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): September 6, 2016
NEWPARK RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-2960 | 72-1123385 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
9320 Lakeside Boulevard, 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:
p | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
p | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
p | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
p | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) |
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Item 7.01. Regulation FD Disclosure.
Newpark Resources, Inc. (the “Company”) has prepared presentation materials (the “Presentation Materials”) that management intends to use from time to time after September 5, 2016 in presentations about the Company’s operations and performance. The Company may use the Presentation Materials, possibly with modifications, in presentations to current and potential investors, lenders, creditors, insurers, vendors, customers, employees and others with an interest in the Company and its business.
The information contained in the Presentation Materials is summary information that should be considered in the context of the Company’s filings with the Securities and Exchange Commission and other public announcements that the Company may make by press release or otherwise from time to time. The Presentation Materials speak as of the date of this Current Report on Form 8-K. While the Company may elect to update the Presentation Materials in the future or reflect events and circumstances occurring or existing after the date of this Current Report on Form 8-K, the Company specifically disclaims any obligation to do so. The Presentation Materials are furnished as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference. The Presentation Materials will also be posted in the Investor Information section of the Company’s website, http://www.newpark.com for 90 days.
The information referenced under Item 7.01 (including Exhibit 99.1 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 referenced in Item 9.01 below) shall not be incorporated by reference into any registration statement, report or other document filed by the Company 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.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits | |||
Exhibit No. | Description | |||
99.1 | Presentation Materials. | |||
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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: | September 6, 2016 | By: | /s/ Gregg S. Piontek |
Gregg S. Piontek, Vice President and Chief Financial Officer | |||
(Principal Financial Officer) | |||
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EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Presentation Materials. | |
4
Newpark Resources
Presentation
September 2016
NYSE: NR
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 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, 2015,
as well as others, could cause results to differ materially from those expressed in, or implied by, these
statements. These risk factors include, but are not limited to, risks related to the worldwide oil and natural
gas industry, our customer concentration and reliance on the U.S. exploration and production market, the
cost and continued availability of borrowed funds, including non-compliance with debt covenants, our
international operations, operating hazards present in the oil and natural gas industry, our ability to execute
our business strategy and make successful business acquisitions and capital investments, the availability of
raw materials and skilled personnel, our market competition, legal and regulatory matters, including
environmental regulations, inherent limitations in insurance coverage, potential impairments of long-lived
intangible assets, technological developments in our industry, our exposure to cybersecurity breaches or
business system disruptions, and the impact of severe weather, particularly in the U.S. Gulf Coast. 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.
3
$909
$984
$1,042
$1,118
$677
$230
$372
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2011 2012 2013 2014 2015 2016
