NR - Earnings call transcript Q3 2018 | NPK International Inc.

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Operator

Greetings, and welcome to the Newpark Resources Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Ken Dennard. Mr. you, Thank begin. may Dennard, you

Ken Dennard

today Thank of Officer; you, joining and We you Fluids Matthew Gregg With morning, to and and Newpark's Chief business; Executive business. Vollands, and for the President good Officer; me results. us XXXX call Chief third everyone. Paul Newpark Howes, review President Mats Financial appreciate Piontek, quarter operator, President are Phil Resources webcast the Lanigan, conference of

financial the of provide the a high-level quarter my outlook the Following management and on second remarks, will call commentary for details before opening Q&A.

to in Before website I replay turn I that's also be newpark.com. you any included available on today, XXXX Please is or on replay of therefore and normal the through. be be will this information of call that housekeeping be run the no details accurate There until a time transcript speaks as will There the It will listening longer November recorded that X, management, reported October to a only webcast Company's call that yesterday's the the as available call. today's of time-sensitive of information have on are the XXXX, information reading. may replay release. and advised XX, note

forward-looking made These comments statements the contain forward-looking reflect meaning this current by statements the addition, laws. conference the In of within federal States of during management call management. Newpark's securities may the views United

certain The those Form Form may financial the XX-Q results, include those comments X-K reader cause certain risks, could or Reports by uncertainties Annual actual Report expressed to to The current and made contingencies performance on statements materially contingencies. on encouraged achievements the management. and uncertainties is reports Newpark's risks, Form various today read measures. in non-GAAP also to or and Quarterly However, on differ of from understand listener XX-K,

website. most the can quarterly found on GAAP are press directly Newpark details to financial the be Additional comparable measures which release reconciliation the and included in

have week be may Lafayette, an Newpark's me the from XX, past Day you to on Louisiana. Additionally, XXXX outside held in November for so Analyst received or Thursday, invitation email XXXX just

you so possible. invitation, please If limited, me, Mr. as or receive any contact soon please is by President not turn me now email Newpark's The RSVP I'd CEO, did phone. with space that Howes. and the as or have over by to And like call Paul behind to your questions

Paul Howes

Consolidated Fluids Ken, execution have be the with Oil Shell the scheduled next North quarters. in continuing and are you, strides We're by drilled and X% to morning meaningful American we to long-term wells during that two Thank good of additional our Kronos markets everyone. both over relatively are pleased the quarter. which for revenues to the to experienced pleased QX. $XXX been were Systems offset American that third segment Fluids, since sequential make X% partially the segment in reduction the improvement although in revenues Mexico. our our were deepwater North report strategy, in segments improved in a quarter as increase. the successfully Gulf completed a softness second $XXX quarter, project awarded of sequentially, by report for to In million at some third I'm came two land We million, flat revenues with quarter

Kuwait in for did million by the the impacted with primarily last from we declined the the reflecting of back level achieved $X Eastern which delays Australia. Gulf However, pull Romania, some negatively revenues experience quarter, customers, anticipated offshore sequentially Hemisphere other and project near-record quarter. revenues Mexico

million quarter, the of of press improvement in in Following release. prior the our identified X% quarter, the declined as third impact reflecting $X.X margin Fluids charges in yesterday's strong margin to operating the the

support to related operation. including expenses impacted quarter's timing was organizational charges the make deepwater North Gulf chemicals continuing include the in new market. American elevated into drilling we're result by the stimulation expansion of the as investments certain Mexico, fluid, markets primarily to we've of our talked Meanwhile, foreign and addition, bad our strategic in well completion quarters, order previous as as about also to both In debt in

seeing are on of the first execute fronts well multiple as strategy recent Fluids the We we Gulf progress quarter. fluid including most as as during successes with our in Mexico our our recent of tangible sale total Shell, completion

and which making solid fluids touched Mexico will completion I a into press the As base Port fluid of deepwater in in primary in our yesterday's upgrading Fourchon, for complement converting drilling support shore legacy progress on we're of our market. facility release, in site the Gulf

goal the of end to the operational have is year. the facility Our before

signs tangible segment to are profitability. Fluid important I to highlight to While expand Fluid investments our total in that a important investments modest it's operating these progress, of headwind total current are there improve provides strategy think margin. our and long-term addressable market our These our

the both continue from provides and non-E&P market. strategy, stability market see the and to the we by E&P opportunity contribution benefits business, which balanced our growth across Mats reflected Turning diversification added meaningful to as

