NR Newpark Resources

Ken Dennard Investor Relations
Paul Howes President and Chief Executive Officer
Gregg Piontek Chief Financial Officer
Dave Paterson President-Fluids Business
Praveen Narra Raymond James
George O'Leary Tudor Pickering Holt & Company
Call transcript
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Greetings and welcome to the Newpark Resources, First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instruction] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ken Dennard, Investor Relations for Newpark Resources. Mr. you, Thank begin. may Dennard, you

Ken Dennard

today Thank of Officer; you, joining and We you Mats Dave Gregg With morning to and and Newpark's Chief Business; Executive Fluids Lanigan, and for the President Business. good Officer; me results. us XXXX call Chief first everyone. Paul Newpark Howes, review President the Financial appreciate Piontek, quarter operator, President are Matthew Resources webcast the Paterson, conference of

on for management the quarter remarks, Following will the outlook high-level commentary details provide first financial my results before a of opening Q&A. near-term and the call

Before the I through. XXXX, release. the There'll over included website will There company's available call a management, run normal replay is in a yesterday's I be of today's at replay XX, turn have May the be available call until be and and also to on housekeeping recorded information webcast details that will to by

only reported time-sensitive Please today, information information that replay, as note longer XXXX, that may advised reading. May of the call no on transcript of be as therefore are listening any time X, accurate of and you the speaks or this

conference In Securities the by made the during may States management within addition, forward-looking contain Laws. statements meaning this United comments the of call Federal

These forward-looking Newpark's of statements reflect the management. current views

from However materially in expressed those by contingencies or cause could uncertainties, statements achievements various the and risks, to Newpark's actual differ management. performance made results

certain the measures. to on some potential the including financial The report reports read encouraged Form quarterly uncertainties X-K listener The and also today to may COVID-XX. risks, of and of Form understand annual current include comments reports XX-K, is non-GAAP on impact Form those contingencies on XX-Q

website. financial included most press details directly the the Newpark's be can comparable to quarterly Additional found measures on reconciliation are GAAP release, which in and

I'd Mr. and to that turn Newpark's Howes, with me, behind Paul over call CEO, to Now, the Paul? like President

Paul Howes

and good Ken Thanks, morning, everyone.

communities few where employees, been at of among continue around have here to as pandemic the we work, The confirmed both they our the to COVID focus Newpark, pandemic continue services. the in families health employees vast live through and COVID-XX only businesses to through around their on essential U.S. the and the While the service safety manage and have here the remains our our of of of majority employees. able world our impact both Thankfully, world. been have the we our a our considered cases and customers

expertise our proud the announce On which capacity blending a and variety recently meet After products. related the of increased for have need chemical we we note, to that COVID-XX against to and are help leveraging joined fight cleaning disinfectants a from detail Food plant, and Conroe recently cover necessary at Administration chemical Protection the now blending and comments. production of in obtaining the certain regulatory the approvals my closing Environmental our cleaning Drug underway products is more Agency, I'll

to created of The historic caused conditions. imbalance turning gas unprecedented the coronavirus supply has collapse market of oil and the the resulting the lows. by Now the of demand price to and decline and oil industry

cost and necessary to decisions These company our our tough the of to in and contributions including match we U.S. structure, of to to executives decline are temporary our majority anticipated the current and retirement base As Directors U.S. a suspension reductions including but cost plan. the downsize reductions Board activity. our the adjust salary result, employees moved and quickly furloughs, for headcount of

with across consolidated executing U.S. first approximately our E&P have the strategic reduce several U.S. actions over land of we been revenue working both shale market dependency actions XX% generated to the our diversified Newpark, market. have strengthened for our outside These position quarter segments. on Fortunately our revenues the last and diligently years base of

returns of shareholders. desired the several Over we've last achieve the importance the by years in our to highlighted the strategy order

that the decline that we U.S. more is to and we now critical execute it the uncertainty unprecedented continue than facing, ever land With strategy. in activity are

requiring the right-size the fluids We changes recent market in that to structural have oil collapse recognize swift our in long-lasting business. prices will further land U.S. likely effects

