NR Newpark Resources Inc

Newpark Resources, Inc. (NYSE: NR) (“Newpark” or the “Company”) today announced results for the third quarter ended September 30, 2024.

On September 13, 2024, the Company completed the sale of its equity interests in substantially all of the Company’s Fluids Systems segment. The results of the Fluids Systems segment are reported in discontinued operations for all periods.

THIRD QUARTER 2024 RESULTS

• Revenue of $44.2 million
• Operating income from continuing operations of $1.2 million
• Income from continuing operations of $14.9 million, which includes a $14.6 million tax benefit; Adjusted Income from Continuing Operations of $0.3 million
• Adjusted EBITDA from Continuing Operations of $7.5 million
• Adjusted EBITDA Margin from Continuing Operations of 17.0%
• $70 million of initial cash proceeds from the sale of Fluids Systems; net deferred consideration and note receivable of $18 million as of September 30, 2024
• Total cash of $43 million and debt of $14 million as of September 30, 2024

 

 

Third Quarter

 

 

 

(In millions)

2024

 

2023

 

Change

Revenues

$

44.2

 

 

$

57.3

 

 

$

(13.1

)

 

Operating income from continuing operations

$

1.2

 

 

$

6.3

 

 

$

(5.1

)

 

Net cash provided by operating activities

$

2.8

 

 

$

27.0

 

 

$

(24.2

)

 

Free Cash Flow

$

(5.6

)

 

$

22.9

 

 

$

(28.5

)

 

Industrial Solutions Segment

 

 

 

 

 

 

Revenues

$

44.2

 

 

$

57.3

 

 

$

(13.1

)

 

Operating income

$

7.3

 

 

$

14.3

 

 

$

(7.0

)

 

Adjusted EBITDA

$

12.5

 

 

$

19.7

 

 

$

(7.2

)

 

Operating margin (%)

 

16.5

%

 

 

25.0

%

 

 

-850

 

bps

Adjusted EBITDA margin (%)

 

28.3

%

 

 

34.4

%

 

 

-610

 

bps

 

MANAGEMENT COMMENTARY

“Our third quarter performance was impacted by a combination of certain key customers shifting their priorities from scheduled transmission projects to renewable generation projects, unfavorable weather conditions, and an extended unplanned maintenance event at our Louisiana manufacturing facility,” stated Matthew Lanigan, President and CEO of Newpark. “In total, the seasonal pullback in rental revenues and six-weeks of facility maintenance impacted third quarter Adjusted EBITDA by nearly $5 million,” continued Lanigan. “The facility has been operating at normal production levels since the start of the fourth quarter.

“Following the more pronounced seasonal effects, customer activity rebounded sharply as we exited the third quarter,” continued Lanigan. “October set a new monthly record for rental volume, putting us on pace for very strong fourth quarter rental revenues.

“Our disciplined, return-driven approach to capital allocation remains central to our value creation thesis,” stated Lanigan. “We intend to prioritize organic investment in rental fleet, while returning capital to shareholders through our programmatic share repurchase program. With the Fluids divestiture completed, we have begun simplifying our business structure and streamlining our support structure around a core site access solutions offering and expect to remain opportunistic acquirors of complementary assets that further enhance our customer value proposition, expand our addressable market, and further support our strategic focus on profitable growth.

“We remain highly constructive on both the near and longer-term outlook for our business,” continued Lanigan. “Entering 2025, our entire organization is solely focused on the significant market opportunity we see in site access solutions. From multi-billion-dollar investment programs focused on high-grading the United States’ aging electricity grid, to the exponential growth in advanced computing data centers, our platform is uniquely equipped to support next-generation investments in our nation’s infrastructure.”

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.

