NEWPARK RESOURCES REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS
- Industrial Solutions segment revenue increased by 8% in 2023, with Adjusted EBITDA margin improving by 170 basis points to 35.8%.
- Fluids Systems segment revenue decreased by 13% in 2023, with Adjusted EBITDA margin increasing by 150 basis points to 6.0%.
- Newpark reduced net debt by $54 million over the last twelve months, ending with a net debt to trailing twelve-month Adjusted EBITDA ratio of 0.5x.
- The company repurchased 6.5 million shares of common equity in 2023, equating to a 7% reduction in total shares outstanding.
- Newpark announced a new $50 million share repurchase authorization in February 2024.
- Industrial Solutions segment sales and Adjusted EBITDA guidance for full-year 2024 is expected to be in the range of $230 million to $240 million and $80 million to $85 million, respectively.
- Fluids Systems segment revenue declined by 28% in the fourth quarter of 2023.
- Net loss of $0.5 million was reported in the fourth quarter of 2023.
- Adjusted Net Income decreased by 43% in the fourth quarter of 2023.
- Total Debt was reported at $75 million as of December 31, 2023.
- Fluids Systems segment operating loss was $1.1 million in the fourth quarter of 2023.
Insights
Analyzing Newpark Resources Inc.'s financial results reveals several key points that are indicative of the company's current financial health and future prospects. The reported decrease in revenues and net income for both the quarterly and annual figures suggest a contraction in the company's business activities. Particularly, the Fluids Systems segment shows a notable revenue decrease of 28%, which could be attributed to market challenges or operational inefficiencies. The net loss reported for the quarter, albeit minimal, is a deviation from profitability and warrants attention.
However, the company's ability to generate free cash flow and to reduce net debt is a positive sign, indicating good liquidity management and a solid balance sheet. The net leverage ratio of 0.5x is significantly low, suggesting that the company is not overly reliant on debt financing. The share repurchase authorization indicates management's confidence in the company's value proposition. Investors should consider the potential impact of these share repurchases on earnings per share and shareholder equity.
The strategic pivot towards becoming a pure-play specialty rental and industrial solutions platform suggests Newpark is focusing on areas where it sees competitive advantage or market opportunity. The emphasis on organic share gains, price discipline and a higher margin sales mix could be a response to the competitive landscape and the need for differentiation. The increase in Adjusted EBITDA margin for the Industrial Solutions segment and the overall improvement in gross margin are reflective of successful operational efficiency initiatives.
It's important to note the international performance, especially in the Eastern Hemisphere, which has seen revenue growth. This diversification can help mitigate risks associated with the domestic market. The guidance for 2024, with expected growth in the Industrial Solutions segment, suggests optimism about the future, which could influence investor sentiment. However, the reliance on infrastructure investment forecasts and the impact of permitting and supply chain dependencies are factors that could introduce variability in future performance.
Newpark's focus on the domestic energy and infrastructure markets indicates an alignment with current trends in energy transition and infrastructure development. The matting demand, influenced by weather events and long-duration projects, highlights the cyclical nature of the industry and the importance of timing in project execution. The Fluids Systems segment's restructuring and divestitures suggest a strategic shift to optimize the segment's portfolio, potentially in response to evolving market conditions in the energy sector.
The ongoing strategic review and anticipated conclusion of the Fluids Systems business sale process by mid-2024 is a significant event that could reshape the company's operations and financials. Stakeholders should monitor the outcome of this review, as it could lead to a reallocation of resources and a change in the company's risk profile.