previous the to have driving invested we accelerated variable capital already to land we operational longer reduce As more structure in the discussed cost well But undertaken calls, reduce supply-demand in cost U.S. our have and actions business. the light our of efforts expanded resulting the and level structure. term of significant in as a towards as pandemic U.S. imbalance, fluids footprint COVID-XX

contract all of land, heavy from products Mexico we relative breaker highlight U.S. IOC which International the of recently see collapse in impact is our our Arabia land, for to in with NOC Gulf region, consistent markets like the additional to markets revenue that in years. the and to an in and and Outside with extending U.S. important of some it's oil result concentration supply subsidiary while I'd will and stability that our in a COVID greater Further will expect XXXX experience prices, patented our two EMEA we acquired last that was XXXX. awarded Saudi year note both anticipate Cleansorb

American expanding role in ever volatility, our the than meaningful North Middle our business. to now fluids more the East With is

markets. same our of highlight our basins the Accelerating remains a XX%. fluids from dependency oil-focused to segment immediate E&P and land the Coronavirus utility from to markets other are timing sales In and while in and markets infrastructure projects, as non-E&P years, U.S. the product the remains reopening term focus medium our we we've Apart look the contributed both revenue business, declined the U.S. that diversification not our the less Through as utilities efforts XX% business. we of shifted in the unchanged. away our to growth than Mats has other recent non-E&P our roughly revenue of outlook economy. strategic beyond energy The now total generates our situation mats it's from longer impacting headwinds important facing

utilities segments remains competitive mat the strategy medium longer-term intact, outlook unchanged. the and the our to markets With in landscape remaining in and non-E&P

to turning specifics the of quarter. the Now

Our sequentially. million system flat by offset North $XXX performance the with IOCs XXXX our sequentially of improved in million expectation, as in largely Gulf fluid fluids $X First is revenues Quarter Canada strength seasonal in Mexico sequential in were million $X of land. a American systems relatively growth relatively line hosting continued and of revenues U.S. decrease

the quarter, in call, sequentially first as related the million March. the of of million by anticipated U.S. contributed $XX of in reflecting well first the as back customer Outside on $XX as million systems. timing quarter, For land North discussed revenues activities a $X fluids delays combination February's pulled America, COVID of to in unanticipated revenue

and $XX activity of decline relatively market during was the the delays due Product markets uncertainty remained quarter in caused number in sequentially segment, $X service million COVID mat This along a restrictions to a down. declined the by shut slowdown modest logistical stable results from first with combination the the aside QX quarter. sales anticipated to million COVID March. In orders by in a the pullback of citing rental European U.S. record from related and in to sales the growing customer related by

XX% and our call We We cash of a near free $XX $XXX first plans quarter. a that quarter lag of of consistent convertible in during delays, impact first like million, including maturity Mats and the flow quarter. we the the end Despite to debt the to with the of actions the we order inventory flow a share positive to the the free purchasing and million. our XXXX temporary to growth gas on taking February's oil debt cash identified December balance cash a bonds necessary through industry million remain receivable our outstanding total our in of downturn. note ended quarter of I'd net and began due collections balance address generation note during with $XXX Finally, generated committed

we We in also reduce sheet available facility liquidity only and have our capital well but a operational our positions settle, meaningful which to our ongoing XXXX solid us needs. balance maturity working as fund under credit XXXX, not our and with debt to did opportunities

call of the With that, to I'll Gregg hand the detailed financials the to discuss quarter. over

Gregg Piontek

update $X I'll by U.S. land increase. segment the modest quarter, a begin million most U.S. $XX in as to share million softening decline million from rig wells felt partially basins. a stronger a XX% softness in contribution quarter, in the the by to land was to being first everyone. of first in per Fluids drilled market offset the land the Mexico rig The reflecting operating reduction the and market $XX revenues improved morning count, U.S. In Systems in declines an the of number offshore Gulf with covering sequential consolidated in declined a revenues U.S. our outlook. results land reflecting of the good a and by specifics across X% sequentially on segment, Paul, for quarter from followed combination Thanks, a and near-term of the

quarter XX% Middle the timing back improving and in $XX of the first pulled discussed East February's contracts, million our sequentially million largest $XX international revenues reflected as Canada, in of operations to million call, the $X QX key we In revenues the seasonal declines. with uptick in to to quarter America, due the increase. activities Africa within on North first sequential Outside and the showing typical

