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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 22, 1998
NEWPARK RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-2960 72-1123385
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 838-8222
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ITEM 5. OTHER EVENTS.
On September 22, 1998, Newpark Resources, Inc. ("Newpark") announced that
it had settled the previously disclosed dispute concerning its obligations under
the NOW Disposal Agreement with U.S. Liquids, Inc. ("USL"). The settlement
terminates the NOW Disposal Agreement with respect to Newpark's contractual
commitment to deliver waste to USL's disposal facilities, eliminates the final
20 years of the original contract and requires Newpark to pay USL $30 million
over the next three years. Newpark also will have the right, but not the
obligation, to deliver specified volumes of waste to USL's facilities for a
period of three years without additional cost, and, subject to certain
conditions, Newpark may extend the disposal arrangement for two additional one-
year terms at an additional cost of approximately $8 million per year.
As part of the settlement, USL agreed not to compete with Newpark in the
marine-related waste disposal business for a period of three years. In
addition, USL has secured the right to immediately enter the vessel and tank
cleaning business in the U.S. Gulf Coast market and has purchased certain assets
from Newpark for a total price of $2.2 million, to be paid to Newpark over the
next four calendar quarters.
Newpark also announced that it was reviewing the asset valuation of its
wooden mat fleet in light of the start-up of production of its new composite
plastic mats, which are intended to replace the majority of Newpark's wooden
mats used to construct access roads and work sites in the U.S. Gulf Coast
market. Newpark indicated that the aggregate pre-tax amount of the non-cash
charges related to the revaluation of its wooden mat inventories, as well as
possible revaluation of other categories of assets which may have been affected
by technological changes or current market conditions, could approximate $66
million. These charges, along with the charges associated with the settlement
with USL and the disruptive effects of three tropical storms in the western Gulf
of Mexico in September 1998, would result in a third quarter net loss.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
None.
(b) Pro forma Financial Information
None.
(c) Exhibits
99.1 Text of Press Release issued by Newpark on September 22, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned hereunto
duly authorized.
NEWPARK RESOURCES, INC.
Dated: October 5, 1998 By: /s/ Eric Wingerter
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Eric Wingerter, Vice President
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EXHIBIT 99.1
NEWPARK RESOURCES ANNOUNCES ARBITRATION
SETTLEMENT AND ACCOUNTING CHARGES, RESULTING
IN THIRD QUARTER LOSS
DISRUPTIONS CAUSED BY RECENT GULF STORMS ALSO A FACTOR
METAIRIE, LA, September 22, 1998...Newpark Resources, Inc. (NYSE: NR) today
announced that it settled the previously disclosed dispute concerning its
obligations under the NOW Disposal Agreement with U.S. Liquids, Inc. ("USL").
The settlement terminates the NOW Disposal Agreement with respect to Newpark's
contractual commitment to deliver waste to USL's disposal facilities. Under
terms of the settlement, Newpark will pay U.S. Liquids $30 million over the next
three years, an amount slightly less than it might have paid for a similar
period under the original agreement. Additionally, the final 20 years of the
original contract have been eliminated. During the settlement term, Newpark will
have the right, but not the obligation, to deliver specified volumes of waste to
the facilities without additional cost. In addition, Newpark has the option,
subject to certain provisions, to extend the arrangement for two additional one-
year terms at an additional cost of approximately $8 million per year.
USL has agreed not to compete with Newpark for the three-year period, after
which it is free to compete in the marine-related waste disposal business. As
part of the settlement, USL secured the right to immediately enter the vessel
and tank cleaning business in the Gulf Coast market and acquired certain assets
in consideration of a total of $2.2 million to be paid to Newpark by USL during
the next four calendar quarters.
Separately, Newpark announced that it was reviewing the asset valuation of its
wooden mat fleet in light of the start-up of production of its new composite
plastic mats, which will replace the majority of its wooden mats used to
construct access roads and work sites in the Gulf Coast market. James D. Cole,
Newpark's president and CEO, stated that, "The new composite mat has operational
advantages over the wooden mat system that are expected to provide improved
profitability for the mat business as they are integrated into our operations.
We plan to use wooden mats in expanding our presence in international markets,
and may eventually add composite mats in selected foreign markets. While there
will always be a need for wooden mats in environmentally sensitive areas, we
plan to use composite mats as our primary system in the Gulf Coast market within
three years," he concluded. Newpark said it expects to record a non-cash charge
to earnings to reflect the revaluation of the wooden mat inventory and that it
was reviewing other categories of assets, the values of which may have been
affected by technological changes or current market conditions, for possible
economic impairment under current accounting rules.
The company indicated that the aggregate pre-tax amount of these non-cash
charges could approximate $66 million, and that the net payments to be made in
the U.S. Liquids settlement would total $27.8 million. In addition, unamortized
intangibles associated with the non-compete provisions of the prior transaction
of approximately $6 million would be charged to earnings in the current quarter.
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Newpark said these charges would result in a third quarter net loss which would
also reflect the disruptive effects of three tropical storms in September upon
its operations in the western Gulf of Mexico during the period. "While there has
been no significant damage to Newpark's facilities," Cole said, "the storms have
interrupted work both in the Gulf of Mexico and along the coast. Offshore
operations have resumed following three rounds of evacuations, but continued
coastal flooding still makes it difficult to work in several key markets".
Newpark Resources, Inc. provides integrated fluids management, environmental and
oilfield services to the exploration and production industry.
For further information contact:
Company New York
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Matthew W. Hardey Ron Hengen
Vice President of Finance R. F. Hengen, Inc.
Newpark Resources, Inc. 253 Southgate Road
3850 N. Causeway, Suite 1770 Murray Hill, New Jersey 07974
Metairie, Louisiana 70002 (908) 508-9000
(504) 838-8222
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