THE
WOODLANDS, Texas, Aug. 1, 2023
/PRNewswire/ -- Newpark Resources, Inc. (NYSE: NR) ("Newpark" or
the "Company") today announced results for the second quarter ended
June 30, 2023.
SECOND QUARTER 2023 RESULTS
(all comparisons versus
the prior year period unless otherwise noted)
- Industrial Solutions segment revenue of $48.1 million, -2%; year-to-date $103.9 million, +23%
- Fluid Systems segment revenue of $135.2
million, -7%; year-to-date $279.4
million, -2%
- Net Income of $1.7 million, or
$0.02 per diluted share
- Adjusted Net Income of $6.8
million, or $0.08 per diluted
share
- Adjusted EBITDA of $19.8 million,
+49%
- Adjusted EBITDA margin of 10.8%, +400 basis points
- Total Debt of $98 million, Net
Debt of $76 million and Net Leverage
of 0.9x as of June 30, 2023
- Repurchased $5 million of common
equity under our share repurchase authorization; a total of
$20 million repurchased
year-to-date
MANAGEMENT COMMENTARY
"Through the first half of the year, our team demonstrated
meaningful progress delivering on our commercial growth,
operational excellence and capital allocation priorities, while
continuing to scale an Industrial Solutions platform equipped to
drive long-term value creation for our shareholders," stated
Matthew Lanigan, President and Chief
Executive Officer of Newpark Resources.
"On a trailing twelve-month basis through the end of the second
quarter, Industrial Solutions segment revenue and Adjusted EBITDA
increased by 20% and 41%, respectively, while segment Adjusted
EBITDA margin has improved by more than 500 basis points,"
continued Lanigan. "Importantly, we remain in the early innings of
our Industrial Solutions power transmission and critical
infrastructure market penetration plan as we seek to accelerate
organic growth, while we optimize asset utilization, maintain price
discipline and capitalize on higher-margin rental
opportunities."
"Newpark continues to build a market-leading position within
site and access support," continued Lanigan. "While our composite
matting technology and related support solutions remain core to our
value proposition, our vision is to expand our high-value platform
of site and access products and specialty rental solutions to
further embed us as a tier-one supplier and partner to the
multi-billion-dollar energy infrastructure and industrial
markets."
"As previously announced, we launched a formal strategic review
of our Fluids Systems segment in June," continued Lanigan. "Over
the last year, we've reshaped Fluids into a more competitive,
higher-return business by reducing costs and invested capital,
exiting non-core markets, and focusing efforts within international
regions where we are competitively advantaged. Our actions to date
have meaningfully transformed the Fluids business, with 54% of
first half 2023 revenues derived from our Eastern Hemisphere and
Canada business units. While the
opportunity and outlook for our capital-lite international Fluids
business remains robust, we will continue to prioritize capital
investment toward Industrial Solutions expansion opportunities,
which continue to demonstrate superior return profiles."
"In addition to the commercial momentum we're seeing in our
Industrial Solutions business, we've also continued to reduce costs
across the organization, while improving organizational
efficiency," continued Lanigan. "As highlighted last quarter, we've
implemented actions in the first half of the year to remove
$6 million in annualized fixed
overhead costs from our business, which we expect to be fully
realized in our expense levels in the second half of the year.
Additionally, in a scenario in which we successfully exit the
Fluids business, we anticipate a further opportunity to simplify
our overhead structure and drive a meaningful SG&A cost
reduction within the remaining organization."
"We continue to maintain a conservative, well-capitalized
balance sheet to support the ongoing growth of our business,"
stated Gregg Piontek, Senior Vice
President and Chief Financial Officer. "Looking ahead, our primary
capital allocation priorities include organic investments in rental
fleet expansion and further reducing debt to support opportunistic
growth investments within our industrial portfolio while
continually evaluating repurchases under our share repurchase
authorization."
"With an expanding pipeline of near-term opportunities, together
with a stable base of recurring projects within our existing
customer base, we remain highly constructive on the outlook for our
business entering the second half of the year," concluded
Lanigan.
BUSINESS UPDATE
Newpark is engaged in a multi-year business transformation plan
designed to drive organic commercial growth within targeted,
higher-margin product and rental markets; improve asset
optimization and organizational efficiency; and pursue a capital
allocation strategy that prioritizes organic and inorganic
investments in opportunities with superior return profiles,
together with a robust return of capital program.
During the second quarter, Newpark continued to deliver on its
business transformation plan, highlighted by the following (all
comparisons versus the prior year period unless otherwise
noted):
- Strong commercial growth in core Industrial Solutions
segment. During the second quarter, Industrial Solutions
revenue from specialty rental and services increased 24% and 42%,
respectively, driven by a combination of continued market share
gains and price discipline. During the second quarter, the Company
introduced the new DURA-BASE® 800 Series™, the most lightweight,
heavy-duty composite matting system in the market. Revenues from
product sales declined to $8 million
for the second quarter of 2023, reflecting typical quarterly
fluctuations in order and delivery timing. For the first half 2023,
revenues from product sales have increased 20% year-over-year,
reflecting strong demand from the utility sector.