85%
15%
First Half 2016 - Revenue by Segment
Company Overview
Operating Segments:
Fluids Systems
Mats and Integrated
Services
Customer markets:
Oil and Gas exploration
Mats expanding into utilities
and other non-exploration
markets
Key geographic markets:
North America
EMEA
Latin America
Asia Pacific
R
e
ve
n
u
e
s
($
m
ill
io
n
s)
Consolidated Revenues
Fluids Systems Mats and Integrated Services
Full Year
First Half
4
Global Presence
First Half 2016 Revenue by Region
42%
39%
11%
1%
7%
U.S. EMEA Latin America APAC Canada
5
35%
8%
42%
13%
2%
U.S. Canada EMEA Latin America APAC
Fluids Systems - Overview
Largest independent drilling
fluids provider
3rd largest drilling fluids
company worldwide*
Seek to capitalize on
competitive diversions to drive
market share gains
Geographic reach continuing to
expand, leveraging IOC/NOC
relationships
$799
$862
$926
$965
$581
$195
$312
$0
$200
$400
$600
$800
$1,000
$1,200
2011 2012 2013 2014 2015 2016
Re
ve
n
u
e
s
($
m
il
lio
n
s)
Total Segment Revenues
First Half 2016 - Revenue by Region
*Based on company data
Full Year
First Half
6
2,283
2,114
2,241
1,170
591
10%
11%
12%
13%
14%
15%
16%
-
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 First Half
2016
NAM Rig Count Market Share
$585 $615
$654
$687
$352
$83
$198
$0
$100
$200
$300
$400
$500
$600
$700
$800
2011 2012 2013 2014 2015 2016
Fluids Systems – North America
Revenues impacted by sharp
decline in drilling activity and
operators reducing well
expenditures
Service quality and focus driving
share gains in a difficult market
environment
Actively managing operating
costs, seeking to match cost
structure to activity levels
Reduced workforce by nearly
60% since the beginning of
2015
(1) Source: BHI and company data
Re
ve
n
u
e
(
$
m
il
lio
n
s)
North American Revenues
NAM U.S Rig Count & Market Share(1)
Full Year
First Half
7
$214
$246
$272 $278
$229
$114 $112
$0
$50
$100
$150
$200
$250
$300
$350
2011 2012 2013 2014 2015 2016
$113 $117
$137
$166 $164
$83
$76 $87
$99
$84
$47
$25
$42
$36 $28
$18
$3
2011 2012 2013 2014 2015 First Half
2016
APAC
LATAM
EMEA
Fluids Systems - International
International expansion is key to our strategy
More stable than NAM, through the current
cycle
Longer term contracts
Largely IOC’s/NOC’s
Few competitors
Key contract awards have driven growth
Black Sea Deepwater
Kuwait (KOC)
Algeria (Sonatrach)
Republic of Congo (ENI)
Uruguay ultra-deepwater (Total)
Albania (Shell)
2015 revenues include ~$57m negative y/y
impact from currency rates (strong U.S. dollar)
International Revenues
Revenues by Region
Full Year
First Half
$26
IMPACT OF
CURRENCY
8
Fluids Strategic Investments
Newpark Technology Center
Manufacturing Facility & Distribution Center
Gulf of Mexico Deepwater Shorebase
Elevated capital campaign largely
completed
Infrastructure investments significantly
enhance our capabilities
Reflects our commitment to be the global
leader in fluids technology
9
$110
$122
$116
$153
$96
$35
$60
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2011 2012 2013 2014 2015 2016
Mats & Integrated Services - Overview
Leading provider of engineered worksite
solutions
Patented technology and size of
composite mat rental fleet provide
competitive advantage
Revenues include rentals and sale of
DURA-BASE composite mats
Mat sales targeted to international E&P
and non-oil and gas customers
Established core rental business in NAM
exploration market, where mats reduce
operator’s costs and improves
environmental protection during drilling
and completion phase
Seeking to accelerate growth by
expanding into new geographic markets
and industries
Total Segment Revenues
R
e
ve
n
u
e
s
($
m
ill
io
n
s)
16%
32%
36%
16% Mat Sales - Non-Exploration
Rental - Exploration
Rental - NAM Utilities & Pipeline
Rental - U.K. Utilities & Other
First Half 2016 Revenues by Market
Full Year
First Half
10
Mats & Integrated Services - Strategy
Key investments made to support
future growth
Manufacturing capacity expanded
R&D center completed
Transform wellsite offering to system
solution, driving lowest cost to
operators
Defender Spill Containment System
Mobile Cleaning System
Other enhancements (lighting, safety
barriers, etc.)