Third quarter expectation. of were our revenues Mats ahead $XX million, modestly

in in transmission While we believe market provides somewhat pressure system pumping a surface for rental decline the was played impact work out offset by system. continued the sand the the anticipated, market our applications, gravity-fed utility as seasonal being superior penetration where

as broadly we the beyond for more expand as markets, achieved demand segment Mats momentum that quarters. weather-driven in quarter across southern confident E&P feel increasing well revenues levels the and will the non-E&P in fourth recent the U.S, With

our with world. the call turning I'd and around update IOCs contract moment to and a NOCs Before take over the like Greg, key on to provide to Fluids

reducing to we work are down in press beginning the our in process Petrobras in-country. activity release, with under levels First, of wind current as force yesterday's contract, noted

on the been informed another While Petrobras when in a the supplier expires our for contract decision that three fluids short-term delayed has their contract, year we've they next of December. contract awarded award to

has provided our us the with continually operating margin. a opportunities Fluid Newpark work to provided our demonstrate to headwind to contract and the capability, Petrobras has revenue While this provided initial meaningful deepwater

infrastructure note technical capabilities and this operational the wells Mexico. the contract, well of opportunities demonstrated Gulf years, point, IOC three market. deepwater with we Mexico, maintain coming using in view that Oil increase the projects plan Brazil years. the To that of remain the we'll eight in Shell our reduce will an positioned success With activity Kronos in current to over capitalize to now offshore IOC two to it's the in end we key in year, the the our and next drilling we've expanding of two including successful It's with on the of technology in and Brazil, footprint personnel current to that our Gulf in important Petrobras deepwater but resume Brazil

report services new In we provided received Furthermore, results that awards new which Fourchon operational, upcoming Australia, help from and there facility several award with we While discussed still a related for Sonatrach quarter. this as I'm contract the expanding Energy other contract our the a in regarding to to completion technical deepwater around Internationally, discussions small impact we will a expand provide becomes with program. three Origin offset year sample that last transition pleased onshore we secured new drilling to recently our their market catalyst opportunities fluid to is the world. challenges IOCs addressable Gulf. our size, have are and the

of $XX we execution, over terms. contract this to estimate to approximately work to subject still provide final million While the contract revenues

and These contract years. Greg In smaller the general the drilling contract Western that are one representative early to I'd to to received to both we quarter. for increase to are discuss addition, support contracts these the Greg? completion their provide Total that, seeing market. to approximately award land financials another the next start expected And a in we million is tendering two program. two revenue provide of multi-year call like we to This offshore the In received of of over over in $XX in of a turn with are operator wells detailed All to drilling Italy, across the drill expected with international Australia. new awards fluid XXXX. activity

Gregg Piontek

quarter System by the segment I'll finishing $XXX good million details everyone. our morning Fluid $XXX of for and of of our third generated second In in revenue X% Thanks quarter the rig with count. U.S. the increase up were X% X% begin The a improvement segment the and Paul million, year-over-year. or U.S. X% revenues consolidated from results. a discussing sequential XXXX, sequentially increase operating reflecting total outpacing the

were a revenues of Paul basis, from As from the second our roughly for Canada, for as quarter, and gains individual on, rig somewhat basis, our U.S. by a QX count strongest sequential XX% with average improvement period a we revenues QX to elevated mud inconsistent remains third had year-over-year a year-over-year counts. improved In in same On market losses. in-line XX% despite timing XXXX, this rig improvement benefit revenue in touched Mexico business this million the largely U.S. the market of over although performance On relatively XX% flat share driven increased unit. market. the by the $XX driven Gulf XX% achieving by offshore projects penetrate revenues of we land continue reflecting

as revenues by was primarily revenues improved revenues Algeria. comparison Australia, and we million contract driven sequentially, basis, the from and with Hughes Albania higher expected decline by increase level the Australia the revenues Brazil from deflation XX% in Hemisphere regions, end achieved Romania impact America, from year-over-year the near were approach primarily contract. a of by offset as currency third reductions million, which Turning X%, services On a third of as well the QX. as Latin envelope in limitation $X the as on in in These well reflecting the Baker the reduction somewhat The in in in to offset integrated quarter, project the reflects contract came Albania. $XX Eastern decline Hemisphere contribution were sequential activity. at X% revenues our benefitting Kuwait. reflecting Petrobras Petrobras primarily current in is from in local Shell anticipated In consisting the declined a from by in an an of international record Eastern the quarter The partially decline Brazil. in KOC declines by the

largely of decreased press of is $X.X release. severance the generated planned operating for we has workforce our workforce in-country cost $X.X associated of quarters and As the of reduction our three to fourth in income the reflecting charges and segment the yesterday's contract, operation which quarter, QX reduce million loss first million, quarter. million $X in Fluid continuing primarily by with QX year, as reported Petrobras $XX revenues have million Through approach sequentially which in $X.X of driven by third consolidated charge the million the the includes in Brazil we an are Operating highlighted end a the charge.