The third quarter of 2024 was highlighted by the following:

• Completed Fluids Systems sale. On September 13, 2024, we completed the sale of the equity interests in substantially all of the Company’s Fluids Systems segment to SCF Partners, a leading private equity firm serving the global energy industry. The sale marks an important strategic milestone for our Company as we focus on growing our scale as a leading, pure-play specialty rental and services business in the global worksite access and critical infrastructure markets.
• Strong balance sheet management. We ended the third quarter of 2024 with total cash of $43 million, total debt of $14 million, and available liquidity under our ABL credit facility of $56 million. Additionally, we have $18 million of net deferred consideration and note receivable from the Fluids Systems sale as of September 30, 2024.
• Summer seasonality in Industrial Solutions segment, but momentum heading into Q4. Industrial Solutions revenue from specialty rental and services decreased to $32 million for the third quarter of 2024, driven by higher summer seasonality impacts as compared to historical experience, caused by key customers shifting their priorities from scheduled transmission projects to renewable generation projects and exceptionally hot and dry weather, particularly in the southern U.S. Revenues from product sales decreased to $12 million for the third quarter of 2024, reflecting typical quarterly fluctuations in order and delivery timing. Following the more pronounced seasonal slowdown in customer projects in the third quarter of 2024, we expect revenues to meaningfully improve in the fourth quarter of 2024, benefiting from higher customer rental project activity and product sales.
• Robust return of capital program. In February 2024, the Board of Directors increased the authorization for repurchases of common stock up to $50.0 million. No share repurchases were made in the first nine months of 2024, due to trading blackout restrictions associated with the Fluids Systems sale process that was completed in September 2024.

FINANCIAL PERFORMANCE

In the third quarter of 2024, Newpark generated income from continuing operations of $14.9 million, or $0.17 per diluted share, on total revenue of $44.2 million, compared to income from continuing operations of $2.7 million, or $0.03 per diluted share, on total revenue of $57.3 million, in the prior year period. Income from continuing operations for the third quarter of 2024 includes an income tax benefit of $14.6 million primarily reflecting the release of valuation allowances on U.S. net operating losses and other tax credit carryforwards following the sale of the Fluids Systems business. The Company reported Adjusted EBITDA from Continuing Operations of $7.5 million in the third quarter 2024, or 17.0% of total revenue, compared to $12.0 million, or 21.0% of total revenue, in the third quarter 2023.

Industrial Solutions segment operating income was $7.3 million in the third quarter of 2024, compared to $14.3 million in the prior year period. Corporate office expenses were $6.1 million in the third quarter 2024, compared to $8.1 million in the prior year period.

BALANCE SHEET AND LIQUIDITY

As of September 30, 2024, Newpark had total cash of $43 million, total debt of $14 million, and available liquidity under our U.S. ABL credit facility of $56 million. Additionally, we have $18 million of net deferred consideration and note receivable from the Fluids Systems sale as of September 30, 2024.

Newpark generated $3 million of operating cash flow in the third quarter 2024, which includes $6 million usage associated with an increase in net working capital within the Fluids Systems business. Capital investments used $8 million, net, primarily funding the expansion of the mat rental fleet to support the October 2024 surge in rental demand. The Company also used $36 million of cash to reduce debt.

FINANCIAL GUIDANCE

The following forward-looking guidance reflects the Company’s current expectations and beliefs as of November 7, 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 $217 million to $223 million
• Industrial Solutions segment Adjusted EBITDA in a range of $77 million to $81 million
• Total Industrial Solutions capital expenditures in a range of $33 million to $35 million

THIRD QUARTER 2024 RESULTS CONFERENCE CALL

A conference call will be held Friday, November 8, 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:

800-274-8461

International Live:

203-518-9814

Conference ID:

NRQ324

To listen to a replay of the teleconference, which subsequently will be available through November 15, 2024:

Domestic Replay:

877-710-5302

International Replay:

402-220-1605

ABOUT NEWPARK RESOURCES

Newpark Resources, Inc. is a site access solutions company that manufactures, sells, and rents industry-leading sustainable composite matting products, along with a full suite of services, including planning, logistics, and remediation. As a geographically diversified company, we deliver superior quality and reliability across critical infrastructure markets, including electrical transmission & distribution, oil and gas exploration, 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 focus on growth of our Industrial Solutions business; the expected benefits from the recently completed sale of our Fluids Systems business; economic and market conditions that may impact our customers’ future spending; the ongoing conflicts in Europe and the Middle East; operating hazards present in the industries in which our customers operate; 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; expanding our services in the utilities sector, which may require unionized labor; the price and availability of raw materials; inflation; capital investments and any future business acquisitions; 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; legal compliance; the inherent limitations of insurance coverage; income taxes; cybersecurity incidents or business system disruptions; 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

 

Nine Months Ended

(In thousands, except per share data)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Revenues

$

44,207

 

 

$

66,791

 

 

$

57,262

 

 

