Exhibit 99.1
Newpark Resources Reports Fiscal 2003 and Fourth Quarter Results
METAIRIE, La., Feb. 25 /PRNewswire-FirstCall/ -- Newpark Resources, Inc.
(NYSE: NR) today announced that it earned net income of $493,000, or $0.01 per
diluted share on revenue of $373.1 million for the fiscal year ended December
31, 2003. This compares to net income of $513,000, or $0.01 per diluted
share, on revenue of $321.2 million for the fiscal year ended December 31,
2002.
For the fourth quarter ended December 31, 2003, Newpark reported a net
loss of $3.0 million, equal to $0.04 per share, on revenue of $94.6 million.
This compares to net income of $747,000, or $0.01 per diluted share, on
revenues of $89.1 million for the year-ago quarter.
James D. Cole, Newpark's chairman and CEO said: "In 1997 we began a
strategy to broaden Newpark's revenue base beyond the Gulf Coast base and
offer some products to customers other than our traditional oilfield
customers. During 2003, those new markets provided 45% of the revenue and
accounted for 75% of Newpark's segment operating income. While the US rig
count rose by 30% during the year, the Gulf Coast market did not participate
in that recovery, ending the year down slightly from 2002 levels. Newpark
would benefit significantly in 2004 from any rebound in activity in the Gulf
Coast market."
Drilling Fluids Segment
Revenue from the drilling fluids business totaled $230.9 million for the
year, up 19% from 2002. Revenue outside the Gulf Coast market rose 46% while
Gulf Coast revenue declined 11% reflecting the weak conditions in that market.
Profitability in non-Gulf Coast markets more than doubled year-over-year led
by strong results in the Mid-continent and Canadian markets.
For the fourth quarter, drilling fluids revenue was $61.6 million,
increasing $8.9 million or 17% from the year-ago quarter, principally on
improved results in the Mid-continent and Canada.
"During 2003, we continued to broaden our customer base, building upon the
technology of our DeepDrill(TM) and FlexDrill(TM) fluid systems. After a slow
2003 in the Gulf Coast, we believe that our customer base in that market is
showing signs of increased activity. As of January 1, 2004, we have over 22
customers for whom we are preferred providers or have annual contracts in
place. We believe their choice of Newpark is driven in large part by
acceptance of our proprietary high-performance water-based fluid technology.
During 2003, we successfully provided these fluids to over 70 customers and
250 wells," Cole stated. "An early indicator of that progress was reflected
in record December revenue levels that have been sustained thus far in 2004,
although we suspect that this trend will be unpredictable in its early stages.
We expect to see a more active customer base in the Gulf Coast market, with
the possibility of adding 40% to 2004 revenue for the segment, as 16 of those
22 key customers operate in that market," he added.
Mat Sales and Mat Rentals
Revenue from the Mat and Integrated Services segment was $88.9 million for
the year, increasing by $13.2 million over the prior year. More than half of
the increase came from sale of Newpark's wooden mat rental inventory in the
Canadian market without significant margin contribution. This was in keeping
with the strategic shift to become a seller of both wood and composite mats to
regional service companies in the geographically diverse Canadian market.
Segment operating contribution declined by $3.1 million to $515,000 for the
year due to higher marketing and operating costs. Composite mat sales were
$9.3 million on 4,800 units for the year, as compared to $12.7 million on
7,750 units in 2002, while expanded marketing efforts in 2003 contributed to
increased operating cost.
Mat rental volume for 2003 totaled 16.6 million square feet at an average
price of $0.93 per square foot. This compares to 15.4 million square feet and
$0.74 per square foot in 2002. "Non-oilfield rentals represented just over 2%
of the volume while contributing 10% of 2003 rental revenue due to the better
pricing in that segment of the market. We anticipate starting several major
projects in that key rental market during 2004 as a cumulative result of our
expanded marketing effort to date," Cole said.
Revenue for the recent quarter was $19.9 million compared to $22.6 in the
year-ago quarter, with the $2.7 million decline in revenue principally due to
lower composite mat sales in the fourth quarter of 2003. Fourth quarter sales
totaled 1,200 units compared to 2,800 in the corresponding quarter of 2002.
The segment produced a $2.3 million loss in the fourth quarter of 2003
compared to a $2.2 million profit in the year ago period. Absence of
significant composite mat sales in the period, increased marketing and
operating costs contributed to the fourth quarter loss.
"We expect the unit to show stronger results in 2004 as the industry's
Gulf Coast inventory of rental mats continues to decline to new historic lows.
Already in 2004 we have begun to see an increase in pricing on new projects,
without a corresponding increase in industry activity, primarily as a result
of the decline in industry capacity," Cole indicated. "During the past three
years, we have sold over 35,000 mats into nine targeted markets worldwide.
Some of these markets will remain sales markets, while others will become
rental markets over time. Based on market data gathered in 2003, we believe
there is a significant rental opportunity in support of expanding exploration
and development activity in Mexico. As a result, we will be opening a new
business unit in that country in the first quarter. Newpark will be the
majority owner of the business with the Mexican principals who are assisting
us in development of the market holding a minority stake," Cole added.
