nr-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-02960

Newpark Resources, Inc.

(Exact name of registrant as specified in its charter)


Delaware		72-1123385
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9320 Lakeside Boulevard,	Suite 100
The Woodlands,	Texas	77381
(Address of principal executive offices)		(Zip Code)

(281) 362-6800

(Registrant’s telephone number, including area code)


Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of July 31, 2023, a total of 86,812,902 shares of common stock, $0.01 par value per share, were outstanding.

NEWPARK RESOURCES, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2023


PART I	FINANCIAL INFORMATION	2
ITEM 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30
ITEM 4.	Controls and Procedures	30
PART II	OTHER INFORMATION	31
ITEM 1.	Legal Proceedings	31
ITEM 1A.	Risk Factors	31
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
ITEM 3.	Defaults Upon Senior Securities	32
ITEM 4.	Mine Safety Disclosures	32
ITEM 5.	Other Information	32
ITEM 6.	Exhibits	33
	Signatures	34

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. We also may provide oral or written forward-looking statements in other materials we release to the public. Words such as “will,” “may,” “could,” “would,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying them. These forward-looking statements reflect the current views of our management as of the filing date of this Quarterly Report on Form 10-Q; however, various risks, uncertainties, contingencies, and other factors, some of which are beyond our control, are difficult to predict and could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, these statements.

We assume no obligation to update, amend, or clarify publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by securities laws. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed in this Quarterly Report on Form 10-Q might not occur.

For further information regarding these and other factors, risks, and uncertainties that could cause actual results to differ, we refer you to the risk factors set forth in Item 1A “Risk Factors” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2022.

PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


(In thousands, except share data)	June 30, 2023		December 31, 2022
ASSETS
Cash and cash equivalents	$	22,353	$	23,182
Receivables, net of allowance of $5,205 and $4,817, respectively	193,365		242,247
Inventories	147,113		149,571
Prepaid expenses and other current assets	14,231		10,966
Total current assets	377,062		425,966

Property, plant and equipment, net	194,584		193,099
Operating lease assets	22,549		23,769
Goodwill	47,273		47,110
Other intangible assets, net	18,766		20,215
Deferred tax assets	2,480		2,275
Other assets	2,237		2,441
Total assets	$	664,951	$	714,875

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current debt	$	21,654	$	22,438
Accounts payable	79,437		93,633
Accrued liabilities	39,327		46,871
Total current liabilities	140,418		162,942

Long-term debt, less current portion	76,466		91,677
Noncurrent operating lease liabilities	18,844		19,816
Deferred tax liabilities	7,780		8,121
Other noncurrent liabilities	7,310		9,291
Total liabilities	250,818		291,847

Commitments and contingencies (Note 9)

Common stock, $0.01 par value (200,000,000 shares authorized and 111,669,464 and 111,451,999 shares issued, respectively)	1,117		1,115
Paid-in capital	637,435		641,266
Accumulated other comprehensive loss	(64,884)		(67,186)
Retained earnings	3,903		2,489
Treasury stock, at cost (24,889,137 and 21,751,232 shares, respectively)	(163,438)		(154,656)
Total stockholders’ equity	414,133		423,028
Total liabilities and stockholders’ equity	$	664,951	$	714,875

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2023		2022		2023		2022
Revenues	$	183,256	$	194,144	$	383,286	$	370,582
Cost of revenues	150,170		168,206		314,908		319,194
Selling, general and administrative expenses	25,576		24,330		50,986		48,763
Other operating (income) loss, net	(1,184)		(80)		(1,445)		(30)
Impairments and other charges	2,816		7,905		2,816		7,905
Operating income (loss)	5,878		(6,217)		16,021		(5,250)

Foreign currency exchange (gain) loss	(102)		(583)		217		(519)
Interest expense, net	2,146		1,638		4,235		2,844
Income (loss) before income taxes	3,834		(7,272)		11,569		(7,575)

Provision (benefit) for income taxes	2,132		480		4,247		(2,344)
Net income (loss)	$	1,702	$	(7,752)	$	7,322	$	(5,231)

Net income (loss) per common share - basic:	$	0.02	$	(0.08)	$	0.08	$	(0.06)
Net income (loss) per common share - diluted:	$	0.02	$	(0.08)	$	0.08	$	(0.06)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


	Three Months Ended June 30,			Six Months Ended June 30,
(In thousands)		2023		2022		2023		2022

Net income (loss)		$	1,702	$	(7,752)	$	7,322	$	(5,231)

Foreign currency translation adjustments, net of tax benefit (expense) of $(128), $366, $(118), $465		303		(6,093)		2,302		(7,321)