Diversify beyond the wellsite
Accelerate penetration of non-
exploration markets, both domestically
and internationally
Commercialize differentiated system
enhancements, including EPZ Grounding
System® for the utility industry
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Navigating Through The Cycle
Short-Term Actions
Actively monitoring and adjusting
cost structure to match current
activity levels
Generating cash flow through
continued working capital
reductions
Minimize capital investments
beyond deepwater project
Long-term Focus
Continue investing in strategic
capital projects
IOC/deepwater focus in fluids
Aggressively pursue non-E&P
market expansion in mats
Selectively seek to strengthen core
competencies during cycle
Expand technology portfolio
$256
$183 $182 $179 $171
$209
$117
$97
$71 $78
20%
23%
26%
29%
32%
35%
$0
$50
$100
$150
$200
$250
$300
2012 2013 2014 2015 June
2016
Total Debt Net Debt Debt to Book Capital Ratio
Capital Structure
Protecting the Balance Sheet
Seeking to maximize near-term liquidity while
preparing for Q4 2017 debt maturity
Revolving credit facility remains unused, providing
additional liquidity
12
APPENDIX
13
Consolidated Statements of Operations
Three Months Ended Six Months Ended
(In thousands, except per share data)
June 30,
2016
March 31,
2016
June 30,
2015
June 30,
2016
June 30,
2015
Revenues $ 115,315 $ 114,544 $ 163,644 $ 229,859 $ 372,108
Cost of revenues 102,803 111,573 142,155 214,376 318,789
Selling, general and administrative expenses 21,435 23,492 23,963 44,927 49,941
Other operating income, net (713 ) (1,696 ) (792 ) (2,409 ) (1,068 )
Impairments and other charges 6,925 — — 6,925 —
Operating income (loss) (15,135 ) (18,825 ) (1,682 ) (33,960 ) 4,446
Foreign currency exchange (gain) loss (746 ) (455 ) (410 ) (1,201 ) 1,154
Interest expense, net 3,022 2,081 2,224 5,103 4,479
Gain on extinguishment of debt — (1,894 ) — (1,894 ) —
Loss from operations before income taxes (17,411 ) (18,557 ) (3,496 ) (35,968 ) (1,187 )
Provision (benefit) for income taxes (3,507 ) (5,257 ) 758 (8,764 ) 2,074
Net loss $ (13,904 ) $ (13,300 ) $ (4,254 ) $ (27,204 ) $ (3,261 )
Loss per common share - basic $ (0.17 ) $ (0.16 ) $ (0.05 ) $ (0.33 ) $ (0.04 )
Loss per common share - diluted $ (0.17 ) $ (0.16 ) $ (0.05 ) $ (0.33 ) $ (0.04 )
14
Operating Segment Results
Three Months Ended
(In thousands)
June 30,
2016
March 31,
2016
June 30,
2015
Revenues
Fluids systems $ 96,153 $ 98,651 $ 140,344
Mats and integrated services 19,162 15,893 23,300
Total revenues $ 115,315 $ 114,544 $ 163,644
Operating income (loss)
Fluids systems $ (11,924 ) $ (15,207 ) $ (223 )
Mats and integrated services 3,989 3,736 6,555
Corporate office (7,200 ) (7,354 ) (8,014 )
Operating loss $ (15,135 ) $ (18,825 ) $ (1,682 )
Segment operating margin
Fluids systems (12.4 )% (15.4 )% (0.2 )%
Mats and integrated services 20.8 % 23.5 % 28.1 %
15
Consolidated Balance Sheets
(In thousands, except share data) June 30, 2016 December 31, 2015
ASSETS
Cash and cash equivalents $ 93,148 $ 107,138
Receivables, net 177,484 206,364
Inventories 144,876 163,657
Prepaid expenses and other current assets 31,198 29,219
Total current assets 446,706 506,378
Property, plant and equipment, net 311,220 307,632
Goodwill 18,620 19,009
Other intangible assets, net 5,985 11,051
Deferred tax assets 3,684 1,821
Other assets 3,808 3,002
Total assets $ 790,023 $ 848,893
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt $ 10,193 $ 7,382
Accounts payable 50,357 72,211
Accrued liabilities 36,680 45,835
Total current liabilities 97,230 125,428
Long-term debt, less current portion 160,460 171,211
Deferred tax liabilities 28,392 26,368
Other noncurrent liabilities 6,254 5,627
Total liabilities 292,336 328,634
Common stock, $0.01 par value, 200,000,000 shares authorized and
99,662,742 and 99,377,391 shares issued, respectively 997
994
Paid-in capital 537,108 533,746
Accumulated other comprehensive loss (57,407 ) (58,276 )
Retained earnings 143,756 171,788
Treasury stock, at cost; 15,240,397 and 15,302,345 shares, respectively (126,767 ) (127,993 )
Total stockholders’ equity 497,687 520,259
Total liabilities and stockholders' equity $ 790,023 $ 848,893
16
Consolidated Statements of Cash Flow
Six Months Ended June 30,
(In thousands) 2016 2015
Cash flows from operating activities:
Net loss $ (27,204 ) $ (3,261 )
Adjustments to reconcile net loss to net cash provided by operations:
Impairments and other non-cash charges 8,617 —
Depreciation and amortization 19,201 21,069
Stock-based compensation expense 5,613 6,510
Provision for deferred income taxes 546 (3,205 )
Net provision for doubtful accounts 1,582 1,033
Gain on sale of assets (1,841 ) (528 )
Gain on extinguishment of debt (1,894 ) —
Change in assets and liabilities:
Decrease in receivables 18,006 113,746
Decrease in inventories 18,981 2,804
Increase in other assets (2,204 ) (2,461 )
Decrease in accounts payable (20,720 ) (38,744 )
Increase (decrease) in accrued liabilities and other 1,143 (15,166 )
Net cash provided by operating activities 19,826 81,797
Cash flows from investing activities:
Capital expenditures (26,652 ) (34,313 )
Increase in restricted cash (22 ) —
Proceeds from sale of property, plant and equipment 2,553 1,144
Net cash used in investing activities (24,121 ) (33,169 )
Cash flows from financing activities:
Borrowings on lines of credit 4,268 4,718
Payments on lines of credit (5,034 ) (5,949 )
Purchase of senior notes (9,206 ) —
Debt issuance costs (1,707 ) (1,697 )
Other financing activities 2,170 (1,487 )
Proceeds from employee stock plans 4 359
Purchases of treasury stock (1,093 ) (1,769 )
Net cash used in financing activities (10,598 ) (5,825 )
Effect of exchange rate changes on cash 903 (4,598 )
Net increase (decrease) in cash and cash equivalents (13,990 ) 38,205
Cash and cash equivalents at beginning of year 107,138 85,052
Cash and cash equivalents at end of period $ 93,148 $ 123,257
17
Experienced Leadership
• Paul Howes President & CEO
• Gregg Piontek VP & CFO
• Mark Airola SVP, GC & Admin Officer
• Bruce Smith President
Fluids Systems
• Matthew Lanigan President
Mats & Integrated Services
18
Management Biographies
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.
Gregg S. Piontek, VP & CFO: Joined Newpark in April 2007 and served as Vice President, Controller and Chief
Accounting Officer from April 2007 to October 2011. Prior to joining Newpark, Mr. Piontek was Vice President and
Chief Accounting Officer of Stewart & Stevenson LLC from 2006 to 2007, where he served as the lead executive
financial officer for the asset acquisition from Stewart & Stevenson Services, Inc. and $150 million public debt offering.
From 2001 to 2006, Mr. Piontek held the positions of Assistant Corporate Controller and Division Controller for Stewart
& Stevenson Services, Inc. Prior to that, Mr. Piontek served in various financials roles at General Electric and CNH Global
N.V., after beginning his career as an auditor for Deloitte & Touche LLP. Mr. Piontek is a Certified Public Accountant and
holds a bachelor degree in Accountancy from Arizona State University and a Master of Business Administration degree
from Marquette University.
Mark J. Airola, Sr. VP, GC & Admin Officer: Mark joined Newpark in October 2006 as its Vice President, General
Counsel and Chief Administrative Officer. Mr. Airola was named Senior Vice President in February of 2011. Prior to
joining Newpark, 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.
19
Bruce C. Smith, Executive VP and President Fluids Systems: 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.
Matthew Lanigan, President Mats and Integrated Services: Matthew joined Newpark in April 2016, as President of
Newpark Mats & Integrated Services. Matthew began his professional career at ExxonMobil in Australia working
on rigs as a Drilling & Completions Engineer, progressing from there to Offshore Production Engineer and as a
Marketer for Crude & LPG. While pursuing his MBA, he accepted a position with GE in the Plastics division
where he rose to the role of Chief Marketing Officer before transferring to the Capital division of GE, based in
the UK. His first opportunity to work in the United States came with the Enterprise Client Group of GE's Capital
division, where he worked in leadership roles in Sales & Marketing. In 2011, he was appointed as the Director
of Commercial Excellence for Asia Pacific, based in Australia. In addition to growing revenue and market share,
key responsibilities for this role included developing cross-organizational synergies and market entry strategies.
Management Biographies