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): August 19, 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 August 19, 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 current and potential investors. 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 Current and Potential Investors. |
| 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.
Dated: August 19, 2008
By: /s/ James E. Braun
James E. Braun, Vice President and Chief Financial Officer
(Principal Financial Officer)
EXHIBIT INDEX
| Exhibit No. | Description | |
99.1
|
Presentation to Current and Potential Investors | |
99.2
|
Company Fact Sheet. |
Exhibit 99.1
| Leadership Focus Growth Newpark August 2008 Newpark Resources, Inc. |
| 2 2 2 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 and Form 10-Q for the quarter ended June 30, 2008, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, our successful completion of the proposed sale of the environmental business, 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 and availability 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. |
| 3 3 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 4 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 5 5 Experienced Leadership Paul Howes, President & CEO Jim Braun, VP & CFO Mark Airola, GC & Admin Officer Bruce Smith, President Fluids Systems and Engineering Bill Moss, President Mats and Integrated Services Tom Eisenman, President Excalibar Minerals LLC |
| 6 6 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 Close expected in fourth quarter of 2008 |
| 7 Revenue Mix Fluids Well Site Construction 86 14 Well Site Construction Services 86% Fluids Systems and Engineering 14% |
| 8 8 8 Fluids Systems and Engineering Strategy Core business line - 86% 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 13% 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: Spears & Associates, Inc. |
| 9 9 9 Fluids Systems and Engineering Strong Revenue Growth 25% CAGR * 6 months annualized |
| 10 10 10 Fluids Systems and Engineering Strong Margin Growth |
| 11 11 11 Serves major North America basins Approximately 17% 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 12 12 Aggressive international market expansion 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 $62 $87 $0 $20 $40 $60 $80 $100 2005 2006 2007 Revenues ($mm) $40 $120 $119 2008* * 6 months annualized |
| 13 13 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 14 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 15 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 16 16 Well Site Construction Services * 6 months annualized |
| 17 17 17 Well Site Construction Services Aiming to Expand Margins |
| 18 18 18 Capital Structure - June 30, 2008 |
| Solid Capital Structure Strong cash flow has allowed $42 million debt reduction over last two years Includes $10 million share repurchases No significant near-term debt maturities: $10 million per year next four years 19 |
| 20 20 FY 2008 Q2 Results Strong growth in total revenues to $194 million, up 29% from 2Q07 Fluid Systems & Engineering Revenues up 8% sequentially and 29% YOY. Strong growth in the U.S. reflecting market share gains; Europe and North Africa revenues continue to grow Operating margin of 10.7%, down sequentially and YOY due to product mix, start up costs and higher than usual operating expenses Well Site Construction Services ("Mats") Strong sale of composite mats offset weak demand and pricing in southern Louisiana rig market, with revenues up 17% sequentially and 32% YOY. Operating margin improved 9.7% in 2Q08 from breakeven in Q1 EPS from continuing operations of $0.10 per diluted share versus $0.07 a year ago Repurchased a total of 1.9 million shares for $10 million |
| 21 21 21 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 Growth in revenues and EPS Share repurchase program in place; $15 million left on $25 million authorization |
| New Leadership New Focus New Strategy Newpark Thank you for your interest! |
| New Leadership New Focus New Strategy Newpark Appendix |
| 24 24 24 Financials |
| 25 25 25 Financials <root/> |
| 26 26 26 Financials |
| 27 27 27 Financials |
| 28 28 28 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 |
| 29 29 29 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. William D. Moss, President Mats & Integrated Services: Bill joined Newpark in June 2008 as President, Mats and Integrated Services. Before joining Newpark, Mr. Moss held management positions at BJ Services Company, most recently, since 1997, as Division President of BJ Chemical Services, a provider of production and industrial chemicals, remedial pumping and capillary services to US and international customers. He previously served as Director, Logistics, of BJ Services with responsibility for worldwide logistics organization. From 1988 to 1995 Moss was Vice-President, International Operations of Western Petroleum Services International and prior to that, he spent 10 years in numerous leadership positions at Western Company of North America. 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