Comprehensive income (loss)		$	2,005	$	(13,845)	$	9,624	$	(12,552)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)


(In thousands)	Common Stock		Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total
Balance at March 31, 2023	$	1,115	$	643,004	$	(65,187)	$	8,109	$	(169,812)	$	417,229
Net income	—		—		—		1,702		—		1,702
Employee stock options, restricted stock and employee stock purchase plan	2		(7,129)		—		(5,908)		11,374		(1,661)
Stock-based compensation expense	—		1,560		—		—		—		1,560
Treasury shares purchased at cost	—		—		—		—		(5,000)		(5,000)
Foreign currency translation, net of tax	—		—		303		—		—		303
Balance at June 30, 2023	$	1,117	$	637,435	$	(64,884)	$	3,903	$	(163,438)	$	414,133

Balance at March 31, 2022	$	1,093	$	636,397	$	(62,708)	$	26,866	$	(136,505)	$	465,143
Net loss	—		—		—		(7,752)		—		(7,752)
Employee stock options, restricted stock and employee stock purchase plan	20		(834)		—		(1,023)		(440)		(2,277)
Stock-based compensation expense	—		1,730		—		—		—		1,730
Foreign currency translation, net of tax	—		—		(6,093)		—		—		(6,093)
Balance at June 30, 2022	$	1,113	$	637,293	$	(68,801)	$	18,091	$	(136,945)	$	450,751

Balance at December 31, 2022	$	1,115	$	641,266	$	(67,186)	$	2,489	$	(154,656)	$	423,028
Net income	—		—		—		7,322		—		7,322
Employee stock options, restricted stock and employee stock purchase plan	2		(7,129)		—		(5,908)		11,367		(1,668)
Stock-based compensation expense	—		3,298		—		—		—		3,298
Treasury shares purchased at cost	—		—		—		—		(20,149)		(20,149)
Foreign currency translation, net of tax	—		—		2,302		—		—		2,302
Balance at June 30, 2023	$	1,117	$	637,435	$	(64,884)	$	3,903	$	(163,438)	$	414,133

Balance at December 31, 2021	$	1,093	$	634,929	$	(61,480)	$	24,345	$	(136,501)	$	462,386
Net loss	—		—		—		(5,231)		—		(5,231)
Employee stock options, restricted stock and employee stock purchase plan	20		(834)		—		(1,023)		(444)		(2,281)
Stock-based compensation expense	—		3,198		—		—		—		3,198
Foreign currency translation, net of tax	—		—		(7,321)		—		—		(7,321)
Balance at June 30, 2022	$	1,113	$	637,293	$	(68,801)	$	18,091	$	(136,945)	$	450,751

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
(In thousands)	2023		2022
Cash flows from operating activities:
Net income (loss)	$	7,322	$	(5,231)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Impairments and other non-cash charges	2,816		7,905
Depreciation and amortization	15,803		20,563
Stock-based compensation expense	3,298		3,198
Provision for deferred income taxes	(916)		(6,918)
Credit loss expense	464		447
Gain on sale of assets	(1,649)		(2,001)
Amortization of original issue discount and debt issuance costs	274		587
Change in assets and liabilities:
(Increase) decrease in receivables	39,324		(5,350)
Increase in inventories	(3,440)		(38,660)
Increase in other assets	(3,187)		(5,196)
Increase (decrease) in accounts payable	(14,453)		12,208
Decrease in accrued liabilities and other	(8,808)		(4,563)
Net cash provided by (used in) operating activities	36,848		(23,011)

Cash flows from investing activities:
Capital expenditures	(15,347)		(9,515)
Proceeds from divestitures	18,086		—
Proceeds from sale of property, plant and equipment	2,304		1,943
Net cash used in investing activities	5,043		(7,572)

Cash flows from financing activities:
Borrowings on lines of credit	149,253		156,420
Payments on lines of credit	(167,435)		(129,914)
Proceeds from term loan	—		3,754
Debt issuance costs	—		(997)
Purchases of treasury stock	(21,966)		(2,537)
Other financing activities	(2,864)		296
Net cash provided by (used in) financing activities	(43,012)		27,022

Effect of exchange rate changes on cash	332		(1,412)

Net decrease in cash, cash equivalents, and restricted cash	(789)		(4,973)
Cash, cash equivalents, and restricted cash at beginning of period	25,061		29,489
Cash, cash equivalents, and restricted cash at end of period	$	24,272	$	24,516

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

NEWPARK RESOURCES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation and Significant Accounting Policies

Newpark Resources, Inc. is a geographically diversified supplier providing environmentally-sensitive products, as well as rentals and se

SEC Form 10-Q filed by Newpark Resources Inc.