Newpark Resources Reports Third Quarter 2015 Results

THE WOODLANDS, Texas, Oct. 29, 2015 /PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) today announced results for its third quarter ended September 30, 2015.  Total revenues for the third quarter of 2015 were $154.2 million compared to $163.6 million in the second quarter and $297.0 million in the third quarter of 2014.  Net loss for the third quarter of 2015 was $4.5 million, or $0.05 per share, compared to a net loss of $4.3 million, or $0.05 per share, in the second quarter, and net income of $23.5 million, or $0.25 per diluted share, in the third quarter of 2014.  Third quarter 2015 results included the impact of the following:

• $2.3 million of pre-tax charges ($1.5 million after-tax) associated with workforce reductions, predominately in North America.
• $3.2 million of pre-tax foreign exchange losses ($3.2 million after-tax), substantially all of which is attributable to the re-valuation of inter-company balances due from our Brazilian subsidiary.
• $0.4 million pre-tax charge and a $3.3 million benefit to the income tax provision ($2.9 million net after-tax benefit) associated with the forgiveness of a portion of the inter-company balances due from our Brazilian subsidiary.
• $2.2 million benefit to the provision for income taxes associated with the release of U.S. tax reserves, following the expiration of statutes of limitation.

Combined, the above items resulted in a $5.9 million increase to pre-tax loss, but a $0.4 million benefit, after taxes.

Paul Howes, Newpark's President and Chief Executive Officer, stated, "While we are encouraged by the continuing strength in cash flow, the challenging market environment again provided a strong headwind to third quarter results.  With the further softening in North American drilling activity over the past two months, our North American Fluids revenues declined slightly from second quarter levels. Meanwhile, our international Fluids revenues remained relatively in-line with the prior quarter and our expectations, with EMEA remaining our strongest performing region, benefitting from the continuing ramp-up of activities in Kuwait and Algeria.  In the Mats segment, as announced previously, we've seen a further softening in rental and services revenues in the weak commodity price environment, particularly in our largest rental market, the Northeast region.  We also experienced softness in the Gulf Coast region, and non-exploration revenues were negatively impacted by the completion of large rental projects, which led to a decline in our rental fleet utilization and an $8 million decline in rental and service revenues.

"In response to the continued weakness and near-term uncertainty in the North American market, we've initiated additional workforce reduction efforts, including an early retirement program within certain business units.  While we expect to see some relief from these cost actions in the near-term, a more meaningful improvement in operating results will need to be driven by an increase in revenue," added Howes.  "Fortunately, we continue to benefit from our strong balance sheet position, including $114 million of cash on-hand and continuing positive cash flow, which allows us to focus on developing new market opportunities in both segments, while preserving our organizational capabilities for the eventual recovery in drilling activity."

SEGMENT RESULTS

The Fluids Systems segment generated revenues of $138.8 million in the third quarter of 2015 compared to $140.3 million in the second quarter and $251.2 million in the third quarter of 2014.  Segment operating loss was $1.2 million in the third quarter of 2015, compared to a $0.2 million operating loss in the second quarter and operating income of $27.8 million in the third quarter of 2014.  The segment results for the third quarter of 2015 included a $2.0 million charge associated with workforce reductions and a $0.4 million charge associated with the forgiveness of inter-company balances due from our Brazilian subsidiary.

The Mats and Integrated Services segment generated revenues of $15.4 million in the third quarter of 2015 compared to $23.3 million in the second quarter and $45.7 million in the third quarter of 2014.  Segment operating loss was $0.1 million in the third quarter of 2015, which included a $0.2 million charge associated with workforce reductions, compared to operating income of $6.6 million in the second quarter, and $20.5 million in the third quarter of 2014. 

LEADERSHIP ANNOUNCEMENT

The Company announced that Tim Armand has been appointed to the role of Vice President of U.S. Offshore Operations within the Fluids Systems segment.  Mr. Armand joins Newpark after nearly 30 years of experience with Schlumberger, predominately in offshore operations.

CONFERENCE CALL

Newpark has scheduled a conference call to discuss third quarter 2015 results, which will be broadcast live over the Internet, on Friday, October 30, 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 November 13, 2015 and may be accessed by dialing (201) 612-7415 and using pass code 13621403.  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.