E&P Waste Services
Revenue from E&P waste was $53.4 million, increasing $2.2 million or 4%
relative to 2002. Operating income was $11.5 million, an increase of $3.4
million or 42% from $8.2 million reported in 2002. Fiscal 2003 marked the
first full year of benefit gained from operating cost reductions made in the
2001-02 restructuring of that business unit. Volume for the year was 3.6
million barrels compared to 3.3 million in the year-ago period, with the added
volume coming from the inland barge rig market. Average pricing per barrel
was down slightly at $12.52 compared to $12.94 a year ago as a result of the
change in mix.
Revenue for 2003's fourth quarter was $13.1 million, compared to $13.8
million in the 2002 period. Volume in the fourth quarter was 850,000 barrels,
down from 902,000 in the year-ago period on lower offshore rig activity.
Pricing averaged $12.18 per barrel compared to $13.00 a year ago due to the
change in mix of revenue. Earnings contribution in the quarter was $2.6
million, down 8% from $2.8 million a year ago, a function of lower market
volume and changes in mix during the period.
During the second half of 2003, the Company opened a new liquid waste
disposal facility to serve the Jonah-Pinedale field in Wyoming, a very active
North American natural gas trend. "As currently configured, the Jonah-
Pinedale facility could add $2.5 million in annual revenue and $0.01 per share
to net income. We are currently working on the application of a new
technology that would boost the effective capacity of the facility and open
the door to on-site processing in the field that would improve revenue and
earnings by eliminating transportation cost and strengthening our competitive
position in that market," Cole said.
Balance Sheet Data
Newpark ended the year with $12.7 million in cash, including $8 million in
restricted cash temporarily securing a letter of credit obligation pending
extension of its bank credit facility. Borrowings under the credit facility
totaled $52.5 million at year-end, including $8 million drawn to fund the
restricted cash deposit. The existing credit facility was to mature in the
first quarter of 2005. During 2002 and 2003, Newpark made several amendments
to the facility to adjust the financial ratios due to the financial
performance of the Company in a period of adverse market conditions. In order
to prevent a recurrence of that situation, Newpark has subsequently entered
into a new $85 million asset-backed bank credit facility, providing $15
million of term borrowings and $70 million of revolving credit. Availability
under the revolving facility is based upon specific advance rates against
various classes of assets. As of the closing date, the Company had $12
million of cash advances immediately available under the facility and $12.5
million of expansion room in the revolver. Compliance tests under the
arrangement are limited to a minimum fixed-charge coverage ratio and tangible
net worth covenants.
Investor Conference Call
Newpark will host a conference call at 10:30 AM EST, Thursday, February
26. That call will be webcast and can be accessed from the Investor Relations
page of the Company's web site at "www. newpark.com."
Newpark Resources, Inc. provides integrated fluids management,
environmental and oilfield services to the exploration and production
industry.
THREE PAGES OF FINANCIAL DATA FOLLOW
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 Newpark, reference is made to
the risk factors set forth in the Prospectus included in Newpark's
Registration Statement on Form S-3 filed on May 8, 2002 (File No. 333-87840),
and to the section entitled "Forward Looking Statements" on page 17 of that
Prospectus. In particular, as described on page 9 of that Prospectus, any
material decline in the level of oil and gas exploration and production
activity could result in fewer opportunities being available for the service
industry in general and Newpark in particular, and may adversely affect the
demand for our services. In addition, as described on page 13 of that
Prospectus, and rescission or relaxation of governmental regulations,
including in the discharge regulations recently implemented, could reduce the
demand for Newpark's services and reduce Newpark's revenues and income. You
are strongly urged to review these sections for a more detailed discussion of
these risks and uncertainties. Newpark's SEC filings can be obtained at no
charge at www.sec.gov , as well as through our Website, www.newpark.com .
Newpark Resources, Inc.
Fourth Quarter Comparison Quarter Ended December 31,
(In thousands, except per share data) 2003 2002
Segment Revenues
E&P Waste Disposal $ 13,062 $ 13,771
Fluids Sales & Engineering 61,619 52,720
Mat &Integrated Services 19,946 22,633
Total Segment Revenues 94,627 89,124
Segment Operating Income
E&P Waste Disposal 2,574 2,785
Fluids Sales & Engineering 3,850 1,625
Mat &Integrated Services (2,281) 2,183
Total Segment Operating Income 4,143 6,593
General and administrative expenses 2,375 861
Provision for uncollectible accounts 1,000 ---
Writedown of abandoned and disposed assets 350 ---
Operating income 418 5,732
Foreign currency exchange (gain) loss (74) (173)
Interest income (63) (253)
Interest expense 3,839 3,833
Income (loss) before income taxes (3,284) 2,325
Provision for income taxes (672) 1,024
Net income (loss) (2,612) 1,301
Less:
Preferred stock dividends and accretion 337 572
Other non-cash preferred stock charges --- (18)
Net income (loss) applicable to common shares $ (2,949) $ 747
Weighted average common shares
outstanding (diluted) 80,988 75,465
Net income (loss) per common share
(diluted) $ (0.04) $ 0.01
Pretax income $ (3,284) $ 2,325
Depreciation and amortization 5,279 5,101
Interest expense 3,839 3,833
EBITDA $ 5,834 $ 11,259
Waste Data (in thousands, except per barrel
amounts)
E&P waste volume 850 902
Average revenue per barrel $ 12.18 $ 13.00
E&P revenue $ 11.3 $ 12.6
NORM 1.2 0.6
Industrial 0.6 0.6
$ 13.1 $ 13.8
Mat Rental Data - Gulf Coast (in thousands,
except per square foot amounts)
Installation $ 3.0 $ 3.2
Re-rental 1.9 1.7
Total $ 4.9 $ 4.9
Average price per square foot - oilfield $ 0.81 $ 0.70
Square feet installed (MM) 3.7 4.5
Drilling Fluids Data
Average Rigs Serviced (North America) 139 120
Annualized revenue per rig (000's) $ 1,520 $ 1,351
Newpark Resources, Inc.