$

159,965

 

 

$

161,193

 

Cost of revenues

 

32,067

 

 

 

41,966

 

 

 

37,602

 

 

 

105,358

 

 

 

104,528

 

Selling, general and administrative expenses

 

11,005

 

 

 

12,750

 

 

 

13,910

 

 

 

35,335

 

 

 

40,834

 

Other operating (income) loss, net

 

(99

)

 

 

(432

)

 

 

(523

)

 

 

(1,435

)

 

 

(1,032

)

Operating income from continuing operations

 

1,234

 

 

 

12,507

 

 

 

6,273

 

 

 

20,707

 

 

 

16,863

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange (gain) loss

 

(562

)

 

 

487

 

 

 

514

 

 

 

170

 

 

 

(172

)

Interest expense, net

 

943

 

 

 

909

 

 

 

1,017

 

 

 

2,612

 

 

 

3,154

 

Income from continuing operations before income taxes

 

853

 

 

 

11,111

 

 

 

4,742

 

 

 

17,925

 

 

 

13,881

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes from continuing operations (1)

 

(14,016

)

 

 

2,483

 

 

 

2,062

 

 

 

(9,626

)

 

 

4,900

 

Income from continuing operations

 

14,869

 

 

 

8,628

 

 

 

2,680

 

 

 

27,551

 

 

 

8,981

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Income from discontinued operations before income taxes

 

629

 

 

 

264

 

 

 

6,923

 

 

 

5,072

 

 

 

9,353

 

Loss on sale of discontinued operations before income taxes

 

(195,729

)

 

 

—

 

 

 

—

 

 

 

(195,729

)

 

 

—

 

Provision (benefit) for income taxes from discontinued operations

 

(5,933

)

 

 

852

 

 

 

1,933

 

 

 

(4,141

)

 

 

3,342

 

Income (loss) from discontinued operations

 

(189,167

)

 

 

(588

)

 

 

4,990

 

 

 

(186,516

)

 

 

6,011

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(174,298

)

 

$

8,040

 

 

$

7,670

 

 

$

(158,965

)

 

$

14,992

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share - basic:

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

0.17

 

 

$

0.10

 

 

$

0.03

 

 

$

0.32

 

 

$

0.10

 

Income (loss) from discontinued operations

 

(2.19

)

 

 

(0.01

)

 

 

0.06

 

 

 

(2.18

)

 

 

0.07

 

Net income (loss)

$

(2.02

)

 

$

0.09

 

 

$

0.09

 

 

$

(1.86

)

 

$

0.17

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share - diluted:

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

0.17

 

 

$

0.10

 

 

$

0.03

 

 

$

0.32

 

 

$

0.10

 

Income (loss) from discontinued operations

 

(2.16

)

 

 

(0.01

)

 

 

0.06

 

 

 

(2.13

)

 

 

0.07

 

Net income (loss)

$

(1.99

)

 

$

0.09

 

 

$

0.09

 

 

$

(1.82

)

 

$

0.17

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares:

 

 

 

 

 

 

 

 

 

Basic

 

86,377

 

 

 

85,473

 

 

 

86,310

 

 

 

85,619

 

 

 

86,873

 

Diluted

 

87,490

 

 

 

87,626

 

 

 

88,034

 

 

 

87,453

 

 

 

88,683

 

 

(1) Provision (benefit) for income taxes from continuing operations for the three and nine months ended September 30, 2024 includes an income tax benefit of $14.6 million primarily reflecting the release of valuation allowances on U.S. net operating losses and other tax credit carryforwards following the sale of the Fluids Systems business.

 

Newpark Resources, Inc.

Operating Segment Results

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

(In thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Revenues

 

 

 

 

 

 

 

 

 

Rental and service revenues

$

32,408

 

 

$

36,396

 

 

$

38,065

 

 

$

103,985

 

 

$

114,374

 

Product sales revenues

 

11,799

 

 

 

30,395

 

 

 

19,197

 

 

 

55,980

 

 

 

46,819

 

Total revenues (Industrial Solutions)

$

44,207

 

 

$

66,791

 

 

$

57,262

 

 

$

159,965

 

 

$

161,193

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) from continuing operations

 

 

 

 

 

 

 

 

 

Industrial Solutions

$

7,286

 

 

$

19,392

 

 

$

14,336

 