million of year-over-year. a revenues on XX% our addition revenues in of $XX in decline based scheduling, most declined Gulf year-over-year Fluid our our related U.S. notably completion includes QX land region $XX the compared the increased our offset international the disruptions COVID revenues which experienced a also quarter, unanticipated million benefited This Mexico, expansion XXXX. Systems late X% On In into in reduction of million decline while fluids Italy. project anticipated $XX to to EMEA in basis, also growth have by from

footprint discussed the more right-size in a and land structure QX in our market. U.S. initiated our operational February plans we call, As to drive action variable cost on

recent accelerated actions. significantly the we've that face, impact expanded and industry of With and we the longer-term headwinds now COVID these

based we evaluating To our several of U.S. facilities on evolving of the the exited four date, closure we additional facilities outlook. and are longer-term have

infrastructure market to slowdown. centralized we addition, are to taking the support reduce In to adjust our actions U.S.

furloughs our compensation while by $XX in personnel annualized Overall, fluids expenses million. collectively employee reduced our and U.S. we've by benefits, workforce also reducing and XX% reductions approximately nearly year-to-date implementing

as in loss, actions the past charges of these first related majority inventory resulting were and $X costs a quarter. million in included $X.X Systems separation of employee yesterday's While million results of release million quarter an Fluid the within the our in operating month, $X EBITDA taken write-downs highlighted to first

Mats in revenues product the reflecting first largely sequentially million XX% Turning result. to record declined business. in following quarter pullback quarter, the the anticipated to fourth $XX segment the Total sales

$X in on quarter than more sales totaling sales the $XX of from customers uncertainty to impacted by anticipated the quarter. touched million first being addition QX negatively of in strong in million Paul in citing was delayed COVID-XX orders demand, resulting number by As the pullback product our in product a revenues

a with relatively exited rental expectations. as impact our quarter, COVID service and projects in Although modest total flat our experienced revenues line from rental we sequentially the remained first

our From perspective, segment of revenues a than $XX in in from derived roughly from was million of the that and Of basins mix markets, infrastructure was derived total the Northeast. markets. the other E&P of non-E&P XX% energy in generated the the revenues half gas-focused quarter more

revenues Comparing markets in first of a last million U.S. and a $XX revenue product E&P the along segment million, land declined $XX largely service decline to the rental million decline quarter sales. in reflecting with year, $X Mats

quarter product million first million operating compared as million income to and decline to of in of million. sales, the $X the $XX segment $XX $X declined sequential the income fourth resulting quarter Mats operating in EBITDA With

$X.X associated Total reductions. in sequential $X declined part expenses was with The corporate million compared the the first driven to quarter, to charges million decline in as quarter. million fourth workforce by lower sequentially $X.X office in

spending M&A quarter first in decline $XXX,XXX remaining as and to the activity. lower fourth quarter. expense $X.X in million due to severance includes personnel to As in The compared is the charges sequential reductions related

and change On a reflecting by with charge the costs. the expenses legal $X and prior office corporate retirement million million, a declined the spending professional lower basis, along year primarily policy in of personnel $X.X with impact year-over-year associated

as million and $XX The expense. last in charge year. and in SG&A decrease reflects in personnel in quarter severance first as to prior $X personnel as of primarily $XX The the as year, $XX million change the well policy the decline legal retirement million were quarter the well charges first and quarter the spending. fourth expense decreases sequential legal costs reflects lower spending in lower the compared largely and professional professional and for year-over-year million

value million quarter. of We purchased for $XX.X our $XX.X the convertible million notes par first during

costs write-off extinguishment required million However, a with debt. of associated on unamortized non-cash and resulting at the despite in $XXX,XXX $XXX,XXX to of $X.X debt purchasing discount the the loss discount issuance par, accounting notes, the notes rules a purchase

declined decline repurchases, fees in amortization million benefit reflects interest half of and first note in of which the quarter convertible non-cash $X.X discounts. the expense the roughly interest rates of the With facility and to