FOURTH QUARTER 2023 RESULTS
(all comparisons versus the prior year period unless otherwise noted)
- Industrial Solutions segment revenue of
$46.5 million 19% - Fluids Systems segment revenue of
$121.4 million 28% - Net Loss of
$0.5 million $0.01 - Adjusted Net Income of
$3.8 million 43% ;$0.04 38% - Adjusted EBITDA of
$16.2 million 25% - Adjusted EBITDA margin of
9.7% , +12 basis points - Total Debt of
$75 million $36 million - Net cash provided by operating activities of
$36.2 million $27.8 million + $35 million - Repurchased
$6 million $50 million
FULL YEAR 2023 RESULTS
(all comparisons versus the prior year period unless otherwise noted)
- Industrial Solutions segment revenue of
$207.6 million 8% - Fluids Systems segment revenue of
$542.0 million 13% - Net Income of
$14.5 million $0.16 - Adjusted Net Income of
$27.8 million 120% ;$0.31 135% - Adjusted EBITDA of
$80.1 million 21% - Adjusted EBITDA margin of
10.7% , +258 basis points - Net cash provided by operating activities of
$100.0 million $74.5 million + $125 million - Repurchased
$32 million
Fourth Quarter | ||||||
(In millions) | 2023 | 2022 | Change | |||
Revenues | $ 167.8 | $ 225.2 | $ (57.4) | |||
Operating income | $ 4.4 | $ 17.5 | $ (13.1) | |||
Net cash provided by operating activities | $ 36.2 | $ 3.1 | $ 33.1 | |||
Free Cash Flow | $ 27.8 | $ (6.8) | $ 34.6 | |||
Fluids Systems Segment | ||||||
Revenues | $ 121.4 | $ 167.7 | $ (46.3) | |||
Operating income (loss) | $ (1.1) | $ 4.8 | $ (5.9) | |||
Adjusted EBITDA | $ 4.7 | $ 7.4 | $ (2.7) | |||
Operating margin (%) | (0.9) % | 2.9 % | -380 | bps | ||
Adjusted EBITDA margin (%) | 3.9 % | 4.4 % | -50 | bps | ||
Industrial Solutions Segment | ||||||
Revenues | $ 46.5 | $ 57.5 | $ (11.0) | |||
Operating income | $ 11.4 | $ 17.8 | $ (6.4) | |||
Adjusted EBITDA | $ 16.8 | $ 23.3 | $ (6.5) | |||
Operating margin (%) | 24.6 % | 30.9 % | -630 | bps | ||
Adjusted EBITDA margin (%) | 36.1 % | 40.5 % | -440 | bps | ||
Full Year | ||||||
(In millions) | 2023 | 2022 | Change | |||
Revenues | $ 749.6 | $ 815.6 | $ (66.0) | |||
Operating income (loss) | $ 33.6 | $ (9.0) | $ 42.6 | |||
Net cash provided by (used in) operating activities | $ 100.0 | $ (25.0) | $ 125.0 | |||
Free Cash Flow | $ 74.5 | $ (50.1) | $ 124.6 | |||
Fluids Systems Segment | ||||||
Revenues | $ 542.0 | $ 622.6 | $ (80.6) | |||
Operating income (loss) | $ 11.9 | $ (15.6) | $ 27.5 | |||
Adjusted EBITDA | $ 32.4 | $ 28.2 | $ 4.2 | |||
Operating margin (%) | 2.2 % | (2.5) % | 470 | bps | ||
Adjusted EBITDA margin (%) | 6.0 % | 4.5 % | 150 | bps | ||
Industrial Solutions Segment | ||||||
Revenues | $ 207.6 | $ 193.0 | $ 14.6 | |||
Operating income | $ 53.0 | $ 43.9 | $ 9.1 | |||
Adjusted EBITDA | $ 74.4 | $ 65.8 | $ 8.6 | |||
Operating margin (%) | 25.5 % | 22.7 % | 280 | bps | ||
Adjusted EBITDA margin (%) | 35.8 % | 34.1 % | 170 | bps | ||
MANAGEMENT COMMENTARY
"Throughout 2023, our team focused on the execution of our business transformation strategy, culminating in strong year-over-year organic growth in Adjusted EBITDA, margin realization, free cash flow and profitability," stated Matthew Lanigan, President and CEO of Newpark. "We've advanced our business transformation by prioritizing organic share gains, price discipline and a higher margin sales mix, while driving increased productivity and operational rigor across the organization. In the year ahead, we will seek to narrow our strategic focus as we pivot to become a pure-play specialty rental and industrial solutions platform of scale, one well-equipped to support a multi-year investment cycle within the domestic energy and infrastructure markets."
