Newpark Resources(US:NR)2022-05-04 22:51Financial Data and Key Metrics Changes - Consolidated revenues decreased 2% sequentially to $176 million in Q1 2022, primarily due to a pullback in Industrial Solutions direct sales, offset by growth in Fluids Systems [14] - Reported EBITDA for Q1 was $11.4 million, with contributions of $11.2 million from Industrial Solutions and $7.4 million from Fluid Systems [15] - Interest expense declined by 41% to $1.2 million in Q1 following the maturity of convertible bonds [23] Business Line Data and Key Metrics Changes - Industrial Solutions segment revenues were $35 million with an operating income of $5.5 million, impacted by a $900,000 operating loss from the wind down of industrial blending operations [16] - Fluid Systems revenues improved 10% sequentially to $141 million, with U.S. land revenues increasing 10% to $68 million [19] - Rental and service revenues in Industrial Solutions increased by 8% sequentially to $31 million, driven by power transmission and industrial markets [17] Market Data and Key Metrics Changes - Revenues from North America land improved by 73% year-over-year, while Gulf of Mexico revenues declined by $5 million [21] - International revenues increased by 74% year-over-year, benefiting from improved customer activity across EMEA and Asia-Pacific markets [21] - In Canada, revenues increased 34% sequentially, marking the strongest quarter in four years [20] Company Strategy and Development Direction - The company is exploring the divestiture of its U.S. mineral grinding business to transform its Fluids business into a capital-light model [11] - The company anticipates completing a joint venture in Saudi Arabia in the second half of the year [12] - The focus remains on enhancing cash generation and returning value to shareholders through share repurchases and investments in high-return growth opportunities [39] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving market conditions and the strength of long-term fundamentals across major energy sectors [29] - The geopolitical landscape is driving a renewed desire for energy security, influencing market activity levels [8] - Despite challenges from supply chain issues and inflation, the company expects strong growth in Q2, particularly in rental and service revenues [30] Other Important Information - The company completed an amendment to its U.S. asset-based loan facility, extending it until 2027 and providing additional liquidity [13] - Corporate office expenses were $7.9 million in Q1, reflecting a year-over-year increase due to legal and professional spending [22] Q&A Session Summary Question: What type of RFP activity is being seen around International Fluids contracts? - Management noted that there is typical RFP flow and expressed encouragement regarding the processes, particularly in the European community focusing on energy security [41][42]