As the weighted of the the first borrowing X.X%. was of rate average approximately our debt end on quarter, cash facilities

income for geographic where U.S. reflects provision our a pretax loss expense million period. the quarter is losses, the first This tax composition tax was taxes in despite The pre-tax our on $XXX,XXX the benefit of the of the received impact higher than of result foreign earnings $XX from losses. reporting

per charges $X.XX of first press was share in of includes income release. quarter in compares which This $X.XX share per diluted last charges first quarter, loss quarter Net a of Our $X.XX share $X.XX yesterday's per highlighted net loss year. the fourth was per share $X.XX. in the net includes to of in the which as

significantly count on the date subject had of Gulf continue fortunately fluids, our turning rig headwinds land well market see U.S. remain decline any revenues to Canada. the which the sharp declines driven activity, to in outlook. near with In revenue as to more trended related seasonal have have and U.S. Mexico, expect the meaningful overall Now the our second COVID activities a we to by near-term April, land land term. we disruptions in operations. impact our In U.S. that decline meaningful expect to closely quarter we stable in In offshore a in not than as expect our U.S. will

North Looking outside America. of

been COVID-XX region. expect activities than of will land, project also causing EMEA activity from have stable global more limitations we impact staff personnel, logistical disruptions quarantines movements not particularly U.S. and our Although in our immune and restricted operations the remain with the delays, of of

project resilient of Africa with in the East impact Italy Europe COVID delays seeing impact. the The remains and and the while Middle most most activities significant showing are restrictions

second ongoing predict, While the our by are pandemic international the duration and $XX to health sequentially very quarter. difficult decline revenues million estimate the currently will magnitude least of at in we

few margin, terms and take the In actions in QX. take Further, a but recognize targeted the actions provide currently of will international markets a the to drive expect modest benefit quarters of are production we continuing it while operating aggressive U.S. necessary for we improvement line. products, to the cleaning business ramping bottom to only we cost we while will the up to line are

the the anticipate the receivables and second of the quarter as segment working million inventories It's business that loss net quarter. Fluids capital to consists $XXX in we segment highlight will majority increase with important end. Consequently, the carrying of Fluids invested roughly capital the of of in

proportional time, the over As which to business in a expect to provide net reductions markets, we impacted flows. drive cash we working capital in tailwind right-size

extent of remain restrictions. limited could logistical permits, factors governmental our Similarly, project to delays impact economy we expect the factors limited to customer recovery. we until the expect they product reopens. economic activity although segment, the mat customer rental has supply issuance as and and a short-term the point in that stable, remained the service see as confidence side, a COVID broader or projects some chain is In visibility work potential very sales our these on To fairly orders stoppage well customers, timing related dependent including of this remain at the variety on in until gain as the

projects typical the quoting to the and our to majority That product both economy expect Mats now sales. levered to remains improve said, we customer reopens. the markets, performance business for of with activity as robust, non-E&P-end more rental And segment

the level. expect QX Regarding will remain corporate million we expenses $X near office spending,

expense the US to see a from we international as to respect expense profits net the from modest likely tax with benefit will continue will operations we tax associated outweigh expect taxes, With losses.

which of cash cash ability previous the to investing by a the and consistent to course managing was our flow. quarter, capital. cash capital in all used Turning which provided net flow, $X activities to in adjust million decrease is first totaled with activities operating quarter working in $X million. quarter attributable net investments Substantially, demonstrates our Cash in

to pulling we market all the remainder will for continued XXXX reduce capital free have aggressively levers light spend expect the our total capital roughly we Paul flow cash generation. non-critical maintain eliminated we In which to changing $XX As of are conditions, of the mentioned, investments, million.

market anticipated strong US we $XXX the from working cash we expect business. capital, with softness, in generation Further, roughly particularly our of as net our Fluids reductions million right-size

$XX XX% and balance debt of cash XX%. of end Our and debt-to-capital a modest $XXX the of debt-to-capital balance ratio leverage of as with of ratio a a resulting of remains March total in net million total million

due remaining and outstanding the notes on Our our which facility, bank components include primary million $XX XXXX. million convertible US XXXX to $XX asset-based debt of December runs

currently million availability We of this $XX have on facility.