"Our Industrial Solutions segment delivered solid results in 2023, a performance highlighted by significant margin expansion and an improved return on net assets," continued Lanigan. "Segment revenue and Adjusted EBITDA for 2023 increased
"Our fourth quarter results reflect a normalization in Industrial Solutions rental and service, when compared to our prior fourth quarter performance," continued Lanigan. "In the fourth quarter of 2022, we benefited from major, non-recurring weather events that contributed to elevated matting demand, rental price and fleet utilization. Further, while the outlook for matting demand remains strong, supported by a significant volume of planned long-duration projects, the start-up of several customer projects initially scheduled to commence in the fourth quarter shifted into 2024."
"Within Fluids Systems, we made substantial progress strengthening the global position and financial performance of our industry-leading business during 2023," stated Lanigan. "Continued strength within our international operations, together with the benefit from prior year divestitures contributed to a
"Newpark remains committed to a balanced capital allocation strategy that seeks to drive long-term shareholder value creation," stated Gregg Piontek, Chief Financial Officer. "For the full-year 2023, we delivered
"The strategic review of our Fluids Systems business is proceeding according to plan, and we continue to anticipate the process will substantially conclude in mid-2024," stated Lanigan. "Given the scope of our international Fluids operations, diligence is time intensive; however, we're making good progress with our partners at Lazard to move the process forward."
"Today, we are introducing Industrial Solutions segment sales and Adjusted EBITDA guidance for the full-year 2024," stated Lanigan. "We currently anticipate full-year 2024 segment revenue in a range of
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 investments in opportunities with superior return profiles, together with a programmatic return of capital program.
During the full-year 2023, 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. Industrial Solutions revenue from specialty rental and services increased
12% on an organic basis for the full year 2023, driven by continued market share gains and sustained price discipline. For the full year 2023, revenues from product sales declined modestly year-over-year, reflecting stable demand from various infrastructure sectors, including utilities. - Delivered significant, balanced margin expansion across reporting segments. Consolidated gross margin increased 360 basis points year-over-year to
18.5% , benefitting from Fluids Systems divestitures and higher contribution from Industrial Solutions. Adjusted EBITDA margin improved 260 basis points to10.7% in 2023. Both reporting segments delivered significant margin expansion in 2023 compared to the prior year, with Industrial Solutions segment Adjusted EBITDA margin increasing 170 basis points to35.8% , and Fluids Systems segment Adjusted EBITDA margin increasing 150 basis points to6.0% . Margin expansion was attributable to a combination of improved asset optimization and operating expense leverage in Industrial Solutions, along with the positive impacts of Fluids Systems divestitures and restructuring actions. - Fluids Systems segment momentum continues, led by international operations. Newpark's Eastern Hemisphere revenue increased
28% to$257 million Canada increased12% to$68 million 29% year-over-year to$84 million 69% of Fluids Systems revenue in the quarter. - Disciplined management of invested capital. In the fourth quarter, Fluids Systems net working capital was reduced by
$25 million $69 million $171 million - Prudent balance sheet management highlighted by reduction in net leverage. Over the twelve months ending December 31, 2023, total debt outstanding declined
$39 million - Active return of capital program.