to addition charges, mix softer certain In decline revenue by a primarily sequential and remaining driven these timing the the of was expenses.

Pau both Gulf areas chemicals. that American As our generated completion in Paul to serve fluid ongoing with elevated the associated revenues reduce our deepwater substantially including years. segment included as points. areas to we well on, out continue that to we with carry debt third of in growth the the are Mexico, identified, drilling previous With of to results bad North basis Fluid growth continuing associated as strategic organization expenses Also, nearly stimulation XXX attributable quarter point, margin touched build as mentioned, charges, we've all and international these

T&D anticipated the seasonal the quarter, a modest to revenues segment softness $XX were million for utility the decline total sequential Mats representing in business, from market. Turning

reflecting pressure rental quarter. at expansion their decline third heat. the and impact in maintenance Mats service reflecting from the Mats continuing with third of Mats segment year, along driven the quarter demand in quarter. our market our as revenues utility QX revenues prior consistent Comparing activities with revenues to strong and Meanwhile remain peak came increased pumping were sale at last T&D in T&D the utility prior by Specifically, coming from million of customers sales demand $XX in acquisitions, rental primarily with quarter, periods XX% to markets. southern a reduced by summer for of during Overall, and million, revenues the service continues X% $XX the impacted XXXX

of quarter lower XXXX patent seasonal quarter to non-recurring benefit last position. the quarter, to result the compared the The With from in the year-over-year margin The the shift for is revenue sequential the attributable resolution the associated prior in rental of largely margin with action. revenues second the largely a XX% the prior decline segment declined and Mats modestly for XX% operating in late operating third pullback to the is XX% favorable year. along related the third services enforcement mix of revenue with change to quarter quarter, for

million, results, quarter last results, million to flat but last which our were quarter, a to the Now of increase XX% $XX in quarter third $XXX SG&A turning quarter million compares representing the and XXXX cost $XX year-over-year. prior consolidated third $XX were year. revenues in to million quarter third

associated for tax to is interest quarter expected with the with the Third Counsel. the with income per General quarters, provision $X an quarter share quarter. EPS. $X.XX quarter last charge full-year $X.XX rate the the million modestly quarter. SG&A quarter approximately $X.XX press third at which third SG&A effective cost remained to of includes third our quarter both $XX.X share compared $X.XX the prior retirement non-cash third for per compared GC quarter last million a $X.X and per our of to of Net diluted for year. were The the was release corporate expense charges, yesterday's to was in previous XX% million income the quarter for relatively Adjusting reduction diluted the in diluted includes result million third expenses and taxes Interest expenses tax in retirement third office primarily primarily The bond. charge the million the reducing in The quarter prior unchanged Consistent third share reflecting XXXX $X.X and charges year-to-date share $X.X of quarter diluted includes convertible quarter earnings in associated U.S. which the of the XX%. brings for a identified expense third the million million including contributed jurisdiction year. per our prior $X.X compared the transition $X.X in higher as the low-tax rate rate declined retirement in rate to effective of Total

in cash third with associated flow, generated associated Canada fire. fully million from of insurance QX as and including million was in increases well the cash receivables a by quarter receivables the capital $XX $XX in increase to increase working Turning million operations facility offset in as Algeria, largely $X with