- Delivered significant margin expansion, led by Industrial
Solutions. During the second quarter, consolidated gross margin
increased 470 basis points year-over-year to 18.1%, while Adjusted
EBITDA margin improved 400 basis points to 10.8% in the period.
Both reporting segments delivered significant margin expansion in
the second quarter compared to the prior year period, with
Industrial Solutions segment Adjusted EBITDA margin increasing 660
basis points to 37.7%, and Fluids Systems segment Adjusted EBITDA
margin increasing 350 basis points to 6.5%. Margin expansion was
attributable to a combination of improved asset optimization and
reductions in fixed overhead expenses.
- Fluids Systems segment momentum continues, led by Eastern
Hemisphere. Newpark delivered record Eastern Hemisphere revenue
in the second quarter, supported by expanding customer drilling
activity in the region and improved pricing on multi-year
contracts. Newpark's Eastern Hemisphere revenue increased 36% in
the second quarter to $65 million,
representing 48% of Fluids Systems revenue in the quarter.
- Programmatic expense reduction program underway. Since
2021, Newpark has reduced SG&A from 15.4% of total revenue to
13.3% in the first half of 2023. On a year-to-date basis, the
Company has taken actions to remove approximately $6 million in overhead costs within Fluids
Systems and its corporate headquarters, incurring $2.1 million of severance costs.
- Conservative balance sheet management highlighted by
reduction in net leverage. Over the last twelve months ending
June 30, 2023, Newpark has reduced
its total debt outstanding by $46
million, supporting a year-over-year reduction in Net
Leverage to 0.9x at the end of the second quarter 2023.
- Active return of capital program. Newpark repurchased
$5 million of common equity during
the second quarter, bringing its year to date repurchases to
$20 million under its share
repurchase program. As of June 30,
2023, the Company had $30
million remaining under its existing repurchase
authorization.
FINANCIAL PERFORMANCE
In the second quarter 2023, Newpark generated net income of
$1.7 million, or $0.02 per diluted share, on total revenue of
$183.3 million, compared to a net
loss of $7.8 million, or ($0.08) per basic share, on total revenue of
$194.1 million, in the prior year
period. The Company reported second quarter Adjusted Net Income of
$6.8 million, or $0.08 per diluted share, compared to Adjusted Net
Income of $1.1 million, or
$0.01 per diluted share, in the prior
year period. Newpark reported Adjusted EBITDA of $19.8 million in the second quarter 2023, or
10.8% of total revenue, compared to $13.3
million, or 6.8% of total revenue, in the second quarter
2022.
The Industrial Solutions segment generated revenues of
$48.1 million in the second quarter
2023, compared to $48.9 million in
the prior year period. Segment operating income was $12.8 million in the second quarter, compared to
$9.8 million in the prior year
period.
The Fluids Systems segment generated revenues of $135.2 million in the second quarter 2023,
compared to $145.3 million in the
prior year period. Segment operating income was $2.0 million in the second quarter, compared
to $0.4 million in the prior year
period. The second quarter 2023 Fluids Systems operating income
includes $4.9 million in total
charges including $2.1 million of net
facility exit and severance costs as well as $2.8 million of non-cash impairment charges
related to inventory and long-lived assets associated with the exit
of certain operations.
Corporate office expenses were $8.9
million in the second quarter 2023, compared to $7.5 million in the prior year period. The second
quarter 2023 corporate office expenses include $0.9 million of severance expense associated with
restructuring actions as well as $0.8
million of costs related to strategic planning projects.
BALANCE SHEET AND LIQUIDITY
As of June 30, 2023, Newpark had
total cash of $22 million and
available liquidity under its U.S. ABL credit facility of
$80 million. At the end of the second
quarter, the Company had total Net Debt outstanding of $76 million, or 0.9x its trailing twelve-month
Adjusted EBITDA as of June 30,
2023.
Newpark generated $7 million of
operating cash flow in the second quarter 2023. Net changes in
working capital used $6 million of
cash, reflecting timing of changes associated with lower revenue,
including a $13 million reduction in
accounts payable. Fluids Systems divestitures generated
$11 million while capital investments
used $7 million, net, primarily
funding the expansion of the rental fleet to support organic growth
efforts in Industrial Solutions. The Company also used $6 million of cash to reduce debt and
$5 million to fund share
repurchases.
FINANCIAL GUIDANCE
The following forward-looking guidance reflects the Company's
current expectations and beliefs as of August 1, 2023 and is subject to change. The
following statements apply only as of the date of this disclosure
and are expressly qualified in their entirety by the cautionary
statements included elsewhere in this document.