$6 million $32 million $18.1 million $50.0 million
FINANCIAL PERFORMANCE
In the fourth quarter 2023, Newpark incurred a net loss of
The Industrial Solutions segment generated revenues of
The Fluids Systems segment generated revenues of
Corporate office expenses were
BALANCE SHEET AND LIQUIDITY
As of December 31, 2023, Newpark had total cash of
Newpark generated
FINANCIAL GUIDANCE
The following forward-looking guidance reflects the Company's current expectations and beliefs as of February 21, 2024 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 full year 2024, Newpark currently anticipates the following:
- Industrial Solutions segment revenue in a range of
$230 million $240 million $80 million $85 million - Total Industrial Solutions capital expenditures in a range of
$30 million $35 million
FOURTH QUARTER 2023 RESULTS CONFERENCE CALL
A conference call will be held Thursday, February 22, 2024 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: | 800-245-3047 |
International Live: | 203-518-9765 |
Conference ID: | NRQ423 |
To listen to a replay of the teleconference, which subsequently will be available through February 29, 2024:
Domestic Replay: | 888-925-9394 |
International Replay: | 402-220-5386 |
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 our exploration of strategic alternatives for the long-term positioning of our Fluids Systems division; divestitures; 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
Newpark Resources, Inc. Condensed Consolidated Statements of Operations (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
(In thousands, except per share data) | December | September | December | December | December | ||||
Revenues | $ 167,816 | $ 198,498 | $ 225,159 | $ 749,600 | $ 815,594 | ||||
Cost of revenues | 137,020 | 159,133 | 186,980 | 611,061 | 694,058 | ||||
Selling, general and administrative expenses | 23,329 | 26,821 | 24,648 | 101,136 | 97,618 | ||||
Other operating (income) loss, net | (435) | (703) | (3,995) | (2,583) | (4,370) | ||||
Impairments and other charges | 3,540 | — | — | 6,356 | 37,322 | ||||
Operating income (loss) | 4,362 | 13,247 | 17,526 | 33,630 | (9,034) | ||||
Foreign currency exchange (gain) loss | 495 | (445) | 2,332 | 267 | 389 | ||||
Interest expense, net | 1,919 | 2,027 | 2,321 | 8,181 | 7,040 | ||||
Income (loss) before income taxes | 1,948 | 11,665 | 12,873 | 25,182 | (16,463) | ||||
Provision for income taxes | 2,424 | 3,995 | 3,881 | 10,666 | 4,371 | ||||
Net income (loss) | $ (476) | $ 7,670 | $ 8,992 | $ 14,516 | $ (20,834) | ||||
Calculation of EPS: | |||||||||
Net income (loss) - basic and diluted | $ (476) | $ 7,670 | $ 8,992 | $ 14,516 | $ (20,834) | ||||
Weighted average common shares outstanding - basic | 85,003 | 86,310 | 92,324 | 86,401 | 92,712 | ||||
Dilutive effect of stock options and restricted stock awards | — | 1,724 | 1,156 | 1,914 | — | ||||
Weighted average common shares outstanding - diluted | 85,003 | 88,034 | 93,480 | 88,315 | 92,712 | ||||
Net income (loss) per common share - basic: | $ (0.01) | $ 0.09 | $ 0.10 | $ 0.17 | $ (0.22) | ||||
Net income (loss) per common share - diluted: | $ (0.01) | $ 0.09 | $ 0.10 | $ 0.16 | $ (0.22) | ||||
Newpark Resources, Inc. Operating Segment Results (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
(In thousands) | December | September | December | December | December | ||||
Revenues | |||||||||
Fluids Systems | $ 121,361 | $ 141,236 | $ 167,705 | $ 541,952 | $ 622,601 | ||||
Industrial Solutions | 46,455 | 57,262 | 57,454 | 207,648 | 192,993 | ||||