Mats largely used in our of of cash Mats million in strong In reduction the $XX addition, increase historically in $XX inventory to the impacted by majority used the which of fund by expenditures in inventory ore and quarter. reflecting the million an fourth $X of business. on quarter barite receipts in increased ahead million timing Capital the activities quarter, bank the financing investments was totaled used Cash million, facility. the $XX

repatriating quarter's As continuing all which jurisdiction in $XX reduce $XXX a we administrative began third in million processes of XX%. work resulting are light with to total reform, facilitated facilitate which net ended of reduction a our to the call, several discussed on capital use foreign in We we back Substantially debt where last debt U.S tax within to capital our a of foreign to quarter cash in of and the quarter, bank million of a debt. excess total foreign targeted cash U.S. of repatriation the the third we to balance on within of ratio balance and balance. XX% cash debt intend cash to our hand facility remains ratio subsidiaries to through the

we as Now year exhausting there seasonal of turning In Canada. to including expect improvement level America modestly customers largely term improvements by in currently end of from their current level, Fluids remains we in the revenues regarding head budget the near some year, outlook. the uncertainty North driven strengthen the while to QX business, QX our toward

in perspective, from million Albania segment rebound elevated to and markets. in not $X.X and as internationally improvements an largely QX and be expenses modest as We offset charges From in a operating well we due levels QX, in other income we of timing expect the contract down will customer expect which expect the driven Kuwait income the Brazil, by America Algeria wind transitions the somewhat to projects in pullback do North by recur. of to

as the well Mats remain benefiting anticipated upon from will chemicals margin, improvement on quarter, we the the The the in sustainability provides where market. segment driven revenue expected some is potential as activity the the near while term year across U.S., direct dependent recent the near deepwater uncertainty the achieved reduction sales an Southern margin heavily well we increase U.S. by the Gulf end. targeted slowdown see Petrobras in demand as typically Looking E&P next expect In a to in touched Northeast weather-driven to into strength XXXX should consistent business, expansion the reflect should in levels mark. as segment, any QX of from potential as back achieving the expect the revenues drive on in strength more we overall exhaust stream higher operating of revenues above beyond segment which quarters, favorably leading softening Mexico as than E&P, the the our market surpass American Overall, customers earlier, stimulation in Paul utilities quarter budget. in seasonal in XXs rebound their margin the fourth North offset mid elevated work utility

office we in of after remain quarter expect to the near-term, capital retirement for relatively the our Counsel. will corporate charges regard stable expenses associated the With We General expenditures, adjusting third consists continue approximately of Roughly of the rental expect our expenditures full million. expansion. year reflect Mats full year capital will to fleet majority $XX growth half of investments, of CapEx which

in to effective tax adjusting the quarter range fourth rate XXs, recur. the to lower rate to to tax few our a in with operations that, the tax year-to-date to Despite tax back mid similar federal we the weighted his for is our expect to a remain rate is reform, for Paul like which expect profitability term, to our concluding foreign do call the not after I'd near be which U.S. remarks. upper tax over to effective We in And serves benefits turn which overall following heavily increase to rate. expected

Paul Howes

Thanks Greg.

fourth we and some of we outlook our specific over parts market in headwind remain expect into quarter, larger strategic have about oilfield near-term on companies portfolio, service coming a to direction limited months. optimistic As segment. our U.S. see The impact in noted the the we business fairly that their move of our these trends both to

well who is Our to and for a years. as believe been recap us who it for for over are you story those those provide to I new years, has with consistent strategy as the useful of have been our

has into to outstanding Wells the that operational penetration system, Service the create last efficiencies made industry-leading enabling is easy our Group Company the market our drive business, been revenues and our stability footprint Our primary Mats of for profitability the where our The Gulf business of the into is focus expanding is end-user has market. our of advancement and done Mats integrating one-year adjacent our acquisition that to in largest us of Mexico for proud With accelerate of the by the our which improve into market, our job to decade. deliver matting acquisition on shareholders. diversifying stand we're Well fluids addition offering say business the geographical our Service additional the existing non-E&P value business. chemistry team targeted of and Group, in composite has in extending here coming international I'm our said, never the of both up of undertaking. In this of our and acquisition an we that business, customers, further an anniversary

Now, in to the the division providing we the each and in revenues team be pipeline. align expand increased focus of verticals deliver manage that to varying superior through these and better continued product focus building innovation understand and it's development service, and and throughout Mats to and to the out the And transmission industry market. positioned created gas, the we've necessary product verticals, oil that XXXX, will customer market value enhance drive to requirement, our share. and into we've key process, energy We point, that our industry distribution to believe take time further utility, business

of XX, just on the to host we our not I at received outside our quarter from Similar in direction expectations reflected third Dennard Fluids Analyst please and a are U.S. Mats stimulation Lafayette, resources that the manufacturing the Louisiana. improvements drilling been on our for to for highlight team technology out at adding you remains as in Ken expansion of Day margin excited and November As in Dennard-Lascar. invitation, center longer-term in while Mats our completion strong. and Have think as important In strategic well chemistry the your advance our anticipated business, both located Gulf Mexico, it's modest pullback Ken and business, in touched reach earlier, our business to fluid the sales QX, we've his outlook, to the

