EX-99.1 4 a20248ksep13exhibit991.htm EX-99.1 Document

Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On September 13, 2024, Newpark Resources, Inc. (“Newpark” or the “Company”) completed the sale of the Company’s equity interests in substantially all of the Company’s Fluids Systems segment (“Sale Transaction”) to SCF Partners, a leading private equity firm serving the global energy industry (the “Purchaser”).
Under the terms of the Sale Transaction agreement, the base sale price of the business is $127.5 million, adjusted by $43 million to reflect lower estimated working capital conveyed at closing as compared to the average 2023 net working capital balance, accrued taxes and certain other liabilities, and $10 million of outstanding debt. Net Sale Transaction consideration is $56 million, which reflects $70 million of cash proceeds received at closing, net of $19 million of foreign cash conveyed with the business, along with a $5 million interest-bearing seller note receivable. The final purchase price remains subject to customary adjustments based upon final working capital, accrued taxes and certain other liabilities, debt and cash conveyed at closing.
The following unaudited pro forma condensed consolidated financial information is intended to illustrate the estimated effects of the Sale Transaction from the historical combined company and have been derived from the historical consolidated financial statements of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The following unaudited pro forma condensed consolidated balance sheet gives effect to the Sale Transaction as if it had occurred on June 30, 2024, our latest balance sheet date. The following unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2024 and the years ended December 31, 2023, December 31, 2022, and December 31, 2021, assume the Sale Transaction occurred on January 1, 2021, the first day of the earliest period presented, and reflect the reclassification of Fluids Systems as discontinued operations for all periods presented. Beginning in the third quarter of 2024, Fluids Systems historical financial results for periods prior to the Sale Transaction will be reflected in Newpark’s consolidated financial statements as discontinued operations in accordance with the applicable accounting guidance.
The adjustments included within the “Discontinued Operations” column of the unaudited pro forma condensed consolidated financial information are consistent with the guidance for discontinued operations under U.S. GAAP. The Company’s current estimates on a discontinued operations basis are preliminary and could change as the Company finalizes discontinued operations accounting to be reported in the Company’s future Annual and Quarterly Reports on Form 10-K and 10-Q, respectively.
The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and do not purport to be indicative of the Company’s financial results as if the Sale Transaction had occurred on such dates as presented. Further, the unaudited pro forma condensed consolidated financial statements should not be viewed as indicative of the Company’s financial results in the future. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024 and Annual Report on Form 10-K for the year ended December 31, 2023.

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Newpark Resources, Inc.
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2024
(Unaudited)

(In thousands, except share data)HistoricalDiscontinued Operations (Note 1)Pro Forma AdjustmentsPro Forma
ASSETS 
Cash and cash equivalents$35,087 $(31,415)$65,598 (a)$37,270 
— (32,000)(a)
Receivables, net158,834 (115,375)— 43,459 
Inventories127,421 (115,079)— 12,342 
Prepaid expenses and other current assets10,284 (5,109)12,813 (b)17,988 
Total current assets331,626 (266,978)46,411 111,059 
Property, plant and equipment, net205,076 (29,491)— 175,585 
Operating lease assets19,555 (8,589)— 10,966 
Goodwill47,259 — — 47,259 
Other intangible assets, net15,580 (4,184)— 11,396 
Deferred tax assets3,553 (2,363)17,434 (c)18,624 
Other assets2,151 (715)5,000 (d)6,436 
Total assets$624,800 $(312,320)$68,845 $381,325 
LIABILITIES AND STOCKHOLDERS’ EQUITY 
Current debt$17,591 $(9,009)$— $8,582 
Accounts payable69,153 (51,910)— 17,243 
Accrued liabilities40,162 (23,658)4,600 (e)21,104 
Total current liabilities126,906 (84,577)4,600 46,929 
Long-term debt, less current portion40,392 (2,707)(32,000)(a)5,685 
Noncurrent operating lease liabilities16,587 (6,184)— 10,403 
Deferred tax liabilities6,843 (4,739)(64)(c)2,040 
Other noncurrent liabilities7,463 (5,235)3,100 (e)5,328 
Total liabilities198,191 (103,442)(24,364)70,385 
Common stock, $0.01 par value (200,000,000 shares authorized and 111,669,464 shares issued)1,117 — — 1,117 
Paid-in capital631,497 — — 631,497 
Accumulated other comprehensive loss(66,084)64,831 — (1,253)
Retained earnings (deficit)26,137 (273,709)93,209 (f)(154,363)
Treasury stock, at cost (25,202,455 shares)(166,058)— — (166,058)
Total stockholders’ equity426,609 (208,878)93,209 310,940 
Total liabilities and stockholders’ equity$624,800 $(312,320)$68,845 $381,325 



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Newpark Resources, Inc.
Condensed Consolidated Statements of Operations
Six Months Ended June 30, 2024
(Unaudited)
(In thousands, except per share data)HistoricalDiscontinued Operations (Note 1)Pro Forma AdjustmentsPro Forma
Revenues$348,116 $(232,358)$— $115,758 
Cost of revenues274,671 (201,380)— 73,291 
Selling, general and administrative expenses50,725 (28,175)— 22,550 
Other operating (income) loss, net(2,438)1,102 — (1,336)
Impairments and other charges— — — — 
Operating income (loss)25,158 (3,905)— 21,253 
Foreign currency exchange (gain) loss97 635 — 732 
Interest expense, net3,546 (1,877)— 1,669 
Income (loss) before income taxes21,515 (2,663)— 18,852 
Provision (benefit) for income taxes6,182 (1,254)— 4,928 
Net income (loss)$15,333 $(1,409)$— $13,924 
Calculation of EPS:
Net income (loss) - basic and diluted$15,333 $13,924 
Weighted average common shares outstanding - basic85,237 85,237 
Weighted average common shares outstanding - diluted87,435 87,435 
Earnings (loss) per common share - basic$0.18 $0.16 
Earnings (loss) per common share - diluted$0.18 $0.16 






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Newpark Resources, Inc.
Condensed Consolidated Statements of Operations
Year Ended December 31, 2023
(Unaudited)
(In thousands, except per share data)HistoricalDiscontinued Operations (Note 1)Pro Forma AdjustmentsPro Forma
Revenues$749,600 $(541,952)$— $207,648 
Cost of revenues611,061 (475,967)— 135,094 
Selling, general and administrative expenses101,136 (52,352)— 48,784 
Other operating (income) loss, net(2,583)1,114 — (1,469)
Impairments and other charges6,356 (6,356)— — 
Operating income (loss)33,630 (8,391)— 25,239 
Foreign currency exchange (gain) loss267 (1,156)— (889)
