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Newpark Resources, Inc. (NYSE:NR)
Q2 2018 Earnings Conference Call
July 27, 2018, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Newpark Resources' Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ken Dennard. Thank you sir, you may begin.

Ken Dennard -- Chief Executive Officer and Managing Partner -- Dennard Lascar Associates, LLC

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Newpark Resources conference call and webcast to review second quarter 2018 results. With me today are Paul Howes, Newpark's President and Chief Executive Officer and Gregg Piontek, Chief Financial Officer. Following my remarks, management will provide a high-level commentary on the financial details of the second quarter and outlook before opening the call to Q&A.

Before I turn over the call to management, I have a few housekeeping details to run through. There'll be a replay of today's call and it will be available by webcast on the company's website at newpark.com. There will also be a recorded replay available until August 5th, 2018, and that information is included in yesterday's release. Please note that the information reported on this call speaks only as of today, July 27th, 2018, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay or transcript reading.

In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of Newpark's management. However, various risks, uncertainties, and contingencies could cause Newpark's actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to read the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K to understand certain of those risks, uncertainties, and contingencies.

The comments today may also include certain non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP measures are included in the quarterly press release and can be found on Newpark's website.

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

Paul Howes -- President and Chief Executive Officer

Thank you, Ken, and good morning to everyone. We're very pleased to report another solid quarter with both segments continuing to make meaningful strides in the execution of our long-term strategy. Consolidated revenues increased 4% sequentially to $236 million for the second quarter, driven by improvements in both operating segments. Benefiting from the stronger top-line performance, second quarter EBITDA improved to $30 million, while net income improved to $0.12 per diluted share.

Last quarter, we noted that in Fluids, our Kronos system was being used for the first time by an IOC in the deepwater Gulf of Mexico, an important step in our efforts to penetrate this market. To that point, I'm pleased to report that this well was completed successfully for Shell Oil during the second quarter, and based on the performance of our Kronos system as well as our overall service quality, we now have our engineers working in-house with the customer and preparing for a second well, which we expect to be completed in the third quarter. Meanwhile, we are also continuing our efforts to qualify the Kronos system with other IOCs.

As we stated in the past, the deepwater Gulf of Mexico remains an important target, not only in terms of opening up a significant new market opportunity, but also in terms of establishing our credibility more broadly among IOCs around the world. We continue to make meaningful progress expanding our revenues generated from targeted IOCs and NOCs, which serves to provide greater stability to our Fluids business. To that point, I'm pleased to highlight that revenues generated from IOC customers combined with our two key NOCs in Algeria and Kuwait now represent approximately one-third of our total Fluids revenue.

In terms of Fluids' operating performance, second quarter revenues for the segment came in at $180 million, a 1% sequential improvement. Revenue gains in the US, including increases in both land and Gulf of Mexico activities fully offset the seasonal impact of spring breakup in Canada. Internationally, revenues also rose modestly, benefiting primarily from the integrated project with Baker Hughes in offshore Australia.

We've also made progress in our efforts to improve our Fluids margins, which increased to 7.4% for the second quarter, driven by the impact of a strong sales mix in our international business along with the increase in revenues. While this is another step in the right direction, we also recognize that there is more work to be done.

Turning to the Mats business, we continue to see the benefits from our market diversification strategy, where revenues improved sequentially in both E&P and non-E&P markets. Second quarter Mat revenues came in at a quarterly record of $57 million, reflecting a 13% improvement from Q1 and in line with our outlook discussed on the April call. The sequential gains reflect broad-based improvements across most targeted markets, both in the US and Europe, as revenues remained evenly balanced between E&P and non-E&P markets.

Looking to build upon the stable foundation and further leverage the investments we've made in this business, we are continuing our efforts to execute our industry-specific strategies to gain market share, expand globally and develop next-generation products to further differentiate Newpark.

Before turning the call over to Gregg, I'd like to touch on a recent event in our Fluids business. Earlier this month, our drilling fluids distribution and warehouse facility in Kenedy, Texas was destroyed by fire. We are very thankful that there were no injuries. I want to express our appreciation for the efforts of our employees as well as the first responders from Kenedy and the surrounding areas and the support we have received from local officials. Although the warehouse and its contents were destroyed, this event has not impacted our ability to provide drilling fluid products and services to our customers in the area.

