Exhibit 99.1
Newpark Resources Reports First Quarter Results
METAIRIE, La., April 26 /PRNewswire-FirstCall/ -- Newpark Resources, Inc.
(NYSE: NR) today announced that it earned net income of $1,415,000, or $0.02
per diluted share, on revenue of $104.3 million for the quarter ended
March 31, 2004. This compares to net income of $1,224,000, or $0.02 per
diluted share, on revenue of $90.6 million for the quarter ended
March 31, 2003.
Newpark's revenue and earnings in markets outside of its historic Gulf
Coast base continued to increase and were primarily responsible for the first
quarter's positive result. Non-Gulf Coast and non-oilfield revenues totaled
$56.3 million in the quarter, contributing $8.6 million to segment operating
profit. Gulf Coast oilfield revenue amounted to $48.1 million and generated a
$700,000 segment operating loss.
James D. Cole, Newpark's chairman and CEO commented: "We are encouraged by
the performance of the Company in the non-Gulf Coast markets that we have been
developing for the past five years. In the first quarter, these new markets
provided 54% of Newpark's total revenue versus 43% a year ago. We believe
that improvement in the second quarter will come from continued strength in
these markets and from several segments within our historic Gulf Coast market.
We expect that near-term gains in the Gulf Coast market will be driven not by
rig activity, but from improving revenue per rig due to the increasing depth
and complexity of drilling."
Drilling Fluids Segment
Revenue from the drilling fluids business totaled $66.2 million for the
quarter, up 31% from $50.5 million reported in the year-ago period, and up 16%
from the fourth quarter. Increases came from the U.S. Mid-Continent region,
where revenue doubled from the first quarter of 2003 on increased rig
activity, and European market revenue that increased 68% from the comparable
quarter of 2003.
Drilling fluids' contribution to operating profit increased to
$5.4 million, equal to 8.2% of revenue, from $2.9 million, or 5.7% of revenue,
in the first quarter of 2003. The improvement was principally attributable to
improved operations in the Mid-Continent region of the U.S.
"We are fortunate to have significantly improved our market position in
key drilling fluid customer relationships," Cole indicated, "and believe that
those customers will be increasingly active in the Gulf Coast market during
the remainder of the year. Several key Gulf of Mexico projects have recently
started, and we expect to see progress in this market in the second quarter."
Mat Sales and Mat Rentals
Revenue from the Mat and Integrated Services segment was $20.9 million for
the first quarter, a decrease of $2.6 million or 11% from the 2003 level, on
lower pricing and activity in the Gulf Coast market and lower mat sales in the
recent quarter.
Oilfield mat rental volume for the quarter totaled 3.6 million square feet
at an average price of $0.83 per square foot. This compares to 4.6 million
square feet at an average of $1.03 per square foot in 2003's first quarter,
which benefited from several large projects that did not recur in the
remainder of 2003.
"Oilfield mat rental pricing has continued to improve since the low in the
third quarter of 2003," Cole said, "and pricing on recently awarded work
increased to $1.05 per square foot in the first quarter, an indicator of
likely second quarter pricing. This is a truly unusual market cycle in which
we anticipate that further improvement in oilfield pricing will result from
industry-wide inventory reductions rather than increased rig activity. Volume
increases will come from non-oilfield utility, general construction and other
projects, a market we have worked several years to develop. The non-oilfield
market provides the opportunity for premium pricing, further enhancing overall
profitability. We will continue to pursue the non-oilfield rental market as
those opportunities arise, including an increase in our rental fleet in Alaska
and the recent introduction of the rental concept in Mexico."
E&P Waste Services
Revenue from E&P waste was $17.2 million compared to $16.6 million in the
same period of 2003. Operating income was $2.8 million, or 16.3% of revenue,
compared to $2.6 million and 15.7% in 2003.
Revenue gains from Canadian E&P, the new Wyoming market and industrial
disposal were sufficient to offset lower Gulf Coast drilling-related volume
during the first quarter. Lower earnings from Gulf Coast operations,
attributable equally to a $0.92 decline in average revenue per barrel and 8%
lower volume, were offset by gains in the other waste markets.
The Company handled 802,000 barrels of E&P waste in the first quarter,
compared to 871,000 in the year-ago period. Average revenue per barrel was
down 7% at $12.11 compared to $13.03 a year ago as a result of the change in
mix.
"We believe that the waste market will trail the improvement in our other
Gulf Coast businesses, since its results are more closely correlated to the
rig count," Cole commented. Beginning in the current quarter, the Company has
revised the segment presentation to include in E&P Waste Services the Canadian
and Wyoming environmental revenues previously reported as part of the Drilling
Fluids segment.