For the third quarter 2023, Newpark currently anticipates the
following:
- Industrial Solutions segment revenue in a range of $52-$58
million
- Fluids Systems segment revenue in a range of $120-$130
million
- Total Adjusted EBITDA in a range of $17-$22
million
- Total Free Cash Flow in a range of $15-$25
million
SECOND QUARTER 2023 RESULTS CONFERENCE CALL
A conference call will be held Wednesday,
August 2, 2023 at 9:30 a.m. ET
to review the Company's financial results and conduct a
question-and-answer session.
A webcast of the conference call will be available in the
Investor Relations section of the Company's website at
www.newpark.com. Individuals can also participate by teleconference
dial-in. To listen to a live broadcast, go to the site at least 15
minutes prior to the scheduled start time in order to register,
download and install any necessary audio software.
To participate in the live teleconference:
Domestic
Live:
|
800-445-7795
|
International
Live:
|
785-424-1699
|
Conference
ID:
|
NRQ223
|
To listen to a replay of the teleconference, which subsequently
will be available through August 9,
2023:
Domestic
Replay:
|
800-934-3336
|
International
Replay:
|
402-220-1148
|
ABOUT NEWPARK RESOURCES
Newpark Resources, Inc. is a geographically diversified supplier
providing environmentally-sensitive products, as well as rentals
and services to a variety of industries, including oil and gas
exploration, electrical transmission & distribution, pipeline,
renewable energy, petrochemical, construction, and other
industries. For more information, visit our website at
www.newpark.com.
FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended. All statements other than statements of
historical facts are forward-looking statements. Words such as
"will," "may," "could," "would," "should," "anticipates,"
"believes," "estimates," "expects," "plans," "intends," and similar
expressions are intended to identify these forward-looking
statements but are not the exclusive means of identifying them.
These statements are not guarantees that our expectations will
prove to be correct 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, and its Quarterly Reports on Form 10-Q,
as well as others, could cause actual plans or results to differ
materially from those expressed in, or implied by, these
statements. These risk factors include, but are not limited to,
risks related to the worldwide oil and natural gas industry; our
ability to generate internal growth; economic and market conditions
that may impact our customers' future spending; our customer
concentration and reliance on the U.S. exploration and production
market; our international operations; the ongoing conflict between
Russia and Ukraine; operating hazards present in the oil
and natural gas and utilities industries and substantial liability
claims, including catastrophic well incidents; our contracts that
can be terminated or downsized by our customers without penalty;
our product offering and market expansion; our ability to attract,
retain, and develop qualified leaders, key employees, and skilled
personnel; our expanding services in the utilities sector, which
may require unionized labor; the price and availability of raw
materials; inflation; capital investments, business acquisitions,
and joint ventures; our market competition; technological
developments and intellectual property; severe weather, natural
disasters, and seasonality; public health crises, epidemics, and
pandemics; our cost and continued availability of borrowed funds,
including noncompliance with debt covenants; environmental laws and
regulations; our legal compliance; the inherent limitations of
insurance coverage; income taxes; cybersecurity breaches or
business system disruptions; our ability to execute on strategic
actions, including whether any transaction will take place in
connection with the strategic review of our Fluids Systems
division; our divestitures; activist stockholders that may attempt
to effect changes at our Company or acquire control over our
Company; share repurchases; and our amended and restated bylaws,
which could limit our stockholders' ability to obtain what such
stockholders believe to be a favorable judicial forum for disputes
with us or our directors, officers or other employees. We assume no
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by securities laws. 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.
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(In thousands, except
per share data)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
$
183,256
|
|
$
200,030
|
|
$
194,144
|
|
$
383,286
|
|
$
370,582
|
Cost of
revenues
|
150,170
|
|
164,738
|
|
168,206
|
|
314,908
|
|
319,194
|
Selling, general and
administrative expenses
|
25,576
|
|
25,410
|
|
24,330
|
|
50,986
|
|
48,763
|
Other operating
(income) loss, net
|
(1,184)
|
|
(261)
|
|
(80)
|
|
(1,445)
|
|
(30)
|
Impairments and other
charges
|
2,816
|
|
—
|
|
7,905
|
|
2,816
|
|
7,905
|
Operating income
(loss)
|
5,878
|
|
10,143
|
|
(6,217)
|
|
16,021
|
|
(5,250)
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
exchange (gain) loss
|
(102)
|
|
319
|
|
(583)
|
|
217
|
|
(519)
|
Interest expense,
net
|
2,146
|
|
2,089
|
|
1,638
|
|
4,235
|
|
2,844
|
Income (loss) before
income taxes
|
3,834
|
|
7,735
|
|
(7,272)
|
|
11,569
|
|
(7,575)
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for
income taxes
|
2,132
|
|
2,115
|
|
480
|
|
4,247
|
|
(2,344)
|
Net income
(loss)
|
$
1,702
|
|
$
5,620
|
|
$
(7,752)
|
|
$
7,322
|
|
$
(5,231)
|
|
|
|
|
|
|
|
|
|
|
Calculation of
EPS:
|
|
|
|
|
|
|
|
|
|
Net income (loss) -
basic and diluted
|
$
1,702
|
|
$
5,620
|
|
$
(7,752)
|
|
$
7,322
|
|
$
(5,231)
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic
|
85,761
|
|
88,573
|
|
92,657
|
|
87,159
|
|
92,389
|
Dilutive effect of
stock options and restricted stock awards
|
1,712
|
|
1,997
|
|
—
|
|
1,853
|
|
—
|
Weighted average common
shares outstanding - diluted
|
87,473
|
|
90,570
|
|
92,657
|
|
89,012
|
|
92,389
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share - basic:
|
$
0.02
|
|
$
0.06
|
|
$
(0.08)
|
|
$
0.08
|
|
$
(0.06)
|
Net income (loss) per
common share - diluted:
|
$
0.02
|
|
$
0.06
|
|
$
(0.08)
|
|
$
0.08
|
|
$
(0.06)
|
Newpark Resources,
Inc.
