UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 25, 2008
NEWPARK RESOURCES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-2960 | 72-1123385 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 2700 Research Forest Drive, Suite 100 The Woodlands, TX |
77381 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (281) 362-6800
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure.
On April 25, 2008 James E. Braun, Vice President and Chief Financial Officer of Newpark Resources, Inc. (“Newpark”), presented the information furnished in Exhibit 99.1 and 99.2 to this report to participants of the Burkenroad Reports/Tulane University conference. Exhibit 99.1 and Exhibit 99.2 are incorporated in this Item 7.01 by reference. The presentation materials will also be posted in the Investor Information section of Newpark’s website, http://www.newpark.com for 90 days after the event.
The information referenced under Item 7.01 (including Exhibit 99.1 and 99.2 referenced in Item 9.01 below) of this Current Report on Form 8-K is being “furnished” under “Item 7.01. Regulation FD Disclosure” and, as such, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information set forth in this Current Report on Form 8-K (including Exhibit 99.1 and 99.2 referenced in Item 9.01 below) shall not be incorporated by reference into any registration statement, report or other document filed by Newpark pursuant to the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing. Newpark does not undertake to update the information as posted on its website; however, it may post additional information included in future press releases and Forms 8-K, as well as posting its periodic Exchange Act reports.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Presentation to Participants of the Burkenroad Reports/Tulane University Conference.
99.2 Company Fact Sheet.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NEWPARK RESOURCES, INC. |
||
| By: /s/ James E. Braun | ||
| James E. Braun, Vice President and | ||
| Chief Financial Officer | ||
| Dated: April 25, 2008 | (Principal Financial Officer) |
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Presentation to Participants of the Burkenroad Reports/Tulane University Conference | |
99.2
|
Company Fact Sheet. |
Exhibit 99.1
| 1 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 future, including statements about 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 presentation and in documents filed with the Securities and Exchange Commission by Newpark, particularly to its Form 10-K for the year ended December 31, 2007, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, an investigation of accounting matters by the Securities and Exchange Commission; claims by our former CEO and CFO related to their terminations of employment; 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. 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. |
| Leadership Focus Growth Newpark Burkenroad Reports/Tulane University April 25, 2008 Newpark Resources, Inc. James E. Braun, VP & CFO |
| 3 Company Profile Specialized provider of: Fluids Systems and Engineering Well Site Construction Services Environmental Services* Customers: Oil and Gas Industry Key markets: North America North Africa South America *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested *Environmental Services to be divested |
| 4 Mission & Vision Leadership, focus, growth Achieve best-in-class competitive positioning and performance in each business line Position for long-term growth through more disciplined approach to strategic investments Build a strong reputation with investors by delivering consistent performance to realize the inherent value of our services |
| 5 Experienced Leadership Paul Howes, President & CEO Jim Braun, VP & CFO Mark Airola, GC & Admin Officer Bruce Smith, President Fluids Systems and Engineering Tom Eisenman, President Excalibar Minerals LLC |
| 6 Overall Growth Strategy Grow Fluids Systems and Engineering Organically / Acquisitions / Domestically / Internationally Expand scope and geographic position in Well Site Construction Services Acquired SEM Construction, based in Western Colorado Exit Environmental Services New agreement signed in April, 2008; close expected in July of 2008 |
| 7 Revenue Mix Fluids Well Site Construction 80 20 Well Site Construction Services 80% Fluids Systems and Engineering 20% |
| 8 Fluids Systems and Engineering Strategy Core business line - 80% of revenues Technologically advanced & unique fluid systems DeepDrill, FlexDrill, DeepDrill II and family of specialized water-based products, has performance applications for off-shore deepwater and shelf, as well as land based drilling Opportunity to increase market share in a growing market Newpark is ranked 4th in both domestic & global drilling fluids 12% domestic market share1 7% global market share2 Organic and acquisition growth Continued penetration of large integrated oil companies and NOC's Continued investments in technology Targeted acquisitions 1 Source: Company estimate 2 Source: Spear & Associates, Inc. |
| 9 Fluids Systems and Engineering Strong Revenue Growth 25% CAGR |
| 10 Fluids Systems and Engineering Strong Margin Growth |
| 11 Serves major North America basins Approximately 16% share of markets serviced in North America1 Substantial service facilities network Growing share vis-a-vis other players Well-positioned to expand into new customers and basins Fluids Systems and Engineering Scope of Operations North America Stronghold Offices Barite Mills Offshore Docks 1 Source: Company estimate |