| August 2008 Company Fact Sheet Newpark Resources, Inc. NYSE: NR Leadership, Focus and Growth www.Newpark.com · Recognized Name in Drilling Fluids. Newpark Resources 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. · 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. In 2007, Mediterranean revenues increased by 41% from 2006, and 2Q08 revenues were up 53% from a year ago. Newpark has also set up operations in Brazil and was awarded a significant deepwater contract by a super major. · Broadening Scope of Mats & Integrated Services. Newpark’s Mats & Integrated Services segment is a top provider of well site construction services. As one of the first service providers on site, Newpark 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. · Competitive in Deepwater Markets. With greater deepwater activity levels worldwide, it is essential that Newpark’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 Newpark’s competitiveness in this market. · Operational Re-Focus and Capital Discipline. Newpark’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. The Company has made significant progress on this plan, selling off non-performing assets and consolidating operations within the Mats segment. Debt has steadily been paid down since the beginning of 2007. The sale of its environmental business, which is expected to close sometime in the 2008 fourth quarter, will allow Newpark to free up excess liquidity and better position itself to pursue growth opportunities in Fluids and Mats & Integrated Services. Price (August 15, 2008) $8.34 Stock Data Fiscal Year-End: December Symbol / Exchange: NR / NYSE 52-Week Range: $3.76-$8.92 Common Shares O/S: 89.1mm Market Capitalization: $743mm Total Enterprise Value (TEV) 1): $912mm Average Daily Volume (L3M): 836,366 |
| Insider Ownership 2): 1.3% 13F Institutional Ownership 3): 95.5% Financial Data 12/31/07 6/30/08 Total Cash: $5.7mm $10.2mm Total Debt: $177.5mm $179.2mm Total Stockholders’ Equity: $360.7mm $378.1mm Net Debt / Net Book Capital: 32.3% 30.9% FY2007 6M2008 Revenue ($mm) 4): $612.8 $372.5 Operating Income ($mm) 4): $ 55.9 $ 31.9 EPS 4): $ 0.28 $ 0.19 Segment Data Revenue Mix 4) 1H2008 North America / International 79% / 21% Fluid Systems / Mats 88% / 12% 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. |
| Company Overview Newpark Resources, Inc. (the “Company”) 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 13% 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 platform on which the Company’s growth story will be built. 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 its services are fundamental to well site preparation, Newpark is often one of the first service providers on a worksite and can leverage this position to offer a broader array of services to its E&P customers. Newpark is broadening the geographic reach of Mats 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, which expanded the Company into well site management as well as equipment rentals in Western Colorado. Growing Presence in International & Deepwater Markets Oil and gas drilling will continue to move towards more challenging environments in less-explored areas of the globe. Newpark has targeted foreign markets as a major growth initiative, and its Mediterranean efforts have been pivotal in driving international growth. North Africa has been particularly noteworthy as the Company was awarded a contract for offshore work in Libya and has been cleared to bid on projects in Egypt after completing well tests. Since 2004, Mediterranean revenues have experienced a healthy 37% CAGR to approximately $87 million for 2007, and have already exceeded $59 million for 1H08. Going forward, Eastern Europe should also contribute a greater share of revenues. International expansion is also a part of Newpark’s deepwater strategy. For instance, since first attaining revenues in the Brazilian land market in 4Q07, the Company has broadened into the country’s offshore market. Progress toward this strategy is evidenced by a deepwater drilling fluids contract that it was awarded earlier this year by a super-major oil company. To support this contract and future business in the region, Newpark is constructing a new fluids facility in Rio de Janeiro that should become fully operational in September. However, as Newpark has incurred upfront costs in preparation for this market, operating margins have come under pressure. Although fluids margins should improve going forward, operational investments in Brazil will continue. Margins should also benefit from Newpark’s active domestic deepwater activities, under which it is operating under a three-year deepwater Gulf of Mexico contract with Eni through 2010. 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 focused 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. Newpark appears well on its way toward achieving these goals as evidenced in the 2008 second quarter results: Revenue was up 9% sequentially and 29% from last year to $194 million, while income from continuing operations was up 41% from last year. U.S. fluids were up 22% from a year ago to $132 million due to share gains. A cornerstone of this refocused strategy is the Company’s exit from environmental services, which was no longer strategic. During the recent quarter, management announced an agreement to sell its Environmental Services business to CCS Inc. for $85 million in cash, which is expected to close in the fourth quarter of 2008. Also during the quarter, the Company reduced debt by about $20 million bringing its debt/cap ratio to 30.9%. The cash proceeds from the sale combined with a well-capitalized financial profile should position Newpark to pursue growth opportunities in its core businesses. |
| Growing Share in the Drilling & Completion Fluids Market Source: Spears & Associates, Inc. Strong Revenue Growth; Margins Pressured by Infrastructure Spending Source: Company Reports International Expansion: Planning and Executing Source: Company Reports |
| Newpark Resources, Inc. NYSE: NR COMPANY HEADQUARTERS 2700 Research Forest Drive, Suite 100 The Woodlands, Texas 77381 Phone: (281) 362-6800 • Fax: (281) 362-6801 www.newpark.com INVESTOR RELATIONS CONTACT 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. 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 and availability 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 August 15, 2008 and the Company undertakes no obligation to update this Fact Sheet. |