Operating Segment
Results
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
|
|
|
|
|
|
|
|
|
Fluids
Systems
|
$
135,181
|
|
$
144,174
|
|
$
145,261
|
|
$
279,355
|
|
$
286,275
|
Industrial
Solutions
|
48,075
|
|
55,856
|
|
48,883
|
|
103,931
|
|
84,307
|
Industrial
Blending
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Total
revenues
|
$
183,256
|
|
$
200,030
|
|
$
194,144
|
|
$
383,286
|
|
$
370,582
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
Fluids
Systems
|
$
1,965
|
|
$
3,466
|
|
$
425
|
|
$
5,431
|
|
$
3,799
|
Industrial
Solutions
|
12,774
|
|
14,483
|
|
9,754
|
|
27,257
|
|
16,112
|
Industrial
Blending
|
—
|
|
—
|
|
(8,912)
|
|
—
|
|
(9,798)
|
Corporate
office
|
(8,861)
|
|
(7,806)
|
|
(7,484)
|
|
(16,667)
|
|
(15,363)
|
Total operating
income (loss)
|
$
5,878
|
|
$ 10,143
|
|
$ (6,217)
|
|
$ 16,021
|
|
$ (5,250)
|
|
|
|
|
|
|
|
|
|
|
Segment operating
margin
|
|
|
|
|
|
|
|
|
|
Fluids
Systems
|
1.5 %
|
|
2.4 %
|
|
0.3 %
|
|
1.9 %
|
|
1.3 %
|
Industrial
Solutions
|
26.6 %
|
|
25.9 %
|
|
20.0 %
|
|
26.2 %
|
|
19.1 %
|
Summarized operating results (including charges in the Fluids
Systems non-GAAP reconciliation table) of our now exited Excalibar
business and Gulf of Mexico
operations, both included in the Fluids Systems segment historical
results, are shown in the following tables:
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
|
|
|
|
|
|
|
|
|
Excalibar
|
$
—
|
|
$
—
|
|
$
12,099
|
|
$
—
|
|
$
26,445
|
Gulf of
Mexico
|
—
|
|
—
|
|
7,412
|
|
—
|
|
10,106
|
Total
revenues
|
$
—
|
|
$
—
|
|
$
19,511
|
|
$
—
|
|
$
36,551
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
|
|
Excalibar
|
$
—
|
|
$
(77)
|
|
$
817
|
|
$
(77)
|
|
$
1,650
|
Gulf of
Mexico
|
(2,107)
|
|
(2,311)
|
|
(3,643)
|
|
(4,418)
|
|
(6,260)
|
Total operating
income (loss)
|
$
(2,107)
|
|
$
(2,388)
|
|
$
(2,826)
|
|
$
(4,495)
|
|
$
(4,610)
|
Newpark Resources,
Inc.