| 12 International market expansion through acquisition of Ava, S.p.A. (Italy) Current key markets Mediterranean North Africa Eastern Europe Brazilian market expansion New contracts signed CapEx in new fixed assets Fluids Systems and Engineering Scope of Operations Expanding Internationally Mediterranean Revenue Growth 61.6 87.0 $0 $20 $40 $60 $80 $100 2005 2006 2007 Revenues ($mm) 40.3 |
| 13 Fluids - Significant Contract Awards Super major in offshore Brazil Large independent in the Rockies Offshore work in Libya with an NOC Large independent in the Gulf Coast International oil company in Gulf of Mexico deepwater |
| 14 Quality processor and supplier of industrial minerals Barite, Barytes Calcium Carbonate Alumina Trihydrate (ATH) Applications Oilfield Industrial Integral to Fluids Systems and Engineering Scope of Operations Excalibar Minerals LLC |
| 15 Well Site Construction Services Leverage relationship with existing customers Advantage of often being first service provider "on site" Expand product and service offerings in the well site preparation market Expansion and diversification Growth opportunities beyond Gulf Coast region Maximize rental versus sales mix |
| 16 Well Site Construction Services |
| 17 Well Site Construction Services Aiming to Expand Margins 0.6% 6.5% 13.6% 15.1% 14.2% 0% 3% 6% 9% 12% 15% 18% 2003 2004 2005 2006 2007 Operating Margins |
| 18 Improvements in Balance Sheet-Debt $209.5 $213.0 $177.5 $150 $175 $200 $225 2005 2006 2007 |
| 19 Capital Structure |
| 20 Investment Considerations Leadership Management team with significant industry experience in place Focus Greater discipline Focusing on improving profitability, returns and free cash flow Growth Spears & Associates projects fluids market to grow 10% in 2008 Growing Fluids organically and through acquisitions Growing Mats through additional products, services and geography Driving results to maximize shareholder value Share repurchase program in place; $25 million authorization |
| New Leadership New Focus New Strategy Newpark Thank you for your interest! |
| New Leadership New Focus New Strategy Newpark Appendix |
| 23 Financials |
| 24 Financials |
| 25 Financials |
| 26 Financials |
| 27 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 plastics manufacturing, and the packaging industry. From 2002 until October 2005, he served as President and Chief Executive Officer of Astaris LLC, a primary chemicals company headquartered in St. Louis, Missouri, with operations in North America, Europe and South America. Prior to this, from 1997 until 2002, he served as Vice President and General Manager, Packaging Division, for Flint Ink Corporation, a global ink company headquartered in Ann Arbor, Michigan with operations in North America, Europe, Asia Pacific and Latin America. James E. Braun, VP & CFO: Jim joined Newpark in October 2006 as its Vice President and Chief Financial Officer. Before joining Newpark, since 2002, Mr. Braun was Vice President, Finance, of Baker Oil Tools, one of the largest divisions of Baker Hughes Incorporated, a leading provider of drilling, formation evaluation, completion and production products and services to the worldwide oil and gas industry. From 1998 until 2002, Mr. Braun was Vice President, Finance and Administration, of Baker Petrolite, the oilfield specialty chemical business division of Baker Hughes Incorporated. Previously, he served as Vice President and Controller of Baker Hughes Incorporated, and he was with Deloitte & Touche prior to joining Baker Hughes Incorporated. Mark J. Airola, GC & Admin Officer: Mark joined Newpark in October 2006 as its Vice President, General Counsel and Chief Administrative Officer. Mr. Airola has practiced law for 22 years, primarily with large, publicly traded companies. Most recently, Mr. Airola was Assistant General Counsel and Chief Compliance Officer for BJ Services Company, a leading provider of pressure pumping and other oilfield services to the petroleum industry, serving as an executive officer since 2003. From 1988 to 1995, he held the position of Senior Litigation Counsel at Cooper Industries, Inc., a global manufacturer of electrical products and tools, with initial responsibility for managing environmental regulatory matters and litigation and subsequently managing the company's commercial litigation. Management Biographies |
| 28 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 the U.K. operations of M-I Swaco, a competitor of Newpark Drilling Fluids, where he was responsible for two business units, including their drilling fluids unit. Thomas E. Eisenman, President Excalibar Minerals LLC: Tom joined Newpark in August 1997 as President of Excalibar Minerals LLC, when Newpark purchased Excalibar Minerals Inc., an industrial minerals processing and marketing company founded by Mr. Eisenman in 1990. Prior to starting Excalibar Minerals he had served as Vice-President of Minerals at Milpark Drilling Fluids Inc., a division of Baker Hughes Inc. from 1986 thru 1990 and President of Eisenman Chemical Co. a wholesale chemical supplier with $65 million in annual sales to the drilling service industry from 1979 thru 1986. Management Biographies |
Exhibit 99.2
April 2008
Company Fact Sheet
Newpark Resources, Inc.