And with that, I'd like to turn the call over to Gregg to discuss the detailed financials of the quarter. Gregg?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Thanks, Paul and good morning, everyone. I'll begin by discussing the details of our operating segments before finishing with our consolidated results. The Fluids Systems segment generated total revenues of $180 million for the second quarter of 2018, reflecting a 1% sequential increase from the first quarter and a 19% improvement year-over-year.

In the US, revenues were $104 million, up 13% sequentially, outpacing the 8% increase in US rig count, benefiting from a modest improvement in market share along with the deepwater project with Shell. On a year-over-year basis, US revenues have increased 18% from Q2 of 2017, modestly outpacing the 16% improvement in average rig count.

In Canada, revenues followed the typical seasonal pattern through spring breakup, coming in at $11 million for the second quarter. This reflects a 51% sequential decline, which compares favorably to the 60% sequential rig count decline from Q1. On a year-over-year basis, revenues improved by 52% despite a modestly lower market rig count over the same period. The strong performance relative to market activity levels is primarily driven by changes in our revenue mix, which is now more heavily weighted toward areas that drill through the spring breakup.

Turning to our international regions, revenues from the eastern hemisphere were $55 million in the second quarter, reflecting a 2% improvement from Q1. The sequential comparison primarily reflects the improvements in Australia, Kuwait, and Albania, largely offset by the anticipated pullback in Romania as well as reductions in Algeria and India. On a year-over-year basis, revenues from the Eastern Hemisphere improved by 19%, primarily benefiting from stronger activity levels in Romania and the contribution from the Baker Hughes integrated services project in Australia, partially offset by a decline in Algeria.

In Latin America, second quarter revenues came in at $9 million, primarily with Petrobras. The second quarter results reflect a $1 million improvement from the first quarter, but remained relatively in line with the second quarter of last year. Operating income for the consolidated Fluids segment increased by $3 million sequentially in the second quarter, improving the segment operating margin to 7.4%. As Paul touched on, the improved margin is largely driven by the impact of a strong sales mix in the eastern hemisphere as well as the overall increase in revenues.

Turning to the Mats business, total segment revenues were a record $57 million for the quarter, representing a 13% sequential improvement from the first quarter with the improvement driven by a fairly balanced contribution from both our rental and services activities as well as an increase in mat sales. Rental and service revenues came in at $45 million, reflecting a 13% improvement from prior quarter. The sequential increase is largely attributable to broad-based improvements across most regions in the US as well as Europe. Additionally, revenues from mat sales improved by 14%, coming in at $11 million for the second quarter.

Comparing to the second quarter of last year, Mats segment revenues increased by 74%. Rental and service revenues increased by $20 million over this period, primarily reflecting the impact of the 2017 acquisition along with expansion in E&P markets from our legacy operations. Non-E&P market rental and service revenues were relatively flat year-over-year, and in the second quarter of last year, included exceptionally strong weather-related demand in the utility transmission and distribution sector. Mat sales also increased by $4 million over the second quarter of last year.

With the stronger revenue contribution, the Mats segment operating income increased by $3 million, both on a sequential and a year-over-year basis. Segment operating margin was 26% for the second quarter compared with 24% for the first quarter and 35% for the second quarter of last year. The sequential improvement in operating margin is largely attributable to the stronger revenues as well as a modest lift from the favorable resolution of two patent enforcement actions, while the year-over-year change was largely the result of a revenue mix shift associated with the late 2017 acquisition.

Now turning to our consolidated results, second quarter 2018 revenues were $236 million, representing a 4% sequential improvement and a 29% increase year-over-year. SG&A costs were $29 million, reflecting a 7% sequential increase and an 8% increase year-over-year. The increased SG&A spending as compared to both prior quarter and prior year is largely attributable to increases in personnel expenses to support growth and elevated severance charges, partially offset by lower legal expenses. As a percentage of revenue, SG&A costs came in at 12% in both the first and second quarters of this year compared to 15% in the second quarter of last year.