requires shareholders. expand we that superior While and are improving these of infrastructure ultimately regions. market level addressable are return prudent market across represent investments this believe several organic capabilities, Internationally, to some and for way a in our of pre-investment organizational our generating conditions evidence we seeing

we quarter. signed the the next quarter, month. be Sonatrach discussed expect quarter a fourth the Algeria sometime to submitted the awarded third proposal expect for and last contract new contract in our we we in Meanwhile Kuwait, next and contracts to few within As multi-year recently the we begin in three-year with transition during

in Also, very any coming Total of tender, us with pleased in is customer with we've success the with Energy in quarter expected optimism execution a the Origin weeks in contract opportunity. contract with with While with assurance developed that new the and regarding a customer Europe Australia. relationship a winning strong the no of provides there valued we're the

to like line our it significance briefly leader speak about the strategy how our Kronos and validating is a industry. of being in of recognized I'd our technology Lastly, product

award it's two have the we award recent the wells offering most recognized in of the leader with of technically which of clear of Newpark And in service additional were Oil speaks continued Mexico. challenging from and drilled now in Gulf the as Shell our As value perspective a Mexico, I eight volumes large being technology offshore that is market. deepwater in Kronos my one integrated of beyond With Shell's that two successfully wells our about plan the company. with up become to in remarks, Gulf mentioned opening providing the is above it's new at the to us will bundling end operational fourth completion acceptance belief Kronos fluids of our doors expected ILC. our And major of the and start technology, our open other facility for quarter, with and fluid completion as questions. their I'd Operator? that, safety. With employees XXXX. Newpark, well thanking for in take on in work now call close drilling to like with continued your the dedication focus their We'll and hard our unique as

Operator

Thank you.

now question-and-answer Instructions] We James. a session. Raymond conducting Praveen [Operator Nara from is will Our first be question with

with proceed may You your question.

Praveen Nara

Good I relief Mats hurricane going obviously lot guess similar bit now morning is side, on there just guys. I of last on a to to start a year. want efforts the

like could help in quantify at efforts relief is terms seems the more should time diversified And or utility expect us of kind us from So hurricane on some of I guide it than Mats then of same business you what impact the guess we the of give sort just an that? side.

So geographical the your could utility talk the on side? distribution of Mats you business about

Matthew Lanigan

I'll for you. Mathew. Praveen, one that its take

related to think as hurricane, say in the people the is damage. fair are assessing I going still and this days somewhat it it's at early point to

We and yet on material the service are not uptick seeing a side. rental

relief organized themselves if the people as think project you are I on will. getting

On side, from area customers the modest projects in bump seen specifically. requiring we a matting sales Mats have some that

more requiring here Louisiana, we've weather be Texas, load. down of the to that and a heavy a going the on combination had is that Gulf QX the of of also think Coast seasonal really I

I we I at that, seeing wouldn't specific are broad-based Beyond demand throughout call our any think network. location.

Praveen Nara

growth those. Right, needed my the of access of investment on am I out lot perfect. curious actually And a follow-up, for guess there. I opportunities to levels

the the bundling in of a about talked fluids growth in There likely is You XXXX. mat.

spend So should growth should and terms talk And can for how XXXX? capital capital expecting we be opportunities year-over-year? what of about much in the you needs we

Gregg Piontek

theme what Gregg. Sure. going take one. a it's to CapEx to Maintenance regard capital significant run the This fluids know think be about are With we our into business, completion as saw is similar business. in needs we expand continues to what you targeted I in the doing to expansion I'll that The are Fourchon. million needs $XX Fluids in real for to the not similar areas, with XXXX. we

here be We range will to in million $X to investments of tend that for each the and $X have there those. one million

fairly limited. So, that's

to the rental the this continue driven that to side, accordingly. On revenue rental as you it's by year, and really we've And growth as feed growth just done we Mats calibrate going overall. more warrants be will that fleet the

Paul Howes

Just facility that been completion bundling we kind It in Mexico, terms Gulf existing had a an of with the the and drilling in used of had not fluid lot. the was of we mud out facility. our that oil-based one converting very That's and plant facility. marsh are that was so for drilling, over coming the inland an limited revenue of to completion fluids

operational start year bundling well at we So, really our that this of in and the can that drilling and completion will go fluids that, both end minimal is facility deepwater XXXX. but to do capital hope with that

Praveen Nara

Perfect. Thank much you very guys.