Condensed
Consolidated Balance Sheets
(Unaudited)
|
|
(In thousands, except
share data)
|
June 30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
22,353
|
|
$
23,182
|
Receivables,
net
|
193,365
|
|
242,247
|
Inventories
|
147,113
|
|
149,571
|
Prepaid expenses and
other current assets
|
14,231
|
|
10,966
|
Total current
assets
|
377,062
|
|
425,966
|
|
|
|
|
Property, plant and
equipment, net
|
194,584
|
|
193,099
|
Operating lease
assets
|
22,549
|
|
23,769
|
Goodwill
|
47,273
|
|
47,110
|
Other intangible
assets, net
|
18,766
|
|
20,215
|
Deferred tax
assets
|
2,480
|
|
2,275
|
Other
assets
|
2,237
|
|
2,441
|
Total
assets
|
$
664,951
|
|
$
714,875
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
debt
|
$
21,654
|
|
$
22,438
|
Accounts
payable
|
79,437
|
|
93,633
|
Accrued
liabilities
|
39,327
|
|
46,871
|
Total current
liabilities
|
140,418
|
|
162,942
|
|
|
|
|
Long-term debt, less
current portion
|
76,466
|
|
91,677
|
Noncurrent operating
lease liabilities
|
18,844
|
|
19,816
|
Deferred tax
liabilities
|
7,780
|
|
8,121
|
Other noncurrent
liabilities
|
7,310
|
|
9,291
|
Total
liabilities
|
250,818
|
|
291,847
|
|
|
|
|
Common stock, $0.01
par value (200,000,000 shares authorized and 111,669,464 and
111,451,999 shares issued, respectively)
|
1,117
|
|
1,115
|
Paid-in
capital
|
637,435
|
|
641,266
|
Accumulated other
comprehensive loss
|
(64,884)
|
|
(67,186)
|
Retained
earnings
|
3,903
|
|
2,489
|
Treasury stock, at
cost (24,889,137 and 21,751,232 shares, respectively)
|
(163,438)
|
|
(154,656)
|
Total stockholders'
equity
|
414,133
|
|
423,028
|
Total liabilities and
stockholders' equity
|
$
664,951
|
|
$
714,875
|
Newpark Resources,
Inc.
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
(In
thousands)
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
7,322
|
|
$
(5,231)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operations:
|
|
|
|
Impairments and other
non-cash charges
|
2,816
|
|
7,905
|
Depreciation and
amortization
|
15,803
|
|
20,563
|
Stock-based
compensation expense
|
3,298
|
|
3,198
|
Provision for deferred
income taxes
|
(916)
|
|
(6,918)
|
Credit loss
expense
|
464
|
|
447
|
Gain on sale of
assets
|
(1,649)
|
|
(2,001)
|
Amortization of
original issue discount and debt issuance costs
|
274
|
|
587
|
Change in assets and
liabilities:
|
|
|
|
(Increase) decrease in
receivables
|
39,324
|
|
(5,350)
|
Increase in
inventories
|
(3,440)
|
|
(38,660)
|
Increase in other
assets
|
(3,187)
|
|
(5,196)
|
Increase (decrease) in
accounts payable
|
(14,453)
|
|
12,208
|
Decrease in accrued
liabilities and other
|
(8,808)
|
|
(4,563)
|
Net cash provided by
(used in) operating activities
|
36,848
|
|
(23,011)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(15,347)
|
|
(9,515)
|
Proceeds from
divestitures
|
18,086
|
|
—
|
Proceeds from sale of
property, plant and equipment
|
2,304
|
|
1,943
|
Net cash provided by
(used in) investing activities
|
5,043
|
|
(7,572)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on lines of
credit
|
149,253
|
|
156,420
|
Payments on lines of
credit
|
(167,435)
|
|
(129,914)
|
Proceeds from term
loan
|
—
|
|
3,754
|
Debt issuance
costs
|
—
|
|
(997)
|
Purchases of treasury
stock
|
(21,966)
|
|
(2,537)
|
Other financing
activities
|
(2,864)
|
|
296
|
Net cash provided by
(used in) financing activities
|
(43,012)
|
|
27,022
|
|
|
|
|
Effect of exchange rate
changes on cash
|
332
|
|
(1,412)
|
|
|
|
|
Net decrease in cash,
cash equivalents, and restricted cash
|
(789)
|
|
(4,973)
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
25,061
|
|
29,489
|
Cash, cash equivalents,
and restricted cash at end of period
|
$
24,272
|
|
$
24,516
|
Newpark Resources, Inc.
Non-GAAP
Reconciliations
(Unaudited)
To help understand the Company's financial performance, the
Company has supplemented its financial results that it provides in
accordance with generally accepted accounting principles ("GAAP")
with non-GAAP financial measures. Such financial measures include
Adjusted Net Income (Loss), Adjusted Net Income (Loss) Per Common
Share, earnings before interest, taxes, depreciation and
amortization ("EBITDA"), Adjusted EBITDA, Free Cash Flow, Adjusted
EBITDA Margin, Net Debt, and Net Leverage.
We believe these non-GAAP financial measures are frequently used
by investors, securities analysts and other parties in the
evaluation of our performance and liquidity with that of other
companies in our industry. Management uses these measures to
evaluate our operating performance, liquidity and capital
structure. In addition, our incentive compensation plan measures
performance based on our consolidated EBITDA, along with other
factors. The methods we use to produce these non-GAAP financial
measures may differ from methods used by other companies. These
measures should be considered in addition to, not as a substitute
for, financial measures prepared in accordance with GAAP.
