Newpark Resources(US:NR)2021-11-03 19:51Financial Data and Key Metrics Changes - Consolidated revenues improved 7% sequentially to $152 million, including an 11% improvement in Fluids Systems [7][10] - Consolidated third quarter EBITDA generation was $4 million, which includes $4 million of charges associated with Hurricane Ida and restructuring costs [7][10] - Reported net loss in the third quarter was $0.11 per share, compared to a net loss of $0.07 per share in the second quarter [21][22] Business Line Data and Key Metrics Changes - Industrial Solutions segment revenues declined 3% sequentially to $44 million, with a $5 million decline in rental and service revenues offset by a $4 million increase in product sales [12][14] - Fluids Systems segment revenues improved 11% sequentially to $108 million, primarily driven by improvements in Canada and other international markets [15][16] - Year-to-date site access revenues from power transmission and other industrial markets reached $108 million, on pace for nearly $115 million for the full year, a 25% improvement from the previous high mark [9] Market Data and Key Metrics Changes - U.S. revenues in Fluids Systems remained in line with prior quarter, with modest improvements in land activity offset by a $2 million weather-related decline in the Gulf of Mexico [10][15] - International revenues improved 6% sequentially to $37 million, with expansion in Asia Pacific being the primary driver [10][16] - North America land revenues nearly doubled year-over-year, while Gulf of Mexico revenues decreased modestly [17] Company Strategy and Development Direction - The company is focused on reshaping its U.S. Fluids business and expanding its presence in the power transmission market [7][9] - There is an ongoing effort to rationalize inventories and streamline the organization in response to smaller market structures [59] - The company plans to resume returning value to shareholders in 2022 through share repurchases after addressing capital needs for growth [39][66] Management's Comments on Operating Environment and Future Outlook - Management remains encouraged by improving market dynamics in the oil and gas sector despite ongoing challenges from inflationary pressures and supply chain issues [27][28] - The company anticipates continued strength in the longer-term fundamentals across all major energy sectors, with expectations for revenue growth in 2022 [36][38] - Management highlighted the importance of maintaining a commitment to safety and compliance while focusing on innovation and sustainable products [48][49] Other Important Information - SG&A costs were $24 million in the third quarter, reflecting a $1 million increase from the prior quarter [18][19] - The company ended the third quarter with a total debt balance of $94 million and a cash balance of $31 million, resulting in a modest 17% debt-to-capital ratio [25][26] - The CEO announced plans to retire, with Matthew Lanigan set to succeed him, emphasizing continuity in leadership and strategy [41][42] Q&A Session Summary Question: Update on restructuring efforts in the U.S. Fluids business - Management is rationalizing inventories and streamlining the organization to adapt to smaller market structures [59] Question: Outlook for 2022 regarding power transmission and industrial markets - There is significant investment in grid resilience and renewables, which serves as a tailwind, while supply chain issues present headwinds [60][64] Question: Plans for share repurchases post-convertible bond maturity - The company plans to utilize free cash flow for share repurchases while also considering capital investments for growth [66]