Operator

Evercore is West ISI. proceed Our question. James Please next with from question with your

James West

guys. morning Good

Paul Howes

morning. Good

Gregg Piontek

morning. Good

James West

well two technologies? Can of you the should financial the clear What a remind wells your obviously the coming. and Paul, Kronos differentiating factor think we is acceleration how some normal going eight completed, there we about Kronos more of already forward? uptake us wells here of impact versus get here and additional success the with kind of

Paul Howes

incremental doing repeat at significant the value it our Shell real why higher to the But perspective you an are That's of look or customer. terms it's product would is is is we're profitability, providing operational with mix relatively in margins. doing from Oil from them maybe value you our business fraction lines, if is of slightly Phil, our getting them a that? the from what and like what in mean think I perspective. we other for of same in differentiation terms the level I of

Phil Vollands

density. product Sure. customers Kronos high to customer view, those And range James, that also It's of it a very that from circulating appreciating. low of at a ECD valuable is performs Flat very and the Rheology are or the has parameters systems a the critical technical point temperatures. equivalent a are level across

Paul Howes

the I quality it's the are too. we proud very is mean, technology Kronos our of delivering And interesting, as certainly we also are that well. service that but bringing,

one and hole doing the value are the is at think thing an petrophysics I job that unique is well. provided I some think like interfacing having and challenges, and understanding they're we that down with on exceptionally IOCs, good as department issues it

James West

of Okay. Got from on Paul, IOCs. interest great the then just off an to amount the market but Petrobras That's rolling And Brazil here, enormous mean I it. hear. obviously in Brazilian

over quickly, an the market starts all things well, we if but to Now explode. have that it pretty change go to really weekend that seems that that admittedly, election me can

And so, the outlook position years? customer situation. don't the there, your and do you coming quarters have up to hick as probably Shell? we coming for here And marketing about How one political of thinking of key the we about with course a how are the you that through go the which the include your assuming, probably in IOCs see

Phil Vollands

there. the maintain down strategy late proportion there. is next year What and see uptick Hey, a down winding year we're – in of our business and down Phil at and into to population support James. new XXXX. coming win there next will our We retain sizeable are here. key This elements an we And currently

Over well the located and is infrastructure need down the a a many years, the to drilling so are applicable there, wells in we've there. drilling down area. of actually our resume history and IOC quite the very technologies Petrobras quite developed and very And – deepwater

Paul Howes

that not my James, Kronos we're Brazil. now is deepwater of too it's we drilled from in into Mexico. perspective have the the Historically, Gulf Kronos interesting fact that driving

So Brazil about the IOC already some technology. we're with Kronos discussions having in

things exciting one success Mexico that's of as presence the leverage ability is Gulf And business of going with in to that serve to IOCs facilities, And to market. reverse my be the the that in operational the perspective it. developing we so we'll maintain into ready are there, comes an Brazilian

James West

the makes Mexico the in about that of more there And same? is than the the about Great. is is Kronos geology it Brazil anything Kronos, Gulf or applicable

Paul Howes

roughly my the equivalent. not do, same. But there have that – would but pre-salt I with once it's different say and be we've than get a it's you we well roughly would in challenges The but some would obviously thoughts. drilled say Kronos, I you

Phil Vollands

performing our today. there has technology successful also been And high water-based down

James West

it. got Okay,

Okay, Thanks guys. great.

Operator

Our Tudor is O'Leary with George question. with Please question & Holt Company. next Pickering, your from proceed

George O'Leary

guys. morning, Good

Paul Howes

morning. Good

George O'Leary

via to that Shell encouraging kind there. each experience projects. work Would with Shell I And wells understanding to with get and to wonder the of Picking well there other the you there. these processes My and is of are up offshore partners those understand on of players just speaks as operators process qualified certainly this any is Kronos other main the the as the is Shell with Kronos performance of have handle winning what the of – some the I of incremental sight well? line well.