Total corporate office expenses were $9 million in the second quarter compared to $8.7 million in the first quarter and $9.3 million in the prior year. Interest expense increased modestly in the second quarter to $3.7 million, which primarily reflects the impact of rising interest rates and higher average debt levels. Consistent with prior quarters, the second quarter interest expense includes approximately $1.3 million of non-cash expense, primarily associated with our convertible bonds.

The provision for income taxes for the second quarter of 2018 was $4.1 million, reflecting an effective tax rate of 28%. The effective tax rate in the quarter was favorably impacted by an excess tax benefit associated with the annual vesting of employee equity compensation, driven by the higher share price. This benefit served to reduce the quarter's effective tax rate by approximately 6 percentage points.

Net income for the second quarter was $0.12 per diluted share compared to $0.08 per diluted share in the previous quarter and $0.02 per diluted share in the second quarter of last year.

Turning to cash flow, during the second quarter, cash provided by operating activities was $21 million, consisting of $27 million of cash generated by operations, of which $6 million was used to fund a net increase in working capital. Capital expenditures used $14 million of cash in the quarter, including $8 million of capital investments in the Mats business, of which $7 million was used to expand our mat rental fleet to support growth and expansion efforts.

Cash provided by financing activities totaled $9 million, including a $7 million net increase in bank facility borrowings. We ended the second quarter with a total debt balance of $197 million and a cash balance of $72 million, resulting in a total debt-to-capital ratio of 26% and a net debt-to-capital ratio of 18%. Substantially all of our cash on hand is held by our foreign subsidiaries, a portion of which we anticipate repatriating back to the US in the second half of the year to facilitate reductions in debt.

Now turning to our near-term outlook. In the Fluids business, we expect near-term revenues to modestly strengthen from Q2 levels, largely driven by improvements in North America, including the seasonal improvements in Canada as well as continued growth in the Gulf of Mexico. We expect the improvements in North America will be somewhat offset by a modest pullback internationally.

From an operating income perspective, we expect segment income contribution will remain relatively consistent with Q2 levels prior to consideration of the recent fire, as the effect of the modestly higher revenue expectation will likely be offset by a return to a more normal product sales mix. We anticipate recognizing approximately $1 million to $2 million of charges in the third quarter related to the fire that Paul discussed, primarily reflecting deductibles associated with our insurance programs.

In the Mats business, following the strong second quarter, we expect the third quarter to pull back somewhat, although segment revenues should still remain above first quarter levels, barring any unusually hot or dry weather pattern. As we've highlighted in recent years, we typically see some seasonal softness in utility T&D customer activity during the third quarter each year, as companies reduce maintenance activities during periods of peak power demand.

Regarding Mats sales activity, while we continue to see a solid pipeline of opportunities and all the -- although the timing is always a bit challenging to predict, we expect third quarter sales to decline from the strong sales volumes in the second quarter. At this revenue level, the Mats operating margin is expected to remain in the mid-20s. We expect corporate office expenses will remain relatively stable in the near term, prior to consideration of any charges associated with the previously announced retirement of our General Counsel.

With regard to 2018 full-year capital expenditures, in response to the expanding opportunities, we are again raising our expectation to approximately $40 million, primarily reflecting elevated investments to expand our mat rental fleet in support of our expansion efforts, both in the US and in the international markets, as well as investments to support our expansion into completion fluids and stimulation chemicals. In total, we estimate that approximately half of our full-year capital expenditures will reflect growth investments, while maintenance CapEx remains approximately $20 million per year.

We expect our second half effective tax rate to be in the mid-30s, which is in a similar range to the first half of the year after adjusting for a few first-half tax benefits, which we do not expect to recur. Despite the lower federal tax rate following the US tax reform, our profitability is expected to remain heavily weighted to foreign operations in the near term, which serves to increase our overall effective tax rate.

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

Paul Howes -- President and Chief Executive Officer

Thanks, Gregg. We are very pleased with our second quarter results with both businesses delivering solid performance in the quarter, while continuing to make meaningful strides in the execution of our long-term strategy. In Fluids, we remain focused on becoming the recognized global technology leader. We continue to build upon our share in key markets and expand our presence with the IOCs and NOCs around the world. And as Gregg mentioned a moment ago, we are now moving forward with capital investments to support our expansion in both completion fluids and stimulation chemicals, as we look to leverage our position as the number two drilling fluids provider in North America.

