2023
ANNUAL REPORT
TO OUR
SHAREHOLDERS
Matthew S. Lanigan
President & CEO
Newpark delivered strong full-year results in 2023,
while moving the pieces to continue to advance a value
creation strategy focused on driving superior returns on
invested capital through the cycle. It was a year in which
we executed on our near-term commercial growth and
operational excellence priorities across our current asset
portfolio while, at a strategic level, further advancing a
multi-year business transformation plan that positions
Newpark to become a leading specialty rental business of
scale serving the power and infrastructure markets.
FOCUSED EXECUTION
Entering 2023, we had three primary areas of focus for our business.
1. Our first area of focus was to re-prioritize growth within our
Industrial Solutions segment, while simplifying the structure of
our business within pure-play specialty rental end-markets.
Over the last three years, we structured our Fluids Systems division to
become a leaner, more agile business as we exited non-core markets and
reduced fixed overhead costs. Today, our Fluids division is a recognized
industry leader with decades of experience in North America and the
EMEA regions. However, following a rigorous review of our long-term
capital allocation priorities and required return thresholds, we made
the strategic decision to exit the Fluids business, while redoubling our
efforts within Industrial Solutions, where our core worksite access
solutions have a demonstrated track record of generating superior unit
economics.
To that end, we launched a formal process to explore strategic
alternatives for a potential sale of the Fluids Systems division in mid-
2023. The strategic alternatives process remains in-process and is
expected to substantially conclude in mid-2024.
2. Our second area of focus centered on
driving improved operational efficiency and
sustained growth in free cash flow generation
to support growth.
I’m pleased to report that we delivered on this
priority, culminating
in strong year-over-year
organic growth
in Adjusted EBITDA, margin
realization, free cash flow and profitability. We
generated $100 million in net cash provided by
operating activities in 2023, an increase of $125
million versus the prior year.
3. Our final area of focus was continued
investing for growth, while returning capital
to shareholders.
Over the past year, we continued to invest in
organic rental fleet expansion, growing our
matting fleet 11% versus the prior year, consistent
with our strategic focus on growing our share of
the domestic worksite access rental market, while
reducing our total debt outstanding by $39 million,
and returning capital to shareholders through the
repurchase of 6.5 million shares, equating to a 7%
reduction in our total shares outstanding. With
continued confidence in the long-term outlook for
Newpark, in February 2024, our Board of Directors
approved a new $50 million share repurchase
authorization, replacing the prior authorization.
STRONG FULL-YEAR PERFORMANCE
In 2023, we continued to prioritize organic share
gains, price discipline and a higher margin sales
mix, while driving increased productivity and
operational rigor across the organization.
Together these actions culminated in the following
financial highlights:
• Operating income of $33.6 million, +$42.7
million from prior year
• Net income of $14.5 million, +$35.4 million
from prior year
At an operational level, we delivered the following:
Launched the DURA-BASE® 800 SeriesTM mat,
•
the lightest-weight heavy-duty mat on the
market
• Reused more than 750,000 pounds of recycled
resin in the production of new mats
•
Increased matting rental fleet scale by 11%
• Delivered top-quartile safety metrics; Fluids
segment reported a record safety performance
• Reduced corporate fixed overhead as we
transition the company to a pure-play industrial
specialty rental and service platform
As a result, Newpark enters 2024 at a very exciting
time for our employees and shareholders. We
have a robust balance sheet and upon a successful
outcome to the divestiture of our fluids division,
a singular focus to grow our industrial specialty
rental and service platform, capable of generating
healthy returns and more consistent cash flow. We
are incredibly proud of our accomplishments and
confident that our strategy will continue to deliver
value for shareholders.
CHARTING A PATH FORWARD
As we look ahead to 2024, our top priorities include:
• Complete a planned divestiture of our Fluids
business by mid-year 2024;
• Become a pure-play specialty rental and
services provider to the utilities transmission
and other critical infrastructure markets;
• Continue to drive investment within our core
matting solutions product lines and product/
service adjacencies; and
• Continue to drive superior cash conversion,
while supporting a balanced return of capital
strategy, which
opportunistic
repurchases of our common equity.
includes
CONCLUSION
We continue to see strong demand fundamentals
for utilities and critical infrastructure in the year
ahead, a dynamic that supports our positive multi-
year outlook for our business. I am deeply grateful
for the many contributions of our employees,
our customer partnerships, together with the
continued support of our investors.
We are excited by the opportunities for value
creation as we enter this next chapter at Newpark
and look forward to having you join us on this
journey.
Sincerely,
Matthew S. Lanigan
President & CEO
BUSINESS UPDATE
INDUSTRIAL SOLUTIONS
For more than 25 years, Newpark Industrial Solutions has partnered with customers
and communities to support the transforming energy landscape. By developing,
manufacturing, and providing sustainable access solutions, we’ve become a trusted
partner in delivering industry-leading products and executing projects safely and efficiently
in various conditions. In recent years, we have been moving the pieces to leverage our
long history and proven success within the exploration and production end markets to
establish our position in the multibillion-dollar energy infrastructure space, including utility
transmission, distribution, and generation. These pivotal moves have strengthened our
position for growth and success.
ample capacity and scale to meet our customers’
needs. We also launched our new DURA-BASE
800 Series mat, again stamping our credential as
an innovation leader with the industry’s lightest
heavy-duty composite mat. Despite the 800-Series
being 13% less weight, it maintains the benefits
and capabilities of the original DURA-BASE mat.
Actual & Projected Transmission Investment*
DOMESTIC ENERGY INFRASTRUCTURE
OPPORTUNITY
Our focus remains on the continued deployment
of growth capital towards the stable and
growing electrical generation, transmission, and
distribution markets, whose U.S. projected capex
for 2024 is $167B, with almost
$30B earmarked for transmission
investment. Our long history as
a trusted partner to our electrical
utility customers leaves 2023 as
our 5th straight year of double
digit growth with approximately
70% of our revenues generated
from
in
this market. This has us well
positioned to continue to play a
vital role in their ongoing project
execution.
customers
repeat
S
N
O
I
L
L
I
B
continued
In 2023, we
to
prioritize our capital to expand
our rental fleet, growing it by 11%
year-over-year to ensure we have
Actual
Projected
~10% of spend on temporary access specialty rental & services
* Transmission investment - Edison Electric Institute Business Analytics Group, Jan 2024
YEARS
By concentrating our resources, expertise, and
innovation in this sector, we aim to meet the
growing demands of utility consumers and
establish ourselves as a significant player in shaping
the industry’s future.
WHERE SUSTAINABILITY EQUATES TO
PROFITABLE GROWTH
Environmental sustainability is not aspirational
for us – it’s been a cornerstone of our business
strategy for decades. Each eco-conscious initiative
mirrors a carefully considered move, balancing our
operational goals and ecological well-being. Our
fully recyclable DURA-BASE® composite matting
system, introduced more than 25 years ago, has
remained a disruptive, sustainable technology
since its first appearance.
We continue to
leverage our investments in
research and development capabilities and
adaptable manufacturing processes to increase
the use of alternate and recycled materials in
our composite mat production, providing further
potential economic benefits and significant
reductions in life-cycle greenhouse gas emissions
compared to traditional virgin resin. In 2023, our
manufacturing operations consumed over 750,000
pounds of recycled resin from both our mats and
our customer mats that were ready to start their
next life cycle, and we are looking to expand our
usage of recycled materials in the future. We
are only beginning to move the pieces of a more
significant play in the circular plastics economy.
With multiple life-cycles of up to 15 years each,
we can create outstanding unit economics across
our rental fleet while helping address single-use
plastics concerns.
Our continued commitment to sustainability
remains front and center; from our product
manufacturing to project execution in the field, we
minimize environmental impact by eliminating raw
material waste, reducing greenhouse gas emissions,
and producing a product with the fundamental
purpose of protecting the environment.
LEADING WITH A SAFETY-DRIVEN
CULTURE
At Newpark, safety is not just a priority – it’s
the number one value embedded in our culture.
is a piece, strategically positioned to
Safety
safeguard our greatest assets – our employees,
clients, and stakeholders. Every move we make
aims to preclude potential threats to the well-
being of our workforce and the sustainability of
our operations. Once again, we have achieved
outstanding performance through our disciplined
approach, with a TRIR of 1.10 and a TVIR of 1.14.
implementing
Our business has focused on improving vehicle
safety by incorporating telematics and cameras
into our vehicles, completing driver safety training
for 100% of our field based drivers to improve
frequent
self-awareness, and
driving behavior communications to remind us
that driving is our #1 risk at Newpark. Regarding
worker injury/illness, we revamped our Keystone
importance of
Safety Rules, emphasizing the
job risk assessments, and launched our safety
campaign, “Think Safe, Work Safe, Be Safe.”
Globally, we implemented a new safety software
system, which helps support Action Cards, Incident
Reporting, Audi Management, and other reporting,
significantly improving our combined reporting
this year.
BUSINESS UPDATE
FLUIDS SYSTEMS
Newpark Fluids Systems is a socially responsible, solutions-focused partner,
consistently recognized for our industry-leading products and service quality.
We have an unmatched ability to enhance our customers’ performance
through our portfolio of drilling and completion fluids products and related
technical services, supported by our innovative digital modeling software suite.
LEADING WITH COMMERCIAL
EXCELLENCE
From market penetration to product innovation,
every decision we make represents a deliberate
and calculated move in our pursuit of sustained
growth. Over the past few years, strategically
moving pieces to reallocate assets has positioned
our fluids segment for its most profitable year
since 2018. We saw a record year in the Eastern
Hemisphere, generating 28% year-over-year
growth, with the notable expansion of our
geothermal activity, where we grew our client
base and operations
into Germany, Hungary,
and Croatia, marking a significant step in our
geothermal global outreach. Our collaboration
with these companies exemplifies our innovative
capabilities in tailoring fit-for-purpose fluid-based
solutions. This approach aligns with the “client-
centered, efficient, and problem-solving strategy”
reported by Kimberlite Research.
in other
Maintaining our strong reputation
countries where we operate:
• We secured a contract from OMV Petrom for
drilling and completion fluids for the largest
natural gas project in the Romanian area of
the Black Sea. This critical project will help
transition Romania to become the largest
natural gas producer in the European Union.
•
•
In Australia, our expertise and water-based
fluid technology enabled an operator to set
new drilling records in the onshore Moroak-
Betaloo basin of the Northern Territories.
Our CleanDrill™ HD drilled the compacted
sandstone formation two times faster than the
previous record, and the Naverick interval was
drilling 314% faster than any other well in the
field.
In Bahrain, with the use of CleanDrill, we were
able to help a client drill a challenging extended
reach horizontal open hole interval targeting a
deeper portion of the reservoir. This project
was executed and completed 10 days ahead
of plan and achieved a record for horizontal
extended reach in the Bahrain field.
• Cleansorb
gained
expansion
further
in 2023 where we delivered
momentum
another record year and where we have
successfully grown revenues by nearly 300%
since this strategic acquisition in 2019 as
customers greatly value the performance
of our industry leading ORCA Breakers to
optimize their reservoir performance.
PURPOSEFUL MOVES TO PROTECT THE
ENVIRONMENT
Sustainable innovation is at the heart of Newpark’s
culture as we continue to move the pieces to deliver
industry-leading solutions meeting our customers’
increasing demands for reducing carbon emissions.
Newpark has a long history of offering superior
products and solutions that improve industry best
practices, helping customers optimize resource
management while working harmoniously with
the environment. Our focus on sustainability has
been a driving force behind breakthroughs in our
offerings, including the Evolution® family of high-
performance water-based drilling fluid systems,
launched over a decade ago, to help reduce the
consumption of hydrocarbon-based products
and associated wastes while optimizing drilling
efficiency, continues to set records worldwide.
With over 30 years of experience in geothermal
drilling around the world, we are helping in the
transition to clean, renewable energy sources.
Our environmentally friendly fluids and expertise
in these challenging high-temperature drilling
operations have helped geothermal operators
extract clean energy safely and efficiently
in drilling
worldwide.
geothermal wells, our team developed a new high-
performance water-based geothermal drilling
is carefully
fluid system, TerraTherm™, which
designed, stress-tested, and validated in the field
As a market
leader
to withstand extreme temperatures in the world’s
most challenging geothermal applications.
MOVING WITH DISCIPLINE TOWARD A
CAPITAL-LIGHT BUSINESS MODEL
Oil and natural gas activity in key markets, such as
the United States, remains well below historical
levels, requiring a more agile and capital-light
business model. Over the past few years, roof-
line rationalization, working capital optimization
efforts, and divestitures of our U.S. mineral grinding
business and Gulf of Mexico operations have set
a course for more than $200 million reduction in
invested capital.
Meanwhile, as global energy demand continues to
increase and the many international countries seek
to enhance the security of energy supply, Newpark
is well positioned with customers in key supply
markets throughout Europe, Africa, the Middle
East and SE Asia, building upon our decades of
experience and industry leading service quality.
SAFETY LEADERSHIP
The Fluids team did an exceptional job in delivering
safe operations globally in 2023 and set its record
lowest TRIR of 0.21 and TVIR of 0.36, capping off a
decade of continuous safety performance.
HIGHLIGHT OF
FINANCIALS
12%growth in Industrial Solutions
Rental & Service revenues
53%rental revenue as % of rental
fleet cost
21%growth in Industrial Solutions
operating income
29%reduction in Fluids Systems
net working capital
$100M
net cash provided by operating
activities
34%reduction in total debt
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
For the transition period from __________ to __________
Commission File Number: 001-02960
Newpark Resources, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
72-1123385
(I.R.S. Employer Identification No.)
9320 Lakeside Boulevard, Suite 100
The Woodlands, Texas
(Address of principal executive offices)
77381
(Zip Code)
Registrant’s telephone number, including area code: (281) 362-6800
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
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☑
Yes ☐ No ☑
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 ☐
Non-accelerated filer ☐
☑
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 has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b).
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☑
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by
reference to the price at which the common equity was last sold as of June 30, 2023, was $453.3 million. The aggregate market
value has been computed by reference to the closing sales price on such date, as reported by The New York Stock Exchange.
As of February 16, 2024, a total of 85,201,652 shares of common stock, $0.01 par value per share, were outstanding.
Pursuant to General Instruction G(3) to this Form 10-K, the information required by Items 10, 11, 12, 13 and 14 of Part III
hereof is incorporated by reference from the registrant’s definitive Proxy Statement for its 2024 Annual Meeting of
Stockholders.
Documents Incorporated by Reference:
NEWPARK RESOURCES, INC.
INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2023
PART I
ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 1C.
ITEM 2.
ITEM 3.
ITEM 4.
Business
Risk Factors
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
ITEM 5.
ITEM 6.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
[Reserved]
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 7A.
Quantitative and Qualitative Disclosures About Market Risk
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.
ITEM 9C.
PART III
ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.
PART IV
ITEM 15.
ITEM 16.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibit and Financial Statement Schedules
Form 10-K Summary
Signatures
1
3
3
8
19
19
20
20
20
20
21
22
23
40
42
74
74
76
76
76
76
76
76
76
76
76
77
81
82
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K 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 Annual Report on Form 10-K; 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 Annual Report on Form 10-K might not occur.
For additional 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 Annual Report on Form 10-K.
2
ITEM 1. Business
General
PART I
Newpark Resources, Inc. is a geographically diversified supplier providing environmentally-sensitive products, as
well as rentals and services to customers across multiple industries. We currently operate our business through two reportable
segments: Industrial Solutions and Fluids Systems, as described further below. In addition, we had a third reportable segment,
Industrial Blending, which was exited in 2022.
Our Industrial Solutions segment provides temporary worksite access solutions, including the rental of our recyclable
composite matting systems, along with related site construction and services to customers in various markets including power
transmission, oil and natural gas exploration and production (“E&P”), pipeline, renewable energy, petrochemical, construction
and other industries, primarily in the United States and United Kingdom. We also sell our manufactured recyclable composite
mats to customers around the world, with power transmission being the primary end-market.
Our Fluids Systems segment provides drilling and completion fluids products and related technical services to
customers for oil, natural gas, and geothermal projects primarily in North America and Europe, the Middle East and Africa
(“EMEA”), as well as certain countries in Asia Pacific. Over the past few years, our primary focus within Fluids Systems has
been the transformation into a more agile and simplified business focused on key markets, while monetizing assets in
underperforming or sub-scale markets and reducing our invested capital, particularly in the U.S.
In the fourth quarter of 2022, we exited two of our Fluids Systems business units, including our U.S.-based mineral
grinding business as well as our Gulf of Mexico fluids operations. In 2023, we exited our stimulation chemicals product line,
certain operations for offshore Australia, and our Latin America operations in Chile. In June 2023, we initiated a review of
strategic alternatives for the long-term positioning of the Fluids Systems division, and in September 2023, we launched a
formal sale process for substantially all the Fluids Systems business as part of this strategic review. While the sale process is
ongoing, we anticipate substantially completing the process in mid-2024, although it is not certain that any such transaction
will be consummated on that timeline or at all.
Newpark Resources, Inc. was organized in 1932 as a Nevada corporation. In 1991, we changed our state of
incorporation to Delaware. Our principal executive offices are located at 9320 Lakeside Boulevard, Suite 100, The Woodlands,
Texas 77381. Our telephone number is (281) 362-6800. You can find more information about us on our website located at
www.newpark.com. We file or furnish annual, quarterly and current reports, proxy statements and other documents with the
Securities and Exchange Commission (“SEC”). Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our
Current Reports on Form 8-K and any amendments to those reports are available free of charge through our website. These
reports are available as soon as reasonably practicable after we electronically file these materials with, or furnish them to, the
SEC. Our Code of Ethics, our Corporate Governance Guidelines, our Audit Committee Charter, our Compensation Committee
Charter, and our Environmental, Social and Governance Committee Charter are also posted to the governance section of our
website. We make our website content available for informational purposes only. It should not be relied upon for investment
purposes, nor is any information contained on our website incorporated by reference in this Form 10-K. The SEC also
maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC, including us.
When referring to Newpark Resources, Inc. (“Newpark,” the “Company,” “we,” “our,” or “us”), the intent is to refer
to Newpark Resources, Inc. and its subsidiaries as a whole or on a segment basis, depending on the context in which the
statements are made. The reference to a “Note” herein refers to the accompanying Notes to Consolidated Financial Statements
contained in Item 8 “Financial Statements and Supplementary Data.”
Industry Fundamentals
Our Industrial Solutions segment, which has been our primary source of operating income and cash generation in
recent years, provides temporary worksite access products and services to various markets including power transmission, E&P,
pipeline, renewable energy, petrochemical, construction and other industries. The demand for our products and services from
customers in these industries is driven, in part, by infrastructure construction and maintenance activity levels within the United
States and United Kingdom, including required infrastructure investments to support energy transition efforts. Product sales
largely reflect sales to power transmission customers and other industrial markets, and typically fluctuate based on the timing
of customer projects and orders. The power transmission sector contributes the majority of our Industrial Solutions segment
revenues, and we expect customer activity in this sector will grow over the next several years, driven in part by the impacts of
the U.S. energy transition and the increasing investment in grid reliance initiatives.
Our Fluids Systems segment operating results remain dependent on oil and natural gas drilling activity levels in the
markets we serve and the nature of the drilling operations, which governs the revenue potential of each well. Drilling activity
3
levels depend on a variety of factors, including oil and natural gas commodity pricing, inventory levels, product demand, and
regulatory restrictions. Oil and natural gas prices and activity are cyclical and volatile, and this market volatility has a
significant impact on our Fluids Systems segment operating results.
Rig count data remains the most widely accepted indicator of drilling activity. During 2021, oil prices and the average
U.S. rig count steadily improved in the wake of the COVID-19 pandemic, and during 2022, oil prices and rig counts further
increased due in part to global economic recovery and geopolitical events. In 2023, market activity in the U.S. steadily
declined, ending the year at 622 active rigs, down 20% from the end of 2022. With recent instability in oil prices, the 2024
outlook for U.S. market activity generally remains below the 2023 average level, as many of our customers maintain strong
capital discipline and prioritize cash flow generation over growth.
Outside of North America, drilling activity is generally more stable as this drilling activity is based on longer-term
economic projections and multi-year drilling programs, which typically reduces the impact of short-term changes in commodity
prices on overall drilling activity. Operations in several countries in the EMEA region experienced activity disruptions and
project delays continuing through 2021, driven by government-imposed restrictions on movements of personnel, quarantines of
staffing, and logistical limitations as a result of the COVID-19 pandemic. Drilling activity within international markets
gradually recovered in 2021 and 2022, though the combination of increasing activity levels combined with the impacts of
global supply chain disruptions caused significant cost inflation to many hydrocarbon-based products and chemicals used in
our fluids systems. While we worked with customers to mitigate the inflationary impact, in some cases, we were unable to
adjust our customer pricing on certain international contracts due to the long-term contracts in place negatively impacting the
profitability of our international operations in 2022 and into 2023. In recent years, geopolitical events have caused several
markets to increase drilling activity levels, to help ensure reliable energy supply in the coming years, while reducing their
dependency on Russia-sourced oil and natural gas. Consequently, the outlook for several markets within the EMEA region
remains strong, with growth in activity expected over the next few years.
Strategy
Our long-term strategy includes key foundational elements that are intended to enhance long-term shareholder value
creation:
•
•
•
Simplify our business model and accelerate Industrial Solutions growth – We have prioritized investment capital in
the growth of our Industrial Solutions business, which has been our primary source of operating income and cash
generation in recent years, the majority of which has been derived from the utilities and other industrial end-markets.
In addition, we divested certain underperforming business units in 2022 and 2023 within our Fluids Systems segment,
and in September 2023, we launched a formal sale process for substantially all the Fluids Systems division.
Drive operational excellence through all aspects of our business – As our business transforms, we are enhancing our
focus on efficiency improvements and operating cost optimization across every aspect of our global footprint. With
our simplified business model and enhanced focus on balance sheet optimization, we seek to improve returns and
consistency in cash flow generation.
Focus on value creation, balancing growth with return of capital to shareholders – We are committed to a disciplined
growth strategy, balancing our investments in high-returning business activities with the return of capital through a
share repurchase program.
Segment Overview
Industrial Solutions
Our Industrial Solutions segment provides temporary worksite access solutions, including the rental of our recyclable
composite matting systems, along with related site construction and services to customers in various markets including power
transmission, E&P, pipeline, renewable energy, petrochemical, construction and other industries, primarily in the United States
and United Kingdom (72% of 2023 segment revenues represented rental and service). We also manufacture and sell our
recyclable composite mats to customers around the world, with power transmission being the primary end-market (28% of
2023 segment revenues represented product sales).
Raw Materials — The resins, chemicals, and other materials used to manufacture our recyclable composite mats are
widely available. Resin is the largest material component in the manufacturing of our recyclable composite mat products. We
believe that our sources of supply for materials used in our business are adequate for our needs. We are not dependent upon any
one supplier, and we have encountered no significant shortages or delays in obtaining any raw materials. In recent years, we
have also expanded the use of alternative materials, including recycled materials in our manufacturing process, which we
believe provides further protection against potential shortages of virgin raw materials. During 2023, our manufacturing
operations consumed over 750,000 pounds of recycled resin.
4
Technology — We have patents related to the design and manufacturing of our recyclable DURA-BASE® mats and
several of the components, as well as other products and systems related to these mats (including the connecting pins and the
EPZ Grounding System™), although certain key patents expired in 2020. Using proprietary technology and systems is an
important aspect of our business strategy. In 2023, we launched our newest generation matting system, the DURA-BASE 800
seriesTM, which fully integrates into our DURABASE® format and offers a nearly 15% reduction in weight. We believe the
lightweight design of our recyclable matting system provides a distinct environmental benefit for our customers as compared to
alternative wood mat products in the market, by eliminating deforestation required to produce wood mat products and also
reducing CO2 emissions associated with product transportation. While we continue to enhance the performance, environmental,
and safety benefits of our products and add to our patent portfolio, we believe that our scale, responsiveness to customers,
reputation in the industry with respect to our technical development and know-how, understanding of regulatory requirements,
and our ability to deliver superior worksite access solutions also have competitive significance in the markets we serve.
Competition — The rental and services market is fragmented and competitive, with many competitors providing
various forms of worksite access products and services. Wood mats and stone continue to be the primary solutions utilized for
temporary worksite access across industries, though composite matting solutions continue to gain market share. The
competitive landscape for composite mat sales is less fragmented than rental and services, with only a few competitors
providing various alternatives to our DURA-BASE® composite mat products, including Signature Systems Group and Spartan
Mat. This is due to many factors, including large capital start-up costs and proprietary technology associated with these
products. We believe that the principal competitive factors in our businesses include reputation, product capabilities, price,
innovation through R&D, and reliability, and that our competitive position is enhanced by our proprietary products,
manufacturing expertise, services, and experience.
Customers — Our customers are principally utility companies, infrastructure construction companies, and oil and
natural gas E&P companies operating in the markets that we serve. During 2023, approximately 67% of our segment revenues
were derived from our 20 largest segment customers. No single customer accounted for more than 10% of our segment
revenues. The segment also generated 93% of its revenues domestically during 2023. Typically, we perform services either
under short-term contracts or rental service agreements. As most agreements with our customers are cancellable upon short
notice, our backlog is not significant. We do not derive a significant portion of our revenues from government contracts.
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Fluids Systems
Our Fluids Systems segment provides drilling and completion fluids products and related technical services to
customers for oil, natural gas, and geothermal projects primarily in North America (52% of 2023 segment revenues) and
EMEA (44% of 2023 segment revenues), as well as certain countries in Asia Pacific. We offer customized solutions for
complex subsurface conditions such as horizontal, directional, geologically deep, or drilling in deep water. These projects
require high levels of monitoring and technical support of the fluids system during the drilling process. Over the past few years,
our primary focus within Fluids Systems has been the transformation into a more agile and simplified business focused on key
markets, while monetizing assets in underperforming or sub-scale markets and reducing our invested capital, particularly in the
U.S. (see Note 2 for additional information). As of December 31, 2023, the net working capital of the Fluids Systems segment
was $171 million, which reflects a $69 million reduction from December 31, 2022.
Raw Materials — We believe that our sources of supply for materials and equipment used in our fluids business are
adequate for our needs. In connection with the sale of our U.S.-based mineral grinding business in November 2022 (see Note
2), we entered into a four-year barite supply agreement for certain regions of our U.S. drilling fluids business. We also obtain
barite and other materials used in the fluids business from various third-party suppliers. In 2022, as a result of the global supply
chain disruptions, including the effect of the ongoing conflict between Russia and Ukraine, we experienced shortages and
significant cost increases associated with many of our raw materials, however, none of the product shortages materially
impacted our operations.
Technology — Proprietary technology and systems are an important aspect of our business strategy, though we
believe that our reputation in the industry, the range of services we offer, ongoing technical development and know-how, and
responsiveness to customers, are of equal or greater competitive significance than our existing proprietary rights. We seek
patents and licenses on new developments whenever we believe it creates a competitive advantage in the marketplace. We own
patent rights in a family of high-performance water-based fluids systems, which we market as Evolution® and DeepDrill®
systems, which are designed to enhance drilling performance while also providing a variety of environmental benefits relative
to traditional oil-based fluids. In addition, we have developed the TerraThermTM water-based fluids system designed
specifically for clean-energy geothermal drilling. We also rely on a variety of unpatented proprietary technologies and know-
how in many of our applications.
Competition — Globally, we face competition from larger companies, including Halliburton, SLB, and Baker Hughes,
which compete vigorously on fluids performance and/or price. Moreover, these companies have broad product and service
offerings in addition to their fluids systems. Within North America, the drilling fluids market is more fragmented, with many
smaller regional competitors competing with us primarily on price and local relationships. We believe that the principal
competitive factors in our businesses include a combination of technical proficiency, reputation, price, reliability, quality, and
experience, and that our competitive position is enhanced by our best-in-class customer experience and value enhancing
products and services.
Customers — Our customers are principally major integrated and independent oil and natural gas E&P companies
operating in the markets that we serve. During 2023, approximately 52% of segment revenues were derived from our 20 largest
segment customers, of which our largest customer represented 11% of our segment revenues. The segment also generated 40%
of its revenues domestically during 2023. In North America, we primarily perform services either under short-term standard
contracts or under “master” service agreements. Internationally, some customers issue multi-year contracts, but many are on a
well-by-well or project basis. As most agreements with our customers can be terminated upon short notice, our backlog is not
significant. We do not derive a significant portion of our revenues from government contracts.