Phil Vollands

is the mean a Hi George, the Primary a IOC. with Kronos. again. success IOCs, technical the the IOCs there position the this And leverage major partners Shell is as I folks where we awareness from we Phil of are here just in other is very now other broad-based in

qualifications with successes. with awareness is general beyond getting specific questions, To a and broad-based now the your them project increasingly Shell qualifying. testing there answer more are into We

Paul Howes

IOC discussions more XXXX have than we the and Shell. qualification We another IOCs, shorter lot obviously absolutely. to in with much A a hope had with process

George O'Leary

and opportunity Got that recently it. from if step I Mats of two, the the deck side. you your on then, portions gas the is on set also room just wonder in opportunity in and very in helpful. the a good know color room frame long for you there is could left? opportunity pumping big back on that but winded That's non-oil call And for guys question, or the one last and are side, the market I the Newpark within today pressure and see investor running you Mats so side mats And us some And today, of is where pressure in how then on how also much you that. on Newpark then there in kind how running pumping? sit much total business opportunity you

Matthew Lanigan

outside those I'll that. in the Look, beginning in we on Matthew. distribution play just Paul as markets frame saw we there of some earlier of E&P, times size. is as the that run that the But – transmission we've the and considerable up markets touched perspective and them E&P from size are as in we the I we so only take we to the up, view room consider call. the it's think way George, pipeline we extent always verticals and has the that multiple journey formalize

So we particular there confident a are is industries. that quite healthy room run those in

from we a systems our technology seeing market, in some the pressure slowdown there but the know is systems driven. pressure favoring matting about what I ship, that pneumatic from On that's heavily is are the technology. gravity-fed is the pumping largely there application, some

relative outlook that, that with where market continuing healthy a in that see we're to so And growth in space.

Paul Howes

components of has terms area the it that well within the a in smaller the revenue the that overall been overall key size of of and well, the mats E&P piece portion. remains growth of still And of

George O'Leary

I I in if Got one it. then sneak more could. And

curious those attacking vigor there the color into on trying for markets are have push markets be that provide gas mats guys wooden mats steel-based. some increased am forms and us these strategy kind like of with I guys non-oil where if to you focus. You also been and just And of your and you other how could or more

share market in over look is have those markets? the the get that the of get to What penetration markets you further to U.K, If kind tend those strategy today? in to the into lion's in

Paul Howes

longevity, do the well success. that really speaks they mean I those from lot for of the transportation, the business itself. quality from Mats played environmental a I from to impact, spaces as in think, advantages service where A I in an ways we seeing Look as areas that have unit a we've think a had historical from we're as some

able meaningful in have ourselves there that. presence go resourcing just we've generally the more beyond up it's to had So than that's in be and a to and past then

said, I Mats side, for itself. As the speaks our credibility in I think service

George O'Leary

the Great. guys. Thanks color for

Operator

Please Our is with Suisse. next question. Lundberg your Jacob proceed from with question Credit

Jacob Lundberg

Good morning guys.

Paul Howes

Good morning.

Jacob Lundberg

incremental to release those that are with a of The the the doing Mexico remarks topline or quarter? magnitude Shell, on guess impact impact couple the that different in on your is press gets that Could in or then of And rig? And shifted income some you're your prepared on we is just should and start operating wells ones. Gulf I first following the rig same color that reference delays. get there? how some the into today XQ we about in think offshore

Phil Vollands

Thanks, Jacob. It's Phil here.

actually different terms on the tension a the Ursa platform. a like of In rig, rig. it's new award TLP It's deepwater Shell

IOCs. completions Beyond to line and being additional to also and our continue product new other show bid introducing that, projects we

Paul Howes

contribution And scale a shifting from is million to the of fourth always quarter. few in in revenue are rebound there the with that we Gulf, terms that with from on works, ultimately the here obviously of some pullback projects have QX to the expecting current that QX projects. larger But goes level these that saw in we the area we

Jacob Lundberg

it. Got

XQ or into some the commentary guidance around So takes account there? so of snap sort back revenue

Paul Howes

correct. is That

Jacob Lundberg

Should generate the Okay, year cool. as that stimulation Can some fluids color you is be in expect XXXX? chemicals talking provide of been And as some of in should up revenues meaningful kind opportunity fluids kind impact well numbers? that next you follow-up from to other to on of something show completion see on just then we have just that the a guys about. the

Paul Howes

we million, quarter, have QX in little it completion of from but actually $X shy wins a In fluids, the did was in terms early independent. some smaller

and bundled bidding next work work, integrated already some fluid of terms drilling completions it. and year, In we're both

material. would expect And so, something we

Phil Vollands

progressed year I this growth impact would meaningful those targets. from we a we XXXX, as there begin more through two expect would