NYSE: NR
Company Fact Sheet
Newpark Resources, Inc.
NYSE: NR
Leadership, Focus and Growth
www.Newpark.com
| • | Recognized Name in Drilling Fluids. Newpark Resources (NR) is one of the leading
providers of proprietary drilling fluids to the oil and gas industry. Fluids segment
revenues have experienced brisk growth of 25% compound annual growth rate since 2003 and
account for over 80% of total revenues. |
|
| • | Broadening Scope of Mats & Integrated Services. NR’s Mats & Integrated Services segment
is a top provider of well site construction services. As one of the first service providers
on site, constructing road and worksite access, NR plans to leverage customer relationships
into expanded services and geographic presence. Consistent with this strategy was its
purchase of SEM Construction Co. in Colorado which added well site management and equipment
rental services. |
|
| • | Actively Growing Worldwide Fluids Business. Newpark is targeting select international
markets where it sees exceptional growth opportunities in its fluids business. Through Ava,
S.p.A, its Mediterranean-based fluids business, Newpark has established a solid presence in
the North African and Eastern European markets. Ava’s 2007 revenues increased by 41% from
2006, and it is expected to demonstrate strong near-term growth. NR has also set up
operations in Brazil and was recently awarded a significant deepwater contract by a super
major. |
|
| • | Competitive in Deepwater Markets. With greater deepwater activity levels worldwide, it is
essential that NR’s fluids product line meet the rigors of deepwater drilling. Its
three-year contract with ENI to provide deepwater fluid systems was a major milestone and
validated NR’s competitiveness in this market. |
|
| • | Operational Re-Focus and Capital Discipline. NR’s strategic plan initiated in early 2007
entails: (1) an operational refocusing with an emphasis on growing the Fluids and Mats &
Integrated Services segments; (2) divestiture of non-core operations; and (3) debt reduction.
Led by a management team in place only 18 months, NR has made significant progress on its
plan. It has sold off non-performing assets and consolidated operations within Mats. Debt
had steadily been paid down since the beginning of 2007. The sale of the environmental
business, expected to close in July 2008, will allow Newpark to free up excess liquidity and
better position itself to pursue growth opportunities in Fluids and Mats & Integrated
Services. |
Price (April 17, 2008) |
$ | 5.67 |
Stock Data
Fiscal Year-End: |
December | |||
Symbol / Exchange: |
NR / NYSE | |||
52-Week Range: |
$3.76-$8.41 | |||
Common Shares O/S: |
90.2mm | |||
Market Capitalization: |
$511mm | |||
Total Enterprise Value (TEV) 1): |
$683mm | |||
Average Daily Volume (L3M): |
444,133 | |||
Insider Ownership 2): |
2.3% | |||
13F Institutional Ownership 3): |
94.8% | |||
Financial Data
| 12/31/06 | 12/31/07 | |||||||
Total Cash: |
$12.7mm | $5.7mm | ||||||
Total Debt: |
$213.0mm | $177.5mm | ||||||
Total Stockholders’ Equity: |
$323.1mm | $360.7mm | ||||||
Net Debt / Net Book Capital: |
38.3% | 32.3% | ||||||
| FY2006 | FY2007 | |||||||
Revenue ($mm) 4): |
$ | 581.9 | $ | 612.8 | ||||
Operating Income ($mm) 4): |
$ | 61.8 | $ | 55.9 | ||||
EPS 4): |
$ | 0.31 | $ | 0.28 | ||||
Segment Data
| Revenue Mix4) | FY2007 | |||
North America / International |
86% / 14 | % | ||
Fluid Systems / Mats |
85% / 15 | % | ||
Stock Price (1-year price performance)
1) Total Enterprise Value (TEV) defined as market capitalization plus total debt less cash.
