Newpark Resources Reports Net Income Of $0.25 Per Diluted Share For The Fourth Quarter Of 2014
Company achieves record year for both Revenues and Operating Income
THE WOODLANDS, Texas, Feb. 12, 2015 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its fourth quarter and full year ended December 31, 2014. Total revenues for the fourth quarter of 2014 were $306.2 million compared to $297.0 million in the third quarter of 2014 and $246.9 million in the fourth quarter of 2013. Income from continuing operations for the fourth quarter of 2014 was $23.4 million, or $0.25 per diluted share, compared to $23.5 million, or $0.25 per diluted share, in the third quarter of 2014, and $10.5 million, or $0.11 per diluted share, in the fourth quarter of 2013.
Fourth quarter 2014 results include $1.5 million of pre-tax charges ($0.01 per diluted share) in Brazil, primarily associated with costs related to workforce reductions and the impairment of certain indirect tax assets.
For the full year 2014, total revenues were $1.118 billion compared to $1.042 billion in 2013. Income from continuing operations for 2014 was $79.0 million, or $0.84 per diluted share, compared to $52.6 million, or $0.56 per diluted share, in 2013.
Paul Howes, Newpark's President and Chief Executive Officer, stated, "We are very pleased with the continuing strength in both operating segments, achieving another record quarter for consolidated revenues. The growth in U.S. fluids revenues continued, increasing 6% sequentially, benefiting from an unusually high volume of oil-based mud product sales. Meanwhile, seasonal improvements in Canada and growth in our EMEA region were largely offset by the impact of the strengthening U.S. dollar and expected declines in Brazil. Due to a higher volume of low margin product sales in the U.S., along with the $1.5 million of charges in Brazil, our Fluids segment margin declined to 9.4% for the quarter.
"Our mats business continued to perform exceptionally well, sustaining revenues above $45 million in the fourth quarter. The strength in rental demand throughout the quarter and a shift in our revenue mix from lower margin site preparation work to higher margin mats sales were key contributors to the operating margin improvements, which exceeded 50% in the fourth quarter.
"Meanwhile, our cash flow and liquidity position remain very strong heading into 2015. During the fourth quarter, our cash balances increased by $44 million, reflecting our strong operating performance and improvements in working capital," concluded Howes.
Segment Results
The Fluids Systems segment generated revenues of $261.0 million in the fourth quarter of 2014 compared to $251.2 million in the third quarter of 2014 and $212.1 million in the fourth quarter of 2013. Segment operating income was $24.5 million (9.4% operating margin) in the fourth quarter of 2014, compared to $27.8 million (11.0% operating margin) in the third quarter of 2014, and $15.2 million (7.1% operating margin) in the fourth quarter of 2013.
The Mats and Integrated Services segment generated revenues of $45.1 million in the fourth quarter of 2014 compared to $45.7 million in the third quarter of 2014 and $34.9 million in the fourth quarter of 2013. Segment operating income was $23.0 million (50.9% operating margin) in the fourth quarter of 2014, compared to $20.5 million (44.9% operating margin) in the third quarter of 2014, and $15.2 million (43.7% operating margin) in the fourth quarter of 2013.
SONATRACH CONTRACT AWARD UPDATE
As previously announced, the Company has been awarded Lot 1 and Lot 3 of a recent restricted tender by Sonatrach to provide drilling fluids and related services in Algeria. The award remains subject to the execution of contract documents. On an annualized basis, the maximum value of the award represents an increase of approximately 165% over our 2014 revenue level with Sonatrach. The previous announcement indicated that this increase was more than 200%.