Paul Howes

about that molecule because the selling thing calcium are that period fluid there completion short qualification bromide. you is is a with more of One very

and not the a that's have qualification up modest been where facility we've lot margin. adding headwinds more the a on that So you people some there chemistry stood provide of to it's is itself, about that's operational

XXXX fluids, completion then drilling we bid our going opportunity to the and So Kronos always tenders. really completion we fluid are technology on a think to with bundle with there is into IOCs unique with trying

Jacob Lundberg

the Appreciate guys. colors. right. All Thanks

Operator

Ken question. Please Sill question next is Robinson Our Humphrey. proceed from SunTrust with with your

Ken Sill

a flooding Where Is I it We've the of obviously that lot you had rain boost the into was some Houston. way I issues in know in all seeing there the I've Texas, QX, across impact Texas biggest it been Louisiana Florida? Central and weather Ford. into to the on in the curious in related the out Eagle hearing the Texas, guys weather is – related? or on been

Matthew Lanigan

Mathew. it's Ken,

a there this point. broad little a we thing touched Louisiana, the Gulf that geographies where I on is as earlier at uptick think Texas, the Coast – we as is most

Ken Sill

Central in Texas? much not So

Matthew Lanigan

at Not this point.

Ken Sill

bit I then give And color. if you to little Okay. us want a can see more

you being kind a QX, and in was Gulf they delayed? projects delayed. One in big of than Mexico bread things quarter the bigger the that are guys cited How of were QX coming were the those box? Are projects of

Gregg Piontek

little This around. projects is of that a as moving This Gregg. kind two ago, we is got different touched you've on been big have

the QX element of look as were Some year. in yet take you of expect in a we pull pushed and back QX and and saw delayed million step that to has into few But overall back that to another next QX. QX, at rebound that you a expectation here area been again, that kind from that here currently

Ken Sill

– up fluid going start my what's completions Okay. That will as question, one that into business, are the as the it kind just on the provide all business clears that fluids up. coming into be is of last going detail you product? the And completion's fluids ramping – guys from the bundled drilling you or

Gregg Piontek

where a color of I our that it's would drilling today expect, And noting worth much bundled driving how naturally fluids fluids growth. on markets we today. fluids number international business. completion terms just in get the there reported of overall fundamental well we'll will in of a definitely market, as It's in be it's with certain have is It regions. element

Operator

Please Tieton with your is Management. Our Dezellem Capital proceed next from Bill with question. question

Bill Dezellem

business, delayed customers different those I Fluids how actually want continue many delays the down to were with?

Paul Howes

Two.

Bill Dezellem

customers? or And Shell and someone two were new else, those

Gregg Piontek

Shell, No. other Not, were customers. they

Bill Dezellem

two would so customers, I reading And that or wrong? imply that that am correct, is new

Gregg Piontek

customers, offshore one one ongoing shelf. been They've deepwater,

Paul Howes

But this Kronos would using be their the technology first time

Bill Dezellem

Thank that today? insight. how are secondarily And you. acquisitions then thinking Especially additional you about

Paul Howes

as point comment total organic on. searching And but synergistic build looking rings opportunities. from to and line for you we're chemistry perspective, where to are this of always around strategy product concentric fluids there trying know, our an really I mean always typically our at to add obviously those we're don't opportunities I on out we're

Gregg Piontek

is opportunities. has only the and finding history right in thing It terms be that opportunity I overall And would an is synergistic our the add to our to very we've clearly strategy. that within of shows selecting fits

Bill Dezellem

more or you timeframe? see really trying you Thank you drive is in you a do environment opportunities would past at current – I what the consider have in and than typical was the timeline to this

Paul Howes

would our we out probably volume of know you say acquisition and that's very screen set is our and higher in our strategy – again but to know careful execution. there, fit look terms opportunity here, advance the of at on of we're these opportunities there a thoughtful strategy how in ability accelerate the I out or and you any the

Operator

for turn Ladies and the back closing to and gentlemen, answer call we would of our have question reached the end management to I like session. comments. over

Paul Howes

Analyst you to Day seeing talking you for like our at again and once you and of to joining look to again forward in quarter. I'd thank interest on also us Alright, the many for next you We Newpark. call November

Operator

Ladies conclude today's thank participation. for teleconference. does your you This gentlemen, and

disconnect may lines a day. wonderful You have and your

NPK International (NPKI) 26 Oct 182018 Q3 Earnings call transcript