Industrial Blending
Our Industrial Blending segment began operations in 2020 and supported industrial end-markets, including the
production of disinfectants and industrial cleaning products. We completed the wind down of the Industrial Blending business
in the first quarter of 2022 and the sale of the industrial blending assets in the fourth quarter of 2022 (see Note 2 for additional
information).
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Human Capital
We are committed to providing a diverse and inclusive environment for all employees and for those with whom we
conduct business. We recognize our greatest assets are our people, and our long-term sustainability depends on our ability to
attract, motivate, and retain the highly talented individuals that make up the Newpark team, while protecting each other like
family and sustaining the environment in which we work. We appreciate our people and their achievements as we recognize
they are integral to fully implementing our business strategy, which directly translates to improving our long-term profitability
and increasing shareholder value.
As a global company, the Newpark team supporting our customers spans more than 20 countries, and more than half
of our employees reside outside of the United States. Our global footprint provides natural diversity within our organization
and serves as a foundation to support an inclusive approach to everything that we do. At December 31, 2023, we employed
approximately 1,550 full and part-time personnel, none of which are represented by labor unions. We consider our relations
with our employees to be satisfactory and through various company-culture initiatives, strive to reinforce our commitment to
our Core Values of safety, integrity, respect, excellence, and accountability. The following charts present the geographic
composition of our revenues and workforce.
Governmental Regulations
Our business exposes us to regulatory risks associated with the various industries that we serve, including
governmental regulations relating to the oil and natural gas industry in general, as well as environmental, health, and safety
regulations that have specific application to our business. Our activities are impacted by various federal, state, local, and
foreign laws, regulations, and policies related to pollution control, health, and safety programs that are administered and
enforced by regulatory agencies.
We have implemented various procedures designed to ensure compliance with applicable regulations and reduce the
risk of damage or loss. These include specified handling procedures and guidelines for waste, ongoing employee training, and
monitoring, as well as maintaining insurance coverage. We also utilize company-wide health, safety, and environmental
management systems (“HSEMS”). The HSEMS is designed to capture information related to the planning, decision-making,
and general operations of environmental regulatory activities within our operations. We also use the HSEMS to capture the
information generated by regularly scheduled independent audits that are performed to validate the findings of our internal
monitoring and auditing procedures.
7
ITEM 1A. Risk Factors
The following summarizes the most significant risks to our business. In addition to these risks, we are subject to a
variety of risks that affect many other companies generally, as well as other risks and uncertainties that are not known to us as
of the date of this Annual Report. Our success will depend, in part, on our ability to anticipate and effectively manage these and
other risks. Any of these risk factors, either individually or in combination, could have a material adverse effect on our results
of operations or financial condition, or prevent us from meeting our profitability or growth objectives. If you hold our securities
or are considering an investment in our securities, you should carefully consider the following risks, together with the other
information contained in this Annual Report.
Risks in this section are grouped in the following categories: (1) Business and Industry Risks; (2) Indebtedness Risks;
(3) Legal and Regulatory Risks; (4) Financial Risks; and (5) General Risks. Many risks affect more than one category, and the
risks are not in order of significance or probability of occurrence because they have been grouped by categories.
Business and Industry Risks
Risks Related to our Exploration of Strategic Alternatives for the Long-Term Positioning of our Fluids Systems
Division
In June 2023, we announced that we initiated a review of strategic alternatives for the long-term positioning of the
Fluids Systems division in June 2023. In September 2023, we launched a formal sale process for substantially all the Fluids
Systems business as part of this strategic review. While the sale process is ongoing, we anticipate substantially completing the
process in mid-2024, although it is not certain that any such transaction will be consummated on that timeline or at all. We do
not intend to disclose developments with respect to the progress of our evaluation of any strategic options until such time as our
Board of Directors has approved a specific transaction or we otherwise deem disclosure is required or appropriate.
We may also incur significant costs and management’s attention may be diverted in connection with the pursuit of
strategic alternatives which are not ultimately consummated. There are risks inherent with the consummation of any such
transaction, such as the risks that the anticipated benefits of such transaction may not be realized, that unexpected liabilities
may result from such transaction and that the process of consummating or the effects of consummating such a transaction may
cause interruption of or slow down the operations of our existing or continuing businesses.
Risks Related to Divestitures
Any divestitures made as part of the Fluids Systems sale process or otherwise could impact us in several ways,
including (i) impacting relationships with our customers and vendors, (ii) restricting our operations due to certain specified
terms of the agreements, and (iii) diminishing our ability to retain or attract employees due to concerns over future job security
or responsibilities.
As a result of any such divestitures, we may incur or experience (i) greater costs or realize fewer benefits than
anticipated under the agreements, (ii) operational or commercial difficulties segregating the divested assets from our retained
assets, (iii) disputes with the purchasers regarding the nature and sufficiency of the transition services we provide or the terms
and conditions of our commercial agreements with the purchasers, (iv) higher vendor costs due to reduced economies of scale
or operational dis-synergies, or (v) losses or increased inefficiencies from stranded or underutilized assets. Any of these risks
could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
In addition, any divestitures we make could reduce our future cash flows. If our remaining businesses fail to perform
as expected, such divestitures could exacerbate certain of the other risks specified in this Annual Report on Form 10-K.
Risks Related to the Worldwide Oil and Natural Gas Industry
Although we continue to diversify our operations and expand into a variety of end-markets, we derive a significant
portion of our revenues from customers in the worldwide oil and natural gas industry; therefore, our risk factors include those
factors that impact the demand for oil and natural gas. Spending by our customers for exploration, development, and
production of oil and natural gas is based on a number of factors, including expectations of future hydrocarbon demand, energy
prices, the risks associated with developing reserves, our customers’ ability to finance exploration and development of reserves,
regulatory developments, and the future value of the reserves. Reductions in customer spending levels adversely affect the
demand for our products and services, and consequently, our revenues and operating results. The key risk factors that we
believe influence the worldwide oil and natural gas markets are discussed below.
Demand for oil and natural gas is subject to factors beyond our control
Demand for oil and natural gas, and consequently the demand for our products and services, is highly correlated with
global economic growth and in particular by the economic growth of countries such as the U.S., India, China, and developing
countries in Asia and the Middle East. Weakness in global economic activity, as well as the global energy transition, could
8
reduce demand for oil and natural gas and result in lower oil and natural gas prices. For example, demand for oil and natural
gas has been and could continue to be impacted by, among other things, the effects of global health crises, geopolitical issues,
supply chain disruptions and inflation. There remains significant uncertainty regarding the long-term impact to global oil
demand, which will ultimately depend on various factors and consequences beyond our control. Continued weakness or
deterioration of the global economy could further reduce our customers’ spending levels and could reduce our revenues and
operating results.
Regulatory agencies and environmental advocacy groups in the European Union, the U.S. and other regions or
countries have been focusing considerable attention on the emissions of carbon dioxide, methane and other greenhouse gases
and their role in climate change. There is also increased focus, including by governments and our customers, investors and
other stakeholders, on these and other sustainability and energy transition matters. Existing or future legislation and regulations
related to greenhouse gas emissions and climate change, as well as initiatives by governments, nongovernmental organizations,
and companies to conserve energy or promote the use of alternative energy sources, and negative attitudes toward or
perceptions of fossil fuel products and their relationship to the environment, may significantly curtail demand for and
production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for our products
and services. This may, in turn, have a material adverse effect on our business, financial condition, results of operations, and
cash flows.
Supply of oil and natural gas is subject to factors beyond our control
Supply of oil and natural gas can be affected by the availability of quality drilling prospects, exploration success, and
the number and productivity of new wells drilled and completed, as well as the rate of production and resulting depletion of
existing wells. Oil and natural gas storage inventory levels are indicators of the relative balance between supply and demand.
Supply can also be impacted by the degree to which individual Organization of Petroleum Exporting Countries nations and
other large oil and natural gas producing countries are willing and able to control production and exports of hydrocarbons, to
decrease or increase supply, and to support their targeted oil price or meet market share objectives. Any of these factors could
affect the supply of oil and natural gas and could have a material effect on our results of operations.
Volatility of oil and natural gas prices can adversely affect demand for our products and services
Volatility of oil and natural gas prices can also impact our customers’ activity levels and spending for our products
and services. The level of energy prices is important to the cash flow for our customers and their ability to fund exploration and
development activities. Expectations about future commodity prices and volatility are important for determining future
spending levels. Our customers also consider the volatility of energy prices and other risk factors by requiring higher returns
for individual projects if there is higher perceived risk.
Our customers’ activity levels, spending for our products and services, and ability to pay amounts owed us could be
impacted by the ability of our customers to access equity or credit markets
Our customers’ activity levels are dependent on their ability to access the funds necessary to develop oil and natural
gas prospects and their ability to generate sufficient returns on investments. In recent years, limited access to external sources
of funding, including the impacts of the global energy transition and pressures from their investors to generate consistent cash
flow has, at times, caused customers in the oil and natural gas industry to reduce their capital spending plans. In addition, a
reduction of cash flow to our customers resulting from declines in commodity prices or the lack of available debt or equity
financing may impact the ability of our customers to pay amounts owed to us.
A heightened focus by our customers on cost-saving measures rather than the quality of products and services could
reduce the demand for our products and services
Our customers are continually seeking to implement measures aimed at greater cost savings, which may include the
acceptance of lesser quality products and services in order to improve short term cost efficiencies as opposed to total cost
efficiencies. The continued implementation of these kinds of cost saving measures could reduce the demand or pricing for our
products and services and have a material adverse effect on our business, financial condition, and results of operations.
Risks Related to Our Ability to Generate Internal Growth
Our ability to generate internal growth may be affected by, among other factors, our ability to:
•
•
•
•
•
attract new customers;
increase the number of projects performed for existing customers;
successfully bid for new projects;
hire and retain qualified personnel;
obtain necessary levels of equipment; and
9
•
adapt the range of products and services we offer to address our customers’ evolving needs.
In addition, our customers may reduce the number or size of projects available to us due to their inability to obtain
capital or in response to economic conditions.
Furthermore, the growth of our Industrial Solutions segment is heavily dependent upon the production of our
recyclable composite mat products, which in turn is dependent on the operations and capacity of our manufacturing facilities in
Carencro, Louisiana.
Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be
certain that our strategies will be successful or that we will be able to generate cash flow sufficient to fund our operations and
to support internal growth. If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or
grow our business.
Risks Related to Economic and Market Conditions that May Impact Our Customers’ Future Spending
A substantial portion of our operating income, cash flows, and financial returns is generated from construction
projects, the awarding of which we do not directly control. The construction industry historically has experienced cyclical
fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, material shortages,
price increases by subcontractors, interest rate fluctuations and other economic factors beyond our control. When the general
level of economic activity deteriorates, our customers may delay, or cancel upgrades, expansions, and/or maintenance and
repairs to their systems. Many factors, including the financial condition of the industry, could adversely affect our customers
and their willingness to fund capital expenditures in the future.
In addition, economic, regulatory and market conditions affecting our specific end markets may adversely impact the
demand for our services, resulting in the delay, reduction or cancellation of certain projects and these conditions may continue
to adversely affect us in the future.
Risks Related to Customer Concentration and Reliance on the U.S. E&P Market
In 2023, approximately 42% of our consolidated revenues were derived from our 20 largest customers, although no
customer accounted for more than 10% of our consolidated revenues. While we are not dependent on any one customer or
group of customers, the loss of one or more of our significant customers could have an adverse effect on our results of
operations and cash flows. In addition, approximately 55% of our consolidated revenues in 2023 were derived from our U.S.
operations, including approximately $270 million from the exploration and production market.
Over the past several years, the U.S. oil and natural gas market has experienced periods of significant declines which
reduced the demand for our services and negatively impacted customer pricing in our U.S. operations. Due in part to these
changes, our quarterly and annual operating results have fluctuated significantly and may continue to fluctuate in future
periods. Because our business has substantial fixed costs, including significant facility and personnel expenses, downtime or
low productivity due to reduced demand could have a material adverse effect on our business, financial condition, and results
of operations.
We have engaged in a number of activities intended to reduce our dependency on the cyclical U.S. oil and natural gas
market, including the 2022 divestitures of the Excalibar U.S. mineral grinding business and Gulf of Mexico drilling fluids
operations, the geographic diversification in select foreign E&P markets, and the review of strategic alternatives for Fluids
Systems. However, these efforts may not be successful or sufficient to offset any volatility in our U.S. operating results.
Risks Related to International Operations
Our Fluids Systems business has significant operations outside of the U.S., including Canada and certain areas of
Europe, the Middle East and Africa. In 2023, our international operations generated approximately 45% of consolidated
revenues. Substantially all of our cash balance at December 31, 2023 resides within our international subsidiaries, including
Congo (31%), Romania (11%), and Algeria (10%). Algeria represented our largest international market outside of North
America, with our Algerian operations representing 8% of our consolidated revenues for 2023 and 8% of our total assets at
December 31, 2023.
In addition, we may seek to expand to other areas outside the U.S. in the future. International operations are subject to
a number of risks and uncertainties which could negatively impact our results from operations, including:
▪ difficulties and cost associated with complying with a wide variety of complex foreign laws, treaties, and
regulations;
▪ uncertainties in or unexpected changes in regulatory environments or tax laws, including with respect to climate
change;
legal uncertainties, timing delays, and expenses associated with tariffs, export licenses, and other trade barriers;
▪
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▪ difficulties enforcing agreements and collecting receivables through foreign legal systems;
▪
▪
▪
▪
▪
risks associated with failing to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, export
laws, and other similar laws applicable to our operations in international markets;
exchange controls or other limitations on international currency movements, including restrictions on the
repatriation of funds to the U.S. from certain countries;
sanctions imposed by the U.S. government that prevent us from engaging in business in certain countries or with
certain counter-parties;
expropriation or nationalization of assets;
inability to obtain or preserve certain intellectual property rights in the foreign countries in which we operate;
▪ our inexperience in certain international markets;
▪ health emergencies or pandemics;
▪
fluctuations in foreign currency exchange rates;
▪ political and economic instability; and
▪
acts of terrorism.
In addition, several North African markets in which we operate, including Algeria, Tunisia, Egypt, and Libya have
experienced social and political unrest in past years, which, when they occur, negatively impact our operating results and can
include the temporary suspension of our operations.
Risks Related to the Ongoing Conflicts in Europe and the Middle East
Given the nature of our business and our global operations, the current conflicts in Europe and the Middle East may
adversely affect our business and results of operations. Although we do not have any operations in Russia, Ukraine, the Gaza
Strip or Israel, the broader consequences of these conflicts, which may include sanctions, embargoes, supply chain disruptions,
regional instability, and geopolitical shifts, and the extent of the conflicts’ effect on our business and results of operations as
well as the global economy, cannot be predicted.
The ongoing conflicts may also have the effect of heightening many of the other risks specified in our risk factors or
disclosed in our public filings, any of which could materially and adversely affect our business and results of operations. Such
risks include, but are not limited to, the volatility of oil and natural gas prices that can adversely affect demand for our products
and services; our customers’ activity levels, spending for our products and services, and their ability to pay amounts owed us
that could be impacted by the ability of our customers to access equity or credit markets; the price and availability of raw
materials; the cost and continued availability of borrowed funds; and cybersecurity incidents or business system disruptions.
Risks Related to Operating Hazards Present in the Oil and Natural Gas and Utilities Industries and Substantial
Liability Claims, Including Catastrophic Well Incidents
We are exposed to significant health, safety, and environmental risks. Our operations are subject to hazards present in
the oil and natural gas industry, such as fires, explosions, blowouts, oil spills, and leaks or spills of hazardous materials (both
onshore and offshore), as well as hazards in the electrical utility industry, such as exposure to wildfires, high voltage
electrocution, among other risks. These incidents as well as accidents or problems in normal operations can cause personal
injury or death and damage to property or the environment. From time to time, customers seek recovery for damage to their
equipment or property that occurred during the course of our service obligations. Damage to our customers’ property and any
related spills of hazardous materials could be extensive if a major problem occurs.
Generally, we rely on contractual indemnities, releases, limitations on liability with our customers, and insurance to
protect us from potential liability related to such events. However, our insurance and contractual indemnification may not be
sufficient or effective to protect us under all circumstances or against all risks. In addition, our customers’ changing views on
risk allocation together with deteriorating market conditions could force us to accept greater risks to obtain new business or
retain renewing business and could result in us losing business if we are not prepared to take such risks. Moreover, we may not
be able to maintain insurance at levels of risk coverage or policy limits that we deem adequate. Any damages caused by our
services or products that are not covered by insurance or contractual indemnification, or are in excess of policy limits or subject
to substantial deductibles, could adversely affect our financial condition, results of operations, and cash flows. See “Risks
Related to the Inherent Limitations of Insurance Coverage” below for additional information.
Risks Related to Contracts that Can Be Terminated or Downsized by Our Customers Without Penalty
Many of our fixed-term contracts contain provisions permitting early termination by the customer at their
convenience, generally without penalty, and with limited notice requirements. In addition, many of our contracts permit our
customers to decrease the products or services without penalty, which could result in a decrease in our revenues and
11
profitability. As a result, you should not place undue reliance on the strength of our customer contracts or the terms of those
contracts.
Risks Related to Product Offering and Market Expansion
As a key component of our long-term strategy to diversify our revenue streams, we seek to continue to expand our
product and service offerings and enter new customer markets with our existing products. As with any market expansion effort,
new customer and product markets require additional capital investment and include inherent uncertainties regarding customer
expectations, industry-specific regulatory requirements, product performance, and customer-specific risk profiles. In addition,
we likely will not have the same level of operational experience with respect to the new customer and product markets as will
our competitors. As such, new market entry is subject to a number of risks and uncertainties, which could have an adverse
effect on our business, financial condition, or results of operations.
Risks Related to Our Ability to Attract, Retain, and Develop Qualified Leaders, Key Employees, and Skilled
Personnel
Our failure to attract, retain, and develop qualified leaders and key employees could have a material adverse effect on
our business. Our businesses are highly dependent on our ability to attract and retain highly-skilled product specialists,
technical sales personnel, and service personnel. The market for qualified employees is extremely competitive. If we cannot
attract and retain qualified personnel, our ability to compete effectively and grow our business will be severely limited. Also, a
significant increase in wages paid by competing employers could result in a reduction in our skilled labor force or an increase
in our operating costs.
We have experienced, and expect to continue to experience, a shortage of labor for certain functions, which has
increased our labor costs and negatively impacted our profitability. The extent and duration of the effect of these labor market
challenges are subject to numerous factors, including the availability of qualified persons in the markets where we and our
contracted service providers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates
and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including increased
minimum wage requirements) or government programs, safety levels of our operations, and our reputation within the labor
market.
Risks Related to Expanding Our Services in the Utilities Sector, Which May Require Unionized Labor
Although none of our employees are currently represented by labor unions, we may expand our services offered in the
utilities sector, the customers of which may require unionized labor. If we, a subsidiary, or a business partner were to have a
unionized workforce, we may be subject to strikes or work stoppages, wage and hour regulations, or other regulations
associated with a collective bargaining agreement, which could adversely impact our relationships with our customers and
cause us to lose business, and could result in an increase in our operating costs.
Risks Related to the Price and Availability of Raw Materials
Our ability to provide products and services to our customers is dependent upon our ability to obtain raw materials
necessary to operate our business. Certain of the raw materials essential to our business are sourced globally and require
various freight services to transport the materials to our job sites. These services may be impacted by periodic supply chain
disruptions and, particularly during times of high demand, may cause delays in the arrival of or otherwise constrain our supply
of raw materials. These constraints could have a material adverse effect on our business and consolidated results of operations.
In addition, price increases, whether as a result of inflation, geopolitical issues, or otherwise, imposed by our vendors for raw
materials used in our business and the inability to pass these increases through to our customers could have a material adverse
effect on our business and results of operations.
Our Industrial Solutions business is highly dependent on the availability of high-density polyethylene (“HDPE”),
which is the primary raw material used in the manufacture of our recyclable composite mats. The cost of HDPE increased
significantly in 2021, but returned to more historical levels in 2022 and 2023. Our costs can vary based on the energy costs of
the producers of HDPE, demand for this material, and the capacity or operations of the plants used to make HDPE. We may not
be able to increase our customer pricing to cover the cost increases that we have experienced, which could result in a reduction
in future profitability.
Our Fluids Systems business is highly dependent on the availability of barite, which is a naturally occurring mineral
that constitutes a significant portion of our fluids systems. In connection with the sale of our U.S.-based mineral grinding
business in the fourth quarter of 2022, we entered a four-year barite supply agreement for certain regions of our U.S. drilling
fluids business. We also obtain barite and other materials used in the fluids business from various third-party suppliers. The
availability and cost of barite ore is dependent on factors beyond our control, including transportation, political priorities, U.S.
tariffs, and government-imposed export fees in the exporting countries, as well as the impact of weather and natural disasters.
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The future supply of barite ore from existing sources may be inadequate to meet the market demand, particularly during periods
of increasing world-wide demand, which could ultimately restrict industry activity or our ability to meet our customers’ needs.
Risks Related to Inflation
Increases in the cost of wages, materials, equipment and other operational components has the potential to adversely
affect our results of operations, cash flows and financial position by increasing our overall cost structure, particularly if we are
unable to achieve commensurate increases in the prices we charge our customers for our products and services. In addition,
inflation has also resulted in higher interest rates, which could cause an increase in the cost of debt borrowing in the future, as
well as supply chain shortages, an increase in the costs of labor, currency fluctuations and other similar effects.
Risks Related to Capital Investments and Business Acquisitions
Our ability to successfully execute our business strategy will depend, among other things, on our ability to make
capital investments and complete acquisitions which provide us with financial benefits. These investments and acquisitions are
subject to a number of risks and uncertainties, including:
▪
▪
incorrect assumptions regarding business activity levels or results from our capital investments, acquired
operations, or assets;
insufficient revenues to offset liabilities assumed;
▪ potential loss of significant revenue and income streams;
▪
▪
▪
increased or unexpected expenses;
inadequate return of capital;
regulatory or compliance issues;
▪ potential loss of key employees, customers, or suppliers of the acquired company;
▪
the triggering of certain covenants in our debt agreements (including accelerated repayment);
▪ unidentified issues not discovered in due diligence;
▪
failure to complete a planned acquisition transaction or to successfully integrate the operations or management of
any acquired businesses or assets in a timely manner;
▪ diversion of management’s attention from existing operations or other priorities;
▪ unanticipated disruptions to our business associated with the implementation of our enterprise-wide operational
and financial system; and
▪ delays in completion and cost overruns associated with large capital investments.
Any of the factors above could have an adverse effect on our business, financial condition, or results of operations.
Additionally, the anticipated benefits of a capital investment or acquisition may not be realized fully or at all, or may take
longer to realize than expected.
Risks Related to Market Competition
We face competition and compete vigorously on product performance and/or price. Our competition in the North
America Fluids Systems business and U.S. Industrial Solutions business is fragmented. The smaller regional competitors
compete with us mainly on price and local relationships. Our competition in the international Fluids Systems business includes
larger companies, such as Halliburton, SLB, and Baker Hughes. These larger companies have broad product and service
offerings in addition to their drilling and completion fluids, and at times, attempt to compete by offering discounts to customers
to use multiple products and services, some of which we do not offer.
In the Industrial Solutions business, many competitors provide various forms of worksite access products and services.
More recently, several competitors have begun marketing composite products to compete with our DURA-BASE® matting
system. While we believe the design and manufacturing quality of our products provide a differentiated value to our customers,
many of our competitors seek to compete on pricing. In addition, certain patents related to our DURA-BASE® matting system
have expired, and competitors may begin offering mats that include features described in those patents. We have filed
additional patent applications on improvements to the structure of, features of, and uses of the DURA-BASE® matting system,
but there is no assurance that our competitors will not be able to offer products that are similar to these improvements, features,
or uses of the DURA-BASE® matting system.
In addition, certain customer contracts are awarded through a competitive bidding process. The strong competition in
our markets requires maintaining skilled personnel and investing in technology, and also puts pressure on profit margins. We
do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins would adversely affect our
business and results of operations.
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Risks Related to Technological Developments and Intellectual Property
The market for our products and services requires technological developments that generate improvements in product
performance or service delivery. If we are not successful in continuing to develop new products, enhancements, or improved
service delivery that are accepted in the marketplace or that comply with industry standards, we could lose market share to
competitors, which could have a material adverse effect on our results of operations and financial condition.
Our success can be affected by our development and implementation of new product designs and improvements, or
software developments, and by our ability to protect and maintain critical intellectual property assets related to these
developments. Although in many cases our products are not protected by any registered intellectual property rights, in other
cases we rely on a combination of patents and trade secret laws to establish and protect this proprietary technology. While
patent rights give the owner of a patent the right to exclude third parties from making, using, selling, and offering for sale the
inventions claimed in the patents, they do not necessarily grant the owner of a patent the right to practice the invention claimed
in a patent. It may also be possible for a third party to design around our patents. We do not have patents in every country in
which we conduct business and our patent portfolio will not protect all aspects of our business. When patent rights expire,
competitors are generally free to offer the technology and products that were covered by the patents. Additionally, the trade
secret laws of some foreign countries may not protect our proprietary technology in the same manner as the laws of the United
States.
We also protect our trade secrets by customarily entering into confidentiality and/or license agreements with our
employees, customers and potential customers, and suppliers. Our rights in our confidential information, trade secrets, and
confidential know-how will not prevent third parties from independently developing similar information. Publicly available
information (such as information in expired patents, published patent applications, and scientific literature) can also be used by
third parties to independently develop technology. We cannot provide assurance that this independently developed technology
will not be equivalent or superior to our proprietary technology.
We may from time to time engage in expensive and time-consuming litigation to determine the enforceability, scope,
and validity of our patent rights. In addition, we can seek to enforce our rights in trade secrets, or “know-how,” and other
proprietary information and technology in the conduct of our business. However, it is possible that our competitors may
infringe upon, misappropriate, violate or challenge the validity or enforceability of our intellectual property, and we may not be
able to adequately protect or enforce our intellectual property rights in the future.
The tools, techniques, methodologies, programs, and components we use to provide our services may infringe upon
the intellectual property rights of others. Infringement claims generally result in significant legal and other costs, and may
distract management from running our business. Royalty payments under licenses from third parties, if applicable, could
increase our costs. Additionally, developing non-infringing technologies could increase our costs. If a license were not
available, we might not be able to continue providing a particular service or product, which could adversely affect our financial
condition, results of operations and cash flows.
Risks Related to Severe Weather, Natural Disasters, and Seasonality
We have significant operations located in market areas around the world that are negatively impacted by severe
adverse weather events or natural disasters, particularly the U.S. A potential result of climate change is more frequent or more
severe weather events or natural disasters. To the extent such weather events or natural disasters become more frequent or
severe, disruptions to our business and costs to repair damaged facilities could increase.
These severe weather events or natural disasters, such as excessive rains, hurricanes, fires, or droughts, could disrupt
our operations and result in damage to our properties, including the manufacturing facilities and technology center for our
Industrial Solutions business located in Carencro, Louisiana, or our leased fluids industrial space in Fourchon, Louisiana.
Additionally, there are market areas around the world in which our operations are subject to seasonality such as Canada where
the Spring “break-up” (an industry term used to describe the time of year when the frost comes out of the ground causing the
earth to become soft and muddy and strict weight restrictions are implemented by the government to prevent potholes forming
on roads) results in a significant slowdown in the oil and natural gas industry and our fluids business each year, or in the
summer in the U.S., where utility companies typically reduce maintenance project activity on the transmission grid due to
elevated consumer electricity demand.
Severe weather, natural disasters, and seasonality could adversely affect our or our customers’ financial condition,
results of operations and cash flows.