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per
Common Share
The following tables reconcile the Company's net income (loss)
and net income (loss) per common share calculated in accordance
with GAAP to the non-GAAP financial measures of Adjusted Net Income
(Loss) and Adjusted Net Income (Loss) Per Common Share:
Consolidated
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Net income (loss)
(GAAP)
|
$
1,702
|
|
$
5,620
|
|
$
(7,752)
|
|
$
7,322
|
|
$
(5,231)
|
Impairments and other
charges
|
2,816
|
|
—
|
|
7,905
|
|
2,816
|
|
7,905
|
Facility exit costs
and other, net
|
2,107
|
|
2,292
|
|
1,031
|
|
4,399
|
|
1,031
|
Severance
costs
|
1,169
|
|
955
|
|
153
|
|
2,124
|
|
520
|
Tax on
adjustments
|
(1,019)
|
|
(682)
|
|
(249)
|
|
(1,701)
|
|
(326)
|
Tax benefit on
restructuring of certain subsidiary legal entities
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,111)
|
Adjusted Net Income
(Loss) (non-GAAP)
|
$
6,775
|
|
$
8,185
|
|
$
1,088
|
|
$
14,960
|
|
$
788
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) (non-GAAP)
|
$
6,775
|
|
$
8,185
|
|
$
1,088
|
|
$
14,960
|
|
$
788
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding - basic
|
85,761
|
|
88,573
|
|
92,657
|
|
87,159
|
|
92,389
|
Dilutive effect of
stock options and restricted stock awards
|
1,712
|
|
1,997
|
|
1,794
|
|
1,853
|
|
1,807
|
Weighted average common
shares outstanding - diluted
|
87,473
|
|
90,570
|
|
94,451
|
|
89,012
|
|
94,196
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss) Per Common Share - Diluted (non-GAAP):
|
$
0.08
|
|
$
0.09
|
|
$
0.01
|
|
$
0.17
|
|
$
0.01
|
Newpark Resources, Inc.
Non-GAAP Reconciliations
(Continued)
(Unaudited)
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
The following table reconciles the Company's net income (loss)
calculated in accordance with GAAP to the non-GAAP financial
measures of EBITDA, Adjusted EBITDA, and Adjusted EBITDA
Margin:
Consolidated
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
$
183,256
|
|
$
200,030
|
|
$
194,144
|
|
$
383,286
|
|
$
370,582
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP)
|
$
1,702
|
|
$
5,620
|
|
$ (7,752)
|
|
$
7,322
|
|
$ (5,231)
|
Interest expense,
net
|
2,146
|
|
2,089
|
|
1,638
|
|
4,235
|
|
2,844
|
Provision (benefit)
for income taxes
|
2,132
|
|
2,115
|
|
480
|
|
4,247
|
|
(2,344)
|
Depreciation and
amortization
|
7,908
|
|
7,895
|
|
10,111
|
|
15,803
|
|
20,563
|
EBITDA
(non-GAAP)
|
13,888
|
|
17,719
|
|
4,477
|
|
31,607
|
|
15,832
|
Impairments and other
charges
|
2,816
|
|
—
|
|
7,905
|
|
2,816
|
|
7,905
|
Facility exit costs
and other, net
|
1,944
|
|
2,292
|
|
761
|
|
4,236
|
|
761
|
Severance
costs
|
1,169
|
|
955
|
|
153
|
|
2,124
|
|
520
|
Adjusted EBITDA
(non-GAAP)
|
$ 19,817
|
|
$ 20,966
|
|
$ 13,296
|
|
$ 40,783
|
|
$ 25,018
|
Adjusted EBITDA
Margin (non-GAAP)
|
10.8 %
|
|
10.5 %
|
|
6.8 %
|
|
10.6 %
|
|
6.8 %
|
Free Cash Flow
The following table reconciles the Company's net cash provided
by (used in) operating activities calculated in accordance with
GAAP to the non-GAAP financial measure of Free Cash Flow:
Consolidated
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Net cash provided by
(used in) operating activities (GAAP)
|
$
7,404
|
|
$
29,444
|
|
$
(25,801)
|
|
$
36,848
|
|
$
(23,011)
|
Capital
expenditures
|
(8,375)
|
|
(6,972)
|
|
(1,894)
|
|
(15,347)
|
|
(9,515)
|
Proceeds from sale of
property, plant and equipment
|
1,564
|
|
740
|
|
1,368
|
|
2,304
|
|
1,943
|
Free Cash Flow
(non-GAAP)
|
$
593
|
|
$
23,212
|
|
$
(26,327)
|
|
$
23,805
|
|
$
(30,583)
|
Newpark Resources, Inc.