In our Mats business, our focus and strategy remains unchanged. We continue to grow the business, diversify revenue streams, expand into new market segments and drive innovation. On that note, I'd like to make an initial save-the-date announcement that we'll be conducting an Analyst Day on November 29th, 2018 at our Mats manufacturing and R&D facility located just outside of Lafayette, Louisiana. Our management team is looking forward to providing a high-level strategy update on both of our segments as well as a more in-depth review of our Mats business, including a tour of both our state-of-the-art manufacturing facility and R&D center. Stay tuned for more information in the coming months from Ken Dennard and his team at Dennard Lascar, our Investor Relations, who have long served as our IR firm.

With that, I'd like to close the call by thanking our employees for their hard work and dedication to Newpark as well as their continued focus on safety. We'll now take your questions. Operator?

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of George O'Leary with Tudor, Pickering. Please proceed with your question.

George O'Leary -- Tudor, Pickering, Holt -- Analyst

Good morning, guys.

Paul Howes -- President and Chief Executive Officer

Good morning.

George O'Leary -- Tudor, Pickering, Holt -- Analyst

I guess, not trying to steal any thunder from the Analyst Day, but I know you guys have been doing a lot of work on the non-oil and gas mat side of the equation and -- both from a strategic perspective and just from a market size perspective. I'm curious it was maybe, if it's nothing else, if you could frame based on the work you've done today or to-date, how -- what percentage of that market you guys -- you have -- believe you already captured to maybe help kind of frame up the market opportunity for us.

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah. This is Gregg. I'll take that. In terms of the current share in these markets, and again, the primary markets that we're targeting are the utility transmission and distribution as well as the pipeline markets. And in both of those markets, our share today still remains in the low single-digit range. So you just do some simple math so that you can get to a rough size of those markets, and obviously that indicates market sizes that are significantly larger than the traditional oilfield markets that we've been in historically.

George O'Leary -- Tudor, Pickering, Holt -- Analyst

Great. That's helpful. And then on the Fluids side, it was easy for me to understand what kind of drove the margins higher in terms of the mix there? On the Mats side of the equation it was -- was there any change or uplift in pricing in that business or were this more so just a throughput and increase in rentals driven margin improvement quarter-on-quarter for the second quarter?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah. I'll take that one as well. I guess starting with the Mats, no real change in the pricing dynamic. This was really an uplift that was, as we've talked about, pretty broad-based across all components, mat sales as well as the rental and services side as well as when you look at it by geography and by end markets, it was kind of a consistent uplift that we saw across the board.

In terms of the Fluids margin lift and the mix issue that we had, we did see -- as you know, historically we'll see periods where we'll see some ebbs and flows in terms of the mix of the products that are sold, and it just so happened that this quarter was a stronger quarter in that sense, particularly in the Eastern Hemisphere. So we would expect that to return to a more typical mix here in the third quarter, which is somewhat what offsets the impact of the higher revenue expectation.

George O'Leary -- Tudor, Pickering, Holt -- Analyst

Okay. That's very helpful. And I'll maybe sneak in one more, if I could, obviously making nice progress on the deepwater side of the equation, you've got work with Woodside in Australia where you're working alongside Baker Hughes, you're doing the Shell work in the Gulf of Mexico and kind of working to get increasingly qualified with operators in the US government in particular, and I'm sure elsewhere in the globe. I guess, can you remind us about that process of getting qualified looks like from a timing and logistics standpoint? I'm sure it varies, but any color on the duration of that process, (inaudible) it would be super helpful.

Paul Howes -- President and Chief Executive Officer

Okay. Yeah. I mean, certainly the process can be fairly extensive when you're running the first wells in deepwater with a major IOC, and as we announced today, that was with Shell Oil. That took a long period of time. However, there was other IOCs that were on that well, and so we've been working with those other partners for the last two years. We've had facility tours of our operations down in Fourchon as well as our technology center and they've been testing our technology as well in their laboratories. So we've been -- that work with our other IOCs has been ongoing for some period of time.

