Newpark Resources(US:NR)2022-02-18 19:10Financial Data and Key Metrics Changes - Consolidated revenues increased 18% sequentially to $180 million in Q4 2021, with reported EBITDA of $10.5 million, including $1.8 million of charges [26][44] - The reported net loss in Q4 was $0.04 per share, an improvement from a net loss of $0.11 per share in Q3 and a loss of $0.20 per share in Q4 of the previous year [45] - Cash flow from operating activities was a net cash usage of $17 million, primarily due to a $35 million increase in receivables [46] Business Line Data and Key Metrics Changes - The industrial solutions segment generated $52 million in revenues for Q4, reflecting an 18% sequential improvement, with $14 million of EBITDA [27][30] - Fluid systems segment revenues improved 18% sequentially to $128 million, with U.S. land revenues increasing 21% to $62 million [28][35] - International revenues for fluid systems increased 21% sequentially to $45 million, driven by activities in North Africa [28][39] Market Data and Key Metrics Changes - North American land revenues improved by 21% sequentially, significantly outpacing the 13% improvement in market rig count [35] - Canadian revenues increased 21% sequentially to $70 million, with operations not experiencing the typical slowdown during the holiday season [36] - International revenues returned to the upper-$40 million range in Q1 2022, aligning with pre-COVID levels [56] Company Strategy and Development Direction - The company aims to reshape its fluids business into a more agile and capital-light model, focusing on higher returning growth markets [10][12] - Expansion into sustainable technology and service solutions is a priority, leveraging existing manufacturing capabilities [11][15] - The company is pursuing strategic options for its mineral grinding business to unlock liquidity for higher returning opportunities [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving outlook for 2022 and the strength of long-term fundamentals across major energy sectors [50] - The industrial solutions segment is expected to see sequential growth in rental and service revenues in Q1 and Q2 2022 [51] - The fluid systems segment is anticipated to remain profitable, with modest revenue growth expected in Q1 [54] Other Important Information - Corporate office expenses increased to $9.3 million in Q4, primarily due to elevated incentive expenses and legal costs [40] - The company ended the year with a total debt balance of $115 million and a cash balance of $24 million, resulting in a 20% debt to capital ratio [48][49] - The company plans to maintain a capital-light model, with limited capital investments in the fluids business [59] Q&A Session Summary Question: Expansion of manufacturing beyond core matting - Management indicated that the expansion relates to repurposing and recycling post-industrial materials, with further updates to come [66][67] Question: Outlook for mat sales - Management noted that timing slips in international markets are pushing some sales from Q1 to Q2, but project flow remains typical [68][69] Question: Exiting the mineral grinding business - Management emphasized the importance of protecting existing businesses with supply agreements during the exit process [70][71] Question: Drill ship mechanical issues - Management confirmed that the issues have been corrected and normal activity is expected to resume in February [78] Question: North American fluids market growth - Management stated that early Q1 activity levels are consistent with expectations, with an increase in activity anticipated [80][81] Question: M&A expenses in Q4 - Management clarified that expenses were related to the acquisition in the mats business and the joint venture in Saudi Arabia [84]