Industrial Blending | — | — | — | — | — | ||||
Total revenues | $ 167,816 | $ 198,498 | $ 225,159 | $ 749,600 | $ 815,594 | ||||
Operating income (loss) | |||||||||
Fluids Systems | $ (1,147) | $ 7,573 | $ 4,828 | $ 11,857 | $ (15,566) | ||||
Industrial Solutions | 11,415 | 14,336 | 17,751 | 53,008 | 43,899 | ||||
Industrial Blending | — | — | 2,322 | — | (8,002) | ||||
Corporate office | (5,906) | (8,662) | (7,375) | (31,235) | (29,365) | ||||
Total operating income (loss) | $ 4,362 | $ 13,247 | $ 17,526 | $ 33,630 | $ (9,034) | ||||
Segment operating margin | |||||||||
Fluids Systems | (0.9) % | 5.4 % | 2.9 % | 2.2 % | (2.5) % | ||||
Industrial Solutions | 24.6 % | 25.0 % | 30.9 % | 25.5 % | 22.7 % | ||||
Summarized operating results (including charges in the Fluids Systems non-GAAP reconciliation table) of our now exited Excalibar business and Gulf of
Three Months Ended | Twelve Months Ended | ||||||||
(In thousands) | December | September | December | December | December | ||||
Revenues | |||||||||
Excalibar | $ — | $ — | $ 11,922 | $ — | $ 55,990 | ||||
Gulf of | — | — | 8,011 | — | 26,708 | ||||
Total revenues | $ — | $ — | $ 19,933 | $ — | $ 82,698 | ||||
Operating income (loss) | |||||||||
Excalibar | $ — | $ — | $ 1,127 | $ — | $ 3,665 | ||||
Gulf of | — | (358) | (4,023) | (4,776) | (43,215) | ||||
Total operating income (loss) | $ — | $ (358) | $ (2,896) | $ (4,776) | $ (39,550) | ||||
Newpark Resources, Inc. Condensed Consolidated Balance Sheets (Unaudited) | |||
(In thousands, except share data) | December 31, | December 31, | |
ASSETS | |||
Cash and cash equivalents | $ 38,594 | $ 23,182 | |
Receivables, net | 168,457 | 242,247 | |
Inventories | 141,079 | 149,571 | |
Prepaid expenses and other current assets | 9,094 | 10,966 | |
Total current assets | 357,224 | 425,966 | |
Property, plant and equipment, net | 195,289 | 193,099 | |
Operating lease assets | 20,731 | 23,769 | |
Goodwill | 47,283 | 47,110 | |
Other intangible assets, net | 17,114 | 20,215 | |
Deferred tax assets | 2,628 | 2,275 | |
Other assets | 2,067 | 2,441 | |
Total assets | $ 642,336 | $ 714,875 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current debt | $ 16,916 | $ 22,438 | |
Accounts payable | 70,087 | 93,633 | |
Accrued liabilities | 49,281 | 46,871 | |
Total current liabilities | 136,284 | 162,942 | |
Long-term debt, less current portion | 58,117 | 91,677 | |
Noncurrent operating lease liabilities | 17,404 | 19,816 | |
Deferred tax liabilities | 8,307 | 8,121 | |
Other noncurrent liabilities | 6,860 | 9,291 | |
Total liabilities | 226,972 | 291,847 | |
Common stock, and 111,451,999 shares issued, respectively) | 1,117 | 1,115 | |
Paid-in capital | 639,645 | 641,266 | |
Accumulated other comprehensive loss | (62,839) | (67,186) | |
Retained earnings | 10,773 | 2,489 | |
Treasury stock, at cost (26,471,738 and 21,751,232 shares, respectively) | (173,332) | (154,656) | |
Total stockholders' equity | 415,364 | 423,028 | |
Total liabilities and stockholders' equity | $ 642,336 | $ 714,875 | |
Newpark Resources, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
Twelve Months Ended | |||
(In thousands) | 2023 | 2022 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 14,516 | $ (20,834) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: | |||
Impairments and other non-cash charges | 6,356 | 37,322 | |
Depreciation and amortization | 31,372 | 38,610 | |
Stock-based compensation expense | 6,638 | 6,861 | |
Provision for deferred income taxes | (482) | (3,384) | |