Balance Sheet Data
Newpark's working capital in the quarter was unchanged despite the 10%
growth in revenue from year-end, assisted by a seven-day improvement in
accounts receivable turnover. Capital expenditures in the period were
$2.6 million. Newpark completed the restructuring of its bank credit facility
early in the first quarter and reduced its usage of the facility by
$8.4 million, principally from application of $8 million of restricted cash
that had been used to secure a letter of credit. Long-term debt represented
35.7% of total capital at quarter end, compared to 36.9% at December 31, 2003.
"We have retained our focus on improving Newpark's capital structure by
reducing debt from free cash flow, and plan to continue this process during
2004, working toward a 30% debt to total capital target," Cole concluded.
Investor Conference Call
Newpark will host a conference call at 10:30 AM EDT, Tuesday, April 27.
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.
TWO 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.
Year-Ago Quarter Comparison
(in thousands, except per share amounts)
1Q04 1Q03
Revenue
Drilling Fluids $66,235 $50,522
E&P Waste Disposal 17,180 16,572
Mat & Integrated Services 20,894 23,483
$104,309 $90,577
Operating Income
Drilling Fluids $5,412 $2,905
E&P Waste Disposal 2,808 2,608
Mat & Integrated Services (431) 1,654
7,789 7,167
Corporate G&A 1,545 1,286
Foreign Currency (gain) loss 108 (277)
Interest Income (121) (325)
Interest Expense 3,572 3,792
Pre-Tax 2,685 2,691
Income tax 1,007 996
Net income 1,678 1,695
Preferred Dividends 263 471
Net income to common $1,415 $1,224
Common share equivalents, diluted 83,137 77,803
Diluted EPS $0.02 $0.02
EBITDA
Pre-tax $2,685 $2,691
Interest 3,572 3,792
Depreciation & Amortization 5,284 5,290
Total $11,541 $11,773
% of Revenue 11.1% 13.0%
Waste Data (in thousands, except
per barrel amounts)
E&P Gulf Coast Waste Volume 802 871
Average Gulf Coast Revenue per Barrel $12.11 $13.03
E&P Gulf Coast Revenue $9,895 $11,560
E&P Non-Gulf Coast 5,466 3,894
NORM 574 594
Industrial 1,245 524
$17,180 $16,572
Mat Rental Data - Gulf Coast (in millions,
except per square foot amounts)
Installation $3.7 $5.6
Re-rental 2.2 2.0
Total $5.9 $7.6
Oilfield Average Price per Square Foot $0.83 $1.03
Oilfield Square Feet Installed 3.6 4.6
Drilling Fluids Data
Average Rigs Serviced (North America) 164 154
Annualized Rev. per Rig (000's) $1,274 $1,090
Consolidated Balance Sheets
(Unaudited) March 31, December 31,
(In thousands) 2004 2003
ASSETS
Current assets:
Cash and cash equivalents $3,795 $4,692
Restricted cash --- 8,029
Trade accounts receivable, less
allowance of $2,723 in 2004 and
$2,920 in 2003 103,027 99,948
Notes and other receivables 6,289 5,428
Inventories 79,338 74,846
Deferred tax asset 9,373 8,698
Other current assets 9,716 8,510
Total current assets 211,538 210,151
Property, plant and equipment, at
cost, net of accumulated depreciation 203,023 206,238
Goodwill and other intangibles 115,511 115,869
Deferred tax asset 7,250 8,778
Other assets 38,165 34,464
$575,487 $575,500
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Foreign bank lines of credit $9,651 $10,610
Notes payable and current
maturities of long-term debt 3,242 3,259
Accounts payable 37,871 40,479
Accrued liabilities 33,191 21,894
Total current liabilities 83,955 76,242
Long-term debt 174,804 183,600
Other non-current liabilities 1,606 1,697
Stockholders' equity:
Preferred Stock 20,000 30,000
Common Stock 838 811
Paid-in capital 401,189 390,788
Unearned restricted stock
compensation (720) (803)
Accumulated other comprehensive
income 4,266 5,033
Retained deficit (110,451) (111,868)
Total stockholders' equity 315,122 313,961
$575,487 $575,500
Ratio of long-term debt to
total capital 35.7% 36.9%
SOURCE Newpark Resources, Inc.
-0- 04/26/2004
/CONTACT: Matthew W. Hardey, Vice President of Finance of Newpark
Resources, Inc., +1-504-838-8222/
/Web site: http://www.newpark.com/
(NR)
CO: Newpark Resources, Inc.
ST: Louisiana
IN: OIL
SU: ERN CCA MAV