News Details

THE WOODLANDS, Texas, April 30, 2015 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its first quarter ended March 31, 2015.  Total revenues for the first quarter of 2015 were $208.5 million compared to $306.2 million in the fourth quarter of 2014 and $242.8 million in the first quarter of 2014.  Income from continuing operations for the first quarter of 2015 was $1.0 million, or $0.01 per diluted share, compared to $23.4 million, or $0.25 per diluted share, in the fourth quarter of 2014, and $11.7 million, or $0.13 per diluted share, in the first quarter of 2014.

First quarter 2015 operating results included $2.9 million of pre-tax charges associated with North American workforce reductions.  In addition, due to the continued strengthening of the US Dollar, the first quarter 2015 results included $1.6 million of pre-tax foreign currency exchange losses, primarily attributable to the revaluation of inter-company balances due from our Brazilian subsidiary.  Further, the foreign currency exchange loss created a pre-tax loss in our Brazilian subsidiary, for which the recording of a tax benefit is not permitted, resulting in an unusually high effective tax rate for the period.  Combined, these items reduced first quarter net income by $0.04 per diluted share.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "The first quarter proved to be very challenging, particularly in the North American Fluids business.  North American Fluids revenues were down 41% sequentially, reflecting the sharp reduction in customer drilling activity combined with the effects of weaker pricing, lower wholesale barite sales, and a weaker sales mix, as customers slowed their product purchases and used their on-hand inventory in anticipation of laying down rigs.  In response to the sharp decline in customer activity levels, we initiated significant actions to right-size our organization, reducing our North American Fluids Systems workforce by more than 35% since the beginning of the year.  Most of the reductions were completed toward the end of the first quarter, so minimal cost benefits were realized in the period.  Outside of North America, customer activities and pricing have remained much more stable, although the continued strengthening of the U.S. Dollar has negatively impacted our revenues and profitability across all international regions.

"Despite the challenges in North America, our mats business continued to perform exceptionally well, sustaining operating margins above the 40% level in the first quarter. While the business was impacted by the lower drilling activity and pricing compression in the period, we are continuing our efforts to diversify this business into non-exploration markets and new geographies.

"Meanwhile, our cash flow and liquidity position remain very strong, generating $32 million of operating cash flow in the quarter and ending the period with $92 million of cash on-hand.  During the first quarter, we also expanded our U.S. revolving credit facility from $125 million to $200 million, and we currently have no borrowings outstanding under the facility.  This strong balance sheet position provides us with exceptional flexibility to continue executing our long-term strategy, despite the challenging North American environment," concluded Howes.

Segment Results

The Fluids Systems segment generated revenues of $171.9 million in the first quarter of 2015 compared to $261.0 million in the fourth quarter of 2014 and $211.4 million in the first quarter of 2014.  Segment operating loss was $1.7 million in the first quarter of 2015, compared to operating income of $24.5 million (9.4% operating margin) in the fourth quarter of 2014 and $15.7 million (7.4% operating margin) in the first quarter of 2014.  The segment results for the first quarter of 2015 included $2.6 million of pre-tax charges associated with workforce reductions.

The Mats and Integrated Services segment generated revenues of $36.6 million in the first quarter of 2015 compared to $45.1 million in the fourth quarter of 2014 and $31.4 million in the first quarter of 2014.  Segment operating income was $15.6 million (42.8% operating margin) in the first quarter of 2015, compared to $23.0 million (50.9% operating margin) in the fourth quarter of 2014, and $13.4 million (42.6% operating margin) in the first quarter of 2014. 

CONFERENCE CALL

Newpark has scheduled a conference call to discuss first quarter 2015 results, which will be broadcast live over the Internet, on Friday, May 1, 2015 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time.  To participate in the call, dial (412) 902-0030 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 May 15, 2015 and may be accessed by dialing (201) 612-7415 and using pass code 13605640.  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, 2014, as well as others, could cause results to differ materially from those expressed in, or implied by, these statements. These risk factors include, but are not limited to, our customer concentration and cyclical nature of our industry, operating hazards inherent  in the oil and natural gas industry, our international operations, the cost and continued availability of borrowed funds, our ability to execute our business strategy and make successful business acquisitions and capital investments, the availability of raw materials and skilled personnel, the impact of restrictions on offshore drilling activity, our market competition, 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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SOURCE Newpark Resources, Inc.