Risks Related to Public Health Crises, Epidemics, and Pandemics
The effects of public health crises, epidemics, and pandemics have resulted and may in the future result in a
significant and swift reduction in U.S. and international economic activity, including adversely affecting the demand for and
price of oil and natural gas, as well as the demand for our products and services. In response to reduced demand for our
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products and services, we would take (and have in the past taken) actions aimed at protecting our liquidity and reshaping the
business for the new market realities, including reducing our workforce and cost structure. However, our business contains high
levels of fixed costs, including significant facility and personnel expenses, which limits the effectiveness of such actions. The
extent to which our operating and financial results are affected by a public health crisis, epidemic or pandemic will depend on
various factors beyond our control, such as the duration and scope of such event, including any resurgences and the emergence
and spread of a subject pathogen; actions taken by businesses and governments in response to such event; and the speed and
effectiveness of responses to combat the subject pathogen, including the availability and public acceptance of effective
treatments or vaccines, and how quickly and to what extent normal economic activity can resume, all of which are highly
uncertain and cannot be predicted. Any such public health crisis, epidemic or pandemic could also materially and adversely
impact our operating and financial results in a manner that is not currently known to us or that we do not currently consider as
presenting material risks to our operations.
Indebtedness Risks
Risks Related to the Cost and Continued Availability of Borrowed Funds, including Risks of Noncompliance with
Debt Covenants
We use borrowed funds as an integral part of our long-term capital structure and our future success is dependent upon
continued access to borrowed funds to support our operations. The availability of borrowed funds on reasonable terms is
dependent on the condition of credit markets and financial institutions from which these funds are obtained. Adverse events in
the financial markets, or restrictions on lenders ability or willingness to lend to companies that have significant exposure to
customers in the oil and natural gas industry, may significantly reduce the availability of funds, which may have an adverse
effect on our cost of borrowings and our ability to fund our business strategy. Our ability to meet our debt service requirements
and the continued availability of funds under our existing or future loan agreements is dependent upon our ability to generate
operating income and generate sufficient cash flow to remain in compliance with the covenants in our debt agreements. This, in
turn, is subject to the volatile nature of the oil and natural gas industry, and to competitive, economic, financial, and other
factors that are beyond our control.
We primarily fund our ongoing operational needs through a $175 million asset-based revolving credit agreement (the
“Amended ABL Facility”). The Amended ABL Facility terminates in May 2027. Borrowing availability under the Amended
ABL Facility is calculated based on eligible U.S. accounts receivable, inventory and composite mats included in the rental
fleet, net of reserves and subject to limits on certain of the assets included in the borrowing base calculation. To the extent
pledged by the borrowers, the borrowing base calculation also includes the amount of eligible pledged cash. The administrative
agent may establish reserves in accordance with the Amended ABL Facility, in part based on appraisals of the asset base, and
other limits in its discretion, which could reduce the amounts otherwise available under the Amended ABL Facility.
The Amended ABL Facility is a senior secured obligation of the Company and certain of our U.S. subsidiaries
constituting borrowers thereunder, secured by a first priority lien on substantially all of the personal property and certain real
property of the borrowers, including a first priority lien on certain equity interests of direct or indirect domestic subsidiaries of
the borrowers and certain equity interests issued by certain foreign subsidiaries of the borrowers. The Amended ABL Facility
contains certain financial covenants, customary representations, warranties and covenants that, among other things, and subject
to certain specified circumstances and exceptions, restrict or limit the ability of the borrowers and certain of their subsidiaries
to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with respect to
capital stock and make other restricted payments, make prepayments on certain indebtedness, engage in mergers or other
fundamental changes, dispose of property, and change the nature of their business.
If we fail to comply with the various covenants and other requirements of the Amended ABL Facility, we would be in
default thereunder, which would permit the holders of the indebtedness to accelerate the maturity thereof and proceed against
their collateral. The acceleration of any of our indebtedness and the election to exercise any remedies could have a material
adverse effect on our business and financial condition and we may not be able to make all of the required payments or borrow
sufficient funds to refinance such indebtedness.
If we are unable to generate sufficient cash flows to repay our indebtedness when due or to fund our other liquidity
needs, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional
financing. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a
default on our debt obligations and could have a material adverse effect on our business and financial condition.
15
Legal and Regulatory Risks
Risks Related to Environmental Laws and Regulations
We are responsible for complying with numerous federal, state, local, and foreign laws, regulations and policies that
govern environmental protection, zoning and other matters applicable to our current and past business activities, including the
activities of our former subsidiaries. Failure to remain compliant with these laws, regulations and policies may result in, among
other things, fines, penalties, costs, investigation and/or cleanup of contaminated sites and site closure obligations, costs of
remedying noncompliance, termination or suspension of certain operations, or other expenditures. We could be exposed to
strict, joint and several liability for cleanup costs, natural resource damages and other damages as a result of our conduct that
was lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties. Private
parties may also pursue legal actions against us based on alleged non-compliance with or liability under certain of these laws,
rules and regulations. Further, any changes in the current legal and regulatory environment could impact industry activity and
the demands for our products and services, the scope of products and services that we provide, or our cost structure required to
provide our products and services, or the costs incurred by our customers.
Many of the markets for our products and services are dependent on the continued exploration for and production of
fossil fuels (predominantly oil and natural gas). In recent years, the topic of climate change has received increased attention
worldwide. Many scientists, legislators and others attribute climate change to increased levels of greenhouse gases, including
carbon dioxide attributed to the use of fossil fuels, which has led to significant legislative and regulatory efforts to limit
greenhouse gas emissions. The Environmental Protection Agency (the “EPA”) and other domestic and foreign regulatory
agencies have adopted regulations that potentially limit greenhouse gas emissions and impose reporting obligations on large
greenhouse gas emission sources. In addition, the EPA has adopted rules that could require the reduction of certain air
emissions during exploration and production of oil and natural gas. President Biden’s administration officially reentered the
U.S. into the Paris Agreement in February 2021 and committed the U.S. to reducing its greenhouse gas emissions by 50-52%
from 2005 levels by 2030. In November 2021, the U.S. and other countries entered into the Glasgow Climate Pact, which
includes a range of measures designed to address climate change, including but not limited to the phase-out of fossil fuel
subsidies, reducing methane emissions 30% by 2030, and cooperating toward the advancement of the development of clean
energy. In August 2022, President Biden also signed into law the Inflation Reduction Act, which contains tax inducements and
other provisions that incentivize investment, development, and deployment of alternative energy sources and technologies and
created a methane emissions reduction program, which provided significant funding to reduce emissions of methane from the
oil and gas sector and requires the EPA to impose a charge on certain oil and gas sources. The implementation of the Inflation
Reduction Act could increase operating costs within the oil and gas industry and accelerate the transition away from fossil
fuels. To the extent that laws and regulations enacted as part of climate change legislation increase the costs of drilling for or
producing such fossil fuels, limit or restrict oil and natural gas exploration and production, or reduce the demand for fossil
fuels, such legislation could have a material adverse effect on our operations and profitability.
The continued expansion of revenues in industrial markets, and particularly end-markets that are likely to benefit from
ongoing energy transition efforts around the world, such as power transmission, renewable energy, and geothermal, remains a
strategic priority going forward, and we anticipate that our capital investments will primarily focus on supporting this
objective. However, it is unclear whether these initiatives, when implemented, will create sufficient incentives for projects or
result in increased demand for our services.
There have also been efforts in recent years to influence the investment community, including investment advisors and
certain sovereign wealth, pension and endowment funds, promoting divestment of fossil fuel equities and pressuring lenders to
limit funding to companies engaged in the extraction of fossil fuel reserves. Such environmental activism and initiatives aimed
at limiting climate change and reducing air pollution could interfere with our business activities, operations, and ability to
access capital. Furthermore, members of the investment community are increasing their focus on Environmental, Social, and
Governance (“ESG”) practices and disclosures by public companies. Concerns over climate change have resulted in, and are
expected to continue to result in, the adoption of regulatory requirements for climate-related disclosures, which could increase
our compliance burden and costs. As a result, we may continue to face increasing pressure regarding our ESG disclosures and
practices. We have published and may continue to publish a Sustainability Report, which outlines our progress and ongoing
efforts to advance our ESG initiatives. Our disclosures on these matters rely on management’s expectations as of the date the
statements are first made, as well as standards for measuring progress that are still in development, and may change or fail to be
realized. These expectations and standards may continue to evolve. If our ESG disclosures and practices do not meet
regulatory, investor or other stakeholder expectations and standards, which continue to evolve, it could have a material adverse
effect on our business or demand for our services.
In addition, hydraulic fracturing is a common practice used by E&P operators to stimulate production of
hydrocarbons, particularly from shale oil and natural gas formations in the U.S. The process of hydraulic fracturing, which
involves the injection of sand (or other forms of proppants) laden fluids into oil and natural gas bearing zones, has come under
16
increased scrutiny from a variety of regulatory agencies, including the EPA and various state authorities. Several states have
adopted regulations requiring operators to identify the chemicals used in fracturing operations, others have adopted
moratoriums on the use of fracturing, and the State of New York has banned the practice altogether. In addition, concerns have
been raised about whether injection of waste associated with hydraulic fracturing operations, or from the fracturing operations
themselves, may cause or increase the impact of earthquakes. Although we do not provide hydraulic fracturing services, we
have offered stimulation chemicals used in the hydraulic fracturing process. Regulations which have the effect of prohibiting,
limiting the use, or significantly increasing the costs of hydraulic fracturing could have a material adverse effect on both the
drilling and stimulation activity levels of our customers, and, therefore, the demand for our products and services.
Risks Related to Legal Compliance
As a global business, we are subject to complex laws and regulations in the U.S., the U.K. and other countries in
which we operate. These laws and regulations relate to a number of aspects of our business, including anti-bribery and anti-
corruption laws, sanctions against business dealings with certain countries and third parties, the payment of taxes, employment
and labor relations, immigration, fair competition, data privacy protections, securities regulation, and other regulatory
requirements affecting trade and investment. The application of these laws and regulations to our business is often unclear and
may sometimes conflict. Compliance with these laws and regulations may involve significant costs or require changes in our
business practices that could result in reduced revenue and profitability. Non-compliance could also result in significant fines,
damages, and other criminal sanctions against us, our officers or our employees, prohibitions or additional requirements on the
conduct of our business and damage our reputation. Certain violations of law could also result in suspension or debarment from
government contracts. We also incur additional legal compliance costs associated with global regulations. In some foreign
countries, particularly those with developing economies, it may be customary for others to engage in business practices that are
prohibited by laws such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, the Italian Criminal Code in Italy,
Brazil’s Clean Companies Act, India’s Prevention of Corruption Act and The Companies Act, and Mexico’s Anti-Corruption
Law. Although we implement policies and procedures designed to ensure compliance with these laws, there can be no
assurance that all of our employees, contractors, agents, and business partners will not take action in violation with our internal
policies. In the U.S., there have been increasing instances of opioid and other illicit drug usage as well as illegal immigration in
certain of the regions in which we operate. While we have taken steps we believe appropriate to ensure that our employees
comply with our internal drug and alcohol policy as well as all applicable immigration laws, we cannot assure you there will
not be violations in the future. Any such violation of our internal policies or the law could have a material adverse effect on our
reputation, business, financial condition, or results of operations.
Financial Risks
Risks Related to the Inherent Limitations of Insurance Coverage
While we maintain liability insurance, this insurance is subject to coverage limitations. Specific risks and limitations
of our insurance coverage include the following:
▪
▪
▪
▪
self-insured retention limits on each claim, which are our responsibility;
exclusions for certain types of liabilities and limitations on coverage for damages resulting from pollution;
coverage limits of the policies, and the risk that claims will exceed policy limits; and
the financial strength and ability of our insurance carriers to meet their obligations under the policies.
In addition, our ability to continue to obtain insurance coverage on commercially reasonable terms is dependent upon
a variety of factors impacting the insurance industry in general, which are outside our control. Any of the issues noted above,
including insurance cost increases, uninsured or underinsured claims, or the inability of an insurance carrier to meet their
financial obligations could have a material adverse effect on our business.
Risks Related to Income Taxes
Our future effective tax rates could be adversely affected by changes in tax laws, both domestically and
internationally, or the interpretation or application thereof. From time to time, U.S. and foreign tax authorities, including state
and local governments, consider legislation that could increase our effective tax rate. For example, effective for costs paid or
incurred in tax years beginning after December 31, 2021, the 2017 U.S. Tax Cuts and Jobs Act enacted legislation that requires
certain research and development expenditures to be capitalized and amortized over five years, rather than being deducted as
incurred. While the Ways and Means Committee of the U.S. House of Representatives recently passed a bill that, if enacted,
would allow for the continued immediate deduction of research and development expenditures incurred in tax years beginning
after December 31, 2021, and before January 1, 2026, there can be no assurance that this proposed legislation will be enacted.
Additionally, longstanding international tax norms that determine each country’s jurisdiction to tax cross-border international
trade are subject to potential evolution. For example, the Organization for Economic Co-operation and Development
(“OECD”), a global coalition of member countries, proposed a two-pillar plan to reform international taxation. The proposals
17
aim to ensure a fairer distribution of profits among countries and to impose a floor on tax competition through the introduction
of a global minimum tax. While the European Union agreed in December 2022 to implement the global minimum tax on larger
companies in 2024, and other countries are actively considering changes to their tax laws to adopt certain parts of the OECD’s
proposals, we cannot determine whether, or in what form, such legislation will be implemented or ultimately be enacted or
what the impact of any such legislation could have on our profitability. If such changes to tax laws are enacted, our profitability
could be negatively impacted.
Our future effective tax rates could also be adversely affected by changes in the valuation of our deferred tax assets
and liabilities, changes in the mix of earnings in countries with differing statutory tax rates, or by changes in tax treaties,
regulations, accounting principles or interpretations thereof in one or more countries in which we operate. In addition, we are
subject to the potential examination of our income tax returns by the U.S. Internal Revenue Service and by other tax authorities
in jurisdictions where we file tax returns. We regularly assess the likelihood of adverse outcomes resulting from these
examinations to determine the adequacy of our provision for income taxes. There can be no assurance that such examinations
will not have a material adverse effect on our business, financial condition, or results of operations.
General Risks
Risks Related to Cybersecurity Incidents or Business System Disruptions
We utilize various management information systems and information technology infrastructure to manage or support a
variety of our business operations, and to maintain various records, which may include confidential business or proprietary
information as well as information regarding our customers, business partners, employees or other third parties. We also utilize
third-party vendors and their systems and technology to support our business activities, including secure processing of
confidential, sensitive, proprietary and other types of information. Failures of or interference with access to these systems, such
as communication disruptions, could have an adverse effect on our ability to conduct operations or directly impact financial
reporting. In addition, our information systems and information technology infrastructure are subject to security threats and
sophisticated cyber-based attacks, including, but not limited to, denial-of-service attacks, hacking, “phishing” attacks, computer
viruses, ransomware, malware, employee or insider error, malfeasance, social engineering, or physical breaches, that can cause
deliberate or unintentional damage, destruction or misuse, manipulation, denial of access to or disclosure of confidential or
important information or intellectual property. A failure of or breach in our information systems and information technology
infrastructure, or those of our third-party vendors, could expose us and our employees, customers, and suppliers to risks of
misuse of information or systems, transaction errors, the compromise of confidential information, manipulation and destruction
of data, the loss of sales and customers and operations disruptions. There can be no assurance that security incidents will not
occur. In addition, there can be no assurance that the policies and procedures we or our third-party vendors have in place,
including system monitoring and data back-up processes, to prevent or mitigate the effects of these potential disruptions or
incidents will be sufficient to prevent, detect and limit the impact of disruptions or incidents. We do not carry insurance against
these risks, although we do invest in security technology, perform penetration tests from time to time, and design our business
processes to attempt to mitigate the risk of such incidents. Our processes require continuous monitoring as technologies change
and efforts to overcome security measures evolve.
We have experienced cybersecurity threats and incidents involving our systems and third-party systems and expect
these incidents to continue. While none of the cybersecurity events have been material to date, a successful breach or attack
could have a material negative impact on our operations or business reputation, harm our reputation and relationships with our
customers, business partners, employees or other third parties, and subject us to consequences such as litigation and direct costs
associated with incident response. These risks could have a material adverse effect on our business, results of operations, and
financial condition.
Risks Related to Activist Stockholders that May Attempt to Effect Changes at Our Company or Acquire Control
Over Our Company
We have been the subject of campaigns by activist stockholders and may continue to be so in the future. Such activist
stockholders may engage in proxy solicitations, advance stockholder proposals, or otherwise attempt to affect changes or
acquire control over our company. Campaigns by stockholders to effect changes at publicly traded companies are sometimes
led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt,
special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by
activist stockholders can be costly and time-consuming and could divert the attention of our Board of Directors and senior
management from the management of our operations and the pursuit of our business strategies. As a result, stockholder
campaigns could adversely affect our results of operations and financial condition.
Risks Related to Share Repurchases
The amount and timing of all future purchases of shares of our common stock pursuant to our securities repurchase
program, if any, are subject to the discretion of the Board of Directors and will depend upon business conditions, results of
18
operations, financial condition and other factors. Our Board of Directors may, without advance notice, suspend or terminate our
repurchase program. There can be no assurance that we will make repurchases of shares of our common stock in the future.
Share repurchases under our repurchase program could diminish our available liquidity, which may impact our ability to
finance future growth and to pursue possible future strategic growth projects. In addition, any elimination of, or downward
revision in, our repurchase program could have an adverse effect on the market price of our common stock.
Our Amended and Restated Bylaws, Which Designate the Court of Chancery of the State of Delaware as the Sole
and Exclusive Forum for Certain Types of Actions and Proceedings that May Be Initiated by Our Stockholders, and the
U.S. Federal District Courts in Wilmington County, Delaware as the Exclusive Forum for Securities Act Claims, Could
Limit Our Stockholders’ Ability to Obtain What Such Stockholders Believe To Be a Favorable Judicial Forum for Disputes
with Us or Our Directors, Officers or Other Employees
Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum,
(i) the Delaware Court of Chancery or, if such court lacks subject matter jurisdiction, another state or federal court located
within the State of Delaware, will be the sole and exclusive forum with respect to (a) any derivative action or proceeding
brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former
directors, officers, stockholders, employees or agents to us or our stockholders, including a claim alleging the aiding and
abetting of such a breach of fiduciary duty, (c) any action asserting a claim against us or any of our current or former directors,
officers, stockholders, employees or agents arising out of or relating to any provision of the Delaware General Corporation Law
(“DGCL”), our certificate of incorporation or its amended and restated bylaws, (d) any action asserting a claim related to or
involving us or any of our directors, officers, stockholders, employees or agents that is governed by the internal affairs doctrine
of the State of Delaware, or (e) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the
DGCL, and (ii) the U.S. Federal District Court in Wilmington County, Delaware will be the sole and exclusive forum for any
action arising under the Securities Act. Our choice-of-forum provision will not apply to suits brought to enforce any liability or
duty created by the Exchange Act, and investors cannot waive compliance with the federal securities laws and the rules and
regulations thereunder.
Any person or entity purchasing or otherwise acquiring an interest in any shares of our capital stock shall be deemed
to have notice of and to have consented to the forum provisions in our amended and restated bylaws. These choice-of-forum
provisions may limit a stockholder’s ability to bring a claim in a judicial forum that he, she or it believes to be favorable for
disputes with us or our directors, officers or other employees, which may discourage such lawsuits. Alternatively, if a court
were to find these provisions of our amended and restated bylaws inapplicable or unenforceable with respect to one or more of
the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other
jurisdictions, which could materially adversely affect our business, financial condition and results of operations.
ITEM 1B. Unresolved Staff Comments
None.
ITEM 1C. Cybersecurity
We believe that cybersecurity is a critical component of our enterprise risk management process, and as such, we have
implemented a cybersecurity program to assess, identify, and manage risks from cybersecurity threats that may result in
adverse effects on the confidentiality, integrity, and availability of our information systems.
Our Board of Directors oversees management’s enterprise risk management process, including cybersecurity risks, to
help align our risk exposure with our strategic objectives. Senior leadership, including our Chief Information Officer (CIO),
regularly briefs the Board of Directors on our cybersecurity and information security, and we have processes by which certain
cybersecurity incidents are escalated to the Board of Directors.
Our CIO, who reports to our Senior VP & Chief Financial Officer, oversees our cybersecurity function. The
Cybersecurity Manager reports to the CIO, and the CIO and Cybersecurity Manager are responsible for assessing and
managing risks from cybersecurity threats, as well as our overall information security strategy, policy, security engineering,
operations, and cybersecurity threat detection and response, and reporting on cybersecurity matters to the Board and executive
management.
Our CIO has a Master of Science in Information Systems and has served in various roles in information technology
for over 25 years. Our Cybersecurity Manager has served in various roles in information technology and information security
for over 25 years, with 10 of those years as the leader responsible for enterprise cybersecurity, including serving as the
Information Security Officer at another larger publicly traded company.
Our CIO receives reports on cybersecurity threats from experienced information security personnel and third-party
consultants and resources, and regularly reviews risk management measures implemented by the Company to identify and
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mitigate data protection and cybersecurity risks. Our processes and systems include automated tools and technical safeguards
managed and monitored by our cybersecurity team. Additionally, we have a set of Company-wide policies and procedures
regarding cybersecurity matters, which include an Information Security best practices intranet site, as well as other policies that
directly or indirectly relate to cybersecurity, such as policies related to email usage, remote network access, internet usage,
passphrase usage, information technology acceptable use, data governance and privacy, and information security. These
policies go through an internal review process and are approved by appropriate members of management. We periodically
conduct penetration and vulnerability testing, data recovery testing, and security audits. We also conduct regular employee
training on cybersecurity. With respect to our incident response, we have adopted a plan that applies in the event of a
cybersecurity threat or incident to provide a framework for responding to such threats and incidents. Our plan sets out a
coordinated approach to investigating, containing, documenting, and mitigating incidents, including reporting findings and
keeping senior management and other key stakeholders informed and involved as appropriate. We also employ processes
designed to oversee and identify risks from cybersecurity threats associated with our use of third-party service providers.
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially
affected us, including our business strategy, results of operations, or financial condition, but we face certain ongoing risks from
cybersecurity threats that, if realized, are reasonably likely to have such an affect.
ITEM 2. Properties
We lease office space to support our operating segments, as well as our corporate offices. We also own a facility
containing approximately 108,000 square feet of office space (approximately 21,000 square feet of which is currently being
leased to third parties) on approximately 11 acres of land in Katy, Texas, which houses our division headquarters and general
and administrative support personnel for both operating segments, the laboratory and technology center for the Fluids Systems
segment, as well as administrative offices for third-party lessees.
Fluids Systems. We own or lease various facilities and warehouses throughout the world to support our operations.
Some of these warehouses include blending facilities. We also lease approximately nine acres of industrial space in Fourchon,
Louisiana which houses a drilling fluids shorebase and blending facility for the deepwater Gulf of Mexico market. During the
fourth quarter of 2022, we entered a seven-year sublease of this property as we exited our Gulf of Mexico fluids operations.
Industrial Solutions. We own a facility containing approximately 93,000 square feet of industrial and office space on
approximately 34 acres of land in Carencro, Louisiana, which houses our manufacturing facilities and technology center for
this segment. We also own or lease various facilities and warehouses throughout the U.S., as well as facilities in the U.K., to
support our field operations.
ITEM 3. Legal Proceedings
In the ordinary course of conducting our business, we become involved in litigation and other claims from private
party actions, as well as judicial and administrative proceedings involving governmental authorities at the federal, state, and
local levels. While the outcome of litigation or other proceedings against us cannot be predicted with certainty, management
does not expect that any loss resulting from such litigation or other proceedings, in excess of any amounts accrued or covered
by insurance, will have a material adverse impact on our consolidated financial statements.
ITEM 4. Mine Safety Disclosures
Not applicable.
20
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock is traded on the New York Stock Exchange under the symbol “NR.”
As of February 1, 2024, we had 1,072 stockholders of record as determined by our transfer agent.
We have not paid any dividends during the three most recent fiscal years or any subsequent interim period, and we do
not intend to pay any cash dividends in the foreseeable future. In addition, our Amended ABL Facility contains covenants
which limit the payment of dividends on our common stock. See Item 7. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources - Asset-Based Loan Facility.”
Stock Performance Graph
The following graph reflects a comparison of the cumulative total stockholder return of our common stock from
January 1, 2019 through December 31, 2023, with the New York Stock Exchange Market Value Index, a broad equity market
index, and the Philadelphia Oil Service Sector Index. The graph assumes the investment of $100 on January 1, 2019 in our
common stock and each index and the reinvestment of all dividends, if any. This information shall be deemed furnished but not
filed in this Form 10-K, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, or
the Securities Exchange Act of 1934, except to the extent we specifically incorporate it by reference.
NOTE: Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2024.
21
Newpark Resources, Inc.NYSE Composite IndexPhiladelphia Oil Service Sector Index1/1/201912/31/201912/31/202012/31/202112/31/202212/31/2023020406080100120140160180 Issuer Purchases of Equity Securities
The following table details our repurchases of shares of our common stock for the three months ended December 31,
2023:
Period
October 2023
November 2023
December 2023
Total Number of
Shares Purchased
Average Price
Paid Per Share
6.85
7.19
—
878,923 $
3,043 $
— $
Total
881,966
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
Maximum Approximate
Dollar Value of Shares that
May Yet be Purchased
Under Plans or Programs
($ in Millions)
878,923 $
— $
— $
878,923
18.1
18.1
18.1
During the three months ended December 31, 2023, we purchased an aggregate of 3,043 shares surrendered in lieu of
taxes under vesting of restricted stock awards. During 2023, we purchased an aggregate of 576,967 shares surrendered in lieu
of taxes under vesting of restricted stock awards. These shares were not acquired pursuant to our securities repurchase program
described below. All of the shares purchased are held as treasury stock.
In November 2018, our Board of Directors authorized a securities repurchase program available for repurchases of
any combination of our common stock and our unsecured convertible senior notes, which matured in December 2021. In
February 2023, our Board of Directors approved certain changes to the repurchase program as well as additional capacity to
increase the total authorization then available to $50.0 million. During the three months ended December 31, 2023, we
repurchased 878,923 shares of our common stock under our repurchase program for a total cost of $6.0 million. During 2023,
we repurchased 6,522,797 shares of our common stock under our repurchase program for a total cost of $31.9 million.
As of December 31, 2023, we had $18.1 million remaining under the program. In February 2024, our Board of
Directors replaced the existing program with a new repurchase program for repurchases of common stock up to $50.0 million.
Our repurchase program is available to purchase outstanding shares of our common stock in the open market or as
otherwise determined by management, subject to certain limitations under the Amended ABL Facility and other factors. The
repurchase program has no specific term. Future repurchases are expected to be funded from operating cash flows, available
cash on hand, and borrowings under our Amended ABL Facility. As part of the share repurchase program, our management has
been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934.
ITEM 6. [Reserved]
22
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition, results of operations, liquidity, and capital resources should be
read in conjunction with the consolidated financial statements and notes thereto included in Item 8 “Financial Statements and
Supplementary Data.”
Overview
We are a geographically diversified supplier providing environmentally-sensitive products, as well as rentals and
services to customers across multiple industries. We currently operate our business through two reportable segments: Industrial
Solutions and Fluids Systems, as described further below. In addition, we had a third reportable segment, Industrial Blending,
which was exited in 2022. We have reflected these three reportable segments for all periods presented in this Annual Report on
Form 10-K.
Over much of the past decade, while the Fluids Systems segment has been the primary driver of revenues, the
Industrial Solutions segment has been the primary driver of operating income, cash flows, and financial returns. Consequently,
our growth investments in recent years have been heavily concentrated in the Industrial Solutions segment. For 2023, the
relative revenues, operating income, and capital expenditures for the Industrial Solutions and Fluids Systems segments for 2023
are as follows (amounts in millions):
* Fluids Systems segment operating income for 2023 includes $12.7 million in total charges for certain impairments, facility exit,
severance costs, and transaction related expenses for the ongoing Fluids Systems segment sale process as described further below.
In June 2023, we announced that we initiated a review of strategic alternatives for the long-term positioning of the
Fluids Systems division. We have retained Lazard to serve as our exclusive financial advisor in connection with the strategic
review. In September 2023, we launched a formal sale process for substantially all the Fluids Systems business as part of this
strategic review. While the sale process is ongoing, we anticipate substantially completing the process in mid-2024, although it
is not certain that any such transaction will be consummated on that timeline or at all. As part of the strategic review, we will
continue to evaluate under-performing areas within our business and anticipate additional actions may be necessary to optimize
our operational footprint and invested capital within the Fluids Systems segment. If we successfully complete the process to
substantially exit the Fluids Systems segment, our remaining operations will primarily reflect a specialty rental and service
business, serving the utilities sector and other critical infrastructure markets. See further information below.
