Newpark Resources Reports Net Income of $0.19 per Diluted Share for the Second Quarter 2011

THE WOODLANDS, Texas, July 28, 2011 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its second quarter ended June 30, 2011.  Total revenues were $230.8 million for the second quarter of 2011 compared to $202.7 million for the first quarter of 2011 and $181.4 million for the second quarter of 2010.  Net income for the second quarter of 2011 was $19.3 million, or $0.19 per diluted share, compared to net income for the first quarter of 2011 of $15.9 million, or $0.16 per diluted share, and net income for the second quarter of 2010 of $10.8 million, or $0.12 per diluted share.  

For the first half of 2011, total revenues were $433.5 million compared to $342.2 million for the first half of 2010.  Net income for the first half of 2011 was $35.1 million, or $0.35 per diluted share, compared to net income of $18.6 million, or $0.21 per diluted share, in the first half of 2010.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "The second quarter of 2011 was another record quarter for Newpark as we achieved new high marks in both quarterly revenues and profit.  Revenues increased sequentially in all of our operating segments, contributing to sequential growth of 14% in consolidated revenues and 22% in consolidated net income.  Strength in U.S. drilling activity, gains in market share, and the continued roll-out of our Evolution™ drilling fluid system contributed to a 22% sequential increase in U.S. revenues within our Fluids Systems and Engineering segment.  Internationally, following the April completion of the previously announced Rheochem acquisition, our Asia Pacific business unit contributed $6.6 million of revenues in the second quarter of 2011."

Segment Results

The Fluids Systems and Engineering segment generated revenues of $191.2 million in the second quarter of 2011 compared to $170.5 million in the first quarter of 2011 and $150.5 million in the second quarter of 2010.  North American revenues increased 14% sequentially in the second quarter of 2011, including a 22% improvement in the U.S. partially offset by a seasonal decline in Canadian revenues of $7.2 million.  International revenues increased $3.5 million, or 7%, from the first quarter of 2011, including $6.6 million of revenue from the Asia Pacific region, while Brazil revenues declined by $2.3 million.  Compared to the second quarter of 2010, revenues increased 29% in North America and 22% in our international operations.  Segment operating income was $20.8 million (10.9% margin) in the second quarter of 2011 compared to $19.2 million (11.3% margin) in the first quarter of 2011 and $15.2 million (10.1% margin) in the second quarter of 2010.  

The Mats and Integrated Services segment generated revenues of $27.8 million in the second quarter of 2011 compared to $23.1 million in the first quarter of 2011 and $17.0 million in the second quarter of 2010.  Revenues for the segment were up 21% from the first quarter of 2011, driven primarily by a $1.6 million increase in composite mat sales along with increased rental and service revenues in the Gulf Coast.  Compared to the second quarter of 2010, segment revenues were up 64%.  Segment operating income was $14.7 million (53.0% margin) in the second quarter of 2011 compared to operating income of $11.8 million (51.1% margin) in the first quarter of 2011 and $5.0 million (29.7% margin) in the second quarter of 2010.  

The Environmental Services segment generated revenues of $11.8 million in the second quarter of 2011 compared to $9.1 million in the first quarter of 2011 and $13.8 million in the second quarter of 2010.  The sequential improvement in revenues is primarily attributable to increased 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 the U.S. government restrictions.  Compared to the second quarter of 2010, segment revenues were down 15%.  Segment operating income was $3.0 million (25.2% margin) in the second quarter of 2011 compared to operating income of $1.6 million (17.8% margin) in the first quarter of 2011 and $4.2 million (30.5% margin) in the second quarter of 2010.

RECENT DEVELOPMENTS

Subsequent to the end of the second quarter, our largest customer in the Mats and Integrated Services segment informed us that they intend to reduce the number of mats utilized on their drilling sites.  As a result, we anticipate that our rental and services revenues within the Mats and Integrated Services segment will decline approximately $6 million to $7 million in the third quarter of 2011 from second quarter 2011 levels as we redeploy available mats to customers in other locations.    

CONFERENCE CALL

Newpark has scheduled a conference call to discuss the second quarter 2011 results, which will be broadcast live over the Internet, on Friday, July 29, 2011 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time.  To participate in the call, dial 480-629-9818 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 5, 2011 and may be accessed by dialing (303) 590-3030 and using pass code 4449568#.  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.

SOURCE Newpark Resources, Inc.