Newpark Resources Returns to Profitability in First Quarter On 11% Revenue Increase
METAIRIE, La., May 1 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR)
today reported that it earned $474,000, equal to $.01 per diluted share, on
revenues of $56.6 million during the first quarter ended March 31, 2000. This
compares to earnings of $896,000, equal to $.01 per diluted share (before
discontinued operations and the cumulative effect of an accounting change) in
the quarter ended March 31, 1999. Revenues in the first quarter of 1999 were
$50.8 million. Recent first quarter results reflect a sequential quarterly
improvement from a loss of $6.2 million, equal to $.09 per share, on revenues
of $52 million in the fourth quarter of 1999.
Earnings before interest, taxes, depreciation and amortization totaled
$11.5 million, or 20% of revenue, compared to $13.1 million, or 26% of
revenue, reported in the first quarter of 1999 while improving $10.1 million
from the December 1999 quarter. "Substantially all of the year-to-year
decline in EBITDA margin resulted from lower mat re-rental revenue and lower
mat rental pricing," Cole said, "which should recover as market conditions
continue to improve." During the quarter, Newpark's working capital position
improved by $2.8 million to $51.0 million while capital expenditures totaled
$3.2 million.
All 1999 amounts have been restated to give effect to the discontinuation
of the company's solids control and processing division in the third quarter
of 1999 and an accounting change made during that year.
Waste Disposal Market
During the recent quarter, Newpark received 950,000 barrels of E&P waste,
generating $10.7 million in revenue compared to 783,000 barrels and
$8.9 million of revenue in the 1999 period. The improvement reflects
increased rig activity in the Gulf Coast market, while pricing remained
stable. Total waste disposal revenue of $12.5 million increased 16% from the
$10.8 million reported in the 1999 period. "Waste receipts increased during
the recent quarter due to improved drilling activity under way," Cole noted,
"and the upturn appears to be continuing. We are also beginning to see early
signs of a positive change in the mix of activity, with indications that the
trend will be moving toward deeper drilling, particularly in the transition
zone, during the remainder of the year." Cole added, "The new industrial
waste business reached profitability in the quarter, and appears to be well
received by its customers. During the quarter we added two key marketing
professionals with years of industry experience who will coordinate the
penetration of this new market."
Drilling Fluids
Revenue from Drilling Fluids operations totaled $28.6 million, an increase
of $7.0 million or 32% from the $21.6 million reported in the 1999 quarter.
Operating income of $1.8 million compared to a loss of $114,000 in the same
period of 1999. During the quarter, Newpark serviced an average of 126 rigs
compared to 103 in the year-ago quarter. Cole commented, "A primary focus for
growth is the Gulf Coast market, where we averaged 41 rigs serviced during the
quarter, but ended the quarter with 51 rigs. During the quarter we started a
number of projects that were planned some time ago but were delayed due to
market conditions, and we have continued to add to the roster of active rigs
being serviced thus far in the second quarter."
Mat Rental and Integrated Services
Mat Rental and Integrated Services revenue of $15.5 million, while 14%
below the level of the year-ago quarter, increased 62% from the $9.6 million
level reported in the fourth quarter of 1999. Segment operating income of
$2.4 million or 15% of revenue improved from a loss of $3.4 million in the
December quarter on the strength of revenue growth from increased drilling
activity in the Gulf Coast and increased activity in the Canadian market
brought about by the early break-up. "While the South Louisiana Land rig
count improved somewhat from the prior quarter, more important was the return
of activity in transition zone for the first time in almost two years," Cole
commented, "There is still considerable improvement anticipated in the local
market. Current bidding activity continues to strengthen, and more
importantly, the quality of the projects is improving in anticipation of
deeper drilling and increased activity in the transition zone of Louisiana and
Texas."
Newpark Resources, Inc. provides integrated drilling fluids management,
environmental and oilfield services to the exploration and production
industry.