2023 Priorities
The following summarizes our performance against key priorities established for 2023:
•
•
Accelerate Industrial Solutions Growth – We continued to prioritize investment capital in the growth of our Industrial
Solutions business, where over the past several years, we have seen the strong market adoption of our specialty rental
products and differentiated service offering. For 2023, 90% of our capital expenditures were directed to the Industrial
Solutions segment. Industrial Solutions segment revenues were $207.6 million in 2023, reflecting an 8% increase from
2022, including a 12% increase in rental and services, with higher revenues seen broadly across all major industries
served.
Operational Excellence – We increased our focus on efficiency improvements and operating cost optimization across
every aspect of our global footprint. With our simplified business model and enhanced focus on balance sheet
optimization, we seek to improve returns and consistency in cash flow generation. During 2023, we generated $100.0
million of operating cash flow, which was partially driven by the effects of the 2022 divestitures and ongoing efforts
to restructure or reduce the level of invested capital in underperforming business activities within the Fluids Systems
segment. In addition, we have continually evaluated and executed actions intended to streamline the organization and
our cost structure, driving reductions in overhead costs and improvements in profitability.
23
Revenues$208$542Industrial SolutionsFluids SystemsOperating Income$53$12Industrial SolutionsFluids Systems* Capital Expenditures$26$2Industrial SolutionsFluids Systems •
Prioritize Return of Capital – We are committed to maintaining a strong balance sheet, using excess cash generation
to reduce our debt and return value to our shareholders. During 2023, we utilized $47 million of cash generation for
debt repayments and another $32 million to repurchase 6.5 million (7%) of our outstanding shares under our
repurchase program.
Segment Overview
Industrial Solutions – Our Industrial Solutions segment, which generated 28% of our consolidated revenues and $53.0
million of operating income for 2023, provides temporary worksite access solutions, including the rental of our manufactured
recyclable composite matting systems, along with related site construction and services to customers in various markets
including power transmission, E&P, pipeline, renewable energy, petrochemical, construction and other industries, primarily in
the United States and United Kingdom. We also sell our manufactured recyclable composite mats to customers around the
world, with power transmission being the primary end-market. For the Industrial Solutions segment, approximately 75% of
2023 revenues were derived from power transmission and other industrial markets.
Our Industrial Solutions segment has been our primary source of operating income and cash generation in recent
years, and has also been the primary focus for growth investments. The growth of our business in the power transmission and
other industrial markets remains a strategic priority for us due to the relative stability of such markets compared to E&P, as
well as the magnitude of growth opportunity in these markets, including the potential positive impact from the energy transition
and future legislation and regulations related to greenhouse gas emissions and climate change. We expect customer activity,
particularly in the power transmission sector, will remain robust in the coming years, driven in part by the impacts of the U.S.
energy transition and the increasing investment in grid reliance initiatives.
Fluids Systems – Our Fluids Systems segment, which generated 72% of our consolidated revenues and $11.9 million
of operating income for 2023 (including $12.7 million in total charges for certain impairments, facility exit, severance costs,
and transaction related expenses for the ongoing Fluids Systems segment sale process), provides drilling and completion fluids
products and related technical services to customers for oil, natural gas, and geothermal projects primarily in North America
and EMEA, as well as certain countries in Asia Pacific. Over the past few years, our primary focus within Fluids Systems has
been the transformation into a more agile and simplified business focused on key markets, while monetizing assets in
underperforming or sub-scale markets and reducing our invested capital to drive improvements in segment profitability and
returns. As of December 31, 2023, the net working capital of the Fluids Systems segment was $171 million, which reflects a
$69 million reduction from December 31, 2022.
Our Fluids Systems operating results remain dependent on oil and natural gas drilling activity levels in the markets we
serve and the nature of the drilling operations, which governs the revenue potential of each well. Drilling activity levels depend
on a variety of factors, including oil and natural gas commodity pricing, inventory levels, product demand, and regulatory
restrictions. Oil and natural gas prices and activity are cyclical and volatile, and this market volatility has a significant impact
on our Fluids Systems operating results.
Rig count data remains the most widely accepted indicator of drilling activity. Average North American rig count data
for the last three years is as follows:
U.S. Rig Count
Canada Rig Count
North America Rig Count
_______________________________________________________
Source: Baker Hughes
Year Ended December 31,
2021
2022
2023
2023 vs 2022
%
Count
2022 vs 2021
%
Count
687
177
864
723
175
898
475
131
606
(36)
2
(34)
(5) %
1 %
(4) %
248
44
292
52 %
34 %
48 %
During 2021, oil prices and the average U.S. rig count steadily improved in the wake of COVID-19, and during 2022,
oil prices and rig counts further increased due in part to global economic recovery and geopolitical events. In 2023, market
activity in the U.S. steadily declined, ending the year at 622 active rigs, down 20% from the end of 2022. With recent
instability in oil prices, the 2024 outlook for U.S. market activity generally remains below the 2023 average level, as many of
our customers maintain strong capital discipline and prioritize cash flow generation over growth.
Outside of North America, drilling activity is generally more stable as this drilling activity is based on longer-term
economic projections and multi-year drilling programs, which typically reduces the impact of short-term changes in commodity
prices on overall drilling activity. Further, geopolitical events in recent years are causing several markets to increase drilling
activity levels, to help ensure reliable energy supply in the coming years, while reducing their dependency on Russia-sourced
oil and natural gas. Consequently, the outlook for several markets within the EMEA region remains strong, with growth in
activity expected over the next few years.
24
Industrial Blending – Our Industrial Blending segment began operations in 2020 and supported industrial end-
markets, including the production of disinfectants and industrial cleaning products. In the first quarter of 2022, we completed
the wind down of the Industrial Blending business, and in November 2022 we completed the sale of the industrial blending
assets.
2023 Strategic Actions
The following strategic actions were taken in 2023.
Review of Strategic Alternatives for Fluids Systems Business
As described above, we initiated a review of strategic alternatives for the long-term positioning of the Fluids Systems
division in June 2023, and in September 2023, we launched a formal sale process for substantially all the Fluids Systems
business as part of this strategic review. While the sale process is ongoing, we anticipate substantially completing the process
in mid-2024, although it is not certain that any such transaction will be consummated on that timeline or at all. As part of this
review, in the fourth quarter of 2023 we recognized a $2.5 million impairment charge (included in impairments and other
charges) related to certain long-lived assets utilized in our U.S. operations. We also incurred $1.2 million and $0.6 million of
transaction related costs in 2023 included in Corporate Office expenses and Fluids Systems segment operating income,
respectively. As of December 31, 2023, the Fluids Systems business had approximately $227 million of net assets, including
$38 million in cash, $13 million of debt, and $171 million of net working capital.
As we continue to evaluate strategic alternatives for our Fluids Systems portfolio, we may incur future charges related
to these efforts or potential asset impairments, which may negatively impact our future results.
Exit of Stimulation Chemicals Product Line
In 2023, we made the decision to exit the stimulation chemicals product line. The Fluids Systems segment operating
results for 2023 includes $1.6 million of total charges (included in impairments and other charges) for inventory write-downs to
reduce the carrying values of certain inventory related to the exit of our stimulation chemicals product line to their net
realizable value. As of December 31, 2023, we had $2.1 million of inventory remaining related to the stimulation chemicals
product line.
Exit of Offshore Australia Operations
In 2023, we made the decision to exit our offshore Australia operations. The Fluids Systems segment operating results
for 2023 includes $1.5 million of total charges (included in impairments and other charges) for inventory write-downs to
reduce the carrying values of certain inventory related to the exit of our offshore Australia operations to their net realizable
value as well as impairments related to the long-lived assets previously used in the now exited business. We expect to incur
certain exit related costs of approximately $1 million from the exit of our offshore Australia operations in 2024.
Exit of Chile Operations
In 2023, we completed our customer contract in Chile, and during the fourth quarter of 2023, we completed the
substantial liquidation of our Chile subsidiary and recognized an $0.8 million non-cash charge (included in impairments and
other charges) for the reclassification of cumulative foreign currency translation losses related to our subsidiary in Chile.
2022 Strategic Actions
The following strategic actions were taken in 2022.
Exit of Industrial Blending Segment and Sale of Conroe, Texas Blending Facility
In the first quarter of 2022, we exited our Industrial Blending operations. In November 2022, we completed the sale of
the industrial blending assets for cash proceeds of approximately $14 million. In connection with this divestiture, we
recognized a $7.9 million impairment charge related to these long-lived assets in the second quarter of 2022 (included in
impairments and other charges), and subsequently recognized a gain of $2.6 million upon the eventual sale in the fourth quarter
of 2022.
Sale of Excalibar U.S. Mineral Grinding Business
In November 2022, we completed the sale of substantially all the long-lived assets, inventory, and operations of our
Excalibar U.S. mineral grinding business (“Excalibar”), which was reported within our Fluids Systems segment, to Cimbar
Resources, INC. (“Cimbar”), for cash proceeds (after purchase price adjustments) of approximately $51 million and recognized
a gain of $1.0 million. The Company retained certain assets and liabilities, including accounts receivable and accounts payable,
the wind down of which was substantially completed in the first quarter of 2023. Such working capital provided approximately
$10 million of cash generation in the fourth quarter of 2022 and approximately $6 million of additional cash generation in the
25
first quarter of 2023. In connection with the sale, the Company and Cimbar entered into a long-term barite supply agreement
for certain regions of our U.S. drilling fluids business, with an initial term of four years following the closing of the transaction.
Exit of Gulf of Mexico Operations
In December 2022, we completed the sale of substantially all assets associated with our Gulf of Mexico completion
fluids operations. Separately, we entered into a seven-year arrangement to sublease our Fourchon, LA drilling fluids shorebase
and blending facility to a leading global energy services provider. As part of this arrangement, substantially all of our Gulf of
Mexico drilling fluids inventory has been sold to the lessee as consumed. These transactions provided cash generation of
approximately $6 million in the fourth quarter of 2022 and approximately $28 million in 2023. Fluids Systems segment
operating income for 2023 includes $4.8 million in charges related to the exit of our Gulf of Mexico operations, which was
substantially completed during the second quarter of 2023.
As a result of the plan to exit the Gulf of Mexico operations as described above, we considered the third quarter 2022
developments to be a potential indicator of impairment that required us to complete an impairment evaluation. Accordingly, we
estimated the fair value for our Gulf of Mexico assets as of September 30, 2022 based on the expected cash flows to be
generated from the anticipated transactions and determined that a $21.5 million impairment charge was required related to the
long-lived assets. We also recognized an $8.0 million charge to reduce the carrying value of inventory to their net realizable
value primarily based on the anticipated transactions. The total charges of $29.4 million were recorded to impairments and
other charges in the third quarter of 2022.
26
Total impairments and other charges are shown in the following table:
(In thousands)
Fluids U.S. Land - Long-lived assets impairment
Stimulation chemicals product line - Inventory write-downs
Australia - Inventory write-downs
Australia - Long-lived assets impairment
Chile exit - Recognition of cumulative foreign currency translation
losses
Industrial Blending - Long-lived assets impairment
Gulf of Mexico - Long-lived assets impairment
Gulf of Mexico - Inventory write-downs
Total impairments and other charges
$
Year Ended December 31,
2023
2022
2,485
1,576
1,058
439
798
—
—
—
6,356 $
—
—
—
—
—
7,905
21,461
7,956
37,322
Summarized operating results of the business units exited in 2022 (including impairments and other charges described
above) are shown in the following table:
(In thousands)
Revenues
Industrial Blending
Excalibar
Gulf of Mexico
Total revenues
Operating income (loss)
Industrial Blending
Excalibar
Gulf of Mexico
Total Operating income (loss)
Year Ended December 31,
2022
2021
2023
$
$
$
$
— $
—
—
— $
— $
55,990
26,708
82,698 $
— $
—
(4,776)
(4,776) $
(8,002) $
3,665
(43,215)
(47,552) $
8,821
36,396
25,366
70,583
(2,384)
(277)
(6,753)
(9,414)
Summarized net assets related to the business units exited in 2022 are shown in the following table:
(In thousands)
Receivables, net
Inventories
Accounts payable
Accrued liabilities
Total net assets
December 31,
2022
$
$
27,798
5,805
(2,060)
(311)
31,232
The net assets remaining as of December 31, 2022 related to the retained working capital from the Excalibar sale and
the remaining Gulf of Mexico net assets. During 2023, we substantially settled the above net assets related to the now exited
Excalibar business and Gulf of Mexico operations.
27
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022
Consolidated Results of Operations
Summarized results of operations for 2023 compared to 2022 are as follows:
(In thousands)
Revenues
Cost of revenues
Selling, general and administrative expenses
Other operating income, net
Impairments and other charges
Operating income (loss)
Foreign currency exchange loss
Interest expense, net
Income (loss) before income taxes
Provision for income taxes
Net income (loss)
Revenues
Year Ended December 31,
2023 vs 2022
2023
2022
$
%
$
749,600 $
815,594 $
611,061
101,136
694,058
97,618
(2,583)
(4,370)
6,356
33,630
267
8,181
25,182
37,322
(9,034)
389
7,040
(16,463)
10,666
4,371
$
14,516 $
(20,834) $
(65,994)
(82,997)
3,518
1,787
(30,966)
42,664
(122)
1,141
41,645
6,295
35,350
(8) %
(12) %
4 %
NM
NM
NM
NM
16 %
NM
NM
170 %
Revenues decreased 8% to $749.6 million for 2023, compared to $815.6 million for 2022. This $66.0 million decrease
includes a $118.8 million (20%) decrease in North America, comprised of a $133.0 million decrease in the Fluids Systems
segment partially offset by a $14.2 million increase in the Industrial Solutions segment. In our Fluids Systems segment,
revenues from North America operations decreased primarily due to a $82.7 million impact from the divested business units, as
well as the effect of lower market share and reduced U.S. market activity. In our Industrial Solutions segment, revenues from
North America operations increased primarily due to an increase in rental and services revenues. Revenues from our
international operations increased by $52.8 million (24%), driven primarily by higher activity in Europe and Africa. Additional
information regarding the change in revenues is provided within the operating segment results below.
Cost of revenues
Cost of revenues decreased 12% to $611.1 million for 2023, compared to $694.1 million for 2022 which included
$90.7 million of cost of revenues from divested business units. This $83.0 million decrease in cost of revenues was primarily
driven by the 8% decrease in revenues described above, as well as the impact of segment revenue mix, with Industrial
Solutions representing a higher proportion of revenues for 2023, as compared to the prior year.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $3.5 million to $101.1 million for 2023, compared to $97.6
million for 2022. This increase was primarily driven by a $1.9 million increase in severance costs and a $1.4 million increase in
expenses related to strategic planning projects. Selling, general and administrative expenses as a percentage of revenues was
13.5% for 2023 compared to 12.0% for 2022. Selling, general and administrative expenses in 2022 included $1.8 million of
costs within divested business units.
28
Other operating income, net
Other operating income, net for 2023 primarily reflects gains and losses associated with the sale of assets, including
assets previously used in divested businesses, as well as lease income on office space from third-party lessees. Other operating
income, net for 2022 includes $3.6 million of total gains on divestitures, including $2.6 million in the Industrial Blending
segment for the sale of the Conroe, Texas blending facility and $1.0 million in the Fluids Systems segment for the Excalibar
sale. See Note 2 for additional details.
Impairments and other charges
For 2023, the Fluids Systems segment includes $5.6 million of non-cash charges for long-lived asset impairments and
inventory write-downs, as well as an $0.8 million non-cash charge for the reclassification of cumulative foreign currency
translation losses related to the substantial liquidation of our subsidiary in Chile.
For 2022, the Fluids Systems segment included $29.4 million of total non-cash impairment charges related to the
long-lived assets and inventory associated with the exit of our Gulf of Mexico operations. In addition, the Industrial Blending
segment included a $7.9 million non-cash impairment charge related to the process to sell the assets previously used in this
now exited business.
Foreign currency exchange
Foreign currency exchange was a $0.3 million loss for 2023 compared to a $0.4 million loss for 2022, and reflects the
impact of currency translation for assets and liabilities (including intercompany balances) that are denominated in currencies
other than functional currencies.
Interest expense, net
Interest expense was $8.2 million for 2023 compared to $7.0 million for 2022. The increase in interest expense is
primarily due to an increase in benchmark borrowing rates partially offset by a decrease in average debt outstanding.
Provision for income taxes
The provision for income taxes was $10.7 million for 2023, reflecting an effective tax rate of 42%. The 2023
provision primarily reflects income taxes associated with our international operations, including the impact from the
geographic composition of our earnings, and was unfavorably impacted by losses in certain international jurisdictions in which
we are unable to recognize a related tax benefit, partially offset by the benefit associated with a partial valuation allowance
release to recognize a portion of previously unbenefited U.S. net operating losses. The provision for income taxes was $4.4
million for 2022, which included an income tax benefit of $3.1 million related to the restructuring of certain subsidiary legal
entities within Europe, as the undistributed earnings for an international subsidiary are no longer subject to certain taxes upon
future distribution. The 2022 provision for income taxes primarily reflects the impact from the geographic composition of our
earnings and was unfavorably impacted as we are unable to recognize a tax benefit related to the $37.3 million in total
impairment charges.
29
Operating Segment Results
Summarized financial information for our reportable segments is shown in the following table (net of inter-segment
transfers):
(In thousands)
Revenues
Fluids Systems
Industrial Solutions
Industrial Blending
Total revenues
Operating income (loss)
Fluids Systems
Industrial Solutions
Industrial Blending
Corporate office
Total operating income (loss)
Segment operating margin
Fluids Systems
Industrial Solutions
Fluids Systems
Revenues
Year Ended December 31,
2023 vs 2022
2023
2022
$
%
(13) %
8 %
— %
(8) %
$
$
$
$
541,952
207,648
—
749,600
11,857
53,008
—
(31,235)
33,630
$
$
$
$
622,601
192,993
—
815,594
(15,566)
43,899
(8,002)
(29,365)
(9,034)
$
$
$
$
(80,649)
14,655
—
(65,994)
27,423
9,109
8,002
(1,870)
42,664
2.2 %
25.5 %
(2.5) %
22.7 %
Total revenues for this segment consisted of the following:
(In thousands)
United States
Canada
Total North America
EMEA
Other
Total International
Year Ended December 31,
2023 vs 2022
2023
2022
$
215,410 $
68,143
283,553
355,435 $
61,069
416,504
238,479
19,920
258,399
185,298
20,799
206,097
$
(140,025)
7,074
(132,951)
53,181
(879)
52,302
%
(39) %
12 %
(32) %
29 %
(4) %
25 %
Total Fluids Systems revenues
$
541,952 $
622,601 $
(80,649)
(13) %
North America revenues decreased 32% to $283.6 million for 2023, compared to $416.5 million for 2022, primarily
related to the divested business units as well as a decline in U.S. land activity. For 2022, U.S. revenues included $56.0 million
from the U.S. mineral grinding business and $26.7 million from offshore Gulf of Mexico, which were exited in 2022. Revenues
from U.S. land decreased $57.3 million, primarily as a result of lower market share and reduced market activity. In addition,
Canada revenues increased $7.1 million driven primarily by elevated product consumption per rig partially offset by a slight
decline in market share, which typically fluctuates based on customer mix and timing of projects.
International revenues increased 25% to $258.4 million for 2023, compared to $206.1 million for 2022. The increase
was primarily driven by higher customer activity and elevated product consumption per rig in Europe and Africa.
30
Operating income (loss)
The Fluids Systems segment generated operating income of $11.9 million for 2023 compared to an operating loss of
$15.6 million incurred for 2022. The Fluids Systems segment operating income for 2023 includes $12.7 million in total charges
for certain impairments, facility exit, severance costs, and transaction related expenses for the ongoing Fluids Systems segment
sale process. The Fluids Systems segment operating loss for 2022 included $29.4 million of total non-cash impairment charges,
as well as operating losses of $10.1 million related to the divested business units. Excluding these items, the $0.7 million
improvement in operating income primarily reflects the impact of the increase in revenues in EMEA and benefits of strategic
actions and cost reduction efforts in the U.S., substantially offset by the decrease in U.S. revenues.
Industrial Solutions
Revenues
Total revenues for this segment consisted of the following:
(In thousands)
Rental and service revenues
Product sales revenues
Total Industrial Solutions revenues
Year Ended December 31,
2023 vs 2022
2023
2022
$
%
$
$
149,954 $
134,301 $
57,694
58,692
207,648 $
192,993 $
15,653
(998)
14,655
12 %
(2) %
8 %
Rental and service revenues increased by 12% for 2023, primarily reflecting increases in rental volume and service
revenues, and was driven by our continued market penetration across all major industries served in the U.S. Product sales
revenues decreased slightly for 2023, with continued strong demand across sectors, including utilities. Product sales typically
fluctuate based on the timing of customer projects and orders.
Operating income
The Industrial Solutions segment generated operating income of $53.0 million for 2023 compared to $43.9 million for
2022, the increase being primarily attributable to incremental profitability associated with revenue growth, including the effects
of improved operating cost leverage from increased manufacturing, rental, and service activity.
Industrial Blending
As described above, the Industrial Blending operating loss for 2022 included a $7.9 million non-cash charge for the
impairment of the long-lived assets as well as exit and other costs related to the process to sell these assets, partially offset by a
$2.6 million gain subsequently recognized upon the eventual sale in the fourth quarter of 2022.
Corporate Office
Corporate office expenses increased to $31.2 million for 2023, compared to $29.4 million for 2022. Corporate office
expenses for 2023 includes approximately $2.9 million of expenses related to strategic planning projects, including $1.2
million of transaction related expenses for the ongoing Fluids Systems segment sale process, as well as $1.2 million of
severance costs, while 2022 included $1.1 million associated with shareholder matters and acquisition and divestiture efforts.
31
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Consolidated Results of Operations
Summarized results of operations for 2022 compared to 2021 are as follows:
(In thousands)
Revenues
Cost of revenues
Selling, general and administrative expenses
Other operating income, net
Impairments and other charges
Operating loss
Foreign currency exchange (gain) loss
Interest expense, net
Loss on extinguishment of debt
Loss before income taxes
Provision for income taxes
Net loss
Revenues
Year Ended December 31,
2022 vs 2021
2022
2021
$
815,594 $
614,781 $
694,058
97,618
(4,370)
37,322
529,552
94,445
(391)
—
(9,034)
(8,825)
389
7,040
—
(16,463)
(397)
8,805
1,000
(18,233)
$
200,813
164,506
3,173
(3,979)
37,322
(209)
786
(1,765)
(1,000)
1,770
4,371
(20,834) $
7,293
(25,526) $
$
(2,922)
4,692
%
33 %
31 %
3 %
NM
NM
(2) %
NM
(20) %
NM
10 %
NM
18 %
Revenues increased 33% to $815.6 million for 2022, compared to $614.8 million for 2021. This $200.8 million
increase includes a $146.2 million (32%) increase in revenues in North America, comprised of a $141.2 million increase in the
Fluids Systems segment and a $13.7 million increase in the Industrial Solutions segment, partially offset by a $8.8 million
decrease in the Industrial Blending segment, which we exited in 2022. Revenues from our North America operations increased
primarily due to the improvement in North America rig count, which favorably impacted our Fluids Systems segment, and an
increase in rental and service revenues in our Industrial Solutions segment. Revenues from our international operations
increased by $54.7 million (33%), as the prior year was unfavorably impacted by activity disruptions and project delays
resulting from the COVID-19 pandemic, partially offset by a $20.8 million decrease in revenues from currency exchange rate
changes resulting from the strengthening U.S. dollar. Consolidated revenues included $82.7 million of revenues from divested
business units for 2022, compared to $70.6 million for 2021. Additional information regarding the change in revenues is
provided within the Operating Segment Results below.
Cost of revenues
Cost of revenues increased 31% to $694.1 million for 2022, compared to $529.6 million for 2021. This $164.5 million
increase was primarily driven by the 33% increase in revenues described above. Consolidated cost of revenues included $90.7
million of cost of revenues from divested business units for 2022, compared to $73.1 million for 2021.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $3.2 million to $97.6 million for 2022, compared to $94.4
million for 2021. This increase was primarily driven by higher personnel expense, as well as higher legal and professional
expenses. Selling, general and administrative expenses as a percentage of revenues was 12.0% for 2022 compared to 15.4% for
2021. Consolidated selling, general and administrative expenses included $1.8 million of costs related to divested business
units for 2022, compared to $2.1 million for 2021.
32
Other operating income, net
Other operating income, net for 2022 includes $3.6 million of total gains on divestitures, including $2.6 million in the
Industrial Blending segment for the sale of the Conroe, Texas blending facility and $1.0 million in the Fluids Systems segment
for the Excalibar sale. See Note 2 for additional details. Other operating income, net for 2021 included gains associated with
sales of assets, along with insurance and a legal settlement in the Industrial Solutions segment, largely offset by a $2.6 million
charge associated with Hurricane Ida in August 2021 that caused damage to our Fourchon, Louisiana Fluids Systems operating
base.
Impairments and other charges
As described above, 2022 includes $29.4 million of total non-cash impairment charges related to the long-lived assets
and inventory associated with the exit of our Fluids Systems Gulf of Mexico operations, as well as a $7.9 million non-cash
impairment charge related to the exit of our Industrial Blending operations.
Foreign currency exchange
Foreign currency exchange was a $0.4 million loss for 2022 compared to a $0.4 million gain for 2021 and reflects the
impact of currency translation for assets and liabilities (including intercompany balances) that are denominated in currencies
other than functional currencies.
Interest expense, net
Interest expense was $7.0 million for 2022 compared to $8.8 million for 2021. Interest expense for 2022 and 2021
included $0.9 million and $3.7 million, respectively, in non-cash amortization of original issue discount and debt issuance
costs. The decrease in interest expense is primarily due to the 2021 repayment of our Convertible Notes using borrowings
under the ABL Facility, partially offset by the increase in benchmark borrowing rates as well as an increase in average debt
outstanding during 2022, in support of the higher working capital associated with the 33% revenue growth.
Loss on extinguishment of debt
In 2021, we repurchased $28.3 million, respectively, of our Convertible Notes in the open market for $28.1 million.
The $1.0 million loss for 2021 reflects the difference in the amount paid and the net carrying value of the extinguished debt,
including original issue discount and debt issuance costs.
Provision for income taxes
The provision for income taxes was $4.4 million for 2022, which includes an income tax benefit of $3.1 million
related to the restructuring of certain subsidiary legal entities within Europe, as the undistributed earnings for an international
subsidiary are no longer subject to certain taxes upon future distribution. The provision for income taxes in 2022 was
unfavorably impacted as we are unable to recognize a tax benefit related to the $37.3 million in total impairment charges. The
provision for income taxes was $7.3 million for 2021 despite reporting a pretax loss for the period. In both years, income tax
expense primarily reflects earnings from our international operations since we are unable to recognize the tax benefit from our
U.S. losses as they may not be realized.
33
Operating Segment Results
Summarized financial information for our reportable segments is shown in the following table (net of inter-segment
transfers):
(In thousands)
Revenues
Fluids Systems
Industrial Solutions
Industrial Blending
Total revenues
Operating income (loss)
Fluids Systems
Industrial Solutions
Industrial Blending
Corporate office
Total operating loss
Segment operating margin
Fluids Systems
Industrial Solutions
Industrial Blending
Fluids Systems
Revenues
Year Ended December 31,
2022 vs 2021
2022
2021
$
%
48 %
4 %
(100) %
33 %
$
$
$
$
622,601
192,993
—
815,594
(15,566)
43,899
(8,002)
(29,365)
(9,034)
$
$
$
$
420,789
185,171
8,821
614,781
(19,012)
42,117
(2,384)
(29,546)
(8,825)
$
$
$
$
201,812
7,822
(8,821)
200,813
3,446
1,782
(5,618)
181
(209)
(2.5) %
22.7 %
NM
(4.5) %
22.7 %
(27.0) %
Total revenues for this segment consisted of the following:
(In thousands)
United States
Canada
Total North America
EMEA
Other
Total International
Year Ended December 31,
2022 vs 2021
2022
2021
$
355,435 $
227,261 $
61,069
416,504
185,298
20,799
206,097
48,007
275,268
132,221
13,300
145,521
$
128,174
13,062
141,236
53,077
7,499
60,576
Total Fluids Systems revenues
$
622,601 $
420,789 $
201,812
%
56 %
27 %
51 %
40 %
56 %
42 %
48 %
North America revenues increased 51% to $416.5 million for 2022, compared to $275.3 million for 2021. The
increase includes a $126.7 million increase from U.S. land markets driven primarily by the 52% increase in U.S. rig count,
partially offset by lower market share, while offshore Gulf of Mexico increased $1.3 million. In addition, Canada revenues
increased $13.1 million driven primarily by the 34% increase in Canada rig count. For 2022, U.S. revenues included $328.4
million from land markets, including $56.0 million from the Excalibar business, and $26.7 million from offshore Gulf of
Mexico. For 2021, U.S. revenues included $201.9 million from land markets, including $36.4 million from the Excalibar
business, and $25.4 million from offshore Gulf of Mexico.