 

$

39,614

 

 

$

41,593

 

Corporate office

 

(6,052

)

 

 

(6,885

)

 

 

(8,063

)

 

 

(18,907

)

 

 

(24,730

)

Total operating income from continuing operations

$

1,234

 

 

$

12,507

 

 

$

6,273

 

 

$

20,707

 

 

$

16,863

 

 

 

 

 

 

 

 

 

 

 

Segment operating margin

 

 

 

 

 

 

 

 

 

Industrial Solutions

 

16.5

%

 

 

29.0

%

 

 

25.0

%

 

 

24.8

%

 

 

25.8

%

 

Newpark Resources, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(In thousands, except share data)

September 30, 2024

 

December 31, 2023

ASSETS

 

 

 

Cash and cash equivalents

$

42,907

 

 

$

789

 

Receivables, net (1)

 

54,561

 

 

 

42,818

 

Inventories

 

14,910

 

 

 

18,606

 

Prepaid expenses and other current assets

 

4,596

 

 

 

4,690

 

Current assets of discontinued operations

 

—

 

 

 

290,321

 

Total current assets

 

116,974

 

 

 

357,224

 

 

 

 

 

Property, plant and equipment, net

 

179,690

 

 

 

165,544

 

Operating lease assets

 

10,481

 

 

 

11,192

 

Goodwill

 

47,461

 

 

 

47,283

 

Other intangible assets, net

 

10,864

 

 

 

12,461

 

Deferred tax assets

 

17,519

 

 

 

1,367

 

Other assets

 

6,617

 

 

 

1,582

 

Noncurrent assets of discontinued operations

 

—

 

 

 

45,683

 

Total assets

$

389,606

 

 

$

642,336

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current debt

$

8,457

 

 

$

6,319

 

Accounts payable

 

19,130

 

 

 

16,345

 

Accrued liabilities

 

23,572

 

 

 

21,026

 

Current liabilities of discontinued operations

 

—

 

 

 

92,594

 

Total current liabilities

 

51,159

 

 

 

136,284

 

 

 

 

 

Long-term debt, less current portion

 

5,506

 

 

 

55,710

 

Noncurrent operating lease liabilities

 

9,957

 

 

 

10,713

 

Deferred tax liabilities

 

1,209

 

 

 

3,697

 

Other noncurrent liabilities

 

5,321

 

 

 

4,191

 

Noncurrent liabilities of discontinued operations

 

—

 

 

 

16,377

 

Total liabilities

 

73,152

 

 

 

226,972

 

 

 

 

 

Common stock, $0.01 par value (200,000,000 shares authorized and 111,669,464 and 111,669,464 shares issued, respectively)

 

1,117

 

 

 

1,117

 

Paid-in capital

 

632,165

 

 

 

639,645

 

Accumulated other comprehensive loss

 

(2,766

)

 

 

(62,839

)

Retained earnings (deficit)

 

(148,161

)

 

 

10,773

 

Treasury stock, at cost (25,172,166 and 26,471,738 shares, respectively)

 

(165,901

)

 

 

(173,332

)

Total stockholders’ equity

 

316,454

 

 

 

415,364

 

Total liabilities and stockholders’ equity

$

389,606

 

 

$

642,336

 

 

(1) Receivables, net as of September 30, 2024, includes $20.0 million for estimated deferred consideration related to the sale of the Fluids Systems business.

 

Newpark Resources, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

Nine Months Ended September 30,

(In thousands)

2024

 

2023

Cash flows from operating activities:

 

 

 

Net income (loss)

$

(158,965

)

 

$

14,992

 

Adjustments to reconcile net income (loss) to net cash provided by operations:

 

 

 

Loss on divestitures

 

195,729

 

 

 

—

 

Impairments and other non-cash charges

 

—

 

 

 

2,816

 

Depreciation and amortization

 

21,804

 

 

 

23,507

 

Stock-based compensation expense

 

4,119

 

 

 

4,967

 

Provision for deferred income taxes

 

(22,290

)

 

 

(1,031

)

Credit loss expense

 

998

 

 

 

827

 

Gain on sale of assets

 

(2,412

)

 

 

(2,176

)

Gain on insurance recovery

 

(874

)

 

 

—

 

Amortization of original issue discount and debt issuance costs

 

885

 

 

 

409

 