CONFERENCE CALL
Newpark has scheduled a conference call to discuss fourth quarter 2014 results, which will be broadcast live over the Internet, on Friday, February 13, 2015 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To participate in the call, dial (201) 689-8349 and ask for the Newpark 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 February 27, 2015 and may be accessed by dialing (201) 612-7415 and using pass code 13598838. 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 value-added drilling fluids systems and composite matting systems used in 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, the execution of the final contract documents with Sonatrach and Sonatrach's willingness to maintain their current drilling plans the impact of recent declines in oil prices, our customer concentration and cyclical nature of our industry, 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 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 |
Twelve Months Ended |
||||||||
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
||||||
(In thousands, except per share data) |
2014 |
2014 |
2013 |
2014 |
2013 |
|||||
Revenues |
$ 306,162 |
$ 296,964 |
$ 246,925 |
$ 1,118,416 |
$ 1,042,356 |
|||||
Cost of revenues |
237,067 |
228,661 |
204,158 |
876,999 |
858,467 |
|||||
Selling, general and administrative expenses |
30,390 |
28,754 |
24,112 |
112,648 |
93,657 |
|||||
Other operating expense (income), net |
114 |
117 |
(3,688) |
(1,827) |
(4,213) |
|||||
Operating income |
38,591 |
39,432 |
22,343 |
130,596 |
94,445 |
|||||
Foreign currency exchange loss |
638 |
1,221 |
737 |
108 |
1,819 |
|||||
Interest expense, net |
2,360 |
2,321 |
3,229 |
10,431 |
11,279 |
|||||
Income from continuing operations before income taxes |
35,593 |
35,890 |
18,377 |
120,057 |
81,347 |
|||||
Provision for income taxes |
12,147 |
12,398 |
7,912 |
41,048 |
28,725 |
|||||
Income from continuing operations |
23,446 |
23,492 |
10,465 |
79,009 |
52,622 |
|||||
Income from discontinued operations, net of tax |
- |
- |
3,059 |
1,152 |
12,701 |
|||||
Gain from disposal of discontinued operations, net of tax |
- |
- |
- |
22,117 |
- |
|||||
Net income |
$ 23,446 |
$ 23,492 |
$ 13,524 |
$ 102,278 |
$ 65,323 |
|||||
Income per common share -basic: |
||||||||||
Income from continuing operations |
$ 0.29 |
$ 0.29 |
$ 0.12 |
$ 0.95 |
$ 0.62 |
|||||
Income from discontinued operations |
- |
- |
0.04 |
0.28 |
0.15 |
|||||
Net income |
$ 0.29 |
$ 0.29 |
$ 0.16 |
$ 1.23 |
$ 0.77 |
|||||
Income per common share -diluted: |
||||||||||
Income from continuing operations |
$ 0.25 |
$ 0.25 |
$ 0.11 |
$ 0.84 |
$ 0.56 |
|||||
Income from discontinued operations |
- |
- |
0.03 |
0.23 |
0.13 |
|||||
Net income |
$ 0.25 |
$ 0.25 |
$ 0.14 |
$ 1.07 |
$ 0.69 |
|||||
Calculation of Diluted EPS: |
||||||||||
Income from continuing operations |
$ 23,446 |
$ 23,492 |
$ 10,465 |
$ 79,009 |
$ 52,622 |
|||||
Assumed conversion of Senior Notes |
1,283 |
1,294 |
1,110 |
5,091 |
5,005 |
|||||
Adjusted income from continuing operations |
$ 24,729 |
$ 24,786 |
$ 11,575 |
$ 84,100 |
$ 57,627 |
|||||
Weighted average number of common shares outstanding-basic |
82,225 |
82,055 |
85,669 |
82,999 |
85,095 |
|||||
Add: Dilutive effect of stock options and restricted stock awards |
1,492 |
1,550 |
1,738 |
1,733 |
1,767 |
|||||
Dilutive effect of Senior Notes |
15,682 |
15,682 |
15,682 |
15,682 |
15,682 |
|||||
Diluted weighted average number of common shares outstanding |
99,399 |
99,287 |
103,089 |
100,414 |
102,544 |
|||||
Diluted income from continuing operations per common share |
$ 0.25 |
$ 0.25 |
$ 0.11 |
$ 0.84 |
$ 0.56 |
Newpark Resources, Inc. |
|||||||
Operating Segment Results |
|||||||
(Unaudited) |
Three Months Ended |
||||||
December 31, |
September 30, |
December 31, |
|||||
(In thousands) |
2014 |
2014 |
2013 |
||||
Revenues |
|||||||
Fluids systems |
$ 261,029 |
$ 251,234 |
$ 212,069 |
||||
Mats and integrated services |
45,133 |
45,730 |
34,856 |
||||
Total revenues |
$ 306,162 |
$ 296,964 |
$ 246,925 |
||||
Operating income (loss) |
|||||||
Fluids systems |
$ 24,533 |
$ 27,756 |
$ 15,158 |
||||
Mats and integrated services |
22,959 |
20,541 |
15,228 |
||||
Corporate office |
(8,901) |
(8,865) |
(8,043) |
||||
Total operating income |
$ 38,591 |
$ 39,432 |
$ 22,343 |
||||
Segment operating margin |
|||||||
Fluids systems |
9.4% |
11.0% |
7.1% |
||||
Mats and integrated services |
50.9% |
44.9% |
43.7% |
