Npk International Inc. · NYSE:NPKI
Npk International — Newpark Resources — Q2 2009 Earnings Presentation
25 slides from Npk International's earnings presentation, Aug 19, 2009
Slide 1: Newpark Resources August 2009
Newpark Resources August 2009
Slide 2: Forward-Looking Statements
2 2 2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. All statements that address expectations or projections about the
Slide 3: Operational Highlights
3 3 3 Operational Highlights Quickly responded to weak North American market conditions Committed to managing costs and optimizing cash flow to offset impact of lower North American drilling activity Positioned for further growth in international businesses Mediterranean revenues remain stable Meani
Slide 4: Cost Management in a Downturn
4 4 4 Cost Management in a Downturn Began cost cutting initiatives in mid-Q4 2008 To date, we estimate annualized cost savings of approximately $80 million from actions taken so far Consolidate NESI & NMIS, leverage purchasing and logistics, improve efficiencies, reduced salaries and wages, lower di
Slide 5: 2Q 2009 Summary
2Q 2009 Summary Total revenues of $110 million in 2Q 2009 versus $211 million in 2Q 2008 Net loss of $8.8 million, or 10¢ per share, including $3.1 million after-tax charges for severance, non-renewal of barge leases and asset write-downs Cost cutting having positive impact; sequentially $3 million
Slide 6: Market Outlook: Balance of 2009
6 Market Outlook: Balance of 2009 The North American market continues to be difficult but appears to be stabilizing Don't see meaningful recovery in North America as excess natural gas supply and reduced demand keep downward pressure on the price of natural gas Low levels of rig activity in North Am
Slide 7: Company Overview
7 7 7 Company Overview Specialized provider of: Fluids Systems and Engineering Well Site Construction Services Environmental Services Customers: Oil and Gas Industry Key geographic markets: North America North Africa Eastern Europe South America First Half 2009 Revenue $237 million
Slide 8: Drilling Fluids - Market Share
8 Drilling Fluids - Market Share Our worldwide market share has grown to 8% from 6% just four years ago Source: Spears & Associates
Slide 9: Fluids Systems and Engineering Scope of Operations - North America
9 Serves major North America basins; recently expanded to Appalachian - Marcellus shale Growing presence in the Haynesville and Eagle Ford Shale Approximately 16% share of U.S. markets served in 20091 1 Source: Company estimate Fluids Systems and Engineering Scope of Operations - North America
Slide 10: Fluids Systems and Engineering Expanding Internationally
10 10 10 Targeted growth markets Core: Italy, Algeria, Libya & Tunisia Brazil: Petrobras & IOC's New Market Opportunities: Turkey, Egypt, Romania and the Middle East Recent "landmark" events Two successful wells in Black Sea Offshore work in Libya with IOC's & NOC FY08 Revenue Mix: 80% North America
Slide 11: Penetrating Brazilian Offshore Market
Penetrating Brazilian Offshore Market Brazilian fluids plant operational in September 2008 Capacity expansion completed in Q2 2009 to support IOCs 2nd largest in country fluids capacity Contributed to XOM's first successful pre-salt well in the Santos basin Contracts with Petrobras, XOM, Maersk and
Slide 12: Environmental Services
12 Environmental Services Processes and disposes of E&P waste Non-hazardous oilfield Naturally occurring radioactive waste Industrial waste Leading market position in U.S. Gulf Coast Use low pressure injection techniques Waste disposed into unique geological structures underground Has remained profi
Slide 13: Well Site Construction Services
Well Site Construction Services Well Site Services Market areas some of hardest hit during this downturn Closed North Louisiana site construction business South Louisiana rig count at historic lows Aggressively moved to reduce people and costs 43% headcount reduction over past 12 months Composite Ma
Slide 14: Capital Structure
14 Capital Structure Continued debt reduction from balance sheet liquidation; $43m debt YTD 2009 Executed waiver and amendment to existing revolving credit facility No significant near- term debt maturities: $10 million per year next four years 14
Slide 15: Credit Agreement Changes
Leverage and Fixed Charge Ratios were not in compliance as of June 2009 Modified Consolidated Leverage Ratio as follows (maximum): Modified Consolidated Fixed Charge Ratio as follows (minimum): Financial covenant calculations will use annualized results rather than trailing four quarters until June
Slide 16: Credit Agreement Changes
Amended the pricing grid (in basis points) as illustrated below: Credit Agreement Changes
Slide 17: Summary
17 17 17 Summary Right sized the business in North America to reflect current market conditions In North America, 2009 to be tough year with no meaningful recovery expected Opportunities to grow, even during downturn, by attracting new customers and entering new markets International market position
Slide 18: Appendix
Appendix NYSE: NR
Slide 19: Consolidated Statements of Operations
Financials ‘Newpark Resources, Inc. ‘Consolidated Statements of Operations ‘Three Months Ended ‘Six Months Ended Wraudied June 30, une 30, (Gn thousand, excep per hare al) 2009 2008 05 2008 Revers S 109.599 $210497 $236,537, $.405,283 Cost of reverses 103,906 12689 27818 327,769 Sling, general and a
Slide 20: Financials
20 20 20 20 Financials <root/>
Slide 21: Operating Segment Results
Financials Newpark Resources, Inc. ‘Operating Segment Results (Unaudited) ‘Three Months Ended (in thousands) ‘Fane 30, 2009 March 31, 2009 Fane 30, 2008 Revenues. Fluids systems and engineering s 602 S 106,588 169,128 ‘Mats and integrated services 8,688 8,863, 24,904 Environmental services 11,319 11
Slide 22: Financials
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Slide 23: Experienced Leadership
23 23 23 Experienced Leadership Paul Howes, President & CEO Jim Braun, VP & CFO Mark Airola, GC & Admin Officer Bill Moss, VP Corporate Strategy & Development Bruce Smith, President Fluids Systems and Engineering Tom Eisenman, President Excalibar Minerals LLC Sammy Cooper, President Mats & integrate
Slide 24: Management Biographies: Paul Howes and James Braun
24 24 24 24 Paul L. Howes, President & CEO: Paul joined Newpark's Board of Directors and was appointed its Chief Executive Officer in March 2006. In June 2006, Mr. Howes also was appointed as Newpark's President. Mr. Howes' career has included experience in the defense industry, chemicals and plasti
Slide 25: Management Biographies: Bruce Smith and William Moss
25 25 25 25 Bruce C. Smith, President Fluids Systems and Engineering: Bruce joined Newpark in April 1998 as Vice President, International. Since October 2000, he has served as President of its subsidiary Newpark Drilling Fluids, L.P. Prior to joining Newpark, Mr. Smith was the Managing Director of t