Credit loss expense | 1,209 | 1,039 | |
Gain on divestitures | — | (3,596) | |
Gain on sale of assets | (2,904) | (2,809) | |
Amortization of original issue discount and debt issuance costs | 541 | 871 | |
Change in assets and liabilities: | |||
(Increase) decrease in receivables | 64,812 | (42,452) | |
(Increase) decrease in inventories | 2,256 | (46,909) | |
(Increase) decrease in other assets | 307 | (855) | |
Increase (decrease) in accounts payable | (25,065) | 10,781 | |
Increase in accrued liabilities and other | 445 | 334 | |
Net cash provided by (used in) operating activities | 100,001 | (25,021) | |
Cash flows from investing activities: | |||
Capital expenditures | (29,232) | (28,273) | |
Proceeds from divestitures | 19,833 | 71,286 | |
Proceeds from sale of property, plant and equipment | 3,709 | 3,217 | |
Net cash provided by (used in) investing activities | (5,690) | 46,230 | |
Cash flows from financing activities: | |||
Borrowings on lines of credit | 241,873 | 287,276 | |
Payments on lines of credit | (277,591) | (290,886) | |
Proceeds from term loan | — | 3,754 | |
Debt issuance costs | — | (1,499) | |
Purchases of treasury stock | (34,265) | (20,248) | |
Proceeds from employee stock plans | 606 | — | |
Other financing activities | (11,670) | (3,327) | |
Net cash used in financing activities | (81,047) | (24,930) | |
Effect of exchange rate changes on cash | 576 | (707) | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 13,840 | (4,428) | |
Cash, cash equivalents, and restricted cash at beginning of period | 25,061 | 29,489 | |
Cash, cash equivalents, and restricted cash at end of period | $ 38,901 | $ 25,061 | |
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 | Twelve Months Ended | |||||||
(In thousands) | December | September | December | December | December | ||||
Net income (loss) (GAAP) | $ (476) | $ 7,670 | $ 8,992 | $ 14,516 | $ (20,834) | ||||
Impairments and other charges | 3,540 | — | — | 6,356 | 37,322 | ||||
Fluids sale process transaction expenses | 894 | 892 | — | 1,786 | — | ||||
Facility exit costs and other, net | — | 358 | 1,303 | 4,757 | 2,860 | ||||
Severance costs | 29 | 506 | 216 | 2,659 | 736 | ||||
Gain on divestitures | — | — | (3,596) | — | (3,596) | ||||
Tax on adjustments | (193) | (369) | (318) | (2,263) | (755) | ||||
Tax benefit on restructuring of certain subsidiary legal entities | — | — | — | — | (3,111) | ||||
Adjusted Net Income (non-GAAP) | $ 3,794 | $ 9,057 | $ 6,597 | $ 27,811 | $ 12,622 | ||||
Adjusted Net Income (non-GAAP) | $ 3,794 | $ 9,057 | $ 6,597 | $ 27,811 | $ 12,622 | ||||
Weighted average common shares outstanding - basic | 85,003 | 86,310 | 92,324 | 86,401 | 92,712 | ||||
Dilutive effect of stock options and restricted stock awards | 2,225 | 1,724 | 1,156 | 1,914 | 1,300 | ||||
Weighted average common shares outstanding - diluted | 87,228 | 88,034 | 93,480 | 88,315 | 94,012 | ||||
Adjusted Net Income Per Common Share - Diluted (non-GAAP): | $ 0.04 | $ 0.10 | $ 0.07 | $ 0.31 | $ 0.13 | ||||
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 | Twelve Months Ended | |||||||
(In thousands) | December | September | December | December | December | ||||
Revenues | $ 167,816 | $ 198,498 | $ 225,159 | $ 749,600 | $ 815,594 | ||||
Net income (loss) (GAAP) | $ (476) | $ 7,670 | $ 8,992 | $ 14,516 | $ (20,834) | ||||
Interest expense, net | 1,919 | 2,027 | 2,321 | 8,181 | 7,040 | ||||
Provision for income taxes | 2,424 | 3,995 | 3,881 | 10,666 | 4,371 | ||||
Depreciation and amortization | 7,865 | 7,704 | 8,351 | 31,372 | 38,610 | ||||
