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As filed with the Securities and Exchange Commission on August 28, 2000
Registration No. 333-39978
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SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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NEWPARK RESOURCES, INC.
(Exact name of registrant as specified in its charter)
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Delaware 72-1123385
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
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3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
(504) 838-8222
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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JAMES D. COLE
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
NEWPARK RESOURCES, INC.
3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
(504) 838-8222
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
HOWARD Z. BERMAN, ESQ.
ERVIN, COHEN & JESSUP LLP
9401 WILSHIRE BOULEVARD, 9TH FLOOR
BEVERLY HILLS, CALIFORNIA 90212
(310) 273-6333
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Approximate date of proposed sale to the public: From time to time after
this Registration Statement becomes effective, as determined by market
conditions.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS SUBJECT TO COMPLETION, DATED AUGUST 28, 2000
7,967,742 SHARES
[NEWPARK NEWPARK RESOURCES, INC.
RESOURCES, INC. COMMON STOCK
LOGO] ($.01 par value)
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From time to time, the selling stockholder identified in the "Selling
Stockholder" section on page 16 of this prospectus may offer and sell, by using
this prospectus, up to 7,967,742 shares of our common stock.
Our common stock is listed on The New York Stock Exchange under the symbol
"NR". On August 25, 2000, the last reported sale price of our common stock on
The New York Stock Exchange was $9.88 per share.
The offering price for the common stock may be the market price for our
common stock prevailing at the time of sale, a price related to the prevailing
market price, a negotiated price or any other price that the selling stockholder
determines from time to time.
BEFORE PURCHASING ANY OF THE SHARES OF COMMON STOCK COVERED BY THIS
PROSPECTUS, YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 6
OF THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is August , 2000.
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary............................................................................................. 3
Risk Factors................................................................................................... 6
Forward Looking Statements..................................................................................... 17
Use of Proceeds................................................................................................ 17
Selling Stockholder............................................................................................ 18
Plan of Distribution........................................................................................... 20
Where You Can Find More Information............................................................................ 22
Legal Matters.................................................................................................. 23
Experts........................................................................................................ 23
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PROSPECTUS SUMMARY
The following summary should be read by you together with the more detailed
information included in other sections of this prospectus or incorporated by
reference into this prospectus. In addition, you should carefully consider the
factors described under "Risk Factors" beginning at page 6 of this prospectus.
Throughout this prospectus, we refer to Newpark Resources, Inc. and its
subsidiaries as "us" "we", "our" or "Newpark".
THE COMPANY
Newpark Resources, Inc. is a leading provider of proprietary environmental
services to the oil and gas exploration and production industry. We operate
primarily in the U.S. Gulf Coast market. We provide, either individually or as
part of a comprehensive package, the following services:
o we sell drilling fluids and provide associated engineering and
technical services;
o we install, rent and sell patented hardwood and composite interlocking
mats used for temporary access roads and work sites in oilfield and
other construction applications;
o we sell lumber, timber and wood by-products
o we process and dispose of oilfield exploration and production, or E&P,
waste;
o we provide other related on-site environmental and oilfield
construction services; and
o we process and dispose of non-hazardous wastes for the refining,
petrochemical and manufacturing industry in the U.S. Gulf Coast market.
We offer our drilling fluids, fluids processing and management and waste
disposal services in an integrated package we call "Minimization
Management(TM)". This allows our customers to consolidate their outsourced
services and reduce the number of vendors used. It can also speed up the
drilling process while reducing the amount of waste that must be disposed of. We
believe our Minimization Management(TM) program differentiates us from our
competitors and increases the efficiencies of our customers' drilling
operations.
In our drilling fluids business, we focus on providing unique solutions to
highly technical drilling projects involving complex conditions. These projects
require critical engineering support of the fluids system during the drilling
process to ensure optimal performance at the lowest total well cost. We have
developed and begun to market several proprietary and patented products that
replace environmentally harmful substances commonly used in drilling fluids.
These elements are typically of the greatest concern in the waste stream created
by drilling fluids. We recently introduced a new, high-performance, water-based
fluid system using these products, and we call this system DeepDrill(TM). We
believe that these new products will make it easier for our customers to comply
with increasingly strict environmental regulations affecting their drilling
operations and improve the economics of the drilling process.
In addition to the U.S. Gulf Coast market, in 1998, we expanded our
drilling fluids operations into west Texas, the U.S. Mid-continent, the U.S.
Rockies and western Canada by acquiring several drilling fluids companies. We
have the service infrastructure necessary to
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participate in the drilling fluids market in these regions. We also have our own
barite grinding capacity to provide critical raw materials for our drilling
fluids operations, primarily in the U.S. Gulf Coast Market.
In our mat rental business, we use patented interlocking wooden and
composite mat systems to provide temporary access roads and worksites in
unstable soil conditions. These mats are used primarily in support of oil and
gas exploration operations along the U.S. Gulf Coast and are typically rented to
the customer. Occasionally, however, we sell the mats to the customer for
permanent access to a site or facility. Since 1994, we also have marketed mat
services for use in constructing and maintaining pipelines, electrical
distribution systems and highways in and through wetlands environments,
including the coastal areas of the Southeastern U.S., particularly Florida and
Georgia. We also market mat services to the oil and gas exploration industries
in western Canada.
We recently started using our new DuraBase(TM) composite plastic mat,
primarily in our U.S. Gulf Coast market. We believe the DuraBase(TM) mat will in
many applications replace our traditional wooden mats. We believe the new
plastic mats provide significant economic benefits to us because they are
lighter, stronger, require less repair and last longer than our wooden mats. We
also are currently exploring selling these mats to various governmental
agencies, which we believe view the strength, durability and shelf life of our
composite mats as an advantage over traditional wooden mats.
Most of the E&P waste received by us is processed and then injected into
environmentally secure geologic formations deep underground. Some waste is
delivered to surface disposal facilities. We also can process E&P waste into a
product which is used as daily cover material or cell liner and construction
material at two municipal waste landfills, although we do not currently use this
method for a significant volume of waste.
Since 1994, we have been licensed to process E&P waste contaminated with
naturally occurring radioactive material, or NORM. We currently operate under a
license that authorizes the direct injection of NORM into disposal wells at our
Big Hill, Texas facility. This is the only offsite facility in the U.S. Gulf
Coast licensed for this purpose. Since July 1999, we also have been operating a
facility adjacent to our NORM facility to dispose of non-hazardous industrial
waste produced by the petrochemical processing and refining industries. This
facility uses the same waste disposal technology as we use for E&P waste and
NORM waste disposal.
We also provide other services for our customers' oil and gas exploration
and production activities. These services include the following:
o site assessment;
o waste pit design;
o construction and installation;
o regulatory compliance assistance;
o site remediation and closure; and
o oilfield construction services, including hooking up and connecting
wells and installing production equipment.
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We were originally organized in 1932 as a Nevada corporation. In April
1991, we changed our state of incorporation to Delaware. Our principal executive
offices are located at 3850 North Causeway Boulevard, Suite 1770, Metairie,
Louisiana 70002. Our telephone number is (504) 838-8222.
THE OFFERING
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Securities offered by the selling stockholder........... 7,967,742 shares of our common stock(1). See "Selling
Stockholder" on page 18.
Use of Proceeds......................................... We will not receive any proceeds from the sale of the
common stock by the selling stockholder. However, we
could receive up to $19,142,500 upon payment of the
exercise price for the common stock underlying the
warrant if all of the warrant is exercised. See "Use
of Proceeds" on page 17.
