THE WOODLANDS, Texas, July 21 /PRNewswire-FirstCall/ -- Newpark Resources,
Inc. (NYSE: NR) announced today that it has entered into a First Amendment and
Waiver to Amended and Restated Credit Agreement ("First Amendment"), amending
provisions of its existing Amended and Restated Credit Agreement. The First
Amendment was principally entered into as a result of the Company's
non-compliance with the consolidated fixed charge coverage ratio and
consolidated leverage ratio financial covenants under its existing credit
agreement as of June 30, 2009. The First Amendment provides a waiver of the
financial covenant violations by the Company's lenders, modifies certain
financial covenant requirements in future periods and amends certain
provisions of the existing credit agreement.
Pursuant to the First Amendment, favorable adjustments were made to the
consolidated fixed charge coverage ratio covenant through June 2010 and the
consolidated leverage ratio covenant through March 2010. In addition, the
method of calculating these two ratios was modified to utilize annualized
results beginning with the Company's third quarter of 2009 and ending with the
first quarter of 2010. Thereafter, the calculations will be made using the
trailing four fiscal quarter results, as set forth in the original credit
agreement. The First Amendment increases the interest cost of borrowings to
reflect current market conditions, including an increase in the margin on
LIBOR based borrowings, which constitutes a substantial portion of the
Company's borrowings, from a range of 150 to 250 basis points to a range of
400 to 750 basis points, depending upon the Company's consolidated leverage
ratio. The margin will initially be 750 basis points. The First Amendment
also reduces the revolving credit facility from $175 million to $150 million.
The amount outstanding under the revolving credit facility at June 30, 2009
was $100.6 million, including letters of credit of $3.6 million.
Paul Howes, President and Chief Executive Officer of Newpark, stated, "We
are pleased to be able to execute this amendment with our lenders as we
continue to manage through this severe downturn in drilling activity in North
America. We believe that this amendment provides us with the opportunity to
continue to position Newpark for further growth in our international
businesses and a recovery in our North American business."
Newpark Resources, Inc. is a worldwide provider of drilling fluids,
temporary worksites and access roads for oilfield and other commercial
markets, and environmental waste treatment solutions. For more information,
visit our website at www.newpark.com.
This news release 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 future, including Newpark's strategy for
growth, product development, market position, expected expenditures and
financial results are forward-looking statements. Some of the forward-looking
statements may be identified by words like "expects," "anticipates," "plans,"
"intends," "projects," "indicates," and similar expressions. These statements
are not guarantees of future performance and involve a number of risks,
uncertainties and assumptions. Many factors, including those discussed more
fully elsewhere in this release and in documents filed with the Securities and
Exchange Commission by Newpark, particularly its Annual Report on Form 10-K
for the year ended December 31, 2008, as well as others, could cause results
to differ materially from those stated. These factors include, but are not
limited to, the instability and effect of the credit and capital markets on
the economy in general and the oil and gas industry in particular; the access
to the credit markets by both Newpark and Newpark's customers; the outlook for
drilling activity in North America and the rest of the world; continued
compliance with our debt covenants; the investigation of certain accounting
matters by the Securities and Exchange Commission; changes in the laws,
regulations, policies and economic conditions, including inflation, interest
and foreign currency exchange rates, of countries in which Newpark does
business; competitive pressures; successful integration of structural changes,
including restructuring plans, acquisitions, divestitures and alliances; cost
of raw materials, research and development of new products, including
regulatory approval and market acceptance; and seasonality of sales of Newpark
products and services. Newpark's filings with the Securities and Exchange
Commission can be obtained at no charge at www.sec.gov, as well as through our
website at www.newpark.com.
Contacts: James E. Braun, CFO
Newpark Resources, Inc.
281-362-6800
Ken Dennard, Managing Partner
Dennard Rupp Gray & Easterly, LLC
ksdennard@drg-e.com
713-529-6600
SOURCE Newpark Resources, Inc.
Web Site: http://www.newpark.com
