Newpark Resources Inc (NR)

[makesumgravy]

Newpark Resources Reports 2008 Second Quarter Results


Thursday July 31, 4:05 pm ET
Company reports income from continuing operations of $0.10 per diluted share


THE WOODLANDS, Texas, July 31 /PRNewswire-FirstCall/ -- Newpark Resources, Inc. (NYSE: NR - News) today announced results for its second quarter ended June 30, 2008. Total revenues were $194.0 million for the second quarter of 2008 compared to $150.0 million for the second quarter of 2007. The Company reported income from continuing operations of $8.7 million, or $0.10 per diluted share, compared to $6.1 million, or $0.07 per diluted share, in the second quarter of 2007. Net income was $10.0 million, or $0.11 per diluted share, compared to $5.3 million, or $0.06 per diluted share, in the second quarter of 2007.


Paul Howes, President and Chief Executive Officer of Newpark, stated, "During the second quarter, we continued our focus on growing our core drilling fluids business where revenues were up 29% in a year-over-year comparison and 8% sequentially from the first quarter of 2008. While this segment's operating margins were lower on a sequential basis, this decline is partially attributable to the seasonal slow-down in the Canadian market, along with start-up costs and short-term inefficiencies associated with new and future revenue streams.

"Meanwhile, despite continued challenges in the Gulf Coast region, our Mats and Integrated Services business rebounded from the first quarter of 2008, increasing its operating margin to almost 10%. We are continuing to reduce the operating costs in this business, and under the leadership of our new division President Bill Moss, we expect to see more benefits ahead."

Segment Results

The Fluids Systems and Engineering segment generated revenues of $169.1 million and a 10.7% operating margin in the second quarter of 2008 compared to revenues of $131.2 million and a 12.4% operating margin during the second quarter of 2007. Second quarter 2008 revenues were driven by strong growth in both the North American and Mediterranean regions. North American revenues increased 21% over the second quarter of 2007 on solid revenue gains from the U.S. market, while our Mediterranean region revenues increased 53% compared to the second quarter of 2007. Brazil also contributed to revenue growth, generating a $3.5 million increase in the second quarter of 2008. Operating margins in this segment were negatively impacted by several factors, including new customer activity which is initially at lower margins due to start-up inefficiencies, unfavorable product mix and inflationary cost increases related to personnel and materials. In addition, the Company incurred start-up costs associated with future revenue streams.

The Mats and Integrated Services segment generated revenues of $24.9 million and a 9.7% operating margin in the second quarter of 2008 compared to revenues of $18.8 million and a 12.1% operating margin in the second quarter of 2007. The growth in revenues is attributable to an $8.3 million increase in composite mat sales, partially offset by lower mat rental and related services revenue. The revenue decline in mat rental and related services, as well as the segment's year-to-year operating margin decline, is primarily attributable to continued weakness in the South Louisiana land rig count, resulting in reduced demand along with pricing pressure.

Share Repurchase Program Update

As previously announced, Newpark's Board of Directors approved a stock repurchase program in February 2008, authorizing the Company to purchase up to $25.0 million of outstanding shares of Newpark common stock. As of June 30, 2008, the Company has repurchased 1,886,000 outstanding shares for an aggregate price of $10.0 million, an average per share price of $5.32.

CONFERENCE CALL

In conjunction with this release, Newpark has scheduled a conference call, which will be broadcast live over the Internet, on Friday, August 1, 2008 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To participate in the call, dial [phone] and ask for the Newpark Resources conference call at least 10 minutes prior to the start time, or access it live over the Internet at http://www.newpark.com. For those who cannot listen to the live call, a replay will be available through August 8, 2008 and may be accessed by dialing [phone] and using pass code 11115505#. Also, an archive of the webcast will be available shortly after the call at http://www.newpark.com for 90 days.






"Bubbles are Good For You !"