EBITDA (non-GAAP) | 11,732 | 21,396 | 23,545 | 64,735 | 29,187 | ||||
Impairments and other charges | 3,540 | — | — | 6,356 | 37,322 | ||||
Fluids sale process transaction expenses | 894 | 892 | — | 1,786 | — | ||||
Facility exit costs and other, net | — | 358 | 1,303 | 4,594 | 2,452 | ||||
Severance costs | 29 | 506 | 216 | 2,659 | 736 | ||||
Gain on divestitures | — | — | (3,596) | — | (3,596) | ||||
Adjusted EBITDA (non-GAAP) | $ 16,195 | $ 23,152 | $ 21,468 | $ 80,130 | $ 66,101 | ||||
Adjusted EBITDA Margin (non-GAAP) | 9.7 % | 11.7 % | 9.5 % | 10.7 % | 8.1 % | ||||
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 | Twelve Months Ended | |||||||
(In thousands) | December | September | December | December | December | ||||
Net cash provided by (used in) operating activities (GAAP) | $ 36,159 | $ 26,994 | $ 3,072 | $ 100,001 | $ (25,021) | ||||
Capital expenditures | (9,098) | (4,787) | (10,553) | (29,232) | (28,273) | ||||
Proceeds from sale of property, plant and equipment | 757 | 648 | 720 | 3,709 | 3,217 | ||||
Free Cash Flow (non-GAAP) | $ 27,818 | $ 22,855 | $ (6,761) | $ 74,478 | $ (50,077) | ||||
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 | Twelve Months Ended | |||||||
(In thousands) | December | September | December | December | December | ||||
Revenues | $ 121,361 | $ 141,236 | $ 167,705 | $ 541,952 | $ 622,601 | ||||
Operating income (loss) (GAAP) | $ (1,147) | $ 7,573 | $ 4,828 | $ 11,857 | $ (15,566) | ||||
Depreciation and amortization | 1,957 | 1,883 | 2,358 | 7,776 | 13,875 | ||||
EBITDA (non-GAAP) | 810 | 9,456 | 7,186 | 19,633 | (1,691) | ||||
Impairments and other charges | 3,540 | — | — | 6,356 | 29,417 | ||||
Fluids sale process transaction expenses | 326 | 293 | — | 619 | — | ||||
Facility exit costs and other, net | — | 358 | 1,000 | 4,594 | 1,000 | ||||
Severance costs | 29 | 40 | 163 | 1,172 | 398 | ||||
Gain on divestiture | — | — | (971) | — | (971) | ||||
Adjusted EBITDA (non-GAAP) | $ 4,705 | $ 10,147 | $ 7,378 | $ 32,374 | $ 28,153 | ||||
Operating Margin (GAAP) | (0.9) % | 5.4 % | 2.9 % | 2.2 % | (2.5) % | ||||
Adjusted EBITDA Margin (non-GAAP) | 3.9 % | 7.2 % | 4.4 % | 6.0 % | 4.5 % | ||||
Industrial Solutions | Three Months Ended | Twelve Months Ended | |||||||
(In thousands) | December | September | December | December | December | ||||
Revenues | $ 46,455 | $ 57,262 | $ 57,454 | $ 207,648 | $ 192,993 | ||||
Operating income (GAAP) | 11,415 | $ 14,336 | $ 17,751 | $ 53,008 | $ 43,899 | ||||
Depreciation and amortization | 5,350 | 5,224 | 5,482 | 21,108 | 21,653 | ||||
EBITDA (non-GAAP) | 16,765 | 19,560 | 23,233 | 74,116 | 65,552 | ||||
Severance costs | — | 162 | 53 | 254 | 214 | ||||
Adjusted EBITDA (non-GAAP) | $ 16,765 | $ 19,722 | $ 23,286 | $ 74,370 | $ 65,766 | ||||
Operating Margin (GAAP) | 24.6 % | 25.0 % | 30.9 % | 25.5 % | 22.7 % | ||||
Adjusted EBITDA Margin (non-GAAP) | 36.1 % | 34.4 % | 40.5 % | 35.8 % | 34.1 % | ||||
Industrial Blending | Three Months Ended | Twelve Months Ended | |||||||
(In thousands) | December | September | December | December | December | ||||
Revenues | $ — | $ — | $ — | $ — | $ — | ||||
Operating income (loss) (GAAP) | $ — | $ — | $ 2,322 | $ — | $ (8,002) | ||||
Depreciation and amortization | — | — | — | — | 678 | ||||
EBITDA (non-GAAP) | — | — | 2,322 | — | (7,324) | ||||
Impairment | — | — | — | — | 7,905 | ||||
Facility exit costs and other, net | — | — | 303 | — | 1,453 | ||||
Severance costs | — | — | — | — | 123 | ||||