in this to Although debt. intended substantially international of outstanding coming $XX are actions of subsidiaries, our repatriated balance to executing reduce the plan million quarters, we the use hand resides all cash on our reduce we cash and our to in

our prepare We We to from to necessary available convertible US a the a XXXX for the and support hand, our convertible cash December our sufficient mature. existing on remains cash based are availability year to half and ongoing by asset anticipate notes, loan liquidity take than currently to provided of our continuing and operations actions facility our maturity provide more operations that away. which generated

need fund we liquidity capital noted noted of we've public As additional remains arise. it the markets. our access the sources be the maturity It past, in that intention should a also available, without to to should have need

European well estate additional US within alternative assets financing through operations create to as meaningful that used be liquidity can arrangements. as our have We or real secured

for Paul to over his back call the turn to like concluding I'd that, with remarks. And

Paul Howes

Greg. Thanks,

restart, proposition the Newpark when of three to these we the the value in turbulent drive continue themes and set opportunities I believe that highlight to uncertainty heart navigate I the want through will us will of times growth economy As apart. at

outstanding gas or First, access will Mexico, whether of Gulf of are desert providing of North to outstanding an and hallmark the America, around solutions to service the Algeria, continue of always world, to companies we Newpark. to customers a quality our we our X,XXXft and non-E&P oil and water support continue our the be in will in to has companies service been in drilling provide E&P utility

performance impact will positive advantages, we business companies the in market to on growing the our recognizing Second, Mats utility continue environment. energy our infrastructure where including our focus are on

in And predominantly third, EMEA longer to continue more activity opportunities business pursue we in international the region where will our the for Fluids we remain expect US. to than term in growth stable

volatility industry's When provides flow is our COVID the and invested Newpark, an head on unlike which a Market for new way reposition is will, industry but on the opportunity current and capital. returns to our not us destruction to the the history. consistent cash to Newpark drive do we within emerge be the rebounds, intend ourselves cycle, marketplace. pandemic certainly created company. Not We at demand and the XXXX-XXXX crisis able the face in to to capitalize stronger unprecedented business storm advantages it the we on will free change by competitive

provide the market quickly and let capabilities leveraging response details we unprecedented to So changes. how me are of example one on our

the E&P to plant market. provide XXXX, was Our opened chemical Conroe originally blending US products specialty in to

on capabilities a highly blending in needs a are these our personnel and number and industries best-in-class that found Our meet well can and are highlighted be skilled for website. to packaging video the equipped facility of chemical

able speed we've people our outside our and first the follow. line the and in flexibility expansion yet changes. of believe life cleaning our adapt to lasting with long-term the the us of oil response business changing cleaning will order, Packaging COVID The Facility. generated customer ingenuity of that we recently and our and I of of virus one with and of being expect Conroe as is gas received from firmly the we This our reflection orders higher for avenue demands way another of to provides and direct first of disinfectants the facility Blending been Having customer change world revenues a market. which this products those to volatile result a at market additional of demand products

to remain like our the liquidity in even I'd positions balance Finally, you and of remind that solid. sheet unprecedented face times, these

right-size the to balance we capital to continue the footprint market take oil downturns and transition. cash to know will our gas We working and strengthen our and We've and as sheet, harvesting been actions minimizing before, what levers from continue adjust our expenditures capital strategic business. to necessary through our in we pull

making quickly the an have team calls of to landscape. tough experienced capable ever-changing We to moving and adjust that's the

that shareholders well and for as close always call, for thanking on Newpark their by employees like in I to do, their I'd work investing in continued as With hard thanking us the dedication and our our focus safety. as

Operator? now We'll take questions. your


you. Thank

question. be question-and-answer conducting the session. from will Narra Praveen question Please Raymond with first now Our line James. with proceed [Operator of We a comes your Instructions]

Praveen Narra

is Good and start size think to to should then we free those the it therefore to be we on may more I we place to enacted we When or and and and expect on cash it each market of this flow willing looking cash down being EBITDA and well negative taking some this facility our there eventual is how what's take facility cutting scale and morning, want or should road, about ensuring are how that think take at expect what today individual is see? guys. size period to that will the saying, place flow we about or okay, cost how initiatives much then EBITDA periods? that cut positive