Change in assets and liabilities:

 

 

 

(Increase) decrease in receivables

 

(13,734

)

 

 

33,917

 

(Increase) decrease in inventories

 

9,481

 

 

 

(2,160

)

Increase in other assets

 

(1,027

)

 

 

(2,133

)

Increase (decrease) in accounts payable

 

12,498

 

 

 

(11,179

)

Increase (decrease) in accrued liabilities and other

 

(3,916

)

 

 

1,086

 

Net cash provided by operating activities

 

42,296

 

 

 

63,842

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(29,940

)

 

 

(20,134

)

Proceeds from divestitures, net of cash disposed

 

48,499

 

 

 

19,355

 

Proceeds from sale of property, plant and equipment

 

3,188

 

 

 

2,952

 

Proceeds from insurance property claim

 

1,385

 

 

 

—

 

Net cash provided by investing activities

 

23,132

 

 

 

2,173

 

 

 

 

 

Cash flows from financing activities:

 

 

 

Borrowings on lines of credit

 

177,541

 

 

 

198,486

 

Payments on lines of credit

 

(224,292

)

 

 

(229,657

)

Debt issuance costs

 

(50

)

 

 

—

 

Purchases of treasury stock

 

(4,504

)

 

 

(28,226

)

Proceeds from employee stock plans

 

17

 

 

 

179

 

Other financing activities

 

(9,538

)

 

 

(2,950

)

Net cash used in financing activities

 

(60,826

)

 

 

(62,168

)

 

 

 

 

Effect of exchange rate changes on cash

 

(119

)

 

 

(504

)

 

 

 

 

Net increase in cash, cash equivalents, and restricted cash

 

4,483

 

 

 

3,343

 

Cash, cash equivalents, and restricted cash at beginning of period

 

38,901

 

 

 

25,061

 

Cash, cash equivalents, and restricted cash at end of period

$

43,384

 

 

$

28,404

 

 

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 Income (Loss) from Continuing Operations, Adjusted Income (Loss) from Continuing Operations Per Common Share, earnings before interest, taxes, depreciation and amortization (“EBITDA”) from Continuing Operations, Adjusted EBITDA from Continuing Operations, Free Cash Flow, and Adjusted EBITDA Margin from Continuing Operations.

 

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 Income (Loss) from Continuing Operations and Adjusted Income (Loss) from Continuing Operations Per Common Share

 

The following tables reconcile the Company’s income (loss) from continuing operations and income (loss) from continuing operations per common share calculated in accordance with GAAP to the non-GAAP financial measures of Adjusted Net Income (Loss) from Continuing Operations and Adjusted Net Income (Loss) from Continuing Operations Per Common Share:

Consolidated

Three Months Ended

 

Nine Months Ended

(In thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Income from continuing operations (GAAP)

$

14,869

 

 

$

8,628

 

 

$

2,680

 

 

$

27,551

 

 

$

8,981

 

Gain on insurance recovery

 

—

 

 

 

—

 

 

 

—

 

 

 

(67

)

 

 

—

 

Gain on legal settlement

 

—

 

 

 

—

 

 

 

—

 

 

 

(550

)

 

 

—

 

Severance costs

 

113

 

 

 

175

 

 

 

466

 

 

 

921

 

 

 

1,487

 

Tax on adjustments

 

(24

)

 

 

(37

)

 

 

(98

)

 

 

(64

)

 

 

(312

)

Unusual tax items (1)

 

(14,617

)

 

 

—

 

 

 

—

 

 

 

(14,617

)

 

 

—

 

Adjusted Income from Continuing Operations (non-GAAP)

$

341

 

 

$

8,766

 

 

$

3,048

 

 

$

13,174

 

 

$

10,156

 

 

Adjusted Income from Continuing Operations (non-GAAP)

$

341

 

$

8,766

 

$

3,048

 

$

13,174

 

$

10,156

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

86,377

 

 

85,473

 

 

86,310

 

 

85,619

 

 

86,873

Dilutive effect of stock options and restricted stock awards

 

1,113

 

 

2,153

 

 

1,724

 

 

1,834

 

 

1,810

Weighted average common shares outstanding - diluted

 

87,490

 

 

87,626

 

 

88,034

 

 

87,453

 

 

88,683

 

 

 

 

 

 

 

 

 

 

Adjusted Income from Continuing Operations Per Common Share - Diluted (non-GAAP):

$

—

 

$

0.10

 

$

0.03

 

$

0.15

 

$

0.11

 

(1) Unusual tax items primarily reflects the release of valuation allowances on U.S. net operating losses and other tax credit carryforwards that are now expected to be realized following the sale of the Fluids Systems business.

