NEWPARK RESOURCES, INC. (NYSE:NR) Files An 8-K Results of Operations and Financial ConditionItem 2.02. Results of Operations and Financial Condition.
On February8, 2018, Newpark Resources, Inc. (the “Company”) issued a press release announcing financial information for the three and twelve months ended December31, 2017. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K and the information in the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.
Use of Non-GAAP Financial Information
To help understand the Company’s financial performance, the Company has supplemented its financial results that it provides in accordance with generally accepted accounting principles (“GAAP”) with non-GAAP financial measures. Such financial measures include earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA Margin, Net Debt and the Ratio of Net Debt to Capital.
We believe these non-GAAP financial measures are frequently used by investors, securities analysts and other parties in the evaluation of our performance and/or that of other companies in our industry. In addition, management uses these measures to evaluate operating performance, and our incentive compensation plan measures performance based on our consolidated EBITDA, along with other factors. The methods we use to produce these non-GAAP financial measures may differ from methods used by other companies. These measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP. Applicable reconciliations to the nearest GAAP financial measure of each non-GAAP financial measure are included in the attached Exhibit 99.1.
Item 2.02 Other Events.
Under the terms of the March 2014 sale of our previous Environmental Services business to Ecoserv, LLC (“Ecoserv”), $8.0 million of the sales price was withheld and placed in an escrow account to satisfy claims for possible breaches of representations and warranties contained in the sale agreement. In December 2014, we received a letter from Ecoserv asserting that we had breached certain representations and warranties contained in the sale agreement, including failing to disclose operational problems and service work performed on injection/disposal wells and increased barge rental costs. The letter indicated that Ecoserv expected the damages associated with these claims to exceed the escrow amount. In July of 2015 we filed an action against Ecoserv in state court in Harris County, Texas, seeking release of the escrow funds. Thereafter, Ecoserv filed a counterclaim seeking recovery in excess of the escrow funds based on the alleged breach of representations and covenants in the sale agreement. Ecoserv also alleged that we committed fraud in connection with the sale transaction. Discovery in the case provided more information about Ecoserv’s claims, which include, among other things, alleged inadequate disclosures regarding the condition of a disposal cavern (at the time of the execution of the sale agreement and again as it relates to the time period between execution of the sale agreement and closing) and the lack of appropriate reserves/accruals/provisions in the financial statements of the business relating to certain regulatory obligations (such as plug and abandonment costs for injection wells and costs associated with a solids drying facility). The case proceeded to a bench (non-jury) trial in December of 2017, leading to the parties engaging in settlement discussions. The parties executed a settlement agreement (effective on February 7, 2018), under which Ecoserv will receive $22.0 million in cash, effectively reducing the sale price of the Environmental Services business by such amount in exchange for dismissal of the pending claims in the lawsuit, and release of any future claims related to the transaction. The impact of this settlement results in a $17.4 million loss from disposal of discontinued operations, net of tax in 2017 to reduce the previously recognized gain of $22.1 million from the sale of the Environmental Services business. The reduction in the sale price will be funded, in part, through the release of $8.0 million that has been held in escrow since the March 2014 transaction.
Item 2.02Financial Statements and Exhibits.
Press release issued by Newpark Resources, Inc. on February8, 2018.
NEWPARK RESOURCES INC ExhibitEX-99.1 2 a2017q48k-erex991.htm EXHIBIT 99.1 Exhibit Exhibit 99.1 NEWS RELEASE Contacts: Gregg PiontekVice President and Chief Financial OfficerNewpark Resources,…To view the full exhibit click
About NEWPARK RESOURCES, INC. (NYSE:NR)
Newpark Resources, Inc. is an oil and gas supplier. The Company provides products and services to the oil and gas exploration (E&P) industry. The Company operates its business through two segments: Fluids Systems, and Mats and Integrated Services. The Company’s Fluids Systems segment offers customized solutions, including technical drilling projects involving subsurface conditions, such as horizontal, directional, geologically deep or deep water drilling. It offers drilling fluids solutions to E&P customers in North America; Europe, the Middle East and Africa (EMEA); Latin America, and Asia Pacific. The Mats and Integrated Services segment provides composite mat rentals, well site construction and related site services to oil and gas customers at well, production, transportation and refinery locations in the United States. The Company manufactures DURA-BASE Advanced Composite Mats for use in its rental operations, as well as for third-party sales.