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Newpark Resources, Inc. (NR)
Q1 2008 Earnings Call Transcript
May 2, 2008 10:00 am ET
Ken Dennard – IR, DRG&E
Paul Howes – President and CEO
Jim Braun – VP and CFO
Marshall Adkins – Raymond James
Brad Evans – Heartland
Terese Fabian – Sidoti & Co.
Karen David-Green – Oppenheimer
John Flanagin – First Analysis Securities Corporation
Roger Young – Wm Smith & Co.
Andrew Morey – Cowen Asset Management
Al Shams – MidSouth Capital
Andrew Rosenberg – Footprints Asset Management
Previous Statements by NR
» Newpark Resources Inc. Q4 2008 Earnings Call Transcript
» Newpark Resources, Inc. Q3 2008 Earnings Call Transcript
» Newpark Resources, Inc. Q2 2008 Earnings Call Transcript
I'd now like to turn the conference over to Mr. Ken Dennard with the DRG&E. Please go ahead.
Thank you, Nicole, and good morning, everyone. Like to thank you for joining us for Newpark Resources conference call today to review 2008 first quarter results. We'd also like to welcome our Internet participants listening to the call as it is being simulcast live on the Web. Before I turn the call to management I do have the normal housekeeping details to run through. For those of you who didn't receive an e-mail of the release yesterday afternoon and would like to be added to the distribution list, please call our offices at DRG&E and that's 713-529-6600 to provide your contact information or you can e-mail me with your e-mail information. There will be a replay of today's call as you are aware and it will be available on the company's web site, and that's www.newpark.com. There's also a recorded telephonic replay that'll be available until May 9th and that information is in the press release put out yesterday.
Please note that information on this call only speaks as of today, May 2, 2008, and therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening. In addition, the comments made today by management of Newpark during the call may contain forward-looking statements within the meaning of the United States federal securities law. These forward-looking statements reflect the current views of management of Newpark, however, risks – various risks, uncertainties, and contingencies could cause Newpark's actual results, performance or achievement to differ materially from those expressed in the statements by management. The listener is encouraged to read the company's Annual Report on Form 10-K for year ended December 31, 2007 to understand certain of those risks, uncertainties, and contingencies.
Thank you and now with that being said I'd like to turn the call over to Newpark's President and CEO Mr. Paul Howes. Paul?
Thank you, Ken. We'd like to take this opportunity to thank all of you for joining us today for our first quarter 2008 conference call. With me today is Jim Braun, our Vice President and Chief Financial Officer. I'd like to begin by covering some of the highlights in the quarter. Following my remarks Jim will then discuss the financial results and I will conclude with a brief discussion of our market outlook before opening the call up to Q&A.
Now, turning our attention to the first quarter results, we are pleased to announce that our financial performance is improving. Our revenue has grown from $149 million to $178 million, a 20% increase year-over-year. In addition, our income from continuing operations rose $8.7 million, or $0.10 per share. This compares to $0.06 per share for the first quarter of 2007.
Our Fluids Systems and Engineering segment posted strong revenue growth of 25% from $125 million to $157 million year-over-year and increased sequentially 15% from $136 million. This strong performance primarily reflects our continued focus on deeper and more complex wells and continued market penetration where the inherent value of our technology and service is recognized by our customers.
I'd like to highlight the fact that during the quarter, we generated strong revenue growth in the Rockies under a new contract with Ultra Petroleum where we are providing fluids and services to their rigs in Wyoming. In addition, we are also able to make to progress in passing through some of cost increases that we had seen in 2007.
Our international Fluids business was also strong, benefiting from market share gains in Europe and North Africa. Revenues from our Mediterranean operations rose 8% sequentially and 87% year-over-year and we recently won new contracts for offshore work in Libya with Hess, Petrobras, and Nippon Oil.
We are also expanding our presence Brazil where we were awarded recently deep water offshore fluids contract with a super major. In support of that contract and other tenders we are bidding on we have previously announced the building of a new fluids facility in Rio de Janeiro. We view this investment as a strategic move to penetrate this attractive and growing market.
Now, turning to Mats and Integrated Services. The South Louisiana land market continues to be problematic. The reported number of active rigs working on land in southern Louisiana has declined by more than a third since last year's first quarter, which took its toll on this quarter's results. The segment also recorded pre-tax charges related to inventory and receivable write-downs, as well as severance cost associated with the restructuring activities in the first quarter, totaling $1.2 million. In an effort to improve our bottom line in this business, we have reduced operating costs in line with current rig count. We continue to look for opportunities to expand this business outside the Gulf Coast market.