George O'Leary -- Tudor, Pickering, Holt -- Analyst

Got it. Thanks very much for that color, Paul and Gregg.

Paul Howes -- President and Chief Executive Officer

Thank you.

Operator

(Operator Instructions) Our next question comes from the line of Bill Dezellem with Tieton Capital. Please proceed with your question.

William Dezellem -- Tieton Capital -- Analyst

Thank you. I actually have three questions today. First of all, would you please give us a more detailed update on the Gulf of Mexico deepwater, please?

Paul Howes -- President and Chief Executive Officer

Sure, Bill. This is Paul. We are very pleased with the first well that we drilled with Shell Oil. It certainly met all of our expectations, and -- not just from a technology perspective, but also from an operations perspective. We've got an outstanding team of people in the Fourchon facility that did a great job in delivering the technology. And as a result of that work, we're going to be doing additional well with Shell Oil, and as we start to link together several wells, we'll start to talk more about the trends and what we're seeing.

William Dezellem -- Tieton Capital -- Analyst

And then I'd like to shift to Saudi Arabia, if I may. Would you provide an update on your activities there and what the prognosis is for additional work with Aramco or in-country?

Paul Howes -- President and Chief Executive Officer

Yeah. I mean, it's -- we mentioned that we'd won a small contract there. We continue to work on putting together the engineering and the preliminary stages of construction but beyond that, there is no additional update at this time.

William Dezellem -- Tieton Capital -- Analyst

And if I may go back to Gulf of Mexico real quick with Shell, did -- will that well be drilled here in the third quarter or when are you anticipating it?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah, we expect the second well will be completed here in the third quarter.

William Dezellem -- Tieton Capital -- Analyst

Great. Thank you. And then lastly, there was a reference to increased severance charges in Q2. Would you give us some detail around that, please?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah. We -- I guess the way I would characterize that is it's not as though we have a much -- a broad-based reduction of any form, but one of the challenges here as an organization is, as you grow and continue to optimize your cost structure, you're always continuing to evaluate your structure and making changes accordingly.

William Dezellem -- Tieton Capital -- Analyst

Thank you both.

Operator

Our next question comes from the line of Praveen Narra with Raymond James. Please proceed with your question.

Praveen Narra -- Raymond James -- Analyst

Hi, good morning, guys.

Paul Howes -- President and Chief Executive Officer

Good morning.

Praveen Narra -- Raymond James -- Analyst

I just wanted to ask a clarifying question on the Gulf of Mexico second well. At this point, I guess, and I know it's just the one incremental, but at this point, are we following the same rig or has Shell moved you to a different location or a different rig?

Paul Howes -- President and Chief Executive Officer

I believe it's with the same rig.

Praveen Narra -- Raymond James -- Analyst

Okay. So I guess, when we think about it going forward, the potential for capturing this rig's work going forward would be the most likely or most probable incremental contracts awarded or to win?

Paul Howes -- President and Chief Executive Officer

Well, that's certainly our goal, right? And again, our job is to continue to replicate the performance we saw on the first well. So --

Praveen Narra -- Raymond James -- Analyst

Right, right. Okay, perfect. When we think about pricing, I know it's one of the things -- we don't usually talk about portfolios but we have kind of recently. Can you talk about the progress for gaining pricing traction even within the North American market?

Paul Howes -- President and Chief Executive Officer

Yeah. That continues to be an area of focus. I would say we're making progress but it's slow in that area. We are making pretty modest progress but as we talked about somewhat last quarter, we recognized that it must remain a continued area of focus as part of the return to double digits story there, it's definitely the key to it.

Praveen Narra -- Raymond James -- Analyst

All right. Okay. And then one more from me, I guess, just on the balance sheet and particularly the DSOs and working capital, certainly it took a pretty good move down to this quarter. Can you talk about how much or can you kind of scale where we are in terms of capturing where receivables can be and where we can get that working capital squeezed out?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah. As you noted, we saw some improvements here in the second quarter where, despite a growth in overall revenues, receivables actually came down. So it's heading in the right direction. We probably have another, call it, five days or so of DSOs that we're targeting as far as what that translates to. What's challenging is your -- it's really negating the need to invest more as you are offsetting by growing revenue.