The foregoing discussion contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended. There are risks and
uncertainties that could cause future events and results to differ materially
from those anticipated by management in the forward-looking statements
included in this press release. For further information regarding these and
other factors, risks and uncertainties affecting the Company, reference is
made to the section entitled "Forward-Looking Statements," on page 45 of the
Annual Report on Form 10-K dated March 27, 2000, (SEC File No. 1-2960). You
are strongly urged to review these filings for a more detailed discussion of
these risks and uncertainties. Newpark's SEC filings can be obtained at no
charge at sec.gov and at freeedgar.com, as well as
through the Website, newpark.com.
Newpark Resources, Inc.
Consolidated Statements of Income
For the Three Month Periods Ended March 31,
(Unaudited)
(In thousands, except per share data)
2000 1999
Revenues $56,564 $50,775
Operating costs and expenses:
Cost of services provided 34,717 32,564
Operating costs 13,964 11,447
48,681 44,011
General and administrative expenses 955 490
Goodwill amortization 1,248 1,171
Operating income 5,680 5,103
Interest income (222) (298)
Interest expense 4,593 3,977
Income from continuing operations before income
taxes and cumulative effect of accounting change 1,309 1,424
Provision for income taxes 535 528
Income from continuing operations before cumulative
effect of accounting change 774 896
Discontinued operations of solids control business:
Loss from discontinued operations
(less applicable income taxes) -- (338)
Loss on disposal (less applicable income taxes) -- --
Income before cumulative effect of accounting change 774 558
Cumulative effect of accounting change
(less applicable income taxes) -- 1,471
Net income 774 2,029
Less:
Preferred stock dividends 188 --
Accretion of discount on preferred stock 112 --
Net income applicable to common and
common equivalent shares $474 $2,029
Weighted average common and common
equivalent shares outstanding:
Basic 69,095 68,872
Diluted 69,702 69,185
Net income per common and common equivalent share:
Basic:
Continuing operations $0.01 $0.01
Discontinued operations 0.00 (0.00)
Cumulative effect of accounting change 0.00 0.02
Net income $0.01 $0.03
Diluted:
Continuing operations $0.01 $0.01
Discontinued operations 0.00 (0.00)
Cumulative effect of accounting change 0.00 0.02
Net income $0.01 $0.03
Newpark Resources, Inc.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
March 31, December 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents $4,290 $4,517
Accounts and notes receivable, less allowance
of $9,184 in 2000 and $8,936 in 1999 55,033 54,447
Inventories 18,044 17,524
Current taxes receivable 165 165
Deferred tax asset 9,927 10,463
Net current assets of discontinued operations 1,145 3,109
Other current assets 6,971 8,602
Total current assets 95,575 98,827
Property, plant and equipment, at cost, net of
accumulated depreciation 165,937 166,603
Cost in excess of net assets of
purchased businesses,
net of accumulated amortization 115,133 116,465
Deferred tax asset 33,595 33,595
Other assets 33,670 34,701
443,910 $450,191
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $1,301 $627
Current maturities of long-term debt 776 991
Accounts payable 21,114 29,232
Accrued liabilities 16,128 14,103
Arbitration settlement payable 5,226 5,630
Current taxes payable -- --
Total current liabilities 44,545 50,583
Long-term debt 209,092 209,210
Arbitration settlement payable 1,236 2,451
Other non-current liabilities 1,511 1,608
Deferred taxes payable -- --
Commitments and contingencies -- --
Stockholders' equity:
Preferred Stock, $.01 par value, 1,000,000 shares
authorized,150,000 shares outstanding 13,121 13,009
Common Stock, $.01 par value, 100,000,000 shares
authorized, 69,131,430 shares outstanding in 2000
and 69,079,243 in 1999 690 690
Paid-in capital 323,055 322,724
Unearned restricted stock compensation (3,373) (3,838)
Accumulated other comprehensive income 55 250
Retained deficit (146,022) (146,496)
Total stockholders' equity 187,526 186,339
443,910 $450,191
SOURCE Newpark Resources, Inc.
CO: Newpark Resources, Inc.
ST: Louisiana
IN: OIL ENV
SU: ERN
05/01/2000 17:47 EDT prnewswire.com |