Internationally, revenues increased 42% to $206.1 million for 2022, compared to $145.5 million for 2021. The
increase was primarily driven by higher activity in Europe, Africa, and the Asia Pacific region following a significant impact in
2021 from the COVID-19 pandemic, as described above, partially offset by a $19.3 million decrease in revenues from currency
exchange rate changes.
34
Operating loss
The Fluids Systems segment incurred an operating loss of $15.6 million for 2022, which includes $29.4 million of
total non-cash impairment charges, compared to a $19.0 million operating loss incurred in 2021. The Fluids Systems segment
operating loss for 2022 includes $1.4 million of charges primarily related to facility exit and severance costs, and the operating
loss for 2021 included $5.5 million of charges primarily related to self-insured costs associated with Hurricane Ida damage to
our Fourchon, Louisiana Fluids Systems operating base, facility exit, and severance costs. The change in operating loss
includes a $33.3 million improvement from North America land markets (reflecting an incremental margin of 24%) along with
a $6.9 million improvement from international operations (reflecting an incremental margin of 11%), driven primarily by the
revenue improvement described above, partially offset by a $36.5 million decline for the Gulf of Mexico (including
impairments). The international operating results reflect the impact of inflationary cost pressures from certain international
contracts in which customer pricing is fixed.
Industrial Solutions
Revenues
Total revenues for this segment consisted of the following:
(In thousands)
Product sales revenues
Rental and service revenues
Total Industrial Solutions revenues
Year Ended December 31,
2022 vs 2021
2022
2021
$
%
$
$
58,692 $
66,796 $
134,301
118,375
192,993 $
185,171 $
(8,104)
15,926
7,822
(12) %
13 %
4 %
Revenues from product sales decreased by $8.1 million from 2021, as 2021 was favorably impacted by pent-up
customer demand following the delays in purchases and project execution associated with the COVID-19 pandemic. Rental and
service revenues increased by 13% from 2021, as continued market penetration of the power transmission sector in the U.S.
was partially offset by lower activity in the U.K.
Operating income
The Industrial Solutions segment generated operating income of $43.9 million for 2022 compared to $42.1 million
for 2021. The 2021 operating results included a $1.0 million gain associated with a legal settlement. The remaining $2.8
million increase is primarily attributable to the growth in revenues described above, partially offset by the effects of lower
average pricing associated with large scale rental projects.
Industrial Blending
We completed the wind down of the Industrial Blending business and the sale of the associated warehouse facility and
related equipment in 2022, as described above. The operating loss for 2022 includes a $7.9 million non-cash charge for the
impairment of the long-lived assets as well as exit and other costs related to the process to sell these assets, partially offset by a
$2.6 million gain subsequently recognized upon the eventual sale in the fourth quarter of 2022.
Corporate Office
Corporate office expenses decreased slightly to $29.4 million for 2022 compared to $29.5 million for 2021. This
decrease was primarily driven by lower stock-based compensation expense partially offset by higher performance-based
incentives and personnel expense.
35
Liquidity and Capital Resources
Net cash provided by operating activities was $100.0 million for 2023 compared to net cash used in operating
activities of $25.0 million for 2022. During 2023, net income adjusted for non-cash items provided cash of $57.2 million and
changes in working capital provided cash of $42.8 million. The cash provided by reductions in work working capital was
primarily driven by Fluids Systems segment reductions in U.S. land, along with the wind down of retained working capital
associated with the fourth quarter 2022 divestiture transactions.
Net cash used in investing activities was $5.7 million for 2023, including $29.2 million in capital expenditures
partially offset by $19.8 million in proceeds received related to our fourth quarter of 2022 divestitures (see Note 2 for
additional information), as well as $3.7 million in proceeds from the sale of assets, which includes the sale of used mats from
our Industrial Solutions rental fleet. The substantial majority of our capital expenditures were directed to expanding our
Industrial Solutions segment rental fleet. Net cash provided by investing activities was $46.2 million for 2022, which included
$71.3 million in proceeds from 2022 divestitures as well as $3.2 million in proceeds from the sale of assets, partially offset by
capital expenditures of $28.3 million.
Net cash used in financing activities was $81.0 million for 2023, which includes $47.4 million in net repayments on
our Amended ABL Facility and other financing arrangements and $32.0 million in share purchases under our repurchase
program. Net cash used in financing activities was $24.9 million for 2022, which included $17.6 million in share purchases
under our repurchase program.
Substantially all our $38.6 million of cash on hand at December 31, 2023 resides in our international subsidiaries. We
primarily manage our liquidity utilizing availability under our Amended ABL Facility and other existing financing
arrangements. Under our Amended ABL Facility, we manage daily cash requirements by utilizing borrowings or repayments
under this revolving credit facility, while maintaining minimal cash on hand in the U.S. As of February 22, 2024, our total
borrowing availability under the Amended ABL Facility was $116.8 million, of which $45.6 million was drawn and $4.0
million was used for outstanding letters of credit, resulting in remaining availability of $67.2 million.
We expect total availability under the Amended ABL Facility to fluctuate directionally based on the level of eligible
U.S. accounts receivable, inventory, and composite mats included in the rental fleet. We expect the projected availability under
our Amended ABL Facility and other existing financing arrangements, cash generated by operations, and available cash on-
hand in our international subsidiaries to be adequate to fund our current operations during the next 12 months.
We anticipate that our near-term working capital requirements for our operations will generally fluctuate directionally
with revenues. We expect capital expenditures in 2024 will remain fairly in line with 2023 levels, with spending heavily
focused on the expansion of our mat rental fleet. We also expect to return value to our shareholders, utilizing excess cash
generation to fund additional share repurchases. In addition, if we are successful in completing the process to substantially exit
the Fluids Systems business, we anticipate the proceeds to be used to repay a substantial portion of our existing outstanding
debt and increase our cash on-hand, providing additional liquidity to fund our long-term strategic initiatives.
Our capitalization is as follows:
(In thousands)
Amended ABL Facility
Other debt
Unamortized discount and debt issuance costs
Total debt
Stockholders’ equity
Total capitalization
December 31, 2023 December 31, 2022
$
$
45,000
30,093
(60)
75,033
415,364
490,397
$
$
80,300
33,949
(134)
114,115
423,028
537,143
$
$
Total debt to capitalization
15.3%
21.2%
Asset-Based Loan Facility. In October 2017, we entered into a U.S. asset-based revolving credit agreement, which
was amended in March 2019 and amended and restated in May 2022 (the “Amended ABL Facility”). The Amended ABL
Facility provides financing of up to $175.0 million available for borrowings (inclusive of letters of credit), which can be
increased up to $250.0 million, subject to certain conditions. The Amended ABL Facility has a five-year term expiring May
2027, is based on a Bloomberg Short-Term Bank Yield Index (“BSBY”) pricing grid, and includes a mechanism to incorporate
a sustainability-linked pricing framework with the consent of the required lenders (as defined in the Amended ABL Facility).
36
As of December 31, 2023, our total availability under the Amended ABL Facility was $109.2 million, of which $45.0
million was drawn and $4.0 million was used for outstanding letters of credit, resulting in remaining availability of $60.2
million.
Borrowing availability under the Amended ABL Facility is calculated based on eligible U.S. accounts receivable,
inventory and composite mats included in the rental fleet, net of reserves and subject to limits on certain of the assets included
in the borrowing base calculation. To the extent pledged by the borrowers, the borrowing base calculation also includes the
amount of eligible pledged cash. The administrative agent may establish reserves in accordance with the Amended ABL
Facility, in part based on appraisals of the asset base, and other limits in its discretion, which could reduce the amounts
otherwise available under the Amended ABL Facility.
Under the terms of the Amended ABL Facility, we may elect to borrow at a variable interest rate based on either, (1)
the BSBY rate (subject to a floor of zero) or (2) the base rate (subject to a floor of zero), equal to the highest of (a) the federal
funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) BSBY for a one-month interest period plus 1.00%,
plus, in each case, an applicable margin per annum. The applicable margin ranges from 1.50% to 2.00% per annum for BSBY
borrowings, and 0.50% to 1.00% per annum for base rate borrowings, based on the consolidated leverage ratio (as defined in
the Amended ABL Facility) as of the last day of the most recent fiscal quarter. We are also required to pay a commitment fee
equal to (i) 0.375% per annum at any time the average daily unused portion of the commitments is greater than 50% and (ii)
0.25% per annum at any time the average daily unused portion of the commitments is less than 50%.
As of December 31, 2023, the applicable margin for borrowings under the Amended ABL Facility was 1.50% with
respect to BSBY borrowings and 0.50% with respect to base rate borrowings. As of December 31, 2023, the weighted average
interest rate for the Amended ABL Facility was 6.9% and the applicable commitment fee on the unused portion of the
Amended ABL Facility was 0.375% per annum.
The Amended ABL Facility is a senior secured obligation of the Company and certain of our U.S. subsidiaries
constituting borrowers thereunder, secured by a first priority lien on substantially all of the personal property and certain real
property of the borrowers, including a first priority lien on certain equity interests of direct or indirect domestic subsidiaries of
the borrowers and certain equity interests issued by certain foreign subsidiaries of the borrowers.
The Amended ABL Facility contains customary representations, warranties and covenants that, among other things,
and subject to certain specified circumstances and exceptions, restrict or limit the ability of the borrowers and certain of their
subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with
respect to capital stock and make other restricted payments, make prepayments on certain indebtedness, engage in mergers or
other fundamental changes, dispose of property, and change the nature of their business.
The Amended ABL Facility requires compliance with the following financial covenants: (i) a minimum fixed charge
coverage ratio of 1.00 to 1.00 for the most recently completed four fiscal quarters and (ii) while a leverage covenant trigger
period (as defined in the Amended ABL Facility) is in effect, a maximum consolidated leverage ratio of 4.00 to 1.00 as of the
last day of the most recently completed fiscal quarter.
The Amended ABL Facility includes customary events of default including non-payment of principal, interest or fees,
violation of covenants, inaccuracy of representations or warranties, cross-default to other material indebtedness, bankruptcy
and insolvency events, invalidity or impairment of security interests or invalidity of loan documents, certain ERISA events,
unsatisfied or unstayed judgments and change of control.
37
Other Financing Arrangements. Certain of our foreign subsidiaries maintain local credit arrangements consisting
primarily of lines of credit or overdraft facilities which are generally renewed on an annual basis. We utilize local financing
arrangements in our foreign operations in order to provide short-term local liquidity needs. In addition, in April 2022, a U.K.
subsidiary entered a £7.0 million term loan and a £2.0 million revolving credit facility. Both the term loan and revolving credit
facility mature in April 2025 and bear interest at a rate of Sterling Overnight Index Average plus a margin of 3.25% per year.
As of December 31, 2023, the interest rate for the U.K. facilities was 8.7%. The term loan is payable in quarterly installments
of £350,000 plus interest beginning June 2022 and a £2.8 million payment due at maturity. We also maintain finance leases
primarily related to transportation equipment.
In August 2021, we completed sale-leaseback transactions related to certain vehicles and other equipment for net
proceeds of approximately $7.9 million. The transactions have been accounted for as financing arrangements as they did not
qualify for sale accounting. As a result, the vehicles and other equipment continue to be reflected on our balance sheet in
property, plant and equipment, net. The financing arrangements have a weighted average annual interest rate of 5.4% and are
payable in monthly installments with varying maturities through October 2025.
Off-Balance Sheet Arrangements
We do not have any special purpose entities. At December 31, 2023, we had $39.8 million in outstanding letters of
credit, performance bonds, and other guarantees for which certain of the letters of credit are collateralized by $0.3 million in
restricted cash. We also enter into normal short-term operating leases for office and warehouse space, as well as certain
operating equipment. None of these off-balance sheet arrangements either has, or is expected to have, a material effect on our
financial statements.
Contractual Obligations
A summary of our outstanding contractual and other obligations and commitments at December 31, 2023 is as
follows:
(In thousands)
Amended ABL Facility
Other debt
Financing obligation (1)
Finance lease liabilities (1)
Operating lease liabilities (1)
Trade accounts payable and accrued
liabilities (2)
Other long-term liabilities (3)
Performance bond obligations
Letter of credit commitments
Total contractual obligations
2024
2025
— $
$
13,078
932
3,389
5,639
114,609
—
24,481
8,748
— $
4,010
157
3,097
4,051
—
1,689
4,160
—
2026
2027
— $ 45,000 $
—
—
2,656
3,628
—
—
1,134
3,236
2028
Thereafter
Total
— $
—
—
261
2,819
— $ 45,000
17,088
—
1,089
—
10,637
100
25,651
6,278
—
558
—
—
—
—
—
1,729
—
—
557
—
—
4,613
—
123
114,609
6,860
29,198
10,600
11,114 $ 260,732
$ 170,876 $ 17,164 $ 6,842 $ 51,099 $ 3,637 $
(1) Financing obligations, finance lease liabilities, and operating lease liabilities represent the undiscounted future
payments.
(2) Excludes the current portion of operating lease liabilities.
(3) Table does not allocate by year expected tax payments, asset retirement obligations, and uncertain tax positions due to
the inability to make reasonably reliable estimates of the timing of future cash settlements.
We anticipate that the obligations and commitments listed above that are due in less than one year will be paid from
the projected availability under our Amended ABL Facility and other existing financing arrangements, cash generated by
operations, and available cash on-hand in our international subsidiaries, subject to covenant compliance and certain restrictions
as further discussed above. The specific timing of settlement for certain long-term obligations cannot be reasonably estimated.
38
Critical Accounting Policies
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts
and disclosures. Significant estimates used in preparing our consolidated financial statements include estimated cash flows and
fair values used for impairments of long-lived assets, including goodwill and other intangibles, and valuation allowances for
deferred tax assets. See Note 1 in Item 8. “Financial Statements and Supplementary Data” for a discussion of the accounting
policies for each of these matters. Our estimates are based on historical experience and on our future expectations that we
believe to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from our current estimates and
those differences may be material.
We believe the critical accounting policies described below affect our more significant judgments and estimates used
in preparing the consolidated financial statements.
Impairment of Long-lived Assets
As of December 31, 2023, our consolidated balance sheet includes $195.3 million of property, plant and equipment
and $17.1 million of finite-lived intangible assets. We review property, plant and equipment, finite-lived intangible assets and
certain other assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. We assess recoverability based on the undiscounted future net cash flows expected from the use and eventual
disposition of such asset. Should the review indicate that the carrying value is not fully recoverable, the amount of impairment
loss is determined by comparing the carrying value to the estimated fair value.
Fluids Systems Operations
In June 2023, we announced that we engaged Lazard to assist us in a review of strategic alternatives for our Fluids
Systems division, and in September 2023, we launched a formal sale process for substantially all the Fluids Systems business
as part of this strategic review. As of December 31, 2023, the Fluids Systems business had approximately $227 million of net
assets, including $171 million of net working capital and $44 million of long-lived assets, as well as $38 million in cash and
$13 million of debt. While the sale process is ongoing, we considered fourth quarter 2023 developments in the sale process to
be a potential indicator of impairment that required us to complete an impairment evaluation. The ongoing Fluids sale process
did not meet the held for sale accounting criteria as of December 31, 2023, and as such, continued to be accounted for as held
for use. Accordingly, we completed the impairment evaluation for the geographic asset groups of the Fluids Systems business
and determined that the carrying value exceeded the estimated undiscounted future net cash flows for only the U.S. Land asset
group.
We estimated the fair value for the U.S. Land asset group as of December 31, 2023 based on the expected cash flows
to be generated from the anticipated use and eventual disposition of such asset group. We estimated the fair value of the long-
lived assets of the U.S. Land asset group, requiring us to recognize a $2.5 million impairment charge in the fourth quarter of
2023. As of December 31, 2023, the U.S. Land asset group had approximately $62 million of net assets, including $58 million
of net working capital and $11 million of long-lived assets, as well as $3 million of debt.
Estimating future net cash flows of the geographic asset groups of our Fluids Systems business, as well as the fair
value of the U.S. Land asset group and the long-lived assets within such group, required us to make judgments regarding the
likelihood of possible outcomes and cash flows of the ongoing sale process, future revenue and costs related to the assets
subject to review, and the use and eventual disposition of such assets. These judgments are uncertain in that they require
assumptions about the potential outcomes for the eventual disposition of the assets from the ongoing Fluids Systems sale
process, as well as forecasts for the demand for our products and services, future market conditions, and technological
development. Depending on the actual outcome of the Fluids Systems sale process, or changes in these assumptions, our
expectations regarding future net cash flows may change and a material impairment could result.
39
Conroe, Texas Blending Facility
In connection with the 2022 wind down of the Industrial Blending business and sales process associated with the
industrial blending and warehouse facility and related equipment as described above, we recognized a $7.9 million impairment
charge to impairments and other charges related to these long-lived assets in the second quarter of 2022, and subsequently
recognized a gain of $2.6 million upon the eventual sale in the fourth quarter of 2022.
Gulf of Mexico Operations
In the third quarter of 2022, our Board of Directors approved management’s plan to exit our Fluids Systems Gulf of
Mexico operations, including the potential sale of related assets. As a result of the plan to exit the Gulf of Mexico operations as
described above, we considered the third quarter of 2022 developments to be a potential indicator of impairment that required
us to complete an impairment evaluation. Accordingly, we estimated the fair value for our Gulf of Mexico assets as of
September 30, 2022 based on the expected cash flows to be generated from the anticipated transactions and determined that a
$21.5 million impairment charge for the third quarter of 2022 was required related to the long-lived assets. While there are
inherent uncertainties and management judgment in estimating the fair value of long-lived assets including the discount rate,
the estimated future cash flows for these assets primarily relate to the rental income from the agreement for a seven-year
sublease of our Fourchon, Louisiana drilling fluids shorebase and blending facility net of the lease payments for our existing
lease of such shorebase facility.
As of December 31, 2023, our consolidated balance sheet includes $47.3 million of goodwill, all of which relates to
the Industrial Solutions segment. Goodwill and other indefinite-lived intangible assets are tested for impairment annually as of
November 1, or more frequently, if indicators of impairment exist. As part of our annual goodwill review, we first perform a
qualitative assessment based on company performance and future business outlook to determine if indicators of impairment
exist. When there are qualitative indicators of impairment, we use an impairment test which includes a comparison of the
carrying value of net assets of our reporting units, including goodwill, with their estimated fair values, which we estimate using
a combination of a market multiple and discounted cash flow approach (classified within Level 3 of the fair value hierarchy). In
completing the annual evaluation during the fourth quarter of 2023, we determined that the fair value of the Industrial Solutions
reporting unit was significantly more than the net carrying value, and therefore, no impairment was required.
Income Taxes
We had total deferred tax assets of $77.3 million and $71.9 million at December 31, 2023 and 2022, respectively. A
valuation allowance must be established to offset a deferred tax asset if, based on available evidence, it is more likely than not
that some or all of the deferred tax asset will not be realized. We have considered future taxable income and tax planning
strategies in assessing the need for our valuation allowance. At December 31, 2023, we had a total valuation allowance of
$49.2 million, which includes a valuation allowance on $29.3 million of net operating loss carryforwards for certain U.S.
federal, state and foreign jurisdictions, as well as a valuation allowance of $13.0 million for foreign tax credits and research and
development credits. Changes in the expected future generation of qualifying taxable income within these jurisdictions or in the
realizability of other tax assets may result in an adjustment to the valuation allowance, which would be charged or credited to
income in the period this determination was made.
We file income tax returns in the U.S. and several non-U.S. jurisdictions and are subject to examination in the various
jurisdictions in which we file. We are no longer subject to income tax examinations for U.S. federal and substantially all state
jurisdictions for years prior to 2019 and for substantially all foreign jurisdictions for years prior to 2008.
We are under examination by various tax authorities in countries where we operate, and certain foreign jurisdictions
have challenged the amounts of taxes due for certain tax periods. These audits are in various stages of completion. We fully
cooperate with all audits but defend existing positions vigorously. We evaluate the potential exposure associated with various
filing positions and record a liability for uncertain tax positions as circumstances warrant. Although we believe all tax positions
are reasonable and properly reported in accordance with applicable tax laws and regulations in effect during the periods
involved, the final determination of tax audits and any related litigation could be materially different than that which is
reflected in historical income tax provisions and accruals.
New Accounting Pronouncements
See Note 1 in Item 8. “Financial Statements and Supplementary Data” for a discussion of new accounting
pronouncements.
40
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates and changes in foreign currency exchange rates. A
discussion of our primary market risk exposure in financial instruments is presented below.
Interest Rate Risk
At December 31, 2023, we had total principal amounts outstanding under financing arrangements of $75.1 million,
including $45.0 million of borrowings under our Amended ABL Facility, $7.8 million of borrowings under a U.K. term loan
and credit facility, and $4.3 million under certain other international credit facilities, which are subject to variable interest rates
as determined by the respective debt agreements. The weighted average interest rates at December 31, 2023 for the Amended
ABL Facility, U.K. debt, and other international credit facilities was 6.9%, 8.4%, and 8.6%, respectively. Based on the balance
of variable rate debt at December 31, 2023, a 100 basis-point increase in short-term interest rates would have increased annual
pre-tax interest expense by $0.6 million.
Foreign Currency Risk
Our principal foreign operations are conducted in certain areas of EMEA, Canada, and Asia Pacific. We have foreign
currency exchange risks associated with these operations, which are conducted principally in the foreign currency of the
jurisdictions in which we operate including European euros, Canadian dollars, Kuwaiti dinar, Algerian dinar, Romanian leu,
British pounds, and Australian dollars. Historically, we have not used off-balance sheet financial hedging instruments to
manage foreign currency risks when we enter into a transaction denominated in a currency other than our local currencies.
41
ITEM 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Newpark Resources, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Newpark Resources, Inc. and subsidiaries (the “Company”)
as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss),
stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes
(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally
accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 23, 2024, expressed an unqualified opinion on the Company’s internal control over
financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due
to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
42
Long-lived Assets – Review of Strategic Alternatives for Fluids Systems Business— Refer to Notes 2 and 4 to the financial
statements
Critical Audit Matter Description
The Company initiated a review of strategic alternatives for the long-term positioning of the Fluids Systems division in June
2023 and in September 2023 launched a formal sale process for substantially all the Fluids Systems business as part of this
strategic review. As part of this review, $2.5 million of total charges were recorded related to the impairment of certain long-
lived assets utilized in Fluids U.S. Land.
We identified impairment for Fluids U.S. Land as a critical audit matter due to the materiality of the long-lived assets balances,
high degree of auditor judgment, an increased level of effort when performing audit procedures to evaluate the reasonableness
of management’s assumptions in determining the future net cash flows, and an increased extent of effort, including the need to
involve fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the evaluation of the Company’s impairment analysis for long-lived assets within the Fluids
U.S. Land asset group included the following, among others:
•
•
•
•
Reviewed minutes from Board of Director meetings and made inquiries of business unit managers and executives
about the expected plans for sale of related assets.
Evaluated indicators of impairment by reviewing information received by management from interested third parties.
Evaluated the completeness and accuracy of the long-lived assets identified for impairment by comparing the listing of
assets evaluated by management in the fair value analysis to the listing of assets recorded in the Fluids U.S. Land asset
group.
Evaluated the reasonableness of key assumptions used by management in determining the undiscounted future net
cash flows.
• With the assistance of our fair value specialists, we tested the completeness and accuracy of the impairment charges
by comparing fair value of underlying assets to independent market data.
Our audit procedures also included testing the effectiveness of controls over the review of impairment indicators and
management’s long-lived asset impairment.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 23, 2024
We have served as the Company’s auditor since 2008.
43
Newpark Resources, Inc.
Consolidated Balance Sheets
December 31,
(In thousands, except share data)
ASSETS
Cash and cash equivalents
Receivables, net of allowance of $4,751 and $4,817, respectively
Inventories
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Operating lease assets
Goodwill
Other intangible assets, net
Deferred tax assets
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current debt
Accounts payable
Accrued liabilities
Total current liabilities
Long-term debt, less current portion
Noncurrent operating lease liabilities
Deferred tax liabilities
Other noncurrent liabilities
Total liabilities
Commitments and contingencies (Note 15)
Common stock, $0.01 par value (200,000,000 shares authorized and
111,669,464 and 111,451,999 shares issued, respectively)
Paid-in capital
Accumulated other comprehensive loss
Retained earnings
Treasury stock, at cost (26,471,738 and 21,751,232 shares, respectively)
Total stockholders’ equity
Total liabilities and stockholders’ equity
2023
2022
38,594 $
168,457
141,079
9,094
357,224
195,289
20,731
47,283
17,114
2,628
2,067
642,336 $
16,916 $
70,087
49,281
136,284
58,117
17,404
8,307
6,860
226,972
23,182
242,247
149,571
10,966
425,966
193,099
23,769
47,110
20,215
2,275
2,441
714,875
22,438
93,633
46,871
162,942
91,677
19,816
8,121
9,291
291,847
1,117
639,645
(62,839)
10,773
(173,332)
415,364
642,336 $
1,115
641,266
(67,186)
2,489
(154,656)
423,028
714,875
$
$
$
$
See Accompanying Notes to Consolidated Financial Statements
44
Newpark Resources, Inc.
Consolidated Statements of Operations
Years Ended December 31,
(In thousands, except per share data)
Revenues
Product sales revenues
Rental and service revenues
Total revenues
Cost of revenues
Cost of product sales revenues
Cost of rental and service revenues
Total cost of revenues
Selling, general and administrative expenses
Other operating (income) loss, net
Impairments and other charges
Operating income (loss)
Foreign currency exchange (gain) loss
Interest expense, net
Loss on extinguishment of debt
Income (loss) before income taxes
Provision (benefit) for income taxes
Net income (loss)
Net income (loss) per common share - basic
Net income (loss) per common share - diluted
2023
2022
2021
$
572,910 $
176,690
749,600
665,318 $
150,276
815,594
496,654
114,407
611,061
101,136
(2,583)
6,356
33,630
267
8,181
—
25,182
588,234
105,824
694,058
97,618
(4,370)
37,322
(9,034)
389
7,040
—
(16,463)
484,300
130,481
614,781
434,405
95,147
529,552
94,445
(391)
—
(8,825)
(397)
8,805
1,000
(18,233)
10,666
14,516 $
4,371
(20,834) $
7,293
(25,526)
0.17 $
0.16 $
(0.22) $
(0.22) $
(0.28)
(0.28)
$
$
$
See Accompanying Notes to Consolidated Financial Statements
45
Newpark Resources, Inc.