Gain on divestiture | — | — | (2,625) | (2,625) | |||||
Adjusted EBITDA (non-GAAP) | $ — | $ — | $ — | $ — | $ (468) | ||||
Newpark Resources, Inc. Non-GAAP Reconciliations (Continued) (Unaudited) EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin - Trailing Twelve Months ("TTM")
| |||||||||
Consolidated | Three Months Ended | TTM | |||||||
(In thousands) | March 31, | June | September | December | December | ||||
Revenues | $ 200,030 | $ 183,256 | $ 198,498 | $ 167,816 | $ 749,600 | ||||
Net income (loss) (GAAP) | $ 5,620 | $ 1,702 | $ 7,670 | $ (476) | $ 14,516 | ||||
Interest expense, net | 2,089 | 2,146 | 2,027 | 1,919 | 8,181 | ||||
Provision for income taxes | 2,115 | 2,132 | 3,995 | 2,424 | 10,666 | ||||
Depreciation and amortization | 7,895 | 7,908 | 7,704 | 7,865 | 31,372 | ||||
EBITDA (non-GAAP) | 17,719 | 13,888 | 21,396 | 11,732 | 64,735 | ||||
Impairments and other charges | — | 2,816 | — | 3,540 | 6,356 | ||||
Fluids sale process transaction expenses | — | — | 892 | 894 | 1,786 | ||||
Facility exit costs and other, net | 2,292 | 1,944 | 358 | — | 4,594 | ||||
Severance costs | 955 | 1,169 | 506 | 29 | 2,659 | ||||
Adjusted EBITDA (non-GAAP) | $ 20,966 | $ 19,817 | $ 23,152 | $ 16,195 | $ 80,130 | ||||
Adjusted EBITDA Margin (non-GAAP) | 10.5 % | 10.8 % | 11.7 % | 9.7 % | 10.7 % | ||||
Fluids Systems | Three Months Ended | TTM | |||||||
(In thousands) | March | June | September | December | December | ||||
Revenues | $ 144,174 | $ 135,181 | $ 141,236 | $ 121,361 | $ 541,952 | ||||
Operating income (loss) (GAAP) | $ 3,466 | $ 1,965 | $ 7,573 | $ (1,147) | $ 11,857 | ||||
Depreciation and amortization | 1,975 | 1,961 | 1,883 | 1,957 | 7,776 | ||||
EBITDA (non-GAAP) | 5,441 | 3,926 | 9,456 | 810 | 19,633 | ||||
Impairments and other charges | — | 2,816 | — | 3,540 | 6,356 | ||||
Fluids sale process transaction expenses | — | — | 293 | 326 | 619 | ||||
Facility exit costs and other, net | 2,292 | 1,944 | 358 | — | 4,594 | ||||
Severance costs | 955 | 148 | 40 | 29 | 1,172 | ||||
Adjusted EBITDA (non-GAAP) | $ 8,688 | $ 8,834 | $ 10,147 | $ 4,705 | $ 32,374 | ||||
Operating Margin (GAAP) | 2.4 % | 1.5 % | 5.4 % | (0.9) % | 2.2 % | ||||
Adjusted EBITDA Margin (non-GAAP) | 6.0 % | 6.5 % | 7.2 % | 3.9 % | 6.0 % | ||||
Industrial Solutions | Three Months Ended | TTM | |||||||
(In thousands) | March 31, | June 30, | September | December | December | ||||
Revenues | $ 55,856 | $ 48,075 | $ 57,262 | $ 46,455 | $ 207,648 | ||||
Operating income (GAAP) | $ 14,483 | $ 12,774 | $ 14,336 | $ 11,415 | $ 53,008 | ||||
Depreciation and amortization | 5,257 | 5,277 | 5,224 | 5,350 | 21,108 | ||||
EBITDA (non-GAAP) | 19,740 | 18,051 | 19,560 | 16,765 | 74,116 | ||||
Severance costs | — | 92 | 162 | — | 254 | ||||
Adjusted EBITDA (non-GAAP) | $ 19,740 | $ 18,143 | $ 19,722 | $ 16,765 | $ 74,370 | ||||
Operating Margin (GAAP) | 25.9 % | 26.6 % | 25.0 % | 24.6 % | 25.5 % | ||||
Adjusted EBITDA Margin (non-GAAP) | 35.3 % | 37.7 % | 34.4 % | 36.1 % | 35.8 % | ||||
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) | December 31, | December 31, | |
Current debt | $ 16,916 | $ 22,438 | |
Long-term debt, less current portion | 58,117 | 91,677 | |
Total Debt | 75,033 | 114,115 | |
Less: cash and cash equivalents | (38,594) | (23,182) | |
Net Debt | $ 36,439 | $ 90,933 | |
Adjusted EBITDA (non-GAAP) - TTM | $ 80,130 | $ 66,101 | |
Net Leverage | 0.5x | 1.4x |
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SOURCE Newpark Resources, Inc.
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