Non-GAAP Reconciliations
(Continued)
(Unaudited)
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
The following tables reconcile the Company's segment operating
income calculated in accordance with GAAP to the non-GAAP financial
measures of EBITDA, Adjusted EBITDA, and Adjusted EBITDA
Margin:
Fluids
Systems
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
$
135,181
|
|
$
144,174
|
|
$
145,261
|
|
$
279,355
|
|
$
286,275
|
Operating income
(GAAP)
|
$
1,965
|
|
$
3,466
|
|
$
425
|
|
$
5,431
|
|
$
3,799
|
Depreciation and
amortization
|
1,961
|
|
1,975
|
|
3,862
|
|
3,936
|
|
7,919
|
EBITDA
(non-GAAP)
|
3,926
|
|
5,441
|
|
4,287
|
|
9,367
|
|
11,718
|
Impairments and other
charges
|
2,816
|
|
—
|
|
—
|
|
2,816
|
|
—
|
Facility exit costs
and other, net
|
1,944
|
|
2,292
|
|
—
|
|
4,236
|
|
—
|
Severance
costs
|
148
|
|
955
|
|
84
|
|
1,103
|
|
235
|
Adjusted EBITDA
(non-GAAP)
|
$
8,834
|
|
$
8,688
|
|
$
4,371
|
|
$ 17,522
|
|
$ 11,953
|
Operating Margin
(GAAP)
|
1.5 %
|
|
2.4 %
|
|
0.3 %
|
|
1.9 %
|
|
1.3 %
|
Adjusted EBITDA
Margin (non-GAAP)
|
6.5 %
|
|
6.0 %
|
|
3.0 %
|
|
6.3 %
|
|
4.2 %
|
|
Industrial
Solutions
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
$ 48,075
|
|
$ 55,856
|
|
$ 48,883
|
|
$
103,931
|
|
$ 84,307
|
Operating income
(GAAP)
|
12,774
|
|
$ 14,483
|
|
$
9,754
|
|
$ 27,257
|
|
$ 16,112
|
Depreciation and
amortization
|
5,277
|
|
5,257
|
|
5,362
|
|
10,534
|
|
10,804
|
EBITDA
(non-GAAP)
|
18,051
|
|
19,740
|
|
15,116
|
|
37,791
|
|
26,916
|
Severance
costs
|
92
|
|
—
|
|
93
|
|
92
|
|
161
|
Adjusted EBITDA
(non-GAAP)
|
$ 18,143
|
|
$ 19,740
|
|
$ 15,209
|
|
$ 37,883
|
|
$ 27,077
|
Operating Margin
(GAAP)
|
26.6 %
|
|
25.9 %
|
|
20.0 %
|
|
26.2 %
|
|
19.1 %
|
Adjusted EBITDA
Margin (non-GAAP)
|
37.7 %
|
|
35.3 %
|
|
31.1 %
|
|
36.5 %
|
|
32.1 %
|
|
Industrial
Blending
|
Three Months
Ended
|
|
Six Months
Ended
|
(In
thousands)
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
June 30,
2023
|
|
June 30,
2022
|
Revenues
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
Operating income
(loss) (GAAP)
|
$
—
|
|
$
—
|
|
$
(8,912)
|
|
$
—
|
|
$
(9,798)
|
Depreciation and
amortization
|
—
|
|
—
|
|
270
|
|
—
|
|
540
|
EBITDA
(non-GAAP)
|
—
|
|
—
|
|
(8,642)
|
|
—
|
|
(9,258)
|
Impairment
|
—
|
|
—
|
|
7,905
|
|
—
|
|
7,905
|
Facility exit costs
and other, net
|
—
|
|
—
|
|
761
|
|
—
|
|
761
|
Severance
costs
|
—
|
|
—
|
|
(24)
|
|
—
|
|
124
|
Adjusted EBITDA
(non-GAAP)
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(468)
|
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin -
Trailing Twelve Months ("TTM")
Consolidated
|
Three Months
Ended
|
|
TTM
|
(In
thousands)
|
September
30,
2022
|
|
December 31,
2022
|
|
March 31,
2023
|
|
June 30,
2023
|
|
June 30,
2023
|
Revenues
|
$
219,853
|
|
$
225,159
|
|
$
200,030
|
|
$
183,256
|
|
$
828,298
|
Net income
(GAAP)
|
$
(24,595)
|
|
$
8,992
|
|
$
5,620
|
|
$
1,702
|
|
$ (8,281)
|
Interest expense,
net
|
1,875
|
|
2,321
|
|
2,089
|
|
2,146
|
|
8,431
|
Provision (benefit)
for income taxes
|
2,834
|
|
3,881
|
|
2,115
|
|
2,132
|
|
10,962
|
Depreciation and
amortization
|
9,696
|
|
8,351
|
|
7,895
|
|
7,908
|
|
33,850
|
EBITDA
(non-GAAP)
|
(10,190)
|
|
23,545
|
|