Consolidated Statements of Comprehensive Income (Loss)
Years Ended December 31,
(In thousands)
Net income (loss)
Foreign currency translation adjustments, net of tax benefit
(expense) of $(93), $1, $639
Recognition of Chile cumulative foreign currency translation losses
Comprehensive income (loss)
2023
2022
2021
$
14,516 $
(20,834) $
(25,526)
3,549
798
18,863 $
(5,706)
—
(26,540) $
(7,308)
—
(32,834)
$
See Accompanying Notes to Consolidated Financial Statements
46
Newpark Resources, Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands)
Common
Stock
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Treasury
Stock
Total
Balance at December 31, 2020
$
1,076 $ 627,031 $
(54,172) $ 50,937 $ (136,840) $ 488,032
Net loss
Employee stock options, restricted stock
and employee stock purchase plan
Stock-based compensation expense
Foreign currency translation, net of tax
—
17
—
—
—
(28)
7,926
—
—
(25,526)
—
(25,526)
—
—
(7,308)
(1,066)
—
—
339
—
—
(738)
7,926
(7,308)
Balance at December 31, 2021
1,093
634,929
(61,480)
24,345
(136,501) 462,386
Net loss
Employee stock options, restricted stock
and employee stock purchase plan
Stock-based compensation expense
Treasury shares purchased at cost
Foreign currency translation, net of tax
—
22
—
—
—
—
(20,834)
—
(20,834)
(524)
6,861
—
—
—
—
(5,706)
(1,022)
(537)
(2,061)
—
—
—
6,861
(17,618) (17,618)
—
(5,706)
Balance at December 31, 2022
1,115
641,266
(67,186)
2,489
(154,656) 423,028
Net income
Employee stock options, restricted stock
and employee stock purchase plan
Stock-based compensation expense
Treasury shares purchased at cost
Foreign currency translation, net of tax
Recognition of Chile cumulative foreign
currency translation losses
—
2
—
—
—
—
—
(8,259)
6,638
—
—
—
—
—
—
—
3,549
798
14,516
—
14,516
(6,232)
13,509
(980)
6,638
—
—
—
—
—
(32,185) (32,185)
—
—
3,549
798
Balance at December 31, 2023
$
1,117 $ 639,645 $
(62,839) $ 10,773 $ (173,332) $ 415,364
See Accompanying Notes to Consolidated Financial Statements
47
Newpark Resources, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31,
(In thousands)
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operations:
2023
2022
2021
$
14,516 $
(20,834) $
(25,526)
Impairments and other non-cash charges
Depreciation and amortization
Stock-based compensation expense
Provision for deferred income taxes
Credit loss expense
Gain on divestitures
Gain on sale of assets
Gain on insurance recovery
Loss on extinguishment of debt
Amortization of original issue discount and debt issuance costs
Change in assets and liabilities:
(Increase) decrease in receivables
(Increase) decrease in inventories
(Increase) decrease in other assets
Increase (decrease) in accounts payable
Increase in accrued liabilities and other
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Capital expenditures
Proceeds from divestitures
Business acquisitions, net of cash acquired
Proceeds from sale of property, plant and equipment
Proceeds from insurance property claim
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Borrowings on lines of credit
Payments on lines of credit
Purchases of Convertible Notes
Payment on Convertible Notes
Proceeds from term loan
Proceeds from financing obligation
Debt issuance costs
Purchases of treasury stock
Proceeds from employee stock plans
Other financing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
Cash, cash equivalents, and restricted cash at end of year
$
6,356
31,372
6,638
(482)
1,209
—
(2,904)
—
—
541
64,812
2,256
307
(25,065)
445
100,001
(29,232)
19,833
—
3,709
—
(5,690)
37,322
38,610
6,861
(3,384)
1,039
(3,596)
(2,809)
—
—
871
(42,452)
(46,909)
(855)
10,781
334
(25,021)
(28,273)
71,286
—
3,217
—
46,230
241,873
(277,591)
287,276
(290,886)
—
—
—
—
—
(34,265)
606
(11,670)
(81,047)
576
13,840
25,061
38,901 $
—
—
3,754
—
(1,499)
(20,248)
—
(3,327)
(24,930)
(707)
(4,428)
29,489
25,061 $
—
42,225
7,926
(1,209)
664
—
(7,182)
(849)
1,000
3,707
(61,283)
(10,336)
(726)
36,341
12,235
(3,013)
(21,793)
—
(13,434)
15,999
1,753
(17,475)
286,154
(208,575)
(28,137)
(38,567)
8,258
8,004
(295)
(1,448)
—
(3,986)
21,408
(1,779)
(859)
30,348
29,489
See Accompanying Notes to Consolidated Financial Statements
48
NEWPARK RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Summary of Significant Accounting Policies
Organization and Principles of Consolidation. Newpark Resources, Inc. was organized in 1932 as a Nevada
corporation. In 1991, we changed our state of incorporation to Delaware. The consolidated financial statements include our
company and our wholly-owned subsidiaries (the “Company,” “we,” “our,” or “us”). All intercompany transactions are
eliminated in consolidation.
We are a geographically diversified supplier providing environmentally-sensitive products, as well as rentals and
services to customers across multiple industries. We currently operate our business through two reportable segments: Fluids
Systems and Industrial Solutions. In addition, we had a third reportable segment, Industrial Blending, which was exited in
2022. We have reflected these three reportable segments for all periods presented in this Annual Report on Form 10-K.
•
•
•
Our Fluids Systems segment provides customized drilling and completion fluids products and related technical
services to oil and natural gas exploration and production (“E&P”) customers primarily in North America and Europe,
the Middle East and Africa (“EMEA”), as well as certain countries in Asia Pacific.
In the fourth quarter of 2022, we exited two of our Fluids Systems business units, including our U.S.-based mineral
grinding business as well as our Gulf of Mexico fluids operations. Additionally, in June 2023, we announced that we
engaged Lazard to assist us in a review of strategic alternatives for the long-term positioning of our Fluids Systems
division. See Note 2 for additional information.
Our Industrial Solutions segment provides temporary worksite access solutions, including the rental of our recyclable
composite matting systems, along with related site construction and services to customers in various markets including
power transmission, E&P, pipeline, renewable energy, petrochemical, construction and other industries, primarily in
the United States and United Kingdom. We also manufacture and sell our recyclable composite mats to customers
around the world, with power transmission being the primary end-market.
Our Industrial Blending segment began operations in 2020 and supported industrial end-markets, including the
production of disinfectants and industrial cleaning products. We completed the wind down of the Industrial Blending
business in the first quarter of 2022 and the sale of the industrial blending assets in the fourth quarter of 2022.
Use of Estimates and Market Risks. The preparation of financial statements in conformity with accounting principles
generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates. Significant estimates used in preparing our consolidated financial statements include, but are not limited to, the
following: estimated cash flows and fair values used for impairments of long-lived assets, including goodwill and other
intangibles, and valuation allowances for deferred tax assets.
Our Fluids Systems operating results remain dependent on oil and natural gas drilling activity levels in the markets we
serve and the nature of the drilling operations (including the depth and whether the wells are drilled vertically or horizontally),
which governs the revenue potential of each well. Drilling activity levels, in turn, depend on a variety of factors, including oil
and natural gas commodity pricing, inventory levels, product demand, and regulatory restrictions. Oil and natural gas prices
and activity are cyclical and volatile, and this market volatility has a significant impact on our operating results.
Cash Equivalents. All highly liquid investments with a remaining maturity of three months or less at the date of
acquisition are classified as cash equivalents.
Restricted Cash. Cash that is restricted as to withdrawal or usage is recognized as restricted cash and is included in
other current assets in the consolidated balance sheets.
Allowance for Credit Losses. Trade receivables are presented at the net amount expected to be collected. We estimate
the lifetime “expected credit loss” for such assets at inception, which generally results in the earlier recognition of allowances
for losses. Our allowance for credit losses reflects losses that are expected over the contractual life of the asset, and takes into
account historical loss experience, current and future economic conditions, and reasonable and supportable forecasts.
Inventories. Inventories are stated at the lower of cost (principally average cost) or net realizable value. Certain
conversion costs associated with the acquisition, production, blending, and storage of inventory in our Fluids Systems segment
as well as the manufacturing operations in the Industrial Solutions segment are capitalized as a component of the carrying value
of the inventory and expensed as a component of cost of revenues as the products are sold. Reserves for inventory obsolescence
49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
are determined based on the net realizable value of the inventory using factors such as our historical usage of inventory on-
hand, future expectations related to our customers’ needs, market conditions, and the development of new products.
Property, Plant and Equipment. Property, plant and equipment are recorded at cost. Additions and improvements that
extend the useful life of an asset are capitalized. We capitalize interest costs on significant capital projects. Maintenance and
repairs are expensed as incurred. Sales and disposals of property, plant and equipment are removed at carrying cost less
accumulated depreciation with any resulting gain or loss reflected in earnings.
Depreciation is provided on property, plant and equipment, including finance lease assets, primarily utilizing the
straight-line method over the following estimated useful service lives or lease term:
Computer hardware and office equipment
Computer software
Autos and light trucks
Furniture, fixtures, and trailers
Composite mats (rental fleet)
Machinery and heavy equipment
Owned buildings
Leasehold improvements
3-5 years
3-5 years
5-7 years
7-10 years
7-12 years
10-15 years
20-39 years
Lease term, including reasonably assured renewal periods
Goodwill and Other Intangible Assets. Goodwill represents the excess of the purchase price of acquisitions over the
fair value of the net identifiable assets acquired in business combinations. Goodwill and other intangible assets with indefinite
lives are not amortized. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s
estimated useful life or on a basis that reflects the pattern in which the economic benefits of the asset are realized. Any period
costs of maintaining intangible assets are expensed as incurred.
Impairment of Long-Lived Assets. Goodwill and other indefinite-lived intangible assets are tested for impairment
annually as of November 1, or more frequently, if indicators of impairment exist. As part of our annual goodwill review, we
first perform a qualitative assessment based on company performance and future business outlook to determine if indicators of
impairment exist. When there are qualitative indicators of impairment, we use an impairment test which includes a comparison
of the carrying value of net assets of our reporting units, including goodwill, with their estimated fair values, which we estimate
using a combination of a market multiple and discounted cash flow approach (classified within level 3 of the fair value
hierarchy). If the carrying value exceeds the estimated fair value, an impairment charge is recorded in the period in which such
review is performed. We identify our reporting units based on our analysis of several factors, including our operating segment
structure, evaluation of the economic characteristics of our geographic regions within each of our operating segments, and the
extent to which our business units share assets and other resources.
We review property, plant and equipment, finite-lived intangible assets and certain other assets for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We assess
recoverability based on the undiscounted future net cash flows expected from the use and eventual disposition of such asset.
Should the review indicate that the carrying value is not fully recoverable, the amount of impairment loss is determined by
comparing the carrying value to the estimated fair value.
Insurance. We maintain reserves for estimated future payments associated with our self-insured employee healthcare
programs, as well as the self-insured retention exposures under our general liability, auto liability, and workers compensation
insurance policies. Our reserves are determined based on historical experience under these programs, including estimated
development of known claims and estimated incurred-but-not-reported claims.
Treasury Stock. Treasury stock is carried at cost, which includes the entire cost of the acquired stock.
Revenue Recognition. The following provides a summary of our significant accounting policies for revenue
recognition.
Fluids Systems. Revenues for fluid system additive products and engineering services, when provided to customers in
the delivery of an integrated fluid system, are recognized as product sales revenues when utilized by the customer. Revenues
for formulated liquid systems are recognized as product sales revenues when utilized or lost downhole while drilling. Revenues
for equipment rentals and other services provided to customers that are ancillary to the fluid system product delivery are
recognized in rental and service revenues when the services are performed. For direct sales of fluid system products, revenues
are recognized when control passes to the customer, which is generally upon shipment of materials.
50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Industrial Solutions. Revenues for rentals and services are generated from both fixed-price and unit-priced contracts,
which are generally short-term in duration. The activities under these contracts include the installation and rental of matting
systems for a period of time and services such as access road construction, site planning and preparation, environmental
protection, erosion control, and site restoration services. Rental revenues are recognized over the rental term and service
revenues are recognized when the specified services are performed. Revenues from any subsequent extensions to the rental
agreements are recognized over the extension period. Revenues from the direct sale of products are recognized when control
passes to the customer, which is upon shipment or delivery, depending on the terms of the underlying sales contract.
For all segments, the amount of revenue we recognize for products sold and services performed reflects the
consideration to which we expect to be entitled in exchange for such goods or services, which generally reflects the amount we
have the right to invoice based on agreed upon unit rates. While billing requirements vary, many of our customer contracts
require that billings occur periodically or at the completion of specified activities, even though our performance and right to
consideration occurs throughout the contract. As such, we recognize revenue as performance is completed in the amount to
which we have the right to invoice. We do not disclose the value of our unsatisfied performance obligations for (i) contracts
with an original expected length of one year or less and (ii) contracts for which we recognize revenue for the amount to which
we have the right to invoice for products sold and services performed.
Shipping and handling costs are reflected in cost of revenues, and all reimbursements by customers of shipping and
handling costs are included in revenues.
Income Taxes. We provide for deferred taxes using an asset and liability approach by measuring deferred tax assets
and liabilities due to temporary differences existing at year end using currently enacted tax rates and laws that will be in effect
when the differences are expected to reverse. We reduce deferred tax assets by a valuation allowance when, based on our
estimates, it is more likely than not that a portion of those assets will not be realized in a future period. The estimates utilized in
recognition of deferred tax assets are subject to revision, either up or down, in future periods based on new facts or
circumstances. We present deferred tax assets and liabilities as noncurrent in the balance sheet based on an analysis of each
taxpaying component within a jurisdiction. We evaluate uncertain tax positions and record a liability as circumstances warrant.
Share-Based Compensation. Share-based compensation cost is measured at the grant date based on the fair value of
the award, net of an estimated forfeiture rate. We recognize these costs in the statement of operations using the straight-line
method over the vesting term.
Foreign Currency Translation. The functional currency for substantially all international subsidiaries is their
respective local currency. Financial statements for these international subsidiaries are translated into U.S. dollars using the
exchange rate at each balance sheet date for assets and liabilities and the average exchange rates in effect during the respective
period for revenues and expenses. Exchange rate adjustments resulting from translation of foreign currency financial statements
of our international subsidiaries are reflected in accumulated other comprehensive loss in stockholders’ equity until such time
that the international subsidiary is sold or liquidation is substantially complete, at which time the related accumulated
adjustments would be reclassified into income. Exchange rate adjustments resulting from foreign currency denominated
transactions are recorded in income. At December 31, 2023 and 2022, accumulated other comprehensive loss related to foreign
subsidiaries reflected in stockholders’ equity was $62.8 million and $67.2 million, respectively.
Fair Value Measurement. Fair value is measured as the price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants at a measurement date. We apply the following fair
value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the
hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
• Level 1: The use of quoted prices in active markets for identical financial instruments.
• Level 2: The use of quoted prices for similar instruments in active markets or quoted prices for identical or similar
instruments in markets that are not active or other inputs that are observable in the market or can be corroborated by
observable market data.
• Level 3: The use of significantly unobservable inputs that typically require the use of management’s estimates of
assumptions that market participants would use in pricing.
51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
New Accounting Pronouncements
Standards Not Yet Adopted
Segment Reporting. In November 2023, the Financial Accounting Standards Board (“FASB”) issued new guidance
which is intended to improve reportable segment disclosure requirements through enhanced disclosures. The amendments
require disclosure of significant segment expenses regularly provided to the chief operating decision maker (CODM) as well as
other segment items, extend certain annual disclosures to interim periods, clarify the applicability to single reportable segment
entities, permit more than one measure of profit or loss to be reported under certain conditions, and require disclosure of the
title and position of the CODM. This guidance will be effective for us for the year ended December 31, 2024. We are currently
evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.
Income Taxes: Improvements to Income Tax Disclosures. In December 2023, the FASB issued new guidance which
is intended to enhance the transparency and decision usefulness of income tax disclosures. This guidance will be effective for
us in the first quarter of 2025. We are currently evaluating the impact of the new guidance on our consolidated financial
statements and related disclosures.
Note 2 — Divestitures and Other Exit Activities
We regularly review our global portfolio of business activities. These reviews focus on evaluating changes in the
outlook for our served markets and customer priorities, while identifying opportunities for value-creating options in our
portfolio, and placing investment emphasis in markets where we generate strong returns and where we see greater long-term
viability and stability.
2023 Strategic Actions
The following strategic actions were taken in 2023.
Review of Strategic Alternatives for Fluids Systems Business
We initiated a review of strategic alternatives for the long-term positioning of the Fluids Systems division in June
2023, and in September 2023, we launched a formal sale process for substantially all the Fluids Systems business as part of this
strategic review. While the sale process is ongoing, we considered fourth quarter 2023 developments in the sale process to be a
potential indicator of impairment that required us to complete an impairment evaluation. The ongoing Fluids sale process did
not meet the held for sale accounting criteria as of December 31, 2023, and as such, continued to be accounted for as held for
use. Accordingly, we completed the impairment evaluation for the geographic asset groups of the Fluids Systems business and
determined that the carrying value exceeded the estimated undiscounted future net cash flows for only the U.S. Land asset
group.
We estimated the fair value for the U.S. Land asset group as of December 31, 2023 based on the expected cash flows
to be generated from the anticipated use and eventual disposition of such asset group. We estimated the fair value of the long-
lived assets of the U.S. Land asset group, requiring us to recognize a $2.5 million impairment charge in the fourth quarter of
2023. As of December 31, 2023, the U.S. Land asset group had approximately $62 million of net assets, including $58 million
of net working capital and $11 million of long-lived assets, as well as $3 million of debt.
Exit of Stimulation Chemicals Product Line
In 2023, we made the decision to exit the stimulation chemicals product line. The Fluids Systems segment operating
results for 2023 includes $1.6 million of total charges (included in impairments and other charges) for inventory write-downs to
reduce the carrying values of certain inventory related to the exit of our stimulation chemicals product line to their net
realizable value. As of December 31, 2023, we had $2.1 million of inventory remaining related to the stimulation chemicals
product line.
Exit of Offshore Australia Operations
In 2023, we made the decision to exit our offshore Australia operations. The Fluids Systems segment operating results
for 2023 includes $1.5 million of total charges (included in impairments and other charges) for inventory write-downs to
reduce the carrying values of certain inventory related to the exit of our offshore Australia operations to their net realizable
value as well as impairments related to the long-lived assets previously used in the now exited business.
Exit of Chile Operations
52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
In 2023, we completed our customer contract in Chile, and during the fourth quarter of 2023, we completed the
substantial liquidation of our Chile subsidiary and recognized an $0.8 million non-cash charge (included in impairments and
other charges) for the reclassification of cumulative foreign currency translation losses related to our subsidiary in Chile.
2022 Strategic Actions
The following strategic actions were taken in 2022.
Exit of Industrial Blending Segment and Sale of Conroe, Texas Blending Facility
In the first quarter of 2022, in consideration of broader strategic priorities and the timeline and efforts required to
further develop the industrial blending business, we exited our Industrial Blending operations. In November 2022, we
completed the sale of the industrial blending and warehouse facility and related equipment located in Conroe, Texas to a global
chemical provider, for cash proceeds of approximately $14 million. In connection with this divestiture, we recognized a
$7.9 million impairment charge related to these long-lived assets in the second quarter of 2022, and subsequently recognized a
gain of $2.6 million upon the eventual sale in the fourth quarter of 2022.
Sale of Excalibar U.S. Mineral Grinding Business
In November 2022, we completed the sale of substantially all the long-lived assets, inventory, and operations of our
Excalibar U.S. mineral grinding business (“Excalibar”), which was reported within our Fluids Systems segment, to Cimbar
Resources, INC. (“Cimbar”), and received cash proceeds (after purchase price adjustments) of approximately $51 million and
recognized a gain of $1.0 million. The Company retained certain assets and liabilities, including accounts receivable and
accounts payable. Such working capital provided approximately $10 million of cash generation in the fourth quarter of 2022
and approximately $6 million of additional cash generation in the first quarter of 2023. In connection with the sale, the
Company and Cimbar entered into a long-term barite supply agreement for certain regions of our U.S. drilling fluids business,
with an initial term of four years following the closing of the transaction.
Exit of Gulf of Mexico Operations
In the third quarter of 2022, our Board of Directors approved management’s plan to exit our Fluids Systems Gulf of
Mexico operations, including the potential sale of related assets. In December 2022, we completed the sale of substantially all
assets associated with our Gulf of Mexico completion fluids operations. Separately, we also entered a seven-year arrangement
to sublease our Fourchon, Louisiana drilling fluids shorebase and blending facility to a leading global energy services provider.
As part of this arrangement, substantially all of our Gulf of Mexico drilling fluids inventory has been sold to the lessee as
consumed. These transactions provided cash generation of approximately $6 million in the fourth quarter of 2022 and
approximately $28 million in 2023. Fluids Systems segment operating income for 2023 includes $4.8 million in charges related
to the exit of our Gulf of Mexico operations, which was substantially completed during the second quarter of 2023.
As a result of the plan to exit the Gulf of Mexico operations as described above, we considered the third quarter 2022
developments to be a potential indicator of impairment that required us to complete an impairment evaluation. Accordingly, we
estimated the fair value for our Gulf of Mexico assets as of September 30, 2022 based on the expected cash flows to be
generated from the anticipated transactions and determined that a $21.5 million impairment charge was required related to the
long-lived assets. We also recognized an $8.0 million charge to reduce the carrying value of inventory to their net realizable
value primarily based on the anticipated transactions. The total charges of $29.4 million were recorded to impairments and
other charges in the third quarter of 2022.
53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Total impairments and other charges are shown in the following table:
(In thousands)
Fluids U.S. Land - Long-lived assets impairment
Stimulation chemicals product line - Inventory write-downs
Australia - Inventory write-downs
Australia - Long-lived assets impairment
Chile exit - Recognition of cumulative foreign currency translation
losses
Industrial Blending - Long-lived assets impairment
Gulf of Mexico - Long-lived assets impairment
Gulf of Mexico - Inventory write-downs
Total impairments and other charges
$
Year Ended December 31,
2023
2022
2,485
1,576
1,058
439
798
—
—
—
6,356 $
—
—
—
—
—
7,905
21,461
7,956
37,322
Summarized operating results of the business units exited in 2022 (including impairments and other charges described
above) are shown in the following table:
(In thousands)
Revenues
Industrial Blending
Excalibar
Gulf of Mexico
Operating income (loss)
Industrial Blending
Excalibar
Gulf of Mexico
Year Ended December 31,
2022
2021
2023
$
$
$
$
— $
—
—
— $
— $
55,990
26,708
82,698 $
— $
—
(4,776)
(4,776) $
(8,002) $
3,665
(43,215)
(47,552) $
8,821
36,396
25,366
70,583
(2,384)
(277)
(6,753)
(9,414)
Summarized net assets related to the business units exited in 2022 are shown in the following table:
(In thousands)
Receivables, net
Inventories
Accounts payable
Accrued liabilities
Total net assets
December 31,
2022
$
$
27,798
5,805
(2,060)
(311)
31,232
The net assets remaining as of December 31, 2022 related to the retained working capital from the Excalibar sale and
the remaining Gulf of Mexico net assets. During 2023, we substantially settled the above net assets related to the now exited
Excalibar business and Gulf of Mexico operations.
54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Note 3 — Inventories
Inventories consisted of the following at December 31:
(In thousands)
Raw materials:
Fluids Systems
Industrial Solutions
Total raw materials
Blended fluids systems components
Finished goods — mats
Total inventories
2023
2022
$
$
104,227 $
4,232
108,459
18,246
14,374
141,079 $
110,623
3,966
114,589
29,244
5,738
149,571
Raw materials for the Fluids Systems segment consist primarily of chemicals and other additives that are consumed in
the production of our fluids systems. Raw materials for the Industrial Solutions segment consist primarily of resins, chemicals,
and other materials used to manufacture composite mats, as well as materials that are consumed in providing spill containment
and other services to our customers. Our blended fluids systems components consist of base fluids systems that have been
either mixed internally at our blending facilities or purchased from third-party vendors. These base fluids systems require raw
materials to be added, as needed to meet specified customer requirements.
The Fluids Systems segment operating results for 2023 includes $2.6 million of total charges for inventory write-
downs included in impairments and other charges (as described in Note 2).
Note 4 — Property, Plant and Equipment
Property, plant and equipment consisted of the following at December 31:
(In thousands)
Land
Buildings and improvements
Machinery and equipment
Computer hardware and software
Furniture and fixtures
Construction in progress
Less accumulated depreciation
Composite mats (rental fleet)
Less accumulated depreciation - composite mats
2023
2022
$
7,216 $
71,446
201,281
47,543
5,523
2,523
335,532
(237,573)
97,959
169,387
(72,057)
97,330
7,804
63,333
229,080
47,743
5,733
5,447
359,140
(248,844)
110,296
147,764
(64,961)
82,803
Property, plant and equipment, net
$
195,289 $
193,099
Depreciation expense was $28.0 million, $35.0 million, and $38.5 million in 2023, 2022 and 2021, respectively. The
Fluids Systems segment operating results for 2023 includes $2.9 million of total charges for long-lived assets impairments (as
described in Note 2).
55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Note 5 — Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill, all of which relates to the Industrial Solutions segment, are as follows:
(In thousands)
Balance at December 31, 2021
Effects of foreign currency
Balance at December 31, 2022
Effects of foreign currency
Balance at December 31, 2023
Industrial
Solutions
$
$
47,283
(173)
47,110
173
47,283
We completed the annual evaluation of the carrying value of our goodwill and other indefinite-lived intangible assets
as of November 1, 2023 and determined that the fair value was significantly more than the net carrying value, and therefore, no
impairment was required.
Other intangible assets consisted of the following:
December 31, 2023
December 31, 2022
(In thousands)
Technology related
Customer related
Permits and licenses
Total intangible assets
Gross
Carrying
Amount
$ 17,794 $
23,898
482
$ 42,174 $
Accumulated
Amortization
Other
Intangible
Assets,
Net
Gross
Carrying
Amount
Accumulated
Amortization
Other
Intangible
Assets,
Net
(9,128) $
(15,769)
(163)
8,666 $ 17,806 $
8,129
319
(25,060) $ 17,114 $ 53,541 $
35,253
482
(8,204) $
(25,122)
9,602
10,131
482
(33,326) $ 20,215
—
Total amortization expense related to other intangible assets was $3.4 million, $3.6 million and $3.7 million in 2023, 2022 and
2021, respectively. The decrease in the gross carrying amount of intangible assets in 2023 was attributable to a write-off of
fully amortized balances.
Estimated future amortization expense for the years ended December 31 is as follows:
(In thousands)
Technology related
Customer related
Permits and licenses
2024
2025
2026
2027
2028
Thereafter
Total
$ 1,050 $ 1,035 $ 1,034 $ 1,019 $
944 $
3,584 $ 8,666
1,798
160
1,535
159
1,268
1,009
—
—
766
—
1,753
—
8,129
319
Total future amortization expense
$ 3,008 $ 2,729 $ 2,302 $ 2,028 $ 1,710 $
5,337 $ 17,114
The weighted average amortization period for technology related, customer related, and permits and licenses
intangible assets is 15 years, 13 years, and 3 years, respectively.
56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Note 6 — Financing Arrangements
Financing arrangements consisted of the following:
December 31, 2023
Unamortized
Discount and
Debt Issuance
Costs
Principal
Amount
Total Debt
Principal
Amount
December 31, 2022
Unamortized
Discount and
Debt Issuance
Costs
Total Debt
(In thousands)
Amended ABL Facility
$
45,000 $
— $
45,000 $
80,300 $
— $
Foreign subsidiary facilities
11,394
Finance leases
U.K. term loan
Other debt
Total debt
9,899
5,793
3,007
75,093
Less: current portion
(16,916)
—
—
(49)
(11)
(60)
—
11,394
16,081
9,899
5,744
2,996
4,999
7,201
5,668
—
—
(99)
(35)
80,300
16,081
4,999
7,102
5,633
75,033
114,249
(134)
114,115
(16,916)
(22,438)
—
(22,438)
Long-term debt
$
58,177 $
(60) $
58,117 $
91,811 $
(134) $
91,677
Asset-Based Loan Facility. In October 2017, we entered into a U.S. asset-based revolving credit agreement, which
was amended in March 2019 and amended and restated in May 2022 (the “Amended ABL Facility”). The Amended ABL
Facility provides financing of up to $175.0 million available for borrowings (inclusive of letters of credit), which can be
increased up to $250.0 million, subject to certain conditions. The Amended ABL Facility has a five-year term expiring May
2027, is based on a Bloomberg Short-Term Bank Yield Index (“BSBY”) pricing grid, and includes a mechanism to incorporate
a sustainability-linked pricing framework with the consent of the required lenders (as defined in the Amended ABL Facility).
As of December 31, 2023, our total availability under the Amended ABL Facility was $109.2 million, of which $45.0
million was drawn and $4.0 million was used for outstanding letters of credit, resulting in remaining availability of $60.2
million.
Borrowing availability under the Amended ABL Facility is calculated based on eligible U.S. accounts receivable,
inventory and composite mats included in the rental fleet, net of reserves and subject to limits on certain of the assets included
in the borrowing base calculation. To the extent pledged by the borrowers, the borrowing base calculation also includes the
amount of eligible pledged cash. The administrative agent may establish reserves in accordance with the Amended ABL
Facility, in part based on appraisals of the asset base, and other limits in its discretion, which could reduce the amounts
otherwise available under the Amended ABL Facility.