2) Represents executive officers and directors as disclosed in the latest Proxy Statement on file
with the SEC.
3) As reported by Bigdough
4) Revenue, operating income, EPS and revenue mix data is based on results from continuing
operations.
©2008 Newpark Resources, Inc.
All Rights Reserved.
All Rights Reserved.
 Fact Sheet
|
April 2008 |
Company Overview
Newpark Resources, Inc. is a worldwide provider of proprietary drilling fluids, temporary access
roads for oilfield and other commercial markets, and well site construction, management and
equipment rentals. The Company operates in the U.S. Gulf Coast, West Texas, the U.S.
Mid-continent, the U.S. Rocky Mountains, Canada, Mexico, Brazil and areas of Europe and North
Africa surrounding the Mediterranean Sea.
Fluids: Newpark’s Foundation and Platform for Growth
Drilling fluids represent the core of Newpark’s business, accounting for over 80% of total Company
revenues. It has been Newpark’s fastest growing business segment, with a 25% compound annual
growth rate (CAGR) over the last four years.
Drilling fluids serve a fundamental and critical function in oil and gas drilling as part of a
rig’s “circulation system,” and different drilling conditions call for fluids of varying density,
viscosity and weight. Fluids perform multiple functions, e.g., removing well cuttings, cleaning
and cooling the drill bit, and well pressure control, under a host of conditions. Thus, fluids can
be deceptively technological, and superior product performance can yield substantial benefits.
Here, Newpark has excelled by providing versatile water-based drilling solutions, such as its
DeepDrill® and FlexDrill™ systems, which not only effectively address multiple
performance applications, but are also environmentally friendly.
Newpark ranks fourth in both domestic and global drilling fluids market share, with a 12% domestic
share and 7% global share. Long term, Newpark plans to leverage its strength in fluids to grow
both organically and via targeted acquisitions worldwide.
Expanding Scope of Mats & Integrated Services
Newpark’s Mats & Integrated Services segment is the other significant foundation on which the
Company’s growth story will be built upon. Revenues in this segment have grown at a 6% CAGR over
the last four years.
This business is largely comprised of the rental and sale of interlocking composite and wooden mat
systems to facilitate work in unstable soil conditions common around remote drilling worksites.
Such services can also be used in other commercial applications. Because it is often one of the
first service providers on a worksite, offering services that are fundamental to well site
preparation, Newpark believes it can leverage this position to offer a broader array of services to
its E&P customers. Newpark is also broadening the geographic reach of Mats & Integrated Services
operations beyond its core Gulf Coast market, evidenced by its push into the northern Louisiana
site construction business. Consistent with this strategic goal was the purchase of SEM
Construction in Colorado, which expands Newpark into well site management in addition to equipment
rentals in Western Colorado.
Growing Presence in International & Deepwater Markets
Oil and gas activity will continue to move towards more challenging environments in less-explored
areas of the globe. Newpark has targeted overseas markets as a major growth initiative, and its
2002 acquisition of Ava S.p.A, which gave the Company exposure in the Mediterranean and North
African markets, has been pivotal in driving international growth. North Africa has been
particularly noteworthy, as the Company was awarded a new contract for offshore work in Libya and
also completed its second test well in Egypt, opening the door for bidding opportunities there.