17,719
|
|
13,888
|
|
44,962
|
Impairments and other
charges
|
29,417
|
|
—
|
|
—
|
|
2,816
|
|
32,233
|
Gain on
divestiture
|
—
|
|
(3,596)
|
|
—
|
|
—
|
|
(3,596)
|
Facility exit costs
and other, net
|
388
|
|
1,303
|
|
2,292
|
|
1,944
|
|
5,927
|
Severance
costs
|
—
|
|
216
|
|
955
|
|
1,169
|
|
2,340
|
Adjusted EBITDA
(non-GAAP)
|
$ 19,615
|
|
$ 21,468
|
|
$ 20,966
|
|
$ 19,817
|
|
$ 81,866
|
Adjusted EBITDA
Margin (non-GAAP)
|
8.9 %
|
|
9.5 %
|
|
10.5 %
|
|
10.8 %
|
|
9.9 %
|
|
Fluids
Systems
|
Three Months
Ended
|
|
TTM
|
(In
thousands)
|
September
30,
2022
|
|
December 31,
2022
|
|
March 31,
2023
|
|
June 30,
2023
|
|
June 30,
2023
|
Revenues
|
$
168,621
|
|
$
167,705
|
|
$
144,174
|
|
$
135,181
|
|
$
615,681
|
Operating income
(GAAP)
|
$
(24,193)
|
|
$
4,828
|
|
$
3,466
|
|
$
1,965
|
|
$
(13,934)
|
Depreciation and
amortization
|
3,598
|
|
2,358
|
|
1,975
|
|
1,961
|
|
9,892
|
EBITDA
(non-GAAP)
|
(20,595)
|
|
7,186
|
|
5,441
|
|
3,926
|
|
(4,042)
|
Impairments and other
charges
|
29,417
|
|
—
|
|
—
|
|
2,816
|
|
32,233
|
Gain on
divestiture
|
—
|
|
(971)
|
|
—
|
|
—
|
|
(971)
|
Facility exit costs
and other, net
|
—
|
|
1,000
|
|
2,292
|
|
1,944
|
|
5,236
|
Severance
costs
|
—
|
|
163
|
|
955
|
|
148
|
|
1,266
|
Adjusted EBITDA
(non-GAAP)
|
$
8,822
|
|
$
7,378
|
|
$
8,688
|
|
$
8,834
|
|
$ 33,722
|
Operating Margin
(GAAP)
|
(14.3) %
|
|
2.9 %
|
|
2.4 %
|
|
1.5 %
|
|
(2.3) %
|
Adjusted EBITDA
Margin (non-GAAP)
|
5.2 %
|
|
4.4 %
|
|
6.0 %
|
|
6.5 %
|
|
5.5 %
|
|
|
Industrial
Solutions
|
Three Months
Ended
|
|
TTM
|
(In
thousands)
|
September
30,
2022
|
|
December 31,
2022
|
|
March 31,
2023
|
|
June 30,
2023
|
|
June 30,
2023
|
Revenues
|
$ 51,232
|
|
$ 57,454
|
|
$ 55,856
|
|
$ 48,075
|
|
$
212,617
|
Operating income
(GAAP)
|
$ 10,036
|
|
$ 17,751
|
|
$ 14,483
|
|
$ 12,774
|
|
$ 55,044
|
Depreciation and
amortization
|
5,367
|
|
5,482
|
|
5,257
|
|
5,277
|
|
21,383
|
EBITDA
(non-GAAP)
|
15,403
|
|
23,233
|
|
19,740
|
|
18,051
|
|
76,427
|
Severance
costs
|
—
|
|
53
|
|
—
|
|
92
|
|
145
|
Adjusted EBITDA
(non-GAAP)
|
$ 15,403
|
|
$ 23,286
|
|
$ 19,740
|
|
$ 18,143
|
|
$ 76,572
|
Operating Margin
(GAAP)
|
19.6 %
|
|
30.9 %
|
|
25.9 %
|
|
26.6 %
|
|
25.9 %
|
Adjusted EBITDA
Margin (non-GAAP)
|
30.1 %
|
|
40.5 %
|
|
35.3 %
|
|
37.7 %
|
|
36.0 %
|
Newpark Resources, Inc.
Non-GAAP Reconciliations
(Continued)
(Unaudited)
Net Debt and Net Leverage
The following table reconciles the Company's total debt
calculated in accordance with GAAP to the non-GAAP financial
measures of Net Debt and Net Leverage:
(In
thousands)
|
June 30,
2023
|
|
December 31,
2022
|
|
June 30,
2022
|
Current
debt
|
$
21,654
|
|
$
22,438
|
|
$
22,484
|
Long-term debt, less
current portion
|
76,466
|
|
91,677
|
|
121,975
|
Total
Debt
|
98,120
|
|
114,115
|
|
144,459
|
Less: cash and cash
equivalents
|
(22,353)
|
|
(23,182)
|
|
(20,159)
|
Net
Debt
|
$
75,767
|
|
$
90,933
|
|
$
124,300
|
|
|
|
|
|
|
Adjusted EBITDA
(non-GAAP) - TTM
|
$
81,866
|
|
$
66,101
|
|
$
44,904
|
|
|
|
|
|
|
Net
Leverage
|
0.9x
|
|
1.4x
|
|
2.8x
|
View original
content:https://www.prnewswire.com/news-releases/newpark-resources-reports-second-quarter-2023-results-301890895.html
SOURCE Newpark Resources, Inc.