Newpark Resources, Inc. |
||||||
Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
December 31, |
December 31, |
|||||
(In thousands, except share data) |
2014 |
2013 |
||||
ASSETS |
||||||
Cash and cash equivalents |
$ 85,052 |
$ 65,840 |
||||
Receivables, net |
318,600 |
268,529 |
||||
Inventories |
196,556 |
189,680 |
||||
Deferred tax assets |
11,013 |
11,272 |
||||
Prepaid expenses and other current assets |
12,615 |
11,016 |
||||
Assets of discontinued operations |
- |
13,103 |
||||
Total current assets |
623,836 |
559,440 |
||||
Property, plant and equipment, net |
283,361 |
217,010 |
||||
Goodwill |
91,893 |
94,064 |
||||
Other intangible assets, net |
15,666 |
25,900 |
||||
Other assets |
5,366 |
6,086 |
||||
Assets of discontinued operations |
- |
65,917 |
||||
Total assets |
$ 1,020,122 |
$ 968,417 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Short-term debt |
$ 11,648 |
$ 12,867 |
||||
Accounts payable |
108,242 |
88,586 |
||||
Accrued liabilities |
53,342 |
46,341 |
||||
Liabilities of discontinued operations |
- |
5,957 |
||||
Total current liabilities |
173,232 |
153,751 |
||||
Long-term debt, less current portion |
172,498 |
172,786 |
||||
Deferred tax liabilities |
37,694 |
27,060 |
||||
Other noncurrent liabilities |
11,240 |
11,026 |
||||
Liabilities of discontinued operations |
- |
22,740 |
||||
Total liabilities |
394,664 |
387,363 |
||||
Commitments and contingencies |
||||||
Common stock, $0.01 par value, 200,000,000 shares authorized and 99,204,318 and 98,030,839 shares issued, respectively |
992 |
980 |
||||
Paid-in capital |
521,228 |
504,675 |
||||
Accumulated other comprehensive loss |
(31,992) |
(9,484) |
||||
Retained earnings |
262,616 |
160,338 |
||||
Treasury stock, at cost; 15,210,233 and 10,832,845 shares, respectively |
(127,386) |
(75,455) |
||||
Total stockholders' equity |
625,458 |
581,054 |
||||
Total liabilities and stockholders' equity |
$ 1,020,122 |
$ 968,417 |
Newpark Resources, Inc. |
||||
Consolidated Statements of Cash Flows |
||||
(Unaudited) |
Twelve Months Ended December 31, |
|||
(In thousands) |
2014 |
2013 |
||
Cash flows from operating activities: |
||||
Net income |
$ 102,278 |
$ 65,323 |
||
Adjustments to reconcile net income to net cash provided by operations: |
||||
Impairment charges |
- |
176 |
||
Depreciation and amortization |
42,030 |
44,198 |
||
Stock-based compensation expense |
12,304 |
9,699 |
||
Provision for deferred income taxes |
(2,328) |
(7,832) |
||
Net provision for doubtful accounts |
1,252 |
416 |
||
Gain on sale of a business |
(33,974) |
- |
||
Gain on sale of assets |
(1,369) |
(3,178) |
||
Excess tax benefit from stock-based compensation |
(1,278) |
(2,146) |
||
Change in assets and liabilities: |
||||
(Increase) decrease in receivables |
(53,494) |
32,172 |
||
(Increase) decrease in inventories |
(14,136) |
16,431 |
||
(Increase) decrease in other assets |
(546) |
4,574 |
||
Increase (decrease) in accounts payable |
23,606 |
(17,733) |
||
Increase in accrued liabilities and other |
14,828 |
9,803 |
||
Net cash provided by operating activities |
89,173 |
151,903 |
||
Cash flows from investing activities: |
||||
Capital expenditures |
(106,973) |
(67,929) |
||
Proceeds from sale of property, plant and equipment |
3,205 |
1,313 |
||
Proceeds from sale of a business |
89,766 |
13,329 |
||
Business acquisition, net of cash acquired |
- |
(6,776) |
||
Net cash used in investing activities |
(14,002) |
(60,063) |
||
Cash flows from financing activities: |
||||
Borrowings on lines of credit |
62,164 |
254,390 |
||
Payments on lines of credit |
(62,445) |
(328,086) |
||
Principal payments on notes payable and long-term debt |
(55) |
(25) |
||
Proceeds from employee stock plans |
3,442 |
8,328 |
||
Post-closing payment for business acquisition |
(412) |
- |
||
Purchases of treasury stock |
(53,130) |
(9,281) |
||
Excess tax benefit from stock-based compensation |
1,278 |
2,146 |
||
Net cash used in financing activities |
(49,158) |
(72,528) |
||
Effect of exchange rate changes on cash |
(6,801) |
(318) |
||
Net increase in cash and cash equivalents |
19,212 |
18,994 |
||
Cash and cash equivalents at beginning of year |
65,840 |
46,846 |
||
Cash and cash equivalents at end of year |
$ 85,052 |
$ 65,840 |
Contact: |
Brian Feldott |
Director, Investor Relations |
|
Newpark Resources, Inc. |
|
281-362-6800 |
SOURCE Newpark Resources, Inc.
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