Recently, Ava sales have also expanded to Eastern Europe. Since 2004, Ava’s revenues have
experienced a healthy 37% CAGR to approximately $87 million for 2007.
International expansion also has some overlap with the deepwater exploration play. For instance,
Newpark has targeted the South American market and has been in the process of setting up operations
in Brazil. Once the Company has established itself in the Brazilian land market, it will then
leverage this presence into the country’s offshore market. Progress toward this strategy is
evidenced by a deepwater drilling fluids contract that it was recently awarded by a super-major oil
company. To support this contract and future business in the region, Newpark is constructing a new
liquid mud facility in Rio de Janeiro. In addition, the Company’s fourth-quarter 2007 results
included revenues from Brazil for the first time. Newpark is also active in domestic deepwater
development where it was awarded a three-year deepwater Gulf of Mexico contract with ENI in early
2007
Executing on the Strategic Plan
In March 2007, Newpark’s new management team, led by CEO Paul Howes, rolled out a new strategic
plan that called for a refocusing of operations on growing and improving profitability within the
Fluids and Mats & Integrated Services segments, the divestiture of non-core and poor performing
assets, and a reduction of debt. 2007 was a transitional year as these initiatives were
implemented. Noteworthy events included the consolidation of the Mats segment and sale of the
Batson, Texas sawmill facility.
A cornerstone of this refocused strategy is the Company’s exit from environmental services, which
management deemed as not in Newpark’s long-term goals of profitability enhancement and growth.
Management recently announced an agreement to sell the Environmental Services business to CCS Inc.
for $85 million in cash. Closing of the sale is expected in July 2008. The Company has already
reduced debt by about $36 million during 2007; and with proceeds from the sale, it will be
well-capitalized to pursue growth opportunities that build on its fluids and integrated oilfield
services operations.
| Page 2 | ©2008 Newpark Resources, Inc. | |
| All Rights Reserved. |
| Fact Sheet
|
April 2008 |
Growing Share in the Drilling & Completion Fluids Market
Source: Spears & Associates, Inc.
Strong Revenue and Margin Growth, but 2007 a Transition Year
Source: Company Reports
International Expansion: Planning and Executing
| Page 3 | ©2008 Newpark Resources, Inc. | |
| All Rights Reserved. |
Newpark Resources, Inc.
NYSE: NR
COMPANY HEADQUARTERS
2700 Research Forest Drive, Suite 100
The Woodlands, Texas 77381
2700 Research Forest Drive, Suite 100
The Woodlands, Texas 77381
Phone: (281) 362-6800 • Fax: (281) 362-6801
www.newpark.com
www.newpark.com
INVESTOR RELATIONS CONTACT
James E. Braun
Vice President and Chief Financial Officer
jbraun@newpark.com
James E. Braun
Vice President and Chief Financial Officer
jbraun@newpark.com
This document is issued by Newpark Resources, Inc. and was prepared in conjunction with the firm
of Dennard Rupp Gray & Easterly, LLC.
of Dennard Rupp Gray & Easterly, LLC.
Reader Advisory and Forward Looking Statements
This Fact Sheet is presented as a brief company overview for the information of investors,
analysts and other parties with an interest in the Company. Newpark’s management hopes that this
Fact Sheet will encourage analysts and investors to investigate more about the Company through its
Securities and Exchange Commission (SEC) filings, press releases and other public materials. This
Fact Sheet does not constitute an offer to sell or a solicitation of an offer to buy any
securities of the Company. This Fact Sheet 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 statements about 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 Fact Sheet 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, 2007, as well as others, could cause results to differ
materially from those stated. These factors include, but are not limited to, 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. Newpark’s filings
with the Securities and Exchange Commission can be obtained at no charge at http://www.sec.gov, as
well as through our website at http://www.newpark.com. This Fact Sheet does not purport to be
all-inclusive or to contain all of the information that a reader may desire regarding the
structure or the affairs of the Company. The information contained in this Fact Sheet is only
current as of April 17, 2008 and the Company undertakes no obligation to update this Fact Sheet.
©2008 Newpark Resources, Inc.
All Rights Reserved.
All Rights Reserved.