments on lines of credit		(45,170	)		(158,679	)
Other financing activities		(30	)		(39	)
Proceeds from employee stock plans		922			6,928
Purchase of treasury stock		(47,450	)		(2,010	)
Excess tax benefit from stock-based compensation		903			-
Net cash (used in) provided by financing activities		(39,038	)		5,812

Effect of exchange rate changes on cash		295			(1,681	)

Net (decrease) increase in cash and cash equivalents		(9,087	)		11,199
Cash and cash equivalents at beginning of year		65,840			46,846

Cash and cash equivalents at end of period	$	56,753		$	58,045

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