Newpark Resources(US:NR)2024-11-12 21:47Financial Performance - Revenues decreased 23% to $44.2 million for Q3 2024, compared to $57.3 million for Q3 2023[59] - Rental and service revenues decreased by $5.7 million (15%) in Q3 2024, while product sales revenues decreased by $7.4 million (39%)[61] - Operating income from continuing operations was $1.2 million in Q3 2024, down from $6.3 million in Q3 2023, reflecting an 80% decline[59] - The company reported a net loss of $174.3 million in Q3 2024, compared to a net income of $7.7 million in Q3 2023[59] - Revenues decreased 1% to $159.965 million for the first nine months of 2024, compared to $161.193 million for the same period in 2023[74] - Rental and service revenues decreased by $10.389 million (9%) for the first nine months of 2024, while product sales revenues increased by $9.161 million (20%)[75] - Operating income from continuing operations increased by 23% to $20.707 million for the first nine months of 2024, compared to $16.863 million for the same period in 2023[74] Expenses and Cost Management - Selling, general and administrative expenses decreased by $2.9 million to $11.0 million in Q3 2024, with SG&A as a percentage of revenues at 24.9%[64] - Selling, general and administrative expenses decreased by $5.5 million (13%) to $35.335 million for the first nine months of 2024[79] - Interest expense decreased by 17% to $2.612 million for the first nine months of 2024, compared to $3.154 million for the same period in 2023[82] Cash Flow and Debt Management - The company ended Q3 2024 with $43 million in cash and $14 million in total debt[67] - Net cash provided by operating activities was $42.3 million for the first nine months of 2024, down from $63.8 million for the same period in 2023[87] - Total debt decreased to $13.963 million as of September 30, 2024, from $62.029 million at the end of 2023[89] - Total debt to capitalization ratio improved to 4.2% as of September 30, 2024, compared to 13.0% at the end of 2023[89] Tax and Financial Benefits - A $14.0 million tax benefit was recorded in Q3 2024, primarily due to the release of valuation allowances on U.S. net operating losses[68] - The benefit for income taxes from continuing operations was $9.626 million for the first nine months of 2024, compared to a provision of $4.9 million for the same period in 2023[83] Future Outlook - The company expects revenues to improve in Q4 2024 due to higher customer rental project activity and product sales[62] - The company aims to reduce SG&A as a percentage of revenue to the mid-teens range by early 2026 following the sale of the Fluids Systems business[54] Financing and Credit Facilities - As of September 30, 2024, the applicable margin for borrowings under the Amended ABL Facility was 1.50% for BSBY borrowings and 0.50% for base rate borrowings[91] - The aggregate commitments under the Credit Agreement were reduced from $175 million to $100 million following the September 2024 amendment[91] - The U.K. subsidiary entered a £7.0 million term loan and a £2.0 million revolving credit facility, with an interest rate of 8.2% as of September 30, 2024[91] - Total principal amounts outstanding under financing arrangements were $14.0 million as of September 30, 2024, with $5.5 million borrowed under the U.K. term loan and credit facility[97] - The Amended ABL Facility requires a minimum fixed charge coverage ratio of 1.00 to 1.00 for the most recently completed four fiscal quarters[91] - The financial covenant requiring the Consolidated Leverage Ratio to be less than or equal to 4.00 to 1.00 will be tested for each fiscal quarter starting from June 30, 2024[91] Asset Management - Capital expenditures for the first nine months of 2024 totaled $29.9 million, primarily directed towards expanding the mat rental fleet[88] - The Fluids Systems business was sold in September 2024, with deferred consideration and estimated liabilities due from the purchaser expected to be finalized in the fourth quarter of 2024[94] Risk Management - The company has not used off-balance sheet financial hedging instruments to manage foreign currency risks associated with operations in the U.K.[98] - The company entered $3.5 million of new finance lease liabilities during the first nine months of 2024[91] - The interest rate for the U.K. facilities was based on the Sterling Overnight Index Average plus a margin of 3.25% per year[91]