Under the terms of the Amended ABL Facility, we may elect to borrow at a variable interest rate based on either, (1)
the BSBY rate (subject to a floor of zero) or (2) the base rate (subject to a floor of zero), equal to the highest of (a) the federal
funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) BSBY for a one-month interest period plus 1.00%,
plus, in each case, an applicable margin per annum. The applicable margin ranges from 1.50% to 2.00% per annum for BSBY
borrowings, and 0.50% to 1.00% per annum for base rate borrowings, based on the consolidated leverage ratio (as defined in
the Amended ABL Facility) as of the last day of the most recent fiscal quarter. We are also required to pay a commitment fee
equal to (i) 0.375% per annum at any time the average daily unused portion of the commitments is greater than 50% and (ii)
0.25% per annum at any time the average daily unused portion of the commitments is less than 50%.
As of December 31, 2023, the applicable margin for borrowings under the Amended ABL Facility was 1.50% with
respect to BSBY borrowings and 0.50% with respect to base rate borrowings. As of December 31, 2023, the weighted average
interest rate for the Amended ABL Facility was 6.9% and the applicable commitment fee on the unused portion of the
Amended ABL Facility was 0.375% per annum.
The Amended ABL Facility is a senior secured obligation of the Company and certain of our U.S. subsidiaries
constituting borrowers thereunder, secured by a first priority lien on substantially all of the personal property and certain real
property of the borrowers, including a first priority lien on certain equity interests of direct or indirect domestic subsidiaries of
the borrowers and certain equity interests issued by certain foreign subsidiaries of the borrowers.
The Amended ABL Facility contains customary representations, warranties and covenants that, among other things,
and subject to certain specified circumstances and exceptions, restrict or limit the ability of the borrowers and certain of their
subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with
57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
respect to capital stock and make other restricted payments, make prepayments on certain indebtedness, engage in mergers or
other fundamental changes, dispose of property, and change the nature of their business.
The Amended ABL Facility requires compliance with the following financial covenants: (i) a minimum fixed charge
coverage ratio of 1.00 to 1.00 for the most recently completed four fiscal quarters and (ii) while a leverage covenant trigger
period (as defined in the Amended ABL Facility) is in effect, a maximum consolidated leverage ratio of 4.00 to 1.00 as of the
last day of the most recently completed fiscal quarter.
The Amended ABL Facility includes customary events of default including non-payment of principal, interest or fees,
violation of covenants, inaccuracy of representations or warranties, cross-default to other material indebtedness, bankruptcy
and insolvency events, invalidity or impairment of security interests or invalidity of loan documents, certain ERISA events,
unsatisfied or unstayed judgments and change of control.
Convertible Notes. In December 2016, we issued $100.0 million of unsecured convertible senior notes (the
“Convertible Notes”) which bore interest at a rate of 4.0% per year and matured in December 2021. A total of $38.6 million of
our Convertible Notes were repaid at maturity. During 2021, we repurchased $28.3 million of our Convertible Notes in the
open market for a total cost of $28.1 million and recognized a net loss of $1.0 million reflecting the difference in the amount
paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs.
Other Financing Arrangements. Certain of our foreign subsidiaries maintain local credit arrangements consisting
primarily of lines of credit or overdraft facilities which are generally renewed on an annual basis. We utilize local financing
arrangements in our foreign operations in order to provide short-term local liquidity needs. In addition, in April 2022, a U.K.
subsidiary entered a £7.0 million term loan and a £2.0 million revolving credit facility. Both the term loan and revolving credit
facility mature in April 2025 and bear interest at a rate of Sterling Overnight Index Average plus a margin of 3.25% per year.
As of December 31, 2023, the interest rate for the U.K. facilities was 8.7%. The term loan is payable in quarterly installments
of £350,000 plus interest beginning June 2022 and a £2.8 million payment due at maturity. We also maintain finance leases
primarily related to transportation equipment.
In August 2021, we completed sale-leaseback transactions related to certain vehicles and other equipment for net
proceeds of approximately $7.9 million. The transactions have been accounted for as financing arrangements as they did not
qualify for sale accounting. As a result, the vehicles and other equipment continue to be reflected on our balance sheet in
property, plant and equipment, net. The financing arrangements have a weighted average annual interest rate of 5.4% and are
payable in monthly installments with varying maturities through October 2025.
We incurred net interest expense of $8.2 million, $7.0 million and $8.8 million for the years ended December 31,
2023, 2022 and 2021, respectively. There was no capitalized interest for the years ended December 31, 2023, 2022 or 2021. As
of December 31, 2023, we had scheduled repayments for financing arrangements of approximately $17 million in 2024,
$9 million in 2025, $3 million in 2026, and $46 million in 2027.
58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Note 7 — Fair Value of Financial Instruments and Concentrations of Credit Risk
Fair Value of Financial Instruments
Our financial instruments include cash and cash equivalents, receivables, payables, and debt. We believe the carrying
values of these instruments approximated their fair values at December 31, 2023 and 2022.
Concentrations of Credit Risk
Financial instruments that potentially subject us to significant concentrations of credit risk primarily consist of cash
and trade accounts receivable. At December 31, 2023, substantially all of our cash deposits were held by our international
subsidiaries in accounts at numerous financial institutions across the various regions in which we operate. As part of our
investment strategy, we perform periodic evaluations of the relative credit standing of these financial institutions.
Customer Revenue Concentration
We derive a significant portion of our revenues and profitability from companies in the energy industry, and more
specifically, customers in the E&P and utility sectors. Our E&P customer base consists primarily of mid-sized and international
oil companies as well as government-owned or government-controlled oil companies operating in the markets that we serve.
Our utility customer base consists primarily of power transmission service providers, as well as large regulated electrical utility
providers. For 2023, 2022 and 2021, revenues from our 20 largest customers represented approximately 42%, 38% and 39%,
respectively, of our consolidated revenues. For 2023, 2022 and 2021, no single customer accounted for more than 10% of our
consolidated revenues.
Receivables
Receivables consisted of the following at December 31:
(In thousands)
Trade receivables:
Gross trade receivables
Allowance for credit losses
Net trade receivables
Income tax receivables
Other receivables
Total receivables, net
2023
2022
$
$
164,292 $
(4,751)
159,541
2,984
5,932
168,457 $
227,762
(4,817)
222,945
2,697
16,605
242,247
The decrease in trade receivables in 2023 was primarily attributable to the decrease in Fluids Systems revenues in the
fourth quarter of 2023 compared to the fourth quarter of 2022, as well as collection of trade receivable amounts outstanding
related to our divestitures (as described in Note 2). Other receivables as of December 31, 2022 included $10.8 million for non-
trade receivables related to our divestitures. Other receivables also included $3.6 million and $3.5 million for value added,
goods and service taxes related to foreign jurisdictions as of December 31, 2023 and 2022, respectively.
Changes in our allowance for credit losses were as follows:
(In thousands)
Balance at beginning of year
Credit loss expense
Write-offs, net of recoveries
Balance at end of year
2023
2022
2021
$
$
4,817 $
1,209
(1,275)
4,751 $
4,587 $
1,039
(809)
4,817 $
5,024
664
(1,101)
4,587
59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Note 8 — Leases
We lease certain office space, warehouses, land, equipment, and an industrial facility. Our leases have remaining
terms ranging from 1 to 8 years with various extension and termination options. We consider these options in determining the
lease term used to establish our operating lease assets and liabilities. Lease agreements with lease and non-lease components
are accounted for as a single lease component. Leases with an initial term of 12 months or less are not recorded in the balance
sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
Leases in the consolidated balance sheets consisted of the following at December 31:
(In thousands)
Assets:
Operating
Finance
Total lease assets
Liabilities:
Current:
Operating
Finance
Noncurrent:
Operating
Finance
Total lease liabilities
Balance Sheet Classification
2023
2022
Operating lease assets
Property, plant and equipment, net
Accrued liabilities
Current debt
Noncurrent operating lease liabilities
Long-term debt, less current portion
$
$
$
$
$
20,731 $
9,275
30,006 $
4,759 $
2,926
17,404 $
6,973
32,062 $
23,769
4,462
28,231
5,587
1,537
19,816
3,462
30,402
Lease costs in the consolidated statements of operations were as follows:
(In thousands)
Operating lease expenses
Long-term operating leases expenses
Short-term operating leases expenses
Total operating lease expenses
Amortization of leased assets for finance leases
Sublease income
Total net lease cost
Year Ended December 31,
2022
2021
2023
$
$
$
$
$
7,269 $
16,111
23,380 $
8,265 $
19,062
27,327 $
2,483 $
909 $
(3,008) $
(407) $
10,227
14,180
24,407
386
—
22,855 $
27,829 $
24,793
Total operating lease expenses approximate cash paid during each period. Interest for finance leases is not material.
Operating lease expenses and amortization of leased assets for finance leases are included in either cost of revenues or selling,
general and administrative expenses. Interest for finance leases is included in interest expense, net. Sublease income is included
in either cost of revenues or other operating income.
60
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
The maturity of lease liabilities as of December 31, 2023 is as follows:
(In thousands)
2024
2025
2026
2027
2028
Thereafter
Total lease payments
Less: Interest
Operating
Leases
Finance
Leases
Total
$
5,639 $
3,389 $
4,051
3,628
3,236
2,819
6,278
25,651
3,488
3,097
2,656
1,134
261
100
10,637
738
9,028
7,148
6,284
4,370
3,080
6,378
36,288
4,226
32,062
Present value of lease liabilities
$
22,163 $
9,899 $
During 2023, we entered into $2.1 million and $7.5 million of new operating lease liabilities and finance lease
liabilities, respectively, in exchange for leased assets. During 2022, we entered into $4.8 million and $4.4 million of new
operating lease liabilities and finance lease liabilities, respectively, in exchange for leased assets.
Weighted-average remaining lease terms and the weighted average discount rates were the following at December 31:
Lease Term and Discount Rate
Weighted-average remaining lease term (years)
Operating leases
Finance leases
Weighted-average discount rate
Operating leases
Finance leases
Note 9 — Income Taxes
The provision (benefit) for income taxes was as follows:
(In thousands)
Current:
U.S. Federal
State
Foreign
Total current
Deferred:
U.S. Federal
State
Foreign
Total deferred
Total provision (benefit) for income taxes
$
61
December 31,
2023
6.0
3.4
4.8 %
7.8 %
Year Ended December 31,
2022
2021
2023
$
284 $
1,134
9,730
11,148
418
179
(1,079)
(482)
10,666 $
318 $
338
7,099
7,755
(3,204)
(142)
(38)
(3,384)
4,371 $
773
525
7,204
8,502
547
(545)
(1,211)
(1,209)
7,293
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Income (loss) before income taxes was as follows:
(In thousands)
U.S.
Foreign
Loss before income taxes
Year Ended December 31,
2022
2021
2023
$
$
(1,907) $
27,089
25,182 $
(38,001) $
21,538
(16,463) $
(36,250)
18,017
(18,233)
The effective income tax rate is reconciled to the statutory federal income tax rate as follows:
(In thousands)
Income tax expense (benefit) at federal statutory rate
Tax benefit on restructuring of certain subsidiary legal entities
Nondeductible executive compensation
Other nondeductible expenses
Stock-based compensation
Different rates on earnings of foreign operations
Dividend taxes on unremitted earnings
U.S. tax on foreign earnings
Research and development credits
Change in valuation allowance
State tax expense (benefit), net
Other items, net
Total provision (benefit) for income taxes
Year Ended December 31,
2022
2021
2023
$
$
5,288 $
—
1,171
455
(42)
812
561
1,121
(476)
589
591
596
10,666 $
(3,457) $
(3,111)
958
684
5
63
874
378
(649)
8,156
55
415
4,371 $
(3,829)
—
999
557
880
(115)
980
—
(1,093)
10,416
(1,302)
(200)
7,293
The provision for income taxes was $10.7 million for 2023 and primarily reflects income taxes associated with our
international operations, including the impact from the geographic composition of our earnings, and was unfavorably impacted
by losses in certain international jurisdictions in which we are unable to recognize a related tax benefit, partially offset by the
benefit associated with a partial valuation allowance release to recognize a portion of previously unbenefited U.S. net operating
losses. The provision for income taxes was $4.4 million for 2022, which includes an income tax benefit of $3.1 million related
to the restructuring of certain subsidiary legal entities within Europe, as the undistributed earnings for an international
subsidiary are no longer subject to certain taxes upon future distribution. The provision for income taxes in 2022 was
unfavorably impacted as we are unable to recognize a tax benefit related to the $37.3 million of impairment charges. The
provision for income taxes was $7.3 million for 2021, despite reporting a pretax loss for the period, and primarily reflects
earnings from our international operations since we were unable to recognize the tax benefit from our U.S. losses as they may
not be realized.
62
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Temporary differences and carryforwards which give rise to deferred tax assets and liabilities consisted of the
following at December 31:
(In thousands)
Deferred tax assets:
Net operating losses
Foreign tax credits
Accruals not currently deductible
Unrealized foreign exchange losses, net
Research and development credits
Stock-based compensation
Capitalized inventory costs
Capitalized research and development expenditures
Other
Total deferred tax assets
Valuation allowance
Total deferred tax assets, net of allowances
Deferred tax liabilities:
Accelerated depreciation and amortization
Tax on unremitted earnings
Other
Total deferred tax liabilities
Total net deferred tax liabilities
Noncurrent deferred tax assets
Noncurrent deferred tax liabilities
Net deferred tax liabilities
2023
2022
$
$
$
$
36,484 $
10,373
4,873
5,157
5,690
1,723
508
7,110
5,372
77,290
(49,197)
28,093
(27,071)
(6,208)
(493)
(33,772)
(5,679) $
2,628 $
(8,307)
(5,679) $
35,430
8,836
2,989
5,353
5,181
1,359
1,821
4,342
6,551
71,862
(47,280)
24,582
(24,099)
(5,656)
(673)
(30,428)
(5,846)
2,275
(8,121)
(5,846)
We have U.S. federal income tax net operating loss carryforwards (“NOLs”) of approximately $82.9 million available
to reduce future U.S. taxable income, which do not expire. We also have state NOLs of approximately $228.5 million available
to reduce future state taxable income, including approximately $167.5 million which do not expire and approximately $61.0
million which expire in varying amounts beginning in 2024 through 2043. Foreign NOLs of approximately $25.4 million are
available to reduce future taxable income, some of which expire beginning in 2024. Effective January 1, 2022, certain research
and development expenditures are now required under regulations enacted as part of the 2017 U.S. Tax Cuts and Jobs Act to be
capitalized and amortized over five years, resulting in a $7.1 million and $4.3 million deferred tax asset at December 31, 2023
and 2022, respectively.
The realization of our net deferred tax assets is dependent on our ability to generate taxable income in future periods.
At December 31, 2023 and 2022, we have recorded a valuation allowance in the amount of $49.2 million and $47.3 million,
respectively, primarily related to certain U.S. federal, state, and foreign NOL carryforwards, as well as for foreign tax credits
and research and development credits, which may not be realized.
We file income tax returns in the U.S. and several non-U.S. jurisdictions and are subject to examination in the various
jurisdictions in which we file. We are no longer subject to income tax examinations for U.S. federal and substantially all state
jurisdictions for years prior to 2019 and for substantially all foreign jurisdictions for years prior to 2008.
We are under examination by various tax authorities in countries where we operate, and certain foreign jurisdictions
have challenged the amounts of taxes due for certain tax periods. These audits are in various stages of completion. We fully
cooperate with all audits but defend existing positions vigorously. We evaluate the potential exposure associated with various
filing positions and record a liability for uncertain tax positions as circumstances warrant. Although we believe all tax positions
are reasonable and properly reported in accordance with applicable tax laws and regulations in effect during the periods
involved, the final determination of tax audits and any related litigation could be materially different than that which is
reflected in historical income tax provisions and accruals.
63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
A reconciliation of the beginning and ending provision for uncertain tax positions is as follows:
(In thousands)
Balance at January 1
Additions (reductions) for tax positions of prior years
Additions (reductions) for tax positions of current year
Reductions for settlements with tax authorities
Reductions for lapse of statute of limitations
Balance at December 31
2023
2022
2021
318 $
3
20
—
(94)
247 $
485 $
(8)
—
(93)
(66)
318 $
213
(6)
306
—
(28)
485
$
$
Approximately $0.2 million of unrecognized tax benefits at December 31, 2023, if recognized, would favorably
impact the effective tax rate.
We recognize accrued interest and penalties related to uncertain tax positions in operating expenses. The amount of
interest and penalties was immaterial for all periods presented.
64
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Note 10 — Capital Stock
Common Stock
Changes in outstanding common stock were as follows:
(In thousands of shares)
Outstanding, beginning of year
Shares issued for exercise of options
Shares issued for time vested restricted stock (net of forfeitures)
Shares issued for employee stock purchase plan
Outstanding, end of year
2023
2022
2021
111,452
109,331
107,588
—
129
88
111,669
—
1,918
203
111,452
—
1,368
375
109,331
Outstanding shares of common stock include shares held as treasury stock totaling 26,471,738, 21,751,232 and
16,981,147 as of December 31, 2023, 2022 and 2021, respectively.
Treasury Stock
Changes in treasury stock were as follows:
(In thousands of shares)
Outstanding, beginning of year
Shares purchased under our Repurchase Program
Shares purchased for employee stock options, restricted stock and
employee stock purchase plan
Shares reissued for employee stock options, restricted stock and employee
stock purchase plan
Outstanding, end of year
2023
2022
2021
21,751
6,523
16,981
4,438
16,781
—
577
592
419
(2,379)
26,472
(260)
21,751
(219)
16,981
During 2023, 2022 and 2021, we purchased shares surrendered in lieu of taxes upon vesting of restricted shares for an
aggregate cost of $2.2 million, $2.7 million and $1.4 million, respectively.
Repurchase Program
In November 2018, our Board of Directors authorized a securities repurchase program available for repurchases of
any combination of our common stock and our unsecured convertible senior notes, which matured in December 2021. In
February 2023, our Board of Directors approved certain changes to the repurchase program as well as additional capacity to
increase the total authorization then available to $50.0 million.
During 2023, we repurchased 6,522,797 shares of our common stock under our repurchase program for a total cost of
$31.9 million. During 2022, we repurchased 4,437,885 shares of our common stock under our repurchase program for a total
cost of $17.5 million.
As of December 31, 2023, we had $18.1 million of authorization remaining under the program. In February 2024, our
Board of Directors replaced the existing program with a new repurchase program for repurchases of common stock up to $50.0
million.
Our repurchase program is available to purchase outstanding shares of our common stock in the open market or as
otherwise determined by management, subject to certain limitations under the Amended ABL Facility and other factors. The
repurchase program has no specific term. Future repurchases are expected to be funded from operating cash flows, available
cash on hand, and borrowings under our Amended ABL Facility. As part of the share repurchase program, our management has
been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934.
65
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Preferred Stock
We are authorized to issue up to 1,000,000 shares of preferred stock, $0.01 par value. There were no outstanding
shares of preferred stock as of December 31, 2023, 2022 or 2021.
Note 11 — Earnings Per Share
The following table presents the reconciliation of the numerator and denominator for calculating net income (loss) per
share:
(In thousands, except per share data)
Numerator
Net income (loss) - basic and diluted
Year Ended December 31,
2022
2021
2023
$
14,516 $
(20,834) $
(25,526)
Denominator
Weighted average common shares outstanding - basic
Dilutive effect of stock options and restricted stock awards
Weighted average common shares outstanding - diluted
86,401
1,914
88,315
92,712
—
92,712
91,460
—
91,460
Net income (loss) per common share
Basic
Diluted
$
$
0.17 $
0.16 $
(0.22) $
(0.22) $
(0.28)
(0.28)
We excluded the following weighted-average potential shares from the calculations of diluted net income (loss) per
share during the applicable periods because their inclusion would have been anti-dilutive:
(In thousands)
Stock options and restricted stock awards
Year Ended December 31,
2023
2022
2021
785
5,545
5,754
For 2022 and 2021, we excluded all potentially dilutive stock options and restricted stock awards in calculating diluted
earnings per share as the effect was anti-dilutive due to the net loss incurred for these periods. For 2021, the Convertible Notes,
which matured in December 2021, did not impact the calculation of diluted earnings per share due to the net loss incurred for
the period.
Note 12 — Stock-Based Compensation and Other Benefit Plans
The following describes stockholder approved plans utilized by us for the issuance of stock-based awards.
2014 Non-Employee Directors’ Restricted Stock Plan
In May 2014, our stockholders approved the 2014 Non-Employee Directors’ Restricted Stock Plan (“2014 Director
Plan”) which authorizes grants of restricted stock to non-employee directors. Each restricted share granted to a non-employee
director vests in full on the earlier of the day prior to the next annual meeting of stockholders following the grant date or the
first anniversary of the grant. In May 2023, our stockholders approved an amendment increasing the number of shares
authorized for issuance from 1.4 million to 2.0 million shares. At December 31, 2023, 0.5 million shares remained available for
award under the 2014 Director Plan.
66
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
2015 Employee Equity Incentive Plan
In May 2015, our stockholders approved the 2015 Employee Equity Incentive Plan (“2015 Plan”) pursuant to which
the Compensation Committee of our Board of Directors (“Compensation Committee”) may grant to key employees, including
executive officers and other corporate and divisional employees, a variety of forms of equity-based compensation, including
options to purchase shares of common stock, shares of restricted common stock, restricted stock units, stock appreciation
rights, other stock-based awards, and performance-based awards. In May 2023, our stockholders approved an amendment
increasing the number of shares authorized for issuance from 15.3 million to 16.5 million shares. At December 31, 2023,
2.5 million shares remained available for award under the 2015 Plan.
In June 2017, our Board of Directors approved the Long-Term Cash Incentive Plan (“Cash Plan”), a sub-plan to the
2015 Plan, pursuant to which the Compensation Committee may grant time-based cash awards or performance-based cash
awards to key employees, including executive officers and other corporate and divisional employees, to provide an opportunity
for employees to receive a cash payment upon either completion of a service period or achievement of predetermined
performance criteria at the end of a performance period.
Activity under each of these programs is described below.
Stock Options
Stock options granted by the Compensation Committee are granted with a three-year vesting period and a term of ten
years. There have been no options granted since 2016.
The following table summarizes activity for our outstanding stock options for the year ended December 31, 2023:
Stock Options
Outstanding at beginning of period
Granted
Exercised
Expired or canceled
Outstanding at end of period
Vested or expected to vest at end of period
Options exercisable at end of period
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value
(In
thousands)
Shares
1,432,738 $
—
(140,460)
(231,745)
1,060,533 $
1,060,533 $
1,060,533 $
7.39
—
4.32
10.52
7.12
7.12
7.12
1.66 $
1,210
1.66 $
1.66 $
1,210
1,210
The total intrinsic value of options exercised was $0.4 million for the year ended December 31, 2023, and cash from
options exercised totaled $0.6 million. For the year ended December 31, 2023, we recognized tax benefits resulting from the
exercise of stock options totaling $0.1 million.
There was no compensation cost recognized for stock options during the years ended December 31, 2023, 2022, or
2021. There were no stock options exercised during 2022 or 2021.
Restricted Stock Awards and Units
Time-vested restricted stock awards and restricted stock units are periodically granted to key employees, including
grants for employment inducements, as well as to members of our Board of Directors. Employee awards provide for vesting
periods ranging from three to four years. Non-employee director grants vest in full on the earlier of the day prior to the next
annual meeting of stockholders following the grant date or the first anniversary of the grant. Upon vesting of these grants,
shares are issued to award recipients.
67
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
The following tables summarize the activity for our outstanding time-vested restricted stock awards (granted to our
Board of Directors) and restricted stock units (granted to employees) for the year ended December 31, 2023:
Nonvested Restricted Stock Awards (Time-Vesting)
Nonvested at January 1, 2023
Granted
Vested
Forfeited
Nonvested at December 31, 2023
Nonvested Restricted Stock Units (Time-Vesting)
Nonvested at January 1, 2023
Granted
Vested
Forfeited
Nonvested at December 31, 2023
Weighted-
Average
Grant Date
Fair Value
4.11
3.89
4.11
—
3.89
Weighted-
Average
Grant Date
Fair Value
3.50
3.89
3.27
3.65
3.82
Shares
260,339 $
200,516
(260,339)
—
200,516 $
Shares
4,379,277 $
1,732,151
(2,073,683)
(673,915)
3,363,830 $
Total compensation cost recognized for restricted stock awards and restricted stock units was $6.4 million, $6.7
million and $7.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. Total unrecognized
compensation cost at December 31, 2023 related to restricted stock awards and restricted stock units was approximately $8.8
million which is expected to be recognized over the next 1.8 years. During the years ended December 31, 2023, 2022 and 2021,
the total fair value of shares vested was $8.0 million, $9.4 million and $5.3 million, respectively. For the years ended
December 31, 2023, 2022 and 2021, we recognized tax benefits resulting from the vesting of restricted stock awards and units
of $1.8 million, $1.8 million and $1.1 million, respectively.
Cash-Based Awards
The Compensation Committee also approved the issuance of cash-based awards to certain executive officers during
2023, 2022 and 2021. The 2023 awards included a target value of $2.5 million of performance-based cash awards, the 2022
awards included a target value of $2.8 million of performance-based cash awards, and the 2021 awards included $1.4 million of
time-based cash awards and a target value of $3.0 million of performance-based cash awards. The cash payout for each award
ranges from 0% to 200% of target.
Of the $2.5 million aggregate target value of 2023 performance-based cash awards, $1.8 million will be settled based
on the relative ranking of our total shareholder return (“TSR”) as compared to the TSR of our designated peer group and
$0.7 million will be settled based on the consolidated return on net capital employed (“RONCE”), each measured over a three-
year performance period. TSR performance for the 2023 grants will be determined based upon the Company’s and peer group’s
average closing share price for the 30 calendar day period ending May 31, 2026, adjusted for dividends, as compared to the 30
calendar day period ending May 31, 2023. RONCE performance for the 2023 grants will be determined based upon the
Company’s average three-year RONCE performance for the fiscal years ending December 31, 2023, 2024 and 2025.
The 2022 and 2021 performance-based cash awards will be settled based on the relative ranking of our TSR as
compared to the TSR of our designated peer group over a three-year period ending May 31, 2025 and May 31, 2024,
respectively.
68
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
The performance-based cash awards are accrued as a liability award over the performance period based on the
estimated fair value. The fair value of the performance-based cash awards is remeasured each period using a Monte Carlo
valuation model with changes in fair value recognized in the consolidated statement of operations.
Total compensation cost recognized for cash-based awards was $3.8 million, $3.4 million and $3.9 million for the
years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023 and 2022, the total liability for cash-
based awards was $6.7 million and $6.5 million, respectively.
Defined Contribution Plan
Substantially all of our U.S. employees are covered by a defined contribution plan (“401(k) Plan”). Employees may
voluntarily contribute up to 50% of compensation, as defined in the 401(k) Plan. Participants’ contributions, up to 4% of
compensation, are matched 100% by us, and the participants’ contributions, from 5% to 6% of compensation, are matched 50%
by us. Effective January 1, 2023, Participant’s contributions up to 4% are matched 100% by us with contributions from 4% to
6% being matched 50%. In connection with the cost reduction programs implemented in early 2020, we temporarily eliminated
our 401(k) matching contribution beginning in April 2020 through March 2021. Under the 401(k) Plan, our cash contributions
were $3.2 million, $2.5 million and $2.2 million for 2023, 2022 and 2021, respectively.
Note 13 — Segment and Related Information
We currently operate our business through two reportable segments: Fluids Systems and Industrial Solutions. In
addition, we had a third reportable segment, Industrial Blending, which was exited in 2022. We have reflected these three
reportable segments for all periods presented in this Annual Report on Form 10-K. All intercompany revenues and related
profits have been eliminated.
•
•
•
Fluids Systems — Our Fluids Systems segment provides drilling and completion fluids products and related technical
services to customers for oil, natural gas, and geothermal projects primarily in North America and EMEA, as well as
certain countries in Asia Pacific.
