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Newpark Resources, Inc. (NR)
Q3 2008 Earnings Call Transcript
October 31, 2008, 10:00 am ET
Carol Cole [ph] – DRG&E
Paul Howes – President & CEO
Jim Braun – VP and CFO
Jim Rolothan [ph] – Raymond James
Karen David-Green – Oppenheimer
Mike Harrison – First Analysis
Terese Fabian – Sidoti and Company
Marshal Atkins – Raymond James
Vijay Singh – Janco Partners
Pierre Conner – Capital One Southcoast
Previous Statements by NR
» Newpark Resources Inc. Q4 2008 Earnings Call Transcript
» Newpark Resources, Inc. Q2 2008 Earnings Call Transcript
» Newpark Resources, Inc. Q1 2008 Earnings Call Transcript
Thank you, Vance, and good morning, everyone. We appreciate your joining us for the Newpark Resources Conference Call today to review 2008 third quarter results. We would also like to welcome our internet participants listening to the call simulcast live over the internet.
Before I turn the call over to management, I have a few housekeeping items to cover. For those of you who do not receive an e-mail of the release this morning I would like to be added to the distribution list. Please call the DRG&E offices at 713-529-6600 to provide us your contact information, or you can e-mail me at the address shown on the context section of the press release.
There will be a replay of today's call, and that will be available via webcast on the company's Web site at www.newpark.com. There will also be a recorded replay, which will be available until November 7th, and that information is in yesterday's release.
Please note that the information reported on this call speaks only as of today, October 31st, 2008, and therefore you are advised to time-sensitive information may no longer be accurate as of the time of the replay. In addition, the comments made by management today of Newpark during this conference call may contain forward-looking statements within the meaning of the United States Federal Securities laws. These forward-looking statements reflect the current views of the management of Newpark. However, various risks, uncertainties, and contingencies could cause Newpark's actual results performance or achievement to differ materially from those expressed in the statements made by management.
The listeners are encouraged to read the company's 2007 annual report on Form 10-K, subsequently filed quarterly reports on Form 10-Q, and current report on Form 8-K to understand certain of those risks, uncertainties and contingencies.
Now with all that said I would like to turn the call over to Newpark President and CEO, Mr. Paul Howes.
Thank you, Carol. Good morning to everyone. We would like to take this opportunity to thank all of you for joining us today for our third quarter conference call. With me today is Jim Braun, our Chief Financial Officer.
I would like to begin by first commenting on the pending sale of the environmental business, and then highlight some of the results of the quarter. Following my remarks, Jim will cover the operational and financial details of the quarter. I would then conclude the discussion of our market outlook before opening the call to Q&A.
Now let me briefly address the sale of the environment business to CCS. After signing agreement with CCS in April 2008, we made our initial HSR filing in May. In July, the FTC issued a request for additional information and documents as part of its standard review process.
On October 23rd, the FTC informed us that they intend to file suit to block the sale due to their belief that the transaction would be anti-competitive and they have filed a complaint in Federal District Court, seeking a temporary restraining order and preliminary injunction to preserve the competitive status quo pending an administrative trial. It's our belief that the FTC conclusions are erroneous [ph].
We disagree with their position, and at this time we intend to oppose the FTC's request to obtain a preliminary injunction to prevent the closing of the sale. Given the circumstances it is unlikely that the transaction will close during the fourth quarter.
Now turning our attention to the quarter, I would like to emphasize how pleased I am with our financial results in what has become an increasingly challenging environment for oil field service companies. We continue to make strong progress growing the company both in domestic and international market.
Revenues for the quarter were a record $212 million, up 9% sequentially, and 38% over the third quarter of last year. Our income from continuing operations for the quarter rose 53% year-over-year to $11.7 million or $0.13 per share.
Our Fluid and Engineering segment revenues were $189 million in the third quarter, up 45% from the same quarter a year ago. Market share gains in North America contributed significantly as did higher pricing and a 13% increase in the average rig count.
We saw market share gains in East Texas, West Texas, Oklahoma, and the Rockies. Canadian revenues nearly doubled for the third quarter of 2007 as the rig count was up 25% from a year ago and market share gains were also achieved.
In the international markets, our Fluids business continued to show strong growth due to increased drilling activity and market share gains in North Africa and Eastern Europe. Following the completion of our Brazilian Fluid plant in September this year we delivered our first product in the offshore deepwater market.