Operating cash flows in the first quarter of 2006 and fourth quarter of 2005 were benefited by the receipt of insurance proceeds in the amount of $3.1 million and $2.0 million, respectively, resulting from hurricanes Katrina and Rita. The company also announced that due to the current status of the internal investigation previously announced on April 17th, it has postponed the first quarter earnings release scheduled for today and the earnings conference call scheduled for Tuesday, May 2. We will announce a rescheduled earnings release and conference call as soon as we can.
Consolidated revenue gains in the first quarter were driven by continued growth in the company's drilling fluids segment, which increased revenue by 40%. All of Newpark's business segments experienced year-over-year and sequential revenue growth in the first quarter.
Newpark ended the quarter with $10.1 million in cash and total debt of $204 million. During the quarter, the company invested approximately $12.7 million in property, plant and equipment, including $1.2 million in replacement of storm-damaged property and $2.7 million in water technology additions. The company received insurance proceeds of approximately $3.5 million in the quarter related to reimbursement of losses on property, plant and equipment resulting from hurricanes Katrina and Rita.
Paul Howes, Newpark's Chief Executive Officer, said: "Newpark's core businesses continue to perform very well and the business climate continues to be strong. The internal investigation, under the direction of the audit committee of the Board, is well under way. Based on information that has come to light to date, it appears we may have asset impairments which we do not believe will exceed $10 million on a pretax basis, subject to possible recovery from third parties. No determination has been made on the impact, if any, on previously issued financial statements. We remain committed to increasing shareholder value through continued improvement in our core business segments and our new technology initiatives."
Newpark Resources, Inc. provides value added drilling fluids, environmental waste treatment solutions, and access to temporary work sites primarily for the oil and gas industry.
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