Over the past few years, our primary focus within the Fluids Systems segment has been the transformation into a more
agile and simplified business focused on key markets, while monetizing assets in underperforming or sub-scale
markets and reducing our invested capital, particularly in the U.S. In the fourth quarter of 2022, we exited two of our
Fluids Systems business units, including our U.S.-based mineral grinding business as well as our Gulf of Mexico
fluids operations. In 2023, we exited our stimulation chemicals product line, certain operations for offshore Australia
and our Latin America operations in Chile. In June 2023, we announced that we engaged Lazard to assist us in a
review of strategic alternatives for the long-term positioning of our Fluids Systems division, and in September 2023,
we launched a formal sale process for substantially all the Fluids Systems business. See Note 2 for additional
information.
Industrial Solutions — Our Industrial Solutions segment provides temporary worksite access solutions, including the
rental of our recyclable composite matting systems, along with related site construction and services to customers in
various markets including power transmission, E&P, pipeline, renewable energy, petrochemical, construction and
other industries, primarily in the United States and United Kingdom. We also sell our manufactured recyclable
composite mats to customers around the world, with power transmission being the primary end-market.
Industrial Blending — Our Industrial Blending segment began operations in 2020 and supported industrial end-
markets, including the production of disinfectants and industrial cleaning products. We completed the wind down of
the Industrial Blending business in the first quarter of 2022 and the sale of the industrial blending and warehouse
facility and related equipment located in Conroe, Texas in the fourth quarter of 2022 (see Note 2 for additional
information).
69
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Summarized financial information for our reportable segments is shown in the following tables:
(In thousands)
Revenues
Fluids Systems
Industrial Solutions
Industrial Blending
Total revenues
Depreciation and amortization
Fluids Systems
Industrial Solutions
Industrial Blending
Corporate office
Total depreciation and amortization
Operating income (loss)
Fluids Systems
Industrial Solutions
Industrial Blending
Corporate office
Total operating income (loss)
Segment assets
Fluids Systems
Industrial Solutions
Industrial Blending
Corporate office
Total segment assets
Capital expenditures
Fluids Systems
Industrial Solutions
Industrial Blending
Corporate office
Total capital expenditures
Year Ended December 31,
2022
2021
2023
541,952 $
207,648
—
749,600 $
622,601 $
192,993
—
815,594 $
7,776 $
21,108
—
2,488
31,372 $
11,857 $
53,008
—
(31,235)
33,630 $
336,004 $
264,024
—
42,308
642,336 $
2,278 $
26,205
—
749
29,232 $
13,875 $
21,653
678
2,404
38,610 $
(15,566) $
43,899
(8,002)
(29,365)
(9,034) $
420,039 $
247,611
—
47,225
714,875 $
3,906 $
23,569
230
568
28,273 $
420,789
185,171
8,821
614,781
17,877
19,304
1,095
3,949
42,225
(19,012)
42,117
(2,384)
(29,546)
(8,825)
458,179
247,531
20,139
27,037
752,886
3,644
15,311
2,091
747
21,793
$
$
$
$
$
$
$
$
$
$
The change in Fluids Systems segment assets in 2023 primarily reflects a decrease in working capital, while the 2022
change reflects the impact of the Excalibar divestiture (see Note 2 for additional information) and the transfer of our Katy,
Texas technology center to the Corporate office, partially offset by an increase in working capital. The increase in Corporate
office segment assets in 2022 related to the transition of our Katy, Texas technology center from the Fluids Systems segment to
a multi-purpose facility housing both business headquarters and support personnel, as well as administrative offices for third-
party lessees.
70
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
Operating results for the Fluids Systems segment include the following charges. See Note 2 for additional information.
(In thousands)
Impairments and other charges
Fluids sale process transaction expenses
Facility exit costs and other
Severance costs
Kenedy, Texas facility fire (insurance recovery)
Gain on divestitures
Fourchon, Louisiana hurricane-related costs
$
Total Fluids Systems impairments and other charges
$
Year Ended December 31,
2022
2021
2023
6,356 $
619
4,594
1,172
—
—
—
12,741 $
29,417 $
—
1,000
398
—
(971)
—
29,844 $
—
—
2,399
1,329
(849)
—
2,596
5,475
Industrial Blending operating results for 2022 includes a $7.9 million non-cash impairment charge related to the long-
lived assets previously used in the now exited Industrial Blending business, as described in Note 2.
The following table presents further disaggregated revenues for the Fluids Systems segment:
(In thousands)
United States
Canada
Total North America
EMEA
Other
Total International
Year Ended December 31,
2022
2021
2023
$
215,410 $
68,143
283,553
355,435 $
61,069
416,504
238,479
19,920
258,399
185,298
20,799
206,097
227,261
48,007
275,268
132,221
13,300
145,521
Total Fluids Systems revenues
$
541,952 $
622,601 $
420,789
The following table presents further disaggregated revenues for the Industrial Solutions segment:
(In thousands)
Rental revenues
Service revenues
Product sales revenues
Total Industrial Solutions revenues
Year Ended December 31,
2022
2021
2023
$
83,400 $
66,554
57,694
75,616 $
58,685
58,692
68,455
49,920
66,796
$
207,648 $
192,993 $
185,171
71
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
NEWPARK RESOURCES, INC.
The following table sets forth geographic information for all of our operations. Revenues by geographic location are
determined based on the operating location from which services are rendered or products are sold. Long-lived assets include
property, plant and equipment and other long-term assets based on the country in which the assets are located.
(In thousands)
Revenues
United States
Canada
EMEA
Asia Pacific
Latin America
Total revenues
Long-lived assets
United States
Canada
EMEA
Asia Pacific
Latin America
Total long-lived assets
Year Ended December 31,
2022
2021
2023
$
$
$
$
409,496 $
68,143
252,041
18,086
1,834
749,600 $
249,216 $
1,043
30,367
1,812
46
282,484 $
535,335 $
61,069
198,391
15,722
5,077
815,594 $
250,196 $
1,215
32,487
2,392
344
286,634 $
402,246
48,007
151,228
7,629
5,671
614,781
318,839
1,209
38,923
2,712
375
362,058
For 2023, 2022 and 2021, no single customer accounted for more than 10% of our consolidated revenues.
Note 14 — Supplemental Cash Flow and Other Information
Supplemental disclosures to the statements of cash flows are presented below:
(in thousands)
Cash paid (received) for:
Income taxes (net of refunds)
Interest
2023
2022
2021
$
$
8,939 $
7,767 $
9,058 $
5,945 $
6,912
5,339
Cash, cash equivalents, and restricted cash in the consolidated statements of cash flows consisted of the following:
(in thousands)
Cash and cash equivalents
Restricted cash (included in other current assets)
Cash, cash equivalents, and restricted cash
2023
2022
2021
$
$
38,594 $
23,182 $
307
1,879
38,901 $
25,061 $
24,088
5,401
29,489
Accounts payable and accrued liabilities at December 31, 2023, 2022, and 2021, included accruals for capital
expenditures of $1.6 million, $1.1 million, and $0.7 million, respectively.
Accrued liabilities at December 31, 2023 and 2022 included accruals for employee incentives and other compensation
related expenses of $28.3 million and $25.2 million, respectively.
72
Note 15 — Commitments and Contingencies
In the ordinary course of conducting our business, we become involved in litigation and other claims from private
party actions, as well as judicial and administrative proceedings involving governmental authorities at the federal, state, and
local levels. While the outcome of litigation or other proceedings against us cannot be predicted with certainty, management
does not expect that any loss resulting from such litigation or other proceedings, in excess of any amounts accrued or covered
by insurance, will have a material adverse impact on our consolidated financial statements.
Other
We do not have any special purpose entities. At December 31, 2023, we had $39.8 million in outstanding letters of
credit, performance bonds, and other guarantees for which certain of the letters of credit are collateralized by $0.3 million in
restricted cash. We also enter into normal short-term operating leases for office and warehouse space, as well as certain
operating equipment. None of these off-balance sheet arrangements either had, or is expected to have, a material effect on our
financial statements.
We are self-insured for health claims, subject to certain “stop loss” insurance policies. Claims in excess of $250,000
per incident are insured by third-party insurers. Based on historical experience, we had accrued liabilities of $0.7 million for
unpaid claims incurred at both December 31, 2023 and 2022. Substantially all of these estimated claims are expected to be paid
within six months of their occurrence. In addition, we are self-insured for certain workers’ compensation, auto, and general
liability claims up to a certain policy limit. Claims in excess of $750,000 are insured by third-party reinsurers. Based on
historical experience, we had accrued liabilities of $1.7 million and $3.1 million for the uninsured portion of claims at
December 31, 2023 and 2022, respectively.
We also maintain accrued liabilities for asset retirement obligations, which represent obligations associated with the
retirement of tangible long-lived assets that result from the normal operation of the long-lived asset. Our asset retirement
obligations primarily relate to required expenditures associated with owned and leased facilities. Upon settlement of the
liability, a gain or loss for any difference between the settlement amount and the liability recorded is recognized. We had
accrued asset retirement obligations of $1.2 million and $1.2 million at December 31, 2023 and 2022, respectively.
73
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) as of the end of the period covered by this annual report. Based on such evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31,
2023, the end of the period covered by this annual report.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended
December 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
Management’s Report on Internal Control Over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Securities and Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control system over financial reporting is
designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Internal control over financial reporting has inherent limitations and may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only reasonable assurance, not absolute assurance with
respect to the financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of
internal control over financial reporting may vary over time.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we have
evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023 as required by the
Securities and Exchange Act of 1934 Rule 13a-15(c). In making our assessment, we have utilized the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in a report entitled “Internal Control —
Integrated Framework (2013).” We concluded that based on our evaluation, our internal control over financial reporting was
effective as of December 31, 2023.
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.
/s/ Matthew S. Lanigan
Matthew S. Lanigan
Chief Executive Officer
/s/ Gregg S. Piontek
Gregg S. Piontek
Senior Vice President and Chief Financial Officer
74
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Newpark Resources, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Newpark Resources, Inc. and subsidiaries (the “Company”) as
of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established
in Internal Control – Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our
report dated February 23, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 23, 2024
75
ITEM 9B. Other Information
Insider Trading Arrangements
During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated any Rule
10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
ITEM 10. Directors, Executive Officers and Corporate Governance
Executive Officers and Directors
PART III
The information required by this Item is incorporated by reference to the “Executive Officers” and “Election of
Directors” sections of the definitive Proxy Statement relating to our 2024 Annual Meeting of Stockholders.
Compliance with Section 16(a) of the Exchange Act
The information required by this Item, if applicable, is incorporated by reference to the “Delinquent Section 16(a)
Reports” section of the definitive Proxy Statement relating to our 2024 Annual Meeting of Stockholders.
Code of Conduct and Ethics
We have adopted a Code of Ethics for Senior Officers and Directors ("Code of Ethics") and a Code of Business Ethics
and Conduct (“Ethics Manual" and, together with the Code of Ethics, the "Codes”) that applies to all officers and employees.
The Code of Ethics and Ethics Manual are publicly available in the investor relations area of our website at
www.newpark.com. Any amendments to, or waivers of, the Codes with respect to our principal executive officer, principal
financial officer or principal accounting officer or controller, or persons performing similar functions, will be disclosed on our
website within four business days following the date of the amendment or waiver. Copies of our Code of Ethics may also be
requested in print by writing to Newpark Resources, Inc., 9320 Lakeside Blvd., Suite 100, The Woodlands, Texas, 77381.
ITEM 11. Executive Compensation
The information required by this Item is incorporated by reference to the “Executive Compensation” section of the
definitive Proxy Statement relating to our 2024 Annual Meeting of Stockholders.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated by reference to the “Ownership of Common Stock” and “Equity
Compensation Plan Information” sections of the definitive Proxy Statement relating to our 2024 Annual Meeting of
Stockholders.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is incorporated by reference to the “Related Person Transactions” and “Director
Independence” sections of the definitive Proxy Statement relating to our 2024 Annual Meeting of Stockholders.
ITEM 14. Principal Accountant Fees and Services
Our independent registered public accounting firm is Deloitte & Touche LLP, Houston, Texas, PCAOB ID No 34.
The information required by this Item is incorporated by reference to the “Independent Auditor” section of the
definitive Proxy Statement relating to our 2024 Annual Meeting of Stockholders.
76
ITEM 15. Exhibit and Financial Statement Schedules
PART IV
(a) List of documents filed as part of this Annual Report or incorporated herein by reference.
1. Financial Statements
The following financial statements of the Registrant as set forth under Part II, Item 8 of this Annual Report on Form
10-K on the pages indicated.
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
Page in this
Form 10-K
42
44
45
46
47
48
49
All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.
77
3. Exhibits
The exhibits listed are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4.1
4.2
†10.1
†10.2
†10.3
†10.4
†*10.5
†*10.6
†10.7
†10.8
†10.9
Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated by reference to Exhibit 3.1 to the
Company’s Form 10-K405 for the year ended December 31, 1998 filed on March 31, 1999 (SEC File No.
001-02960).
Certificate of Designation of Series A Cumulative Perpetual Preferred Stock of Newpark Resources, Inc.
incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 27, 1999
(SEC File No. 001-02960).
Certificate of Designation of Series B Convertible Preferred Stock of Newpark Resources, Inc., incorporated by
reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 7, 2000 (SEC File No.
001-02960).
Certificate of Rights and Preferences of Series C Convertible Preferred Stock of Newpark Resources, Inc.,
incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 4, 2001
(SEC File No. 001-02960).
Certificate of Designation, Preferences, and Rights of Series D Junior Participating Preferred Stock of the
Company, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May
28, 2020 (SEC File No. 001-02960).
Certificate of Elimination of the Series D Junior Participating Preferred Stock of Newpark Resources, Inc.,
incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 24, 2021
(SEC File No. 001-02960).
Certificate of Amendment to the Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated
by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 4, 2009 (SEC File
No. 001-02960).
Certificate of Amendment to the Restated Certificate of Incorporation of Newpark Resources, Inc., incorporated
by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed on July 29, 2016 (SEC File
No. 001-02960).
Amended and Restated Bylaws of Newpark Resources, Inc., effective November 15, 2022, incorporated by
reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on November 17, 2022 (SEC File
No. 001-02960).
Description of Common Stock of Newpark Resources, Inc., incorporated by reference to Exhibit 4.1 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 25, 2022 (SEC
File No. 001-02960).
Specimen form of common stock certificate of Newpark Resources, Inc., incorporated by reference to the exhibit
filed with the Company’s Registration Statement on Form S-1 (SEC File No. 33-40716).
Amended and Restated Employment Agreement effective March 1, 2022, between Newpark Resources, Inc. and
Matthew Lanigan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed
on March 4, 2022 (SEC File No. 001-02960).
Change in Control Agreement, dated as of April 22, 2016, between Newpark Resources, Inc. and Matthew S.
Lanigan, incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on July
29, 2016 (SEC File No. 001-02960).
Employment Agreement, dated as of October 18, 2011, between Newpark Resources, Inc. and Gregg S. Piontek,
incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 21,
2011 (SEC File No. 001-02960).
Amendment to Employment Agreement between Newpark Resources, Inc. and Gregg S. Piontek dated as of
February 16, 2016, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed
on February 18, 2016 (SEC File No. 001-02960).
Change in Control Agreement, dated as of January 7, 2008, between Newpark Resources, Inc. and Gregg Piontek.
Amendment to Change in Control Agreement, dated as of March 7, 2011, between Newpark Resources, Inc. and
Gregg Piontek.
Amendment to Employment Agreement and Change of Control Agreement dated as of April 6, 2020 between
Newpark Resources, Inc. and Gregg S. Piontek, incorporated by reference to Exhibit 10.2 to the Company's
Current Report on Form 8-K filed on April 8, 2020 (SEC File No. 001-02960).
Amendment to Employment Agreement and Change of Control Agreement dated May 19, 2021, between
Newpark Resources, Inc. and Gregg S. Piontek, incorporated by reference to Exhibit 10.2 to the Company's
Current Report on Form 8-K filed on May 24, 2021 (SEC File No. 001-02960).
Employment Agreement, dated as of October 11, 2019, between Newpark Resources, Inc. and David Paterson,
incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q filed on October 31,
2019 (SEC File No. 001-02960).
78
†10.10
†10.11
†10.12
†10.13
10.14
10.15
10.16
10.17
†10.18
†10.19
†10.20
†10.21
†10.22
†10.23
†10.24
†10.25
†10.26
†10.27
†10.28
†10.29
Change in Control Agreement, dated as of July 2, 2019, between Newpark Resources, Inc. and David Paterson,
incorporated by reference to Exhibit 10.5 of the Company's Current Report on Form 8-K filed on July 8, 2019
(SEC File No. 001-02960).
Amendment to Employment Agreement and Change in Control Agreement dated April 6, 2020 between Newpark
Resources, Inc. and David Paterson, incorporated by reference to Exhibit 10.3 to the Company's Current Report
on Form 8-K filed on April 8, 2020 (SEC File No. 001-02960).
Amendment to Employment Agreement and Change in Control Agreement dated May 19, 2021 between
Newpark Resources, Inc. and David Paterson, incorporated by reference to Exhibit 10.3 to the Company's Current
Report on Form 8-K filed on May 24, 2021 (SEC File No. 001-02960).
Retirement and Restrictive Covenant Agreement and General Release dated August 17, 2021, between Newpark
Resources, Inc. and Paul L. Howes, incorporated by reference to Exhibit 10.2 to the Company's Current Report on
Form 8-K filed on August 23, 2021 (SEC File No. 001-02960).
Form of Indemnification Agreement, incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report
on Form 10-Q filed on July 25, 2014 (SEC File No. 001-02960).
Indemnification Agreement, dated June 7, 2006, between the registrant and Paul L. Howes, incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 13, 2006 (SEC File No.
001-02960).
Amendment to the Indemnification Agreement between Newpark Resources, Inc. and Paul L. Howes dated
September 11, 2007, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed on September 14, 2007 (SEC File No. 001-02960).
Indemnification Agreement, dated October 26, 2011, between Gregg S. Piontek and Newpark Resources, Inc.,
incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 31,
2011 (SEC File No. 001-02960).
Newpark Resources, Inc. Amended and Restated Employee Stock Purchase Plan, incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2023 (SEC File No.
001-02960).
Amendment No. 1 to the Newpark Resources, Inc. Amended and Restated Employee Stock Purchase Plan,
incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed on August 2,
2023 (SEC File No. 001-02960).
Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated Effective June 10, 2009),
incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on August
14, 2009 (SEC File No. 333-161378).
Amendment No. 1 to the Newpark Resources, Inc. 2006 Equity Incentive Plan (As Amended and Restated
Effective June 10, 2009), incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on
Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).
Form of Non-Qualified Stock Option Agreement under the Newpark Resources, Inc. 2006 Equity Incentive Plan
(As Amended and Restated Effective June 10, 2009) (as amended), incorporated by reference to Exhibit 4.9 to the
Company’s Registration Statement on Form S-8 filed on June 9, 2011 (SEC File No. 333-174807).
Newpark Resources, Inc. 2010 Annual Cash Incentive Plan, incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on April 2, 2010 (SEC File No. 001-02960).
Newpark Resources, Inc. Amended and Restated 2014 Non-Employee Directors’ Restricted Stock Plan,
incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on August 2,
2023 (SEC File No. 001-02960).
Form of Non-Employee Director Restricted Stock Agreement under the Newpark Resources, Inc. 2014 Non-
Employee Directors’ Restricted Stock Plan, incorporated by reference to Exhibit 10.8 to the Company's Quarterly
Report on Form 10-Q filed on August 2, 2023 (SEC File No. 001-02960).
Newpark Resources, Inc. Second Amended and Restated 2015 Equity Incentive Plan, incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2023 (SEC File No.
001-02960).
Form of Restricted Stock Agreement (time vested) under the Newpark Resources, Inc. 2015 Employee Equity
Incentive Plan, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8
filed May 22, 2015 (SEC File No. 333-204403).
Form of Restricted Stock Unit Agreement (performance-based) under the Newpark Resources, Inc. 2015
Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.9 to the Company’s Registration
Statement on Form S-8 filed May 22, 2015 (SEC File No. 333-204403).
Form of Restricted Stock Unit Agreement (retirement eligible) under the Newpark Resources, Inc. 2015
Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.10 to the Company’s Registration
Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).
79
†10.30
†10.31
†10.32
†10.33
†10.34
†10.35
†10.36
†10.37
†10.38
†10.39
†10.40
†10.41
†10.42
10.43
10.44
*21.1
*23.1
*31.1
*31.2
**32.1
**32.2
Form of Restricted Stock Unit Agreement (not retirement eligible) under the Newpark Resources, Inc. 2015
Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.11 to the Company’s Registration
Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).
Form of Restricted Stock Unit Agreement (international) under the Newpark Resources, Inc. 2015 Employee
Equity Incentive Plan, incorporated by reference to Exhibit 4.12 to the Company’s Registration Statement on
Form S-8 filed May 22, 2015 (SEC File No. 333.204403).
Form of Non-Qualified Stock Option Agreement (retirement eligible) under the Newpark Resources, Inc. 2015
Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.13 to the Company’s Registration
Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).
Form of Non-Qualified Stock Option Agreement (not retirement eligible) under the Newpark Resources, Inc.
2015 Employee Equity Incentive Plan, incorporated by reference to Exhibit 4.14 to the Company’s Registration
Statement on Form S-8 filed May 22, 2015 (SEC File No. 333.204403).
Newpark Resources, Inc. Amended and Restated Long-Term Cash Incentive Plan, incorporated by reference to
Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2023 (SEC File No.
001-02960).
Form of Performance-Based Cash Award Agreement under the Newpark Resources, Inc. Long-Term Cash
Incentive Plan, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on
June 15, 2017 (SEC File No. 001-02960).
Form of Performance-Based Cash Award Agreement under the Newpark Resources, Inc. Long-Term Cash
Incentive Plan, incorporated by reference to Exhibit 10.8 of the Company's Quarterly Report on Form 10-Q filed
on July 31, 2019 (SEC File No. 001-02960).
Form of Non-Employee Director Cash Award Agreement, incorporated by reference to Exhibit 10.6 of the
Company's Quarterly Report on Form 10-Q filed on August 4, 2020 (SEC File No. 001-02960).
Newpark Resources, Inc. Retirement Policy for U.S. Employees, as amended, Approved and Adopted April 6,
2015, amended as of May 20, 2020, incorporated by reference to Exhibit 10.7 of the Company's Quarterly Report
on Form 10-Q filed on August 4, 2020 (SEC File No. 001-02960).
Newpark Resources, Inc. U.S. Executive Severance Plan, incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report on Form 10-Q filed on November 4, 2020 (SEC File No. 001-02960).
Form of Participation Agreement under the Newpark Resources, Inc. U.S. Executive Severance Plan (Participants
With Employment Agreements), incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on
Form 10-Q filed on August 2, 2023 (SEC File No. 001-02960).
Form of Participation Agreement under the Newpark Resources, Inc. U.S. Executive Severance Plan (Participants
Without Employment Agreements), incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report
on Form 10-Q filed on August 2, 2023 (SEC File No. 001-02960).
Newpark Resources, Inc. Change in Control Plan, incorporated by reference to Exhibit 10.75 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 26, 2021 (SEC File No.
001-02960).
Second Amended and Restated Credit Agreement dated as of May 2, 2022 by and among Newpark Resources,
Inc., Newpark Drilling Fluids LLC, Newpark Mats & Integrated Services LLC, Excalibar Minerals LLC,
Newpark Industrial Blending Solutions LLC, and Dura-Base Nevada, Inc., as borrowers, Bank of America, N.A.,
as the Administrative Agent, Swing Line Lender and an L/C Issuer, and the other Lenders party hereto,
incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q filed on May 4, 2022
(SEC File No. 001-02960).
Cooperation Agreement, by and between Newpark Resources, Inc., Bradley L. Radoff and The Radoff Family
Foundation, dated February 17, 2022, incorporated by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K filed on February 18, 2022 (SEC File No. 001-02960).
Subsidiaries of the Registrant.
Consent of Independent Registered Public Accounting Firm.
Certification of Matthew S. Lanigan pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Gregg S. Piontek pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Matthew S. Lanigan pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
Certification of Gregg S. Piontek pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Newpark Resources, Inc. Clawback Policy
*97
*101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document
80
*101.SCH Inline XBRL Schema Document
*101.CAL Inline XBRL Calculation Linkbase Document
*101.LAB Inline XBRL Label Linkbase Document
*101.PRE Inline XBRL Presentation Linkbase Document
*101.DEF Inline XBRL Definition Linkbase Document
*104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
† Management compensation plan or agreement.
* Filed herewith.
** Furnished herewith.
ITEM 16. Form 10-K Summary
None.
81
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
NEWPARK RESOURCES, INC.
By: /s/ Matthew S. Lanigan
Matthew S. Lanigan
Chief Executive Officer
Dated: February 23, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures
Title
Date
/s/ Matthew S. Lanigan
Matthew S. Lanigan
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Gregg S. Piontek
Gregg S. Piontek
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 23, 2024
February 23, 2024
February 23, 2024
/s/ Douglas L. White
Douglas L. White
/s/ Rose M. Robeson
Rose M. Robeson
/s/ Roderick A. Larson
Roderick A. Larson
/s/ Michael A. Lewis
Michael A. Lewis
/s/ Claudia M. Meer
Claudia M. Meer
/s/ John C. Mingé
John C. Mingé
/s/ Donald W. Young
Donald W. Young
Vice President, Chief Accounting Officer and
Treasurer
(Principal Accounting Officer)
Chairman of the Board
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
Director
Director
Director
Director
Director
82
DIRECTORS
ROSE M. ROBESON
MATTHEW S. LANIGAN
RODERICK A. LARSON
MICHAEL A. LEWIS
Chairman of the Board
Retired Senior Vice
President and Chief
Financial Officer of DCP
Midstream Partners, LP
President and
Chief Executive Officer
President and Chief
Executive Officer,
Oceaneering International,
Inc.
Retired Interim President
and Senior Vice President,
Electric Operations,
Pacific Gas & Electric
Corporation
CLAUDIA M. MEER
Co-founder and CEO,
CoreMax Consulting
JOHN C. MINGÉ
DONALD W. YOUNG
Retired Chairman and
President, BP America, Inc.
Managing Member, Race
Rock Group LLC
EXECUTIVE OFFICERS
MATTHEW S. LANIGAN
GREGG S. PIONTEK
M. CELESTE FRUGÉ
LORI A. BRIGGS
DAVID A. PATERSON
DOUGLAS L. WHITE
President and
Chief Executive Officer
Senior Vice President and
Chief Financial Officer
Vice President,
General Counsel,
Chief Compliance Officer,
and Corporate Secretary
Vice President and
President, Industrial
Solutions
Vice President and
President,
Fluids Systems
Vice President,
Chief Accounting Officer
and Treasurer
CORPORATE INFORMATION
NEWPARK RESOURCES, INC.
CORPORATE HEADQUARTERS
9320 Lakeside Blvd., Suite 100
The Woodlands, Texas 77381
INVESTOR RELATIONS CONTACT
GREGG S. PIONTEK
Senior Vice President and Chief Financial Officer
Phone: 281-362-6800
Fax: 281-362-6801
E-mail: gpiontek@newpark.com
AUDITORS
DELOITTE & TOUCHE LLP
Houston, Texas
TRANSFER AGENT
BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.
P.O. Box 1342
Brentwood, NY 11717
Phone: 1-800-586-1741
ANNUAL MEETING
The Annual Meeting of Shareholders of Newpark
Resources, Inc. will be held on Thursday, May 16, 2024,
at 9:00 AM CDT, at the Newpark Technology Center
21920 Merchant’s Way
Katy, Texas 77449
COMMON STOCK LISTED
NEW YORK STOCK EXCHANGE
Symbol - NR
CORE VALUES
SAFETY
INTEGRITY
RESPECT
EXCELLENCE
Protecting each other like
family, while sustaining the
environment in which we work
Acting honestly, ethically and
responsibly in all aspects
of our business
Dealing fairly and openly
with employees, customers,
suppliers and community
Delivering value through
performance, innovation and
service quality
ACCOUNTABILITY
Using good judgment and taking
responsibility for our actions
CORPORATE HEADQUARTERS
9320 Lakeside Blvd., Suite 100
The Woodlands, TX 77381
(281) 362-6800
www.newpark.com