Gregg Piontek


So I'll to it then Gregg. hand kind over is David. start this of and

expect most the think markets international more kind the we be I is much business it's we markets, to -- to here. as -- much I initiatives stable. stable, the really highlight cost the US targeted of Mats beyond talked important more is COVID we here impacted about which look as think on at The

cycle quickly that pace of The the US coming And with one long-term down. really taken cost So it keys here, that's cutting we markets we're have really that go kind different about moving is forward to has keeping of than you're to business. outlooks the but have talking very been to Fluids have on date the recognize that, as we And activity my financials we market we'll that what earlier regarding add no -- where described a call to this longer restructure. comments do that's to want to on to you a bit need that? the XXXX. or some detailed of quarter. I size, okay, changes of evaluate; prior this be the little into in get structural David, is how we we expected going

Dave Paterson

Praveen. the these morning, today, look look at When Praveen, what at similar Good XXXX. it like And in is land pillars. today, very it I look looks Yes. to I looked I geographical at them. US May each three Fluids there's in And look dropping. business, dynamics if when you land pillars of at US different

of Now, the QX in will early the in that be and count end a count, rig we at QX. to US softening so structure for rig taken further we expect actions land further

resilient. very looks Mexico of Gulf

completion We have of the the good space. IOC Fluids with exposure diversified with customers into

see steady of with activity we So in Gulf Mexico. the the majors

The we or the been price is have rather biggest oil than have uncertainty impacted because of been have -- COVID rigs the international economic internationally The markets. in factors. the situation impacted

probably international see, visibility in will we'll we markets have in QX. better a So the

that building prior scalable So we've land a for us US structure and that. calls talked the in on big really about focus is

Paul Howes

as or bleeding negative whether XXX XXX be hitting proving basically so looking kind and what is operations point, the of not other low counts it's we're the Euro in and that modeling levels address financial right-sizing our your to firms' and be to to the rig those regions around all EBITDA cash and cash of is is at US. and our or Yes, could firm business to goal right-size and would to all

Praveen Narra

any that's positive I to you be so any any All obviously variable that, we we committed downturn cash you important be should we but important were I us. know right. cost about to think to structure Can say when be guys time, -- hear significantly. happy and period sufficiently can given EBITDA through us cycle to for meaningful guys really and quarter guess are And -- very XQ the flow variablizing of lumpy, free positive? still over hear, was that but

Gregg Piontek

maintain I that's you flow off, cost and, to step etc, look at seen take you view call we have tough not on focus at sure interim fast have the Paul a and the this because so you as and COVID is can market can't can in longer-term as take when getting -- that within we're through, also all a mentioned, think moving cash pace on in only legs, to in rigs but necessarily that the periods, and out that back you're but one dropping can way it positive, which it the you that's making the disruption you've the you out, the taking past say you focused what maintain we

Paul Howes

and it's lag the expenses. quickly the rock now. how dropping, tough how always that right, lead can but we we're tear is that, and our doing But to committed to to the is there That's goal fast commit periods right out

Praveen Narra

significant seem terribly you Can But concerned interpret just us we've seen that benefit on US give capital receivables. and side. be customer I little If for we on way ask guys to on you further? into particularly a that color more one working that translates collectability on about or a don't US, of and collectability XXXX how the how base thinking any bit pain, your of capital, could the working E&P Right. more of should that

Gregg Piontek

Fluids global so from part a in revenues and have to on obviously perspective. business is is that things has different the think base your that NOCs, customer out, yourself and credit-risk our we -- on it level, it IOCs there of very roughly you point picture I a Yes, XX% to couple remind of a a have is of coming to

it's secure a to receivables our have environment, leaned no through we is ability etcetera. challenging the question, U.S., there do

that I debt historical period the bad at best when was in from think is change look very see how didn't really during history guide debt And through of out. not, XXXX. our experience. you went challenging -- to We was experience a that it back time our it -- time, plays

there elevation debt. the no was bad So significant to

Paul Howes


Just speaking Paul. not so unconventional about on the process bashful we've what the what those cash we've and do construction that of is that about quality we quite of to wells. free quality cycles that's to in continue most in of And the honestly, placing ensure liquidity the This We're receivables. wells, and of produce we're part generate will this talked or necessary to about. used cycle flow are receivables that prior wells