Praveen Narra -- Raymond James -- Analyst

Awesome. Great quarter, guys.

Paul Howes -- President and Chief Executive Officer

Thank you.

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Thank you.

Operator

Our next question comes from the line of Jacob Lundberg with Credit Suisse. Please proceed with your question.

Jacob Lundberg -- Credit Suisse -- Analyst

Hey, good morning, guys.

Paul Howes -- President and Chief Executive Officer

Good morning.

Jacob Lundberg -- Credit Suisse -- Analyst

I was wondering if we could just get a little more color on sort of the effort around building out stimulation chemicals and completion fluids. So you -- you mentioned you'll be putting some CapEx toward that. Just curious where are you investing and I don't know if it's too early for any timeline, but sort of thoughts around when you might be able to commercialize some products out of that effort would be great.

Paul Howes -- President and Chief Executive Officer

Sure. On the stimulation area where we've been making investments, we started first with personnel. We brought in a Global Vice President to manage that product line. Then we've been bringing in lab technicians, some product line managers below the Global Vice President. So we've been adding resources there, which obviously has some effect on the margins within the Fluids business as we are yet to have any real revenues in that segment. But from an investment perspective, obviously the largest stimulation market is here in the North American region. That's where we would look to make those initial investments but in terms of timing, I would agree it's premature at this point to comment on timing.

Jacob Lundberg -- Credit Suisse -- Analyst

Okay, great. And then just, I guess, following up on that, so you're carrying those costs in the Fluids business, which is impacting margin. Any sense that you can give us about the magnitude of that?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah. The -- we talked a little bit about that last quarter. And there was roughly a point of margin deterioration associated with the areas that included the completion, the stimulation as well as the deepwater, the broader deepwater cost structure. Now, obviously we're starting to see the deepwater revenue generate, but there is no question that that's still far from the capacity that we're built for.

Jacob Lundberg -- Credit Suisse -- Analyst

Okay. Got it. And then I guess switching gears on the well that you'll drill deepwater Gulf of Mexico in 3Q, is it similar -- similar scope to the -- in terms of revenue opportunity to the one that you drilled in -- that you provided fluids for in 2Q?

Paul Howes -- President and Chief Executive Officer

Yeah, absolutely.

Jacob Lundberg -- Credit Suisse -- Analyst

Okay, great. And then I guess on the Mats side, so you're investing some incremental capital into the rental fleet. Just wondering on the -- in the Mats business, how do you think about return hurdles for incremental CapEx there?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Well, the Mats business is an area that has continued to perform above our weighted average cost of capital and that's always the barometer that we gauge our investments on. So with the performance of that business, we're obviously continuing to invest in the fleet and we'll continue to manage the utilization levels of the fleet to ensure that we're getting those proper returns.

Jacob Lundberg -- Credit Suisse -- Analyst

Okay. And do you have a sense for a payback on those investments?

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Well, again, that kind of depends on where it's going, the pricing in specific markets and that's getting into details that we don't disclose.

Paul Howes -- President and Chief Executive Officer

We're pleased with the return, but --

Gregg Piontek -- Senior Vice President and Chief Financial Officer

Yeah.

Jacob Lundberg -- Credit Suisse -- Analyst

Okay. Understood. Thanks for the color, guys. Good quarter.

Paul Howes -- President and Chief Executive Officer

All right. Thanks.

Operator

Thank you. It appears we have no further questions at this time. I would now like to turn the floor back over to management for final comments.

Paul Howes -- President and Chief Executive Officer

All right. Thank you once again for joining us on the call and for your interest in Newpark Resources, and we look forward to talking to you again after the third quarter.

Operator

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

Duration: 33 minutes

Call participants:

Ken Dennard -- Chief Executive Officer and Managing Partner -- Dennard Lascar Associates, LLC

Paul Howes -- President and Chief Executive Officer

Gregg Piontek -- Senior Vice President and Chief Financial Officer

George O'Leary -- Tudor, Pickering, Holt -- Analyst

William Dezellem -- Tieton Capital -- Analyst

Praveen Narra -- Raymond James -- Analyst

Jacob Lundberg -- Credit Suisse -- Analyst

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