Form 8-K NEWPARK RESOURCES INC For: Feb 12

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 12, 2015

 

NEWPARK RESOURCES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware	1-2960	72-1123385
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
9320 Lakeside Blvd., Suite 100
The Woodlands, TX		77381
(Address of principal executive offices)		(Zip Code)

          

Registrant's telephone number, including area code: (281) 362-6800

 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

|_|     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

|_|     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

|_|	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

|_|	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

 

 

Item 2.02.      Results of Operations and Financial Condition.

 

On February 12, 2015, Newpark Resources, Inc. (the “Company”) issued a press release announcing financial information for the three and twelve months ended December 31, 2014. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

 

The information in Item 2.02 of this Current Report on Form 8-K and the information in the exhibit attached hereto announcing the Company’s earnings for the three and twelve months ended December 31, 2014 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

 

 

 

Item 9.01     Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.	Description
99.1	Press release issued by Newpark Resources, Inc. on February 12, 2015.

               

 

 

SIGNATURES

 

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	NEWPARK RESOURCES, INC.
Dated: February 13, 2015	By:	/s/ Gregg S. Piontek
		Gregg S. Piontek, Vice President and Chief Financial Officer
		(Principal Financial Officer)

 

 

  

EXHIBIT INDEX

 

 

Exhibit No.	Description
99.1	Press release issued by Newpark Resources, Inc. on February 12, 2015.

 

 

 

Exhibit 99.1

 

 

		Contacts:	Brian Feldott Director, Investor Relations Newpark Resources, Inc. [email protected] 281-362-6800
FOR IMMEDIATE RELEASE

 

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, TX – FEBRUARY 12, 2015 – 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

 

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