Praveen Narra

guys. you thank helpful, much very Very


the comes [Operator line proceed question Holt & from question. your Instructions] with of Tudor George next Pickering Our Please with Company. O'Leary

George O'Leary

Adding Good questions. morning, to one guys. of on Praveen's

Fluids about like probably the to you standpoint, bit near-term are half a decremental harsher be I and pressure and they and they the between to two, the second kind margin that from the about And of going about think would then are I Mats of the you that if in differs think than are update expect near-term historically way decrementals year sounds of a Mats little margin right it is or versus year, the normal So the Fluids then, business? back how wonder to talk business in it the that half could environment. one,

Gregg Piontek


historically on the we you into absent flow-through keeping side, went quarters as XX% a that where, as in taking at looking the taken take range, structural in have that that to they on David there. margins more historically, work that point. a that with we structural to So and your more Obviously, and been Fluids seen near-term have the more one decremental but to we've -- pace the actions improve into been expect recognize see decremental is doing that's we're detail, little reductions would what the in incremental some margins our have actions one, before out. that ran cost see to have will to natural Those take that actions date by we with would here taking we're really few that XX%

that revenue and we a their Mat a there sales purchases. typical a start comfort On decremental of question historically. was we the really get up, I to Mats up outlook the projects that with in when the when of is changing not that side our what that that from would and because typical economic a business, revenue the of business, obviously and mean more margins seen expect is the range there When anything incremental in is that usually that therefore their again was question with anything, than of be the a high picks happens, COVID we've structurally level and There coming see. was customers ranges continue would the the

George O'Leary

down helpful just there you generate flow of deal kind kind blow and -- of business, and where cash very that color and priority as we or on that. then, continue first XXXX first sheet? the that's balance through in discount? you you're about think that away leverage a cash of uses you the any just sheet balance How to speak working could kind that incremental of ability to around guys whittle wonder to generation and free Okay, be? to your resize the free good desire the balance priorities of flow provided some and if for Is some with do the as progress to cash might second helpful you I you at cash cold at capital debt is as the

Gregg Piontek

we is operations. there in sure our eye make a funding You no -- to operation. maturity so your build enhances to are to continue your to position, question, working Yes, that we I to the settle continue you also you also as position liquidity a want it's to and able have on that's fund important the obviously back have liquidity that capital while down take that be XXXX your think to But do balance, want and to December we right?

So, I collect mean, all we going to say to it, immediately when reduce revolver. our bank is cash

debt And liquidity. overall our so enhancing reducing that's our and

George O'Leary

could. Okay, great. more one if just I'll in, sneak And I

you're for you that about pressure internationally, framing, any business, was areas, color, where pockets onshore? to onshore seeing markets helpful the to Fluids international Geo in Gulf offshore If of pronounced with onshore resilience the markets markets respect think that relative of more especially international but any Mexico,

Dave Paterson

we've East change, to Hey to periods crew from people been I'm very restrictions and expect proud through the worked resilient, of the the But that, in George, away families extended is really Paterson. it of to travel handled and East that challenging. how it's David impacting well. extremely remains beat. have challenge but a we time their for strong the team very the resilient. we I haven't the remain has etcetera, ability they've is missed get Middle Middle East remain the sites well most The right, Middle

a move because ability there's lot rigs COVID the fairly to move Activity steadily, and rigs shut around situation of down countries. continues between of products and being people Europe

a you meaningful air return clears some the improves, to know, uncertainty I'm once there's think lot more I the dust in of fairly activity. the a there, optimistic So but, visibility and

probably bigger mark I dynamic day. is activity Africa of very in question a but, picture terms it's a twice there's The again, a changes think where picture. North probably

the some it clarity know, month the we resumption you part will key a that on think probably world. I activity of, before or of be in have

George O'Leary

Great, thank you, guys, very much for the color.

Paul Howes

bet, You George.


to question-and-answer our back closing hand to for remarks. concludes I'd session. management This like it

Paul Howes

us once look Newpark. interest you, quarter. again we Thank your in you the for joining with again speaking to for and And next forward on call

Gregg Piontek

Thank you.


Ladies may day. this and lines a participation, time your have at for teleconference. wonderful you and does gentlemen, Thank this your you today's disconnect conclude