Fiscal Year Comparison Year Ended December 31,
(In thousands, except per share data) 2003 2002
Segment Revenues
E&P Waste Disposal $ 53,436 $ 51,240
Fluids Sales & Engineering 230,863 194,271
Mat &Integrated Services 88,880 75,684
Total Segment Revenues 373,179 321,195
Segment Operating Income
E&P Waste Disposal 11,534 8,111
Fluids Sales & Engineering 12,967 12,681
Mat &Integrated Services 515 3,587
Total Segment Operating Income 25,016 24,379
General and administrative expenses 5,342 5,323
Provision for uncollectible accounts 1,000 ---
Writedown of abandoned and disposed assets 350 ---
Operating income 18,324 19,056
Foreign currency exchange (gain) loss (831) (170)
Interest income (633) (741)
Interest expense 15,251 12,286
Income (loss) before income taxes 4,537 7,681
Provision for income taxes 2,460 3,060
Net income (loss) 2,077 4,621
Less:
Preferred stock dividends and accretion 1,583 3,071
Other non-cash preferred stock charges --- 1,037
Net income (loss) applicable to common shares $ 494 $ 513
Weighted average common shares
outstanding (diluted): 79,905 71,879
Net income (loss) per common share: $ 0.01 $ 0.01
Pretax income $ 4,537 $ 7,681
Depreciation and amortization 21,329 21,843
Interest expense 15,251 12,286
EBITDA $ 41,117 $ 41,810
Waste Data (in thousands, except per barrel
amounts)
E&P waste volume 3,589 3,256
Average revenue per barrel $ 12.52 $ 12.94
E&P revenue $ 47.8 $ 45.0
NORM 3.4 4.0
Industrial 2.2 2.3
$ 53.4 $ 51.3
Mat Rental Data - Gulf Coast (in thousands,
except per square foot amounts)
Installation $ 15.5 $ 11.4
Re-rental 8.6 5.6
Total $ 24.1 $ 17.0
Average price per square foot -
oilfield $ 0.93 $ 0.74
Square feet installed (MM) 16.6 15.4
Drilling Fluids Data
Average Rigs Serviced (North
America) 138 121
Annualized revenue per rig (000's) $ 1,407 $ 1,425
Consolidated Balance Sheets
(Unaudited) December 31, December 31,
(In thousands) 2003 2002
ASSETS
Current assets:
Cash and cash equivalents $ 4,692 $ 2,725
Restricted cash 8,029 ---
Trade accounts receivable, less
allowances 99,948 97,657
Notes and other receivables 5,428 3,307
Inventories 74,846 55,473
Deferred tax asset 8,698 11,094
Prepaid expenses and other current
assets 8,510 10,039
Total current assets 210,151 180,295
Property, plant and equipment, net 206,238 204,703
Goodwill 115,247 110,727
Deferred tax asset 9,400 8,950
Other intangible assets, net of
accumulated amortization 15,002 15,786
Other assets 19,462 21,795
$ 575,500 $ 542,256
LIABILITIES AND STOCKHOLDERS' EQUITY
Foreign bank lines of credit $ 10,610 $ 6,621
Current maturities of long-term debt 3,259 3,258
Accounts payable 40,479 35,568
Accrued liabilities 21,894 18,414
Total current liabilities 76,242 63,861
Long-term debt, less current portion 183,600 172,049
Other noncurrent liabilities 1,697 923
Preferred Stock 30,000 41,875
Common Stock 811 777
Paid-in capital 390,788 376,278
Unearned restricted stock compensation (803) (281)
Accumulated other comprehensive income 5,033 (864)
Retained deficit (111,868) (112,362)
Total stockholders' equity 313,961 305,423
$575,500 $ 542,256
SOURCE Newpark Resources, Inc.
-0- 02/25/2004
/CONTACT: Matthew W. Hardey, Vice President of Finance of Newpark
Resources, Inc., +1-504-838-8222/
/Web site: http://www.sec.gov /
/Web site: http://www.newpark.com /
(NR)
CO: Newpark Resources, Inc.
ST: Louisiana
IN: OIL ENV
SU: ERN CCA MAV