Risk Factors............................................ The shares of common stock offered under this
prospectus involve a high degree of risk. See "Risk
Factors" beginning on page 6.
New York Stock Exchange Symbol.......................... NR
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(1) Includes (a) 6,067,742 shares of our common stock issuable upon conversion
of our Series B Convertible Preferred Stock and as dividends on the Series
B Convertible Preferred Stock and (b) 1,900,000 shares of our common stock
issuable upon exercise of a warrant.
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RISK FACTORS
In addition to the other information in this prospectus, including the
information which we have incorporated by reference into this prospectus, you
should consider carefully the risk factors described below relating to our
business before you decide to buy any of the shares offered by this prospectus.
OUTSTANDING PREFERRED STOCK AND WARRANTS COULD RESULT IN POTENTIAL DILUTION AND
IMPAIR THE PRICE OF OUR COMMON STOCK.
To the extent that our outstanding shares of preferred stock are converted
into common stock or outstanding warrants to purchase common stock are
exercised, our existing common stockholders will experience dilution in their
percentage ownership interests. The following table provides certain information
regarding the number of shares of our common stock issuable upon conversion of
our outstanding shares of preferred stock and our outstanding warrants to
purchase common stock:
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NUMBER OF SHARES OF COMMON PERCENTAGE OF DILUTION OR ACCRETION
STOCK ISSUABLE UPON OUTSTANDING IN BOOK VALUE PER SHARE
CONVERTIBLE SECURITY CONVERSION OR EXERCISE COMMON STOCK(1) UPON EXERCISE OR CONVERSION(2)
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Series A Cumulative Perpetual Preferred Stock(3) .... 1,588,870 2.24% ($.07)
Series B Convertible Preferred Stock(4) ............. 3,432,324 4.72% ($.15)
Series A Warrants(5) ................................ 2,400,000 3.35% $.18
Series B Warrants(6) ................................ 1,900,000 2.67% $.19
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Total ............................................. 9,321,194 11.85% $.13
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(1) Based on a total of 69,346,374 shares of our common stock outstanding as of
August 25, 2000 and in each case after giving effect to the issuance of
those shares.
(2) Assumes conversion or exercise as of June 30, 2000, based on a total of
69,162,859 shares or our common stock outstanding and total stockholders'
equity of $219,287,00 as of that date.
(3) Based on a conversion price of $9.5125 as of August 25, 2000, determined in
accordance with the conversion formula contained in the certificate
relating to the Series A Cumulative Perpetual Preferred Stock, and includes
11,998 shares of common stock issuable with respect to accrued but unpaid
dividends. The Series A Cumulative Perpetual Preferred Stock is not
convertible until June 1, 2004.
(4) Based on a conversion price of $8.8333 as of August 25, 2000, determined in
accordance with the conversion formula contained in the certificate
relating to the Series B Convertible Preferred Stock, and includes 36,085
shares of common stock issuable with respect to accrued but unpaid
dividends.
(5) The Series A Warrants are not exercisable until October 15, 2000 and have
an exercise price of $8.50 per share.
(6) The Series B Warrants are presently exercisable and have an exercise price
of $10.075 per share.
Because of the conversion features in our outstanding shares of the Series
A Cumulative Perpetual Preferred Stock and the Series B Convertible Preferred
Stock, the preferred stockholders will receive a greater number of shares of
common stock upon conversion if our common stock price
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declines. In addition, we are required to make quarterly dividend payments with
respect to the Series A Cumulative Perpetual Preferred Stock, which we are to
pay in shares of our common stock until April 2002. We also must pay quarterly
dividends on the Series B Convertible Preferred Stock, which also may be paid in
shares of our common stock if we satisfy certain conditions. The number of
shares to be issued in payment of these dividends will depend on the market
value of those shares when they are issued. As a result, the preferred
stockholders will receive a greater number of shares of common stock in payment
of these dividends if our common stock price decreases.
If the preferred stockholders convert their preferred stock or exercise
their warrants and then sell our common stock, the market price of our common
stock may decline due to the additional shares in the market. This could allow
the preferred stockholders to convert their remaining preferred stock, if any,
into greater amounts of common stock, the sales of which may further depress the
stock price. This potential downward pressure on the price of our common stock
could encourage short sales and consequently place further downward pressure on
the market price of our common stock.
The additional shares of common stock available for sale upon conversion of
the preferred stock, as dividends on the preferred stock or upon exercise of the
warrants may have a negative impact on the price of the outstanding common
stock. In addition, sales by the selling stockholder or others of substantial
amounts of our common stock in the public market, or the perception that these
sales might occur, could depress the price of our common stock. The selling
stockholder has the sole discretion to determine the timing, structure and all
terms of any disposition of our common stock, all of which could affect the
market price of our common stock.
We currently do not have any commitments to sell any additional convertible
securities or warrants to purchase any shares of our common stock.
WE MAY BE REQUIRED TO OBTAIN STOCKHOLDER CONSENT TO OUR ISSUANCE OF THE SERIES B
CONVERTIBLE PREFERRED STOCK AND THE WARRANT IF THE TOTAL NUMBER OF SHARES OF OUR
COMMON STOCK ISSUABLE WITH RESPECT TO THOSE SECURITIES EXCEEDS 20% OF OUR
OUTSTANDING SHARES AS OF THE AGREEMENT DATE, AND WE WILL INCUR PENALTIES IF WE
DO NOT TIMELY OBTAIN THIS CONSENT.
The rules of the New York Stock Exchange require us to obtain stockholder
approval if the total number of shares of common stock issuable with respect to
the Series B Convertible Preferred Stock and the warrant is more than
13,825,034. This number is 19.99% of the number of shares of common stock we had
outstanding on May 30, 2000. If we fail to comply with this rule, the New York
Stock Exchange may delist our common stock, which could negatively affect the
price of our common stock and your ability to sell our common stock.
Because the conversion feature of the Series B Preferred Stock is tied to
the market price of our common stock, and because the number of shares we are to
issue as dividends with respect to the Series B Preferred Stock also is
dependent on the market price of our common stock, we could be required to
obtain this stockholder consent if the market price of our common stock were to
drop significantly. As described below, if we fail to obtain this stockholder
consent on a timely basis, we could be required to issue to the selling
stockholder additional shares of Series B Convertible Preferred Stock or shares
of common stock upon exercise of the warrant without receiving any cash
consideration for those securities.
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If we are required to obtain stockholder consent, and this consent is not
received within 60 days after notice is sent to us by the selling stockholder,
the selling stockholder may elect to do either or a combination of the
following:
o a cashless exercise of the warrant for up to that number of shares of
our common stock that would require stockholder consent;
o convert the number of shares exceeding 13,825,034 into a right with a
value equal to the market price of our common stock on the notice date,
in the case of Series B Convertible Preferred Stock, and the spread
between the market price of our common stock over the exercise price of
the warrant on the notice date, in the case of the warrant, times the
number of shares of our common stock converted into this right.
For one year after it is issued, the selling stockholder may apply this
right, on a dollar-for-dollar basis, in lieu of payment of the exercise price
under the warrant. The selling stockholder also may convert this right during
that one-year period into shares with substantially the same rights and
obligations as the Series B Convertible Preferred Stock at the ratio of $250 in
stated value of the right into one share of Series B Convertible Preferred
Stock.
A MATERIAL DECLINE IN THE LEVEL OF OIL AND GAS EXPLORATION AND PRODUCTION AND
ANY REDUCTION IN THE INDUSTRY'S WILLINGNESS TO SPEND CAPITAL ON ENVIRONMENTAL
AND OILFIELD SERVICES COULD ADVERSELY AFFECT THE DEMAND FOR OUR SERVICES.
Prices for oil and natural gas are volatile and this volatility affects the
demand for our services. A material decline in oil or natural gas prices or
activities, as occurred during 1998, could materially affect the demand for our
services and, therefore, our consolidated financial statements. We will continue
to be impacted by changes in oil and gas supply and demand, which are generally
affected by the following factors:
o Oil and gas prices;
o Expectations about future prices;
o The cost to explore for, produce and deliver oil and gas;
o The discovery rate for new oil and gas reserves;
o The ability of oil and gas companies to raise capital;
o Domestic and international political, military, regulatory and economic
conditions; and
o Government regulations regarding, among other things, environmental
protection, taxation, price controls and product allocation
The potential fluctuations in the level of future oil and gas industry
activity or demand for our services and products are difficult, if not
impossible, to predict. There may be times when oil and gas industry activity or
demand for our services may be less than expected.
OUR OPERATING RESULTS HAVE FLUCTUATED DURING RECENT YEARS AND THESE FLUCTUATIONS
MAY CONTINUE, WHICH MAY HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF OUR COMMON
STOCK.
We have experienced in the past, any may continue to experience in the
future, fluctuations in our yearly and quarterly operating results. It is
possible that we will not realize expected earnings
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growth and that earnings in any particular year or quarter will fall short of
either a prior fiscal year or quarter or investors' expectations. If this were
to occur, the market price of our common stock would likely be adversely
affected. The following factors, in addition to others not listed, may affect
our operating results in the future:
o fluctuations in the oil and gas industry;
o competition;
o the ability to manage and control our operating costs;
o the rate and extent of acceptance of our new drilling fluids products
and our new composite mats;
o our ability to efficiently integrate and operate businesses that we
have recently acquired; and
o the ability to identify strategic acquisitions at reasonable prices.
WE ARE HIGHLY LEVERAGED AND MAY NOT HAVE SUFFICIENT CASH FLOW FROM OPERATIONS TO
MEET OUR DEBT SERVICE REQUIREMENTS.
Our balance sheet is highly leveraged given our present operating level.
There is a risk that we may be unable to obtain sufficient cash flow from
operations or obtain other financing in the future to repay this debt. As of
December 31, 1999, we had approximately $209.2 million of long-term debt, and we
had approximately $196.3 million of long-term debt, or debt that is due to be
repaid in no less than one year, as of June 30, 2000. For the year ended
December 31, 1999, we had total interest expense of approximately $16.7 million,
and the current portion of our long-term debt was $1.6 million at December 31,
1999. For the twelve-month period ended June 30, 2000, we had total interest
expense of approximately $18 million, with $573,000 in current maturities of our
long term debt. Our ability to meet our debt service requirements and comply
with the covenants in our various debt agreements, including the indenture
governing our senior subordinated notes, will depend on our future performance.
This, in turn, is subject to the volatile nature of the oil and gas industry,
and to competitive, economic, financial and other factors that are beyond our
control. If we are unable to obtain sufficient cash flow from operations or
obtain other financing in the future to service our debt, we may be required to
sell assets, reduce capital expenditures or refinance all or a portion of our
existing debt in order to continue to operate. We may not be able to obtain any
additional debt or equity financing if and when needed, and the terms we may be
required to offer for this additional debt or equity financing may not be as
favorable as the terms we have been able to obtain in the past.
Substantially all of our assets are pledged to secure our credit facility,
and the indenture governing our senior subordinated notes restricts our ability
to incur additional debt. In particular, we may not incur additional debt unless
the ratio of our net income before income taxes, interest expense and certain
non-cash charges for the four preceding fiscal quarters, to our interest expense
for the same four quarters, would be at least 2:1. In calculating this "fixed
charge coverage ratio," the additional debt is treated as if it had been
incurred on the first day of the four quarter period, and several other
adjustments required by the indenture are made. The principal exceptions to this
restriction include our ability to:
o refinance existing debt without increasing the amount of that debt;
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o incur up to $100,000,000 of debt under our credit facility or a
replacement or refinancing of our credit facility;
o issue bonds, letters of credit and similar items in the ordinary course
of our business;
o incur capitalized leases and obligations for the purchase of property
not exceeding a total of $20,000,000; and
o have outstanding at any time up to $25,000,000 of additional debt.
As of June 30, 2000, not including amounts available under our credit
facility, the refinance of existing debt and the issuance of bonds, letters of
credit and similar items in the ordinary course of business, we could incur up
to $43.7 million of additional debt within the indenture restrictions.
WE MAY NOT BE ABLE TO COMPLY WITH ALL OF THE RESTRICTIONS IMPOSED BY THE TERMS
OF OUR INDEBTEDNESS AND COULD BE PLACED IN DEFAULT BY OUR LENDERS.
Both the indenture governing the terms of our senior subordinated notes and
our credit facility contain restrictive covenants that we may not be able to
comply with. Our credit facility also requires us to satisfy certain financial
tests. If we were to breach these covenants or fail to satisfy these financial
tests, all amounts owing, including accrued interest, under both our senior
subordinated notes and our credit facility could be declared immediately due and
payable. The lenders under the credit facility also could terminate all
commitments under the credit facility and enforce their rights to their security
interests on substantially all of our assets. In addition, a default under our
credit facility could constitute a cross-default under the indenture, and a
default under the indenture could constitute a cross-default under our credit
facility.
Our ability to comply with these restrictive covenants and satisfy these
financial tests may be affected by events beyond our control. These events
include changes in oil and gas exploration and production levels and industry
conditions that affect our financing and capital needs. The indenture includes
covenants limiting our ability to:
o incur additional debt;
o pay dividends and redeem capital stock;
o make certain investments;
o issue any capital stock of our subsidiaries;
o create any liens or other restrictions affecting our subsidiaries;
o issue any guarantees;
o enter into transactions with any of our affiliates; and
o sell assets, merge or consolidate.
WE HAVE HIGH LEVELS OF FIXED COSTS THAT MAY NOT BE COVERED IF THERE ARE ANY
DOWNTURNS IN OUR BUSINESS.
Our business has high fixed costs, and downtime or low productivity due to
reduced demand, weather interruptions, equipment failures or other causes can
result in significant operating losses.
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WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE OUR RECENT ACQUISITIONS INTO OUR
OPERATIONS AND THESE ACQUISITIONS MAY NOT ACHIEVE SALES AND PROFITABILITY LEVELS
THAT JUSTIFY OUR INVESTMENT IN THEM. THIS COULD RESULT IN THESE BUSINESSES
PLACING DOWNWARD PRESSURE ON OUR MARGINS OR OUR DISPOSING OF THESE BUSINESSES AT
A LOSS.
We have acquired a number of companies over the past few years as we have
expanded our product offerings and geographic presence. We may not be able to
profitably manage the companies that we have acquired over the past few years or
be able to successfully integrate these companies into our existing operations.
This may occur as a result of our inability to supervise or retain the
management and other employees of the acquired companies or to implement our
cost controls and other systems in these companies. These companies also may not
achieve sales and profitability levels that justify our investment in them,
which may be the result of the failure to realize anticipated synergies from the
acquisitions. These synergies include potential cross-selling opportunities and
economies of scale, such as volume discounts and sharing of resources. If an
acquired company does not achieve adequate sales and profitability levels, it
could place downward pressure on our margins, result in our recording an
impairment charge on the goodwill of the acquired company or result in our
disposing of the company at a loss.
WE HAVE HIGH LEVELS OF GOODWILL IN RELATION TO OUR TOTAL ASSETS AND
STOCKHOLDERS' EQUITY AS A RESULT OF OUR RECENT ACQUISITIONS. THIS COULD HAVE A
SIGNIFICANT IMPACT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
As of December 31, 1999, we had recorded over $116.4 million in unamortized
costs in excess of net assets of businesses we acquired and identifiable
intangible assets. These costs are being amortized on a straight-line basis over
15 to 35 years. Our estimates of the values and useful lives of these assets
could be reduced in the future as a result of various factors beyond our
control. Any reduction in the value of these assets would reduce our reported
income or increase our reported loss and reduce our total assets and
stockholders' equity in the year in which the reduction is recognized. Any
reduction in the useful lives of these assets would increase the amount of our
annual amortization expense, reduce our annual reported income or increase our
reported losses and reduce our stockholders' equity.
The $116.4 million balance of unamortized costs represents 25.6% of our
total assets and 62.5% of our total stockholders' equity as of December 31,
1999. For the year ended December 31, 1999, this amortization increased our
pre-tax reported loss by $5.0 million. For the year ended December 31, 1998,
this amortization increased our pre-tax reported loss by $5.2 million.
WE MAY NOT BE ABLE TO KEEP PACE WITH THE CONTINUAL AND RAPID TECHNOLOGICAL
DEVELOPMENTS THAT CHARACTERIZE THE MARKET FOR OUR PRODUCTS AND SERVICES, AND OUR
FAILURE TO DO SO MAY RESULT IN OUR LOSS OF MARKET SHARE.
The market for our products and services is characterized by continual and
rapid technological developments that have resulted in, and will likely continue
to result in, substantial improvements in product functions and performance. If
we are not successful in developing and marketing, on a timely and
cost-effective basis, product enhancements or new products that respond to
technological developments that are accepted in the marketplace or that comply
with industry standards we could lose market share. In addition, current
competitors or new market entrants may
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develop new technologies, products or standards that could render some of our
products or services obsolete, which could have a material adverse effect on our
consolidated financial statements.
Our future success and profitability are dependent upon our ability to:
o improve our existing product lines;
o address the increasingly sophisticated needs of our customers;
o maintain a reputation for technological leadership;
o maintain market acceptance of our products and services; and
o anticipate changes in technology and industry standards and respond to
technological developments on a timely basis, either internally or
through strategic alliances.
THE DEMAND FOR OUR SERVICES MAY BY ADVERSELY AFFECTED BY SHORTAGES OF CRITICAL
EQUIPMENT IN THE OIL AND GAS INDUSTRY AND PERSONNEL TRAINED TO OPERATE THIS
EQUIPMENT.
Shortages of critical equipment necessary to explore for, produce or
deliver oil and gas have on occasion limited the amount of drilling activity in
our primary markets. There also have been shortages of qualified personnel
necessary to operate this equipment. Shortages in either of these areas could
limit the amount of drilling activity and, accordingly, the demand for our
services. There is a risk that these shortages may occur again in the future and
reduce the demand for our services. These shortages also may limit our ability
to expand our services or geographic presence.
IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO HIRE ADDITIONAL QUALIFIED PERSONNEL,
WE MAY NOT BE SUCCESSFUL.
Our future success depends on our ability to retain our highly-skilled
engineers and technical sales and service personnel. The market for these
employees is very competitive, and if we cannot continue to attract and retain
quality personnel, our ability to compete effectively and to grow our business
will be severely limited. We expect that as conditions improve in the oil and
gas market generally, the supply of qualified personnel in the oilfield service
industry could tighten substantially. Furthermore, attracting and retaining
qualified personnel in our industry typically requires attractive compensation
packages. A significant increase in the wages paid by competing employers could
result in a reduction in our skilled labor force, increases in the rates of
wages we must pay, or both. Our success also depends upon the continuing
contributions of our key executive officers, many of whom would be difficult to
replace, including James D. Cole, our Chairman, President and Chief Executive
Officer. None of our executive officers is covered by a long-term employment
contract, and we do not know how long they will remain with our organization. We
do not have key man life insurance policies on any of our personnel.
A RECISSION OR RELAXATION OF GOVERNMENT REGULATIONS COULD REDUCE THE DEMAND FOR
OUR SERVICES AND REDUCE OUR REVENUES AND INCOME. CHANGES IN EXISTING REGULATIONS
ALSO COULD REQUIRE US TO CHANGE THE WAY WE DO BUSINESS, WHICH MAY HAVE A
MATERIAL ADVERSE AFFECT ON OUR CONSOLIDATED FINANCIAL STATEMENTS.
We believe that the demand for our principal environmental services is
directly related to regulation of E&P waste. If these regulations were rescinded
or relaxed, or governmental authorities failed to enforce these regulations, we
could see a decrease in the demand for our services. This
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<PAGE> 14
decrease in demand could materially affect our consolidated financial
statements. We may also be affected adversely by new regulations or changes in
other applicable regulations.
E&P waste that is not contaminated with NORM is currently exempt from the
principal Federal statute governing the handling of hazardous waste. In recent
years, proposals have been made to rescind this exemption. If the exemption
covering this type of E&P waste is repealed or modified, we could be required to
alter significantly our method of doing business. We also could be required to
change the way we do business if the regulations interpreting the rules
regarding the treatment or disposal of E&P waste or NORM waste were changed. If
we are required to change the way we do business, it could have a material
adverse effect on our consolidated financial statements.
OUR PATENTS OR OTHER PROPRIETARY TECHNOLOGY MAY NOT PREVENT OUR COMPETITORS FROM
DEVELOPING SUBSTANTIALLY SIMILAR TECHNOLOGY, WHICH WOULD REDUCE ANY COMPETITIVE
ADVANTAGES WE MAY HAVE FROM THESE PATENTS AND PROPRIETARY TECHNOLOGY.
We hold U.S. and foreign patents for certain of our drilling fluids systems
and mat systems. We also hold U.S. patents on certain aspects of our system to
process and dispose of E&P waste, including E&P waste that is contaminated with
NORM. However, these patents are not a guarantee that we will have a meaningful
advantage over our competitors, and there is a risk that others may develop
systems that are substantially equivalent to those covered by our patents. If
that were to happen, we would face increased competition from both a service and
a pricing standpoint. In addition, costly and time-consuming litigation could be
necessary to enforce and determine the scope of our patents and proprietary
rights. Our business could be negatively impacted by future technological change
and innovation. It is possible that future innovation could change the way
companies drill for oil and gas, reduce the amount of waste that is generated
from drilling activities or create new methods of disposal or new types of
drilling fluids. This could reduce the competitive advantages we may derive from
our patents and other proprietary technology.
WE FACE INTENSE COMPETITION IN OUR EXISTING MARKETS AND EXPECT TO FACE TOUGH
COMPETITION IN ANY MARKETS INTO WHICH WE SEEK TO EXPAND. THIS WILL PUT PRESSURE
ON OUR ABILITY TO MAINTAIN OUR CURRENT MARKET SHARE AND MAY LIMIT OUR ABILITY TO
EXPAND OUR MARKET SHARE OR ENTER INTO NEW MARKETS.
E&P waste processing is a relatively new industry. We expect that
competition in this market will increase as the industry develops, which could
put downward pressure on our margins or make it more difficult for us to
maintain or expand our market share. In the meantime, we would expect to
encounter significant competition if we try to expand into new geographic areas
or if we introduce new services. Barriers to entry by competitors in the
environmental and oilfield services industries are low. Therefore, competitive
products and services have been and may be developed and marketed successfully
by others. We also face competition from efforts by oil and gas producing
customers to improve their own methods of disposal. By doing so, they can reduce
or eliminate the need to use third party E&P waste disposal companies like us.
Our ability to expand our business or increase prices will also be affected by
future technological change and innovation, which could affect our customers'
decisions to use their own methods of disposal. We also face competition in the
drilling fluids market, where there are several companies larger than us that
may have both lower capital costs and greater geographic coverage. There also
are numerous smaller companies
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<PAGE> 15
competing against us in the drilling fluids market. These companies may have a
lower total cost structure.
WE MAY FAIL TO COMPLY WITH ANY OF THE NUMEROUS FEDERAL, STATE AND LOCAL LAWS,
REGULATIONS AND POLICIES THAT GOVERN ENVIRONMENTAL PROTECTION, ZONING AND OTHER
MATTERS APPLICABLE TO OUR BUSINESS, OR THESE REGULATIONS AND POLICIES MAY
CHANGE. IF THAT WERE TO HAPPEN, WE MAY FACE FINES OR OTHER PENALTIES FOR OUR
FAILURE TO COMPLY OR BE FORCED TO MAKE SIGNIFICANT CAPITAL EXPENDITURES OR
CHANGES TO OUR OPERATIONS TO COMPLY WITH THESE NEW REGULATIONS.
These laws and regulations have changed frequently in the past and it is
reasonable to expect additional changes in the future. If existing regulatory
requirements change, we may be required to make significant unanticipated
capital and operating expenditures. There is a risk that our operations may not
comply with future laws and regulations. In that event, governmental authorities
may seek to impose fines and penalties on us or to revoke or deny the issuance
or renewal of operating permits for failure to comply with applicable laws and
regulations. Under these circumstances, we might be required to reduce or cease
operations or conduct site remediation or other corrective action. Any of these
results could have a material adverse effect on our consolidated financial
statements.
OUR BUSINESS EXPOSES US TO POTENTIAL ENVIRONMENTAL OR REGULATORY LIABILITY, AND
WE COULD BE REQUIRED TO PAY SUBSTANTIAL AMOUNTS WITH RESPECT TO THESE
LIABILITIES, INCLUDING THE COSTS TO CLEAN UP AND CLOSE CONTAMINATED SITES.
Our business exposes us to the risk that harmful substances may escape into
the environment, which could result in:
o personal injury or loss of life;
o severe damage to or destruction of property; or
o environmental damage and suspension of operations.
Our current and past activities, as well as the activities of our former
divisions and subsidiaries, could result in our facing substantial
environmental, regulatory and other liabilities. This could include the costs of
cleanup of contaminated sites and site closure obligations. These liabilities
could also be imposed on the basis of one or more of the following theories:
o negligence;
o strict liability;
o breach of contract with customers; or
o our contractual agreements to indemnify our customers in the normal
course of our business.
Certain aspects of the technology we use in our injection wells have not
been used before by others. The future performance of this technology is
uncertain.
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<PAGE> 16
WE MAY NOT HAVE ADEQUATE INSURANCE FOR POTENTIAL LIABILITIES, AND ANY
SIGNIFICANT LIABILITY NOT COVERED BY INSURANCE OR IN EXCESS OF OUR COVERAGE
LIMITS COULD HAVE A MATERIAL ADVERSE AFFECT ON OUR FINANCIAL CONDITION.
While we maintain liability insurance, this insurance is subject to
coverage limits. In addition, certain policies do not provide coverage for
damages resulting from environmental contamination. We face the following risks
with respect to our insurance coverage:
o we may not be able to continue to obtain insurance on commercially
reasonable terms or at all;
o we may be faced with types of liabilities that will not be covered by
our insurance;
o our insurance carriers may not be able to meet their obligations under
the policies; or
o the dollar amount of any liabilities may exceed our policy limits.
Even a partially uninsured claim, if successful and of significant size,
could have a material adverse effect on our consolidated financial statements.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS WHICH COULD
LIMIT OUR ABILITY TO EXPAND INTERNATIONALLY OR REDUCE THE REVENUES AND
PROFITABILITY OF THESE OPERATIONS.
We have significant operations in Canada and may seek to expand to other
areas outside the United States in the future. International operations are
subject to a number of risks and uncertainties, including:
o difficulties and cost associated with complying with a wide variety of
complex foreign laws, treaties and regulations;
o unexpected changes in regulatory environments;
o inadequate protection of intellectual property in foreign countries;
o legal uncertainties, timing delays and expenses associated with
tariffs, export licenses and other trade barriers;
o difficulties enforcing agreements and collecting receivables through
foreign legal systems;
o tax rates in foreign countries that may exceed those of the United
States and foreign earnings that may be subject to withholding
requirements, tariffs or other restrictions;
o exchange controls or other limitations on international currency
movements;
o fluctuations in foreign currency exchange rates; and
o political and economic instability.
Our success will be dependent, in part, on our ability to anticipate and
effectively manage these and other risks. Any of these factors could impair our
ability to expand into international markets and could prevent us from
increasing our revenue and our profitability and meeting our growth objectives.
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<PAGE> 17
THE HOLDERS OF OUR OUTSTANDING SHARES OF PREFERRED STOCK HAVE RIGHTS, AND THE
HOLDERS OF ANY ADDITIONAL SHARES OF PREFERRED STOCK THAT MAY BE ISSUED BY US MAY
BE GRANTED RIGHTS THAT ARE SUPERIOR TO THE RIGHTS OF HOLDERS OF OUR COMMON
STOCK.
We currently have outstanding 150,000 shares of Series A Cumulative
Perpetual Preferred Stock and 120,000 shares of Series B Convertible Preferred
Stock. These shares of preferred stock have dividend and liquidation preferences
superior to those of the common stock, as well as specified rights in connection
with mergers and other business combination transactions in which we may be
involved. In particular, the approval of a majority of the Series A Cumulative
Perpetual Preferred Stock will be required to approve any merger or other
business combination that would result in our experiencing a change in control
under the terms of the Series A Cumulative Perpetual Preferred Stock or under
Delaware law on or before April 15, 2004.
The holders of the Series B Convertible Preferred Stock will have the right
in any business combination to elect to receive either or a combination of the
following:
o the stock and other securities, cash and property which the holder
would have received had the holder converted the Series B Convertible
Preferred Stock into shares of our common stock immediately before the
transaction;
o shares of common stock of the acquiring person or its parent company,
as elected by the holders, according to a formula which takes into
account various factors, including the acquisition price for our common
stock, the conversion price for the Series B Convertible Preferred
Stock, the market price of the common stock of the acquiring person or
its parent and the stated value of the Series B Convertible Preferred
Stock; or
o cash in an amount equal to 133% of the stated value of the Series B
Convertible Preferred Stock, to be paid by the acquiring party or its
parent.
In addition, our Board of Directors may issue up to 730,000 additional
shares of preferred stock without further stockholder approval and with voting,
dividend or liquidation rights that could adversely affect your rights as common
stockholders. These shares of preferred stock could delay, deter or prevent a
change in control of Newpark or other corporate action. This could discourage
premium bids for our common stock.
THE MARKET PRICE OF OUR COMMON STOCK IS SUBJECT TO FLUCTUATION AND INVESTORS MAY
NOT BE ABLE TO PREDICT THE TIMING OR EXTENT OF THESE FLUCTUATIONS.
The market price of our common stock may fluctuate depending on a number of
factors. These include the general economy, stock market conditions, general
trends in the oilfield service industry, announcements made by us or our
competitors and variations in our operating results. Investors may not be able
to predict the timing or extent of these fluctuations.
WE DO NOT PLAN TO PAY ANY DIVIDENDS ON OUR COMMON STOCK AND INVESTORS SHOULD NOT
BUY OUR COMMON STOCK EXPECTING TO RECEIVE DIVIDENDS.
We have paid no dividends on our common stock, and we may not achieve
sufficient earnings to pay cash dividends on our common stock in the future.
Further, we intend to retain
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<PAGE> 18
earnings to fund our operations. The indenture governing our senior subordinated
notes and our credit facility restrict our ability to pay dividends and make
other distributions. In addition, so long as shares of either our Seris A
Cumulative Perpetual Preferred Stock or our Series B Convertible Preferred Stock
are outstanding, we may not pay any dividends on our common stock, except for
dividends payable solely in shares of our common stock. Therefore, we do not
anticipate paying any cash dividends on our common stock for the foreseeable
future.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in or incorporated by reference in this
prospectus discuss our plans and strategies for our business or state other
forward-looking statements, as this term is defined in the Private Securities
Litigation Reform Act. The words "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; however, various risks, uncertainties and contingencies, including
the risk factors discussed above, could cause our actual results, performance or
achievements to differ materially from those expressed in, or implied by, these
statements, including the success or failure of our efforts to implement our
business strategy.
We assume no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise. In light of
these risks, uncertainties and assumptions, the forward-looking events discussed
in or incorporated by reference in this prospectus might not occur. In addition
to the disclosure contained in this prospectus, you should carefully review any
disclosure of risks and uncertainties contained in other documents we file or
have filed from time to time with the SEC according to the Securities Exchange
Act of 1934.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the
selling stockholder. The selling stockholder will receive all of the net
proceeds from any sale of the shares of common stock being sold by the selling
stockholder pursuant to this prospectus. However, we could receive up to
$19,142,500 upon payment of the exercise price for the common stock underlying
the warrant if all of the warrant is exercised. We will use these proceeds, if
any, to repay debt, for working capital and for general corporate purposes. As
of August 25, 2000, the exercise price under the warrant exceeds the market
price of our common stock, and no portion of the warrant has been exercised. We
have not received any notice from the selling stockholder of its intention to
exercise the warrant, and we would not anticipate the warrant being exercised
unless and until the market price of our common stock exceeds the warrant
exercise price. The net proceeds from the sale of the Series B Convertible
Preferred Stock and the warrant have been used to repay indebtedness.
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<PAGE> 19
SELLING STOCKHOLDER
The 7,967,742 shares of our common stock offered by this prospectus are
being offered for the account of the selling stockholder, Fletcher International
Limited. These shares consist of the following:
o Up to 6,067,742 shares of our common stock issuable upon conversion of
our Series B Convertible Preferred Stock and as dividends on the Series
B Convertible Preferred Stock; and
o Up to 1,900,000 shares of our common stock issuable upon exercise of a
warrant.
Based on the 69,346,374 shares of our common stock outstanding as of August
25, 2000, these shares would represent approximately 10.31% of our outstanding
shares of common stock if issued as of that date.
We issued the Series B Convertible Preferred Stock and the warrant to the
selling stockholder in a private placement transaction. We are registering the
shares of common stock issuable with respect to the Series B Convertible
Preferred Stock and the warrant to permit the selling stockholder and its
pledgees, donees, transferees or other successors-in-interest that receive their
shares from the selling stockholder as a gift, distribution or other non-sale
related transfer after the date of this prospectus to resell the shares when
they deem appropriate.
The selling stockholder has the right to convert all or any part of the
Series B Convertible Preferred Stock into shares of our common stock at a
conversion rate based on the then-current market value of our common stock. This
market value is based on the weighted average daily market price of our common
stock over the 40 trading days ending five days before the measurement date.
However, the conversion price will not be greater than the lowest of the
following: (a) $10.075 per share; (b) the average of the market prices for the
first three trading days of that 40-day period; or (c) the average of the market
prices for the last three days of that 40-day trading period. For purposes of
any conversion, each share of Series B Convertible Preferred Stock will have a
value equal to its liquidation preference of $250 per share, plus any accrued
and unpaid dividends. As of August 25, 2000, the conversion price is $8.8333 per
share under this conversion formula. Accordingly, the outstanding shares of
Series B Convertible Preferred Stock would be convertible into 3,396,239 shares
of our common stock, plus another 36,085 shares of our common stock with respect
to accrued but unpaid dividends through that date.
Pursuant to the terms of the agreement by which the selling stockholder
acquired the Series B Convertible Preferred Stock and the warrant, the shares of
Series B Convertible Preferred Stock are convertible, and the warrant is
exercisable, only to the extent that the number of shares of common stock
initially issuable upon conversion or exercise, together with the number of
shares previously issued to the selling stockholder and its affiliates under the
agreement (but not including shares of common stock underlying unconverted
shares of the Series B Convertible Preferred Stock or the unexercised portion of
the warrant held by the selling stockholder and its affiliates) would not exceed
9.75% of the then outstanding shares of our common stock. The selling
stockholder may increase this amount to any amount specified by the selling
stockholder after 65 days following delivery of a notice to us.
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<PAGE> 20
The following table provides certain information with respect to the
selling stockholder, including the selling stockholder's beneficial ownership of
our common stock as of June 22, 2000, and as adjusted to give effect to the sale
of the shares offered by this prospectus. The shares of common stock offered by
this prospectus may be offered from time to time by the selling stockholder
named below or its nominees.
<TABLE>
<CAPTION>
SHARES OF COMMON SHARES OF SHARES OF COMMON
STOCK OWNED COMMON STOCK STOCK OWNED
NAME PRIOR TO OFFERING(1) TO BE SOLD(2) AFTER OFFERING
---- -------------------- ------------- ----------------
<S> <C> <C> <C>
Fletcher International Limited............ 7,967,742 7,967,742 0
</TABLE>
----------
(1) Includes (a) 6,067,742 shares of our common stock issuable upon conversion
of our Series B Convertible Preferred Stock and as dividends on the Series
B Convertible Preferred Stock and (b) 1,900,000 shares of our common stock
issuable upon exercise of a warrant.
(2) The actual number of shares of our common stock offered by this prospectus
and included in the Registration Statement of which this prospectus is a
part includes, pursuant to Rule 416 under the Securities Act of 1933, an
additional number of shares of our common stock which may be issuable with
respect to the Series B Convertible Preferred Stock or upon exercise of the
warrant to prevent dilution resulting from stock splits, stock dividends or
other similar transactions.
The securities listed above include outstanding securities held in one or
more accounts managed by Fletcher Asset Management, Inc. ("FAM") for the selling
stockholder. FAM is an investment adviser to the selling stockholder and is
registered under Section 203 of the Investment Advisors Act of 1940, as amended.
Pursuant to an investment advisory agreement between FAM and the selling
stockholder, FAM has the authority to vote and dispose of the securities in
these accounts. By reason of the provisions of Rule 13d-3 under the Securities
Exchange Act of 1934, the selling stockholder and FAM may each be deemed to own
beneficially the securities registered under the Registration Statement of which
this prospectus is a part. In addition, by virtue of Alphonse Fletcher, Jr.'s
position as Chairman and Chief Executive Officer of FAM, Mr. Fletcher may be
deemed to have the shared power to vote or direct the vote of, and the shared
power to dispose or direct the disposition of, these securities. Therefore, Mr.
Fletcher may be deemed to be the beneficial owner of these securities.
In the agreement pursuant to which the selling stockholder acquired the
Series B Preferred Stock and the Warrant, we granted the selling stockholder
certain rights with respect to the registration under the Securities Act of the
shares of our common stock issuable with respect to those securities. The shares
offered by this prospectus are being registered pursuant to these registration
rights.
If the registration statement of which this prospectus is a part is not
declared effective by August 30, 2000, the exercise price under the warrant and
the conversion price for the Series B Convertible Preferred Stock will be
permanently reduced by 2.5% for each month, or portion of a month, after that
date that the registration statement is not declared effective. In addition, if
we fail to maintain the effectiveness of the registration statement more than
twice in any 12-month period or for more than 30 days, the exercise price under
the warrant and the conversion price for the Series B Convertible Preferred
Stock will be permanently reduced by 2.5%. Additional 2.5% reductions would be
made to the exercise price and the conversion price if we were to again violate
this covenant in subsequent years, and the reductions will continue in effect
until 12 months have passed without a violation of this covenant.
In accordance with the terms of these registration rights, we will pay
substantially all of the expenses of this offering, including the printing,
legal and accounting expenses we incur and the registration and filing fees
imposed by the SEC and The New York Stock Exchange. The selling stockholder will
be indemnified by us against certain liabilities, including certain liabilities
under the Securities Act of 1933, or will be entitled to contribution from us in
connection with these liabilities. We also will be indemnified by the selling
stockholder against certain liabilities, including certain liabilities under the
Securities Act of 1933, or will be entitled to contribution from the selling
stockholder in connection with these liabilities.
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<PAGE> 21
We have agreed to provide the selling stockholder, its affiliates and its
designees who together with the selling stockholder and its affiliates hold at
least 60,000 shares of Series B Convertible Preferred Stock, with a right of
first refusal with respect to any shares of our capital stock or any securities
convertible into or exchangeable for any shares of our capital stock. This right
of first refusal will be exercisable for ten trading days after delivery of the
required notice from us to the selling stockholder. The right of first refusal
will terminate when the number of shares of common stock we are required to
register under the Securities Act is less than 3,457,988, as that number may be
adjusted for stock splits, stock dividends, recapitalizations or other similar
adjustments.
The acquisition transaction with the selling stockholder was negotiated at
arms' length. We believe that the terms of this transaction were commercially
reasonable in the circumstances. There is no affiliation, under Rule 405 of the
Securities Act, between either us and the selling stockholder or between the
selling stockholder and any of our affiliates.
PLAN OF DISTRIBUTION
The selling stockholder may sell the shares of common stock described in
this prospectus directly or through underwriters, broker-dealers or agents. The
selling stockholder may also transfer, devise or gift its shares by other means
not described in this prospectus. As a result, pledgees, donees, transferees or
other successors in interest that receive shares as a gift, distribution or
other non-sale related transfer may offer shares of common stock. Because the
selling stockholder may be deemed to be an "underwriter" within the meaning of
Section 2(11) of the Securities Act of 1933, the selling stockholder will be
subject to the prospectus delivery requirements of the Securities Act of 1933.
In addition, if any shares covered by this prospectus qualify for sale pursuant
to Rule 144 under the Securities Act, the selling stockholder may sell those
shares under Rule 144 rather than pursuant to this prospectus.
The selling stockholder, or its pledgees, donees or other successors in
interest, may sell the shares of common stock offered by this prospectus from
time to time in one or more transactions:
o at fixed prices that may be changed;
o at market prices prevailing at the time of sale;
o at prices related to prevailing market prices or at negotiated prices;
or
o at other prices as determined by the selling stockholder from time to
time.
The selling stockholder, or its pledgees, donees or other successors in
interest, may sell the shares of common stock offered by this prospectus from
time to time in one or more of the following transactions:
o on The New York Stock Exchange or any other national securities
exchange or quotation service on which the common stock may be listed
or quoted at the time of sale;
o in the over-the-counter market;
o in privately negotiated transactions;
o in an underwritten offering;
o by pledge to secure debts and other obligations;
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<PAGE> 22
o through block transactions;
o by a combination of the above methods of sale; or
o to cover short sales, equity swaps, options or other derivative
security or hedging transactions made pursuant to this prospectus.
In effecting sales, brokers or dealers engaged by the selling stockholder
may arrange for other brokers or dealers to participate in the resales. The
selling stockholder may enter into hedging transactions with broker-dealers, and
in connection with those transactions, broker-dealers may engage in short sales
of the shares. The selling stockholder also may sell shares short and deliver
the shares to close out these short positions. The selling stockholder also may
enter into option or other transactions with broker-dealers that require the
delivery to the broker-dealer of the shares, which the broker-dealer may resell
pursuant to this prospectus. The selling stockholder also may pledge the shares
to a broker or dealer, and upon a default, the broker or dealer may effect sales
of the pledged shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholder.
Broker-dealers or agents may also receive compensation from the purchasers of
the shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection with
the sale. Market makers and block purchasers purchasing the shares will do so
for their own account and at their own risk. It is possible that the selling
stockholder will attempt to sell shares of common stock in block transactions to
market makers or other purchasers at a price per share which may be below the
then market price. There can be no assurance that all or any part of the shares
offered by this prospectus will be issued to, or sold by, the selling
stockholder. The selling stockholder will bear all commissions and discounts, if
any, attributable to the sales of the shares. The selling stockholder may agree
to indemnify any broker-dealer or agent that participates in transactions
involving sales of the shares against specific liabilities, including
liabilities arising under the Securities Act of 1933.
The SEC may deem the selling stockholder and any underwriters,
broker-dealers or agents that participate in the distribution of the shares of
common stock to be "underwriters" within the meaning of the Securities Act of
1933. The SEC may deem any profits on the resale of the shares of common stock
and any compensation received by any underwriter, broker-dealer or agent to be
underwriting discounts or commissions under the Securities Act of 1933.
Upon a sale of common stock pursuant to the Registration Statement of which
this prospectus forms a part, the common stock will be freely tradable in the
hands of persons other than our affiliates.
Under the Securities Exchange Act of 1934, any person engaged in the
distribution of the shares of common stock may not simultaneously engage in
market-making activities with respect to the common stock for five business days
prior to the start of the distribution. In addition, the selling stockholder and
any other person participating in a distribution will be subject to the
Securities Exchange Act of 1934, which may limit the timing of purchases and
sales of common stock by the selling stockholder or any other person seeking to
sell shares.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following regional offices of
the SEC: 7 World Trade Center, Suite 1300, New York, New York 10048; and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
You can obtain copies of this material from the Public Reference Room of the SEC
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available from our web site at
"http://www.newpark.com" or at the SEC's web site at "http://www.sec.gov". The
information contained in our website is not a part of this prospectus and shall
not be deemed to be incorporated in this prospectus.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
1. Our Annual Report on Form 10-K for the year ended December 31, 1999, as
amended on August 28, 2000;
2. Our Quarterly Report on Form 10-Q for the three months ended March 31,
2000 and June 30, 2000, as those reports were amended on August 28, 2000;
3. Our Proxy Statement for the annual meeting of stockholders held on June
14, 2000;
4. Our Current Report on Form 8-K dated June 1, 2000; and
5. The description of our common stock contained in our Registration
Statement pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended from time to time.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Ms. Edah Keating
Corporate Secretary
Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, Louisiana 70002
(504) 838-8222
This prospectus is part of a Registration Statement we filed with the SEC.
It does not contain all the information included or incorporated by reference in
the Registration Statement. The full
22
<PAGE> 24
Registration Statement can be obtained from the SEC as indicated above or from
us. You should rely only on the information or representations provided in this
prospectus or incorporated by reference. We have authorized no one to provide
you with different information. We are not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of this document.
Unless the context requires otherwise, all references in this prospectus to
"this prospectus" include documents incorporated by reference into this
prospectus.
LEGAL MATTERS
The validity of the securities being offered by this prospectus will be
passed upon for us by Ervin, Cohen & Jessup LLP, Beverly Hills, California.
EXPERTS
Our consolidated financial statements as of December 31, 1999 and for the
year ended December 31, 1999 incorporated by reference in this prospectus have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect to those financial statements, and are
included in this prospectus in reliance upon the authority of Arthur Andersen
LLP as experts in accounting and auditing in giving these reports. Reference is
made to this report, which includes an explanatory paragraph with respect to a
change in the method of computing depreciation in 1999, as discussed in Note A
to the financial statements.
The consolidated financial statements as of December 31, 1998 and for each
of the two years in the period ended December 31, 1998 incorporated in this
prospectus by reference from our Annual Report on Form 10-K/A have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference (which report expresses an unqualified
opinion and contains explanatory paragraphs relating to the change in method of
accounting for costs of start up activities as discussed in Note A and the
restatement discussed in Note D), and has been so incorporated in reliance upon
the report of Deloitte & Touche LLP given upon their authority as experts in
accounting and auditing.
23
<PAGE> 25
--------------------------------------------------------------------------------
NO ONE (INCLUDING ANY SALESMAN OR BROKER) IS AUTHORIZED TO PROVIDE ORAL OR
WRITTEN INFORMATION ABOUT THIS OFFERING THAT IS NOT INCLUDED IN THIS PROSPECTUS.
YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION.
----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary ................................................... 3
Risk Factors ......................................................... 6
Forward Looking Statements ........................................... 17
Use of Proceeds ...................................................... 17
Selling Stockholder .................................................. 18
Plan of Distribution ................................................. 20
Where You Can Find More Information .................................. 22
Legal Matters......................................................... 23
Experts............................................................... 23
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[NEWPARK RESOURCES, INC. LOGO]
NEWPARK RESOURCES, INC.
7,967,742 SHARES
COMMON STOCK
($.01 PAR VALUE)
PROSPECTUS
AUGUST , 2000
--------------------------------------------------------------------------------
<PAGE> 26
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by the
registrant in connection with the filing of this Form S-3 Registration
Statement. The registrant will pay all of these expenses on behalf of the
selling stockholder.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee .... $16,959.34
Printing costs ......................................... 5,000.00
Legal fees ............................................. 30,000.00
Accounting fees and expenses ........................... 25,000.00
Miscellaneous expenses ................................. 1,000.00
----------
Total ............................................. $77,959.34
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"GCL") permits a corporation to, and the registrant's bylaws require that it,
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
As permitted under Section 145 of the GCL, the registrant's bylaws also
provide that it shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. However, in such an action by or on behalf of a corporation, no
indemnification may be made in respect of any claim, issue or matter as to which
the person is adjudged liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent that the court
determines that, despite the adjudication of liability but in view of all the
circumstances, the person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
In addition, the indemnification provided by section 145 shall not be
deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under any bylaw,
II-1
<PAGE> 27
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
The registrant's Certificate of Incorporation (the "Certificate") provides
that the registrant shall indemnify, to the fullest extent permitted by law,
each of its officers, directors, employees and agents who was or is a party to,
or is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the registrant. The Certificate also provides
that, to the fullest extent permitted by law, no director of the registrant
shall be liable to the registrant or its stockholders for monetary damages for
breach of his fiduciary duty as a director.
The Certificate also provides that the registrant may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the registrant, or is serving at the request of the registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against any liability
incurred by such person in any such capacity, or arising out of his status as
such, regardless of whether the registrant is empowered to indemnify such person
under the provisions of law. The registrant currently maintains this insurance
for its directors, officers, employees and agents.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
4.1 Form of certificate representing shares of the registrant's
common stock.(1)
4.2 Certificate of Rights and Preferences of Series B Convertible
Preferred Stock of the registrant.(2)
4.3 Warrant Certificate, dated June 1, 2000, issued to Fletcher
International Limited by the registrant.(2)
5.1 Opinion of Ervin, Cohen & Jessup LLP.*
10.1 Agreement, dated May 30, 2000, between the registrant and
Fletcher International Limited.(2)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Ervin, Cohen & Jessup LLP (included in Exhibit 5.1).*
24.1 Powers of Attorney (set forth on Pages II-5 and II-6).*
----------
(1) Incorporated by reference from the registrant's Registration Statement on
Form S-1 (File No. 33-40716).
(2) Incorporated by reference from the registrant's Current Report on Form 8-K
dated June 1, 2000.
* Previously filed.
II-2
<PAGE> 28
ITEM 17. UNDERTAKINGS
A. The registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more that a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
related to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 29
C. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Metairie, State of Louisiana, on August 28,
2000.
NEWPARK RESOURCES, INC.
By /s/ Matthew W. Hardey
------------------------------------
Matthew W. Hardey, Vice President of
Finance and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
James D. Cole* Chairman of the Board, President August 28, 2000
----------------------------------- and Chief Executive Officer
James D. Cole
/s/ Matthew W. Hardey Vice President of Finance August 28, 2000
----------------------------------- and Chief Financial Officer
Matthew W. Hardey
Wm. Thomas Ballantine* Executive Vice President August 28, 2000
----------------------------------- and Director
Wm. Thomas Ballantine
David P. Hunt* Director August 28, 2000
-----------------------------------
David P. Hunt
Alan J. Kaufman* Director August 28, 2000
-----------------------------------
Dr. Alan J. Kaufman
James H. Stone* Director August 28, 2000
-----------------------------------
James H. Stone
Roger C. Stull* Director August 28, 2000
-----------------------------------
Roger C. Stull
David Baldwin* Director August 28, 2000
-----------------------------------
David Baldwin
</TABLE>
*By: /s/ Matthew W. Hardey
------------------------------
Matthew W. Hardey
Attorney-in-Fact
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
4.1 Form of certificate representing shares of the registrant's
common stock.(1)
4.2 Certificate of Rights and Preferences of Series B Convertible
Preferred Stock of the registrant.(2)
4.3 Warrant Certificate, dated June 1, 2000, issued to Fletcher
International Limited by the registrant.(2)
5.1 Opinion of Ervin, Cohen & Jessup LLP.*
10.1 Agreement, dated May 30, 2000, between the registrant and
Fletcher International Limited.(2)
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Ervin, Cohen & Jessup LLP (included in Exhibit 5.1).*
24.1 Powers of Attorney (set forth on Pages II-5 and II-6).*
</TABLE>
----------
(1) Incorporated by reference from the registrant's Registration Statement on
Form S-1 (File No. 33-40716).
(2) Incorporated by reference from the registrant's Current Report on Form 8-K
dated June 1, 2000.
* Previously filed.