 

Newpark Resources, Inc.

Non-GAAP Reconciliations (Continued)

(Unaudited)

 

EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA Margin from Continuing Operations

 

The following table reconciles the Company’s income (loss) from continuing operations calculated in accordance with GAAP to the non-GAAP financial measures of EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA Margin from Continuing Operations:

Consolidated

Three Months Ended

 

Nine Months Ended

(In thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Revenues

$

44,207

 

 

$

66,791

 

 

$

57,262

 

 

$

159,965

 

 

$

161,193

 

Income from continuing operations (GAAP)

$

14,869

 

 

$

8,628

 

 

$

2,680

 

 

$

27,551

 

 

$

8,981

 

Interest expense, net

 

943

 

 

 

909

 

 

 

1,017

 

 

 

2,612

 

 

 

3,154

 

Provision (benefit) for income taxes

 

(14,016

)

 

 

2,483

 

 

 

2,062

 

 

 

(9,626

)

 

 

4,900

 

Depreciation and amortization

 

5,592

 

 

 

5,674

 

 

 

5,821

 

 

 

16,932

 

 

 

17,688

 

EBITDA from Continuing Operations (non-GAAP)

 

7,388

 

 

 

17,694

 

 

 

11,580

 

 

 

37,469

 

 

 

34,723

 

Gain on insurance recovery

 

—

 

 

 

—

 

 

 

—

 

 

 

(67

)

 

 

—

 

Gain on legal settlement

 

—

 

 

 

—

 

 

 

—

 

 

 

(550

)

 

 

—

 

Severance costs

 

113

 

 

 

175

 

 

 

466

 

 

 

921

 

 

 

1,487

 

Adjusted EBITDA from Continuing Operations (non-GAAP)

$

7,501

 

 

$

17,869

 

 

$

12,046

 

 

$

37,773

 

 

$

36,210

 

Adjusted EBITDA Margin from Continuing Operations (non-GAAP)

 

17.0

%

 

 

26.8

%

 

 

21.0

%

 

 

23.6

%

 

 

22.5

%

 

Free Cash Flow

 

The following table reconciles the Company’s net cash provided by operating activities calculated in accordance with GAAP to the non-GAAP financial measure of Free Cash Flow:

 

Consolidated

Three Months Ended

 

Nine Months Ended

(In thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Net cash provided by operating activities (GAAP)

$

2,765

 

 

 

27,581

 

 

$

26,994

 

 

$

42,296

 

 

$

63,842

 

Capital expenditures

 

(9,472

)

 

 

(6,586

)

 

 

(4,787

)

 

 

(29,940

)

 

 

(20,134

)

Proceeds from sale of property, plant and equipment

 

1,146

 

 

 

899

 

 

 

648

 

 

 

3,188

 

 

 

2,952

 

Free Cash Flow (non-GAAP)

$

(5,561

)

 

$

21,894

 

 

$

22,855

 

 

$

15,544

 

 

$

46,660

 

 

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:

 

Industrial Solutions

Three Months Ended

 

Nine Months Ended

(In thousands)

September 30, 2024

 

June 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Revenues

$

44,207

 

 

$

66,791

 

 

$

57,262

 

 

$

159,965

 

 

$

161,193

 

Operating income (GAAP)

 

7,286

 

 

$

19,392

 

 

$

14,336

 

 

$

39,614

 

 

$

41,593

 

Depreciation and amortization

 

5,155

 

 

 

5,215

 

 

 

5,224

 

 

 

15,551

 

 

 

15,758

 

EBITDA (non-GAAP)

 

12,441

 

 

 

24,607

 

 

 

19,560

 

 

 

55,165

 

 

 

57,351

 

Gain on insurance recovery

 

—

 

 

 

—

 

 

 

—

 

 

 

(67

)

 

 

—

 

Gain on legal settlement

 

—

 

 

 

—

 

 

 

—

 

 

 

(550

)

 

 

—

 

Severance costs

 

49

 

 

 

175

 

 

 

162

 

 

 

742

 

 

 

254

 

Adjusted EBITDA (non-GAAP)

$

12,490

 

 

$

24,782

 

 

$

19,722

 

 

$

55,290

 

 

$

57,605

 

Operating Margin (GAAP)

 

16.5

%

 

 

29.0

%

 

 

25.0

%

 

 

24.8

%

 

 

25.8

%

Adjusted EBITDA Margin (non-GAAP)

 

28.3

%

 

 

37.1

%

 

 

34.4

%

 

 

34.6

%

 

 

35.7

%

 

Newpark Resources, Inc.

Non-GAAP Reconciliations (Continued)

(Unaudited)

 

Trailing Twelve Months (“TTM”)

 

Consolidated

Three Months Ended

 

TTM

(In thousands)

December 31, 2023

 

March 31, 2024

 

June 30, 2024

 

September 30, 2024

 

September 30, 2024

Revenues

$

46,455

 

 

$

48,967

 

 

$

66,791

 

 

$

44,207

 

 

$

206,420

 

Income from Continuing Operations (GAAP)

$

5,168

 

 

$

4,054

 

 

$

8,628

 

 

$

14,869

 

 

$

32,719

 

Interest expense, net

 

953

 

 

 

760

 

 

 

909

 

 

 

943

 

 

 

3,565

 

Provision (benefit) for income taxes

 

673

 

 

 

1,907

 

 

 

2,483

 

 

 

(14,016

)

 

 

(8,953

)

Depreciation and amortization

 

5,908

 

 

 

5,666

 

 

 

5,674

 

 

 

5,592

 

 

 

22,840

 

EBITDA from Continuing Operations (non-GAAP)

 

12,702

 

 

 

12,387

 

 

 

17,694

 

 

 

7,388

 

 

 

50,171

 

Gain on insurance recovery

 

—

 

 

 

(67

)

 

 

—

 

 

 

—

 

 

 

(67

)

Gain on legal settlement

 

—

 

 

 

(550

)

 

 

—

 

 

 

—

 

 

 

(550

)

Severance costs

 

—

 

 

 

633

 

 

 

175

 

 

 

113

 

 

 

921

 

Adjusted EBITDA from Continuing Operations (non-GAAP)

$

12,702

 

 

$

12,403

 

 

$

17,869

 

 

$

7,501

 

 

$

50,475

 

Adjusted EBITDA Margin from Continuing Operations (non-GAAP)

 

27.3

%

 

 

25.3

%

 

 

26.8

%

 

 

17.0

%

 

 

24.5

%

 

Industrial Solutions

Three Months Ended

 

TTM

(In thousands)

December 31, 2023

 

March 31, 2024

 

June 30, 2024

 

September 30, 2024

 

September 30, 2024

Revenues

$

46,455

 

 

$

48,967

 

 

$

66,791

 

 

$

44,207

 

 

$

206,420

 

Operating income (GAAP)

$

11,415

 

 

$

12,936

 

 

$

19,392

 

 

$

7,286

 

 

$

51,029

 

Depreciation and amortization

 

5,350

 

 

 

5,181

 

 

 

5,215

 

 

 

5,155

 

 

 

20,901

 

EBITDA (non-GAAP)

 

16,765

 

 

 

18,117

 

 

 

24,607

 

 

 

12,441

 

 

 

71,930

 

Gain on insurance recovery

 

—

 

 

 

(67

)

 

 

—

 

 

 

—

 

 

 

(67

)

Gain on legal settlement

 

—

 

 

 

(550

)

 

 

—

 

 

 

—

 

 

 

(550

)

Severance costs

 

—

 

 

 

518

 

 

 

175

 

 

 

49

 

 

 

742

 

Adjusted EBITDA (non-GAAP)

$

16,765

 

 

$

18,018

 

 

$

24,782

 

 

$

12,490

 

 

$

72,055

 

Operating Margin (GAAP)

 

24.6

%

 

 

26.4

%

 

 

29.0

%

 

 

16.5

%

 

 

24.7

%

Adjusted EBITDA Margin (non-GAAP)

 

36.1

%

 

 

36.8

%

 

 

37.1

%

 

 

28.3

%

 

 

34.9

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107381828/en/

IR CONTACT Noel Ryan or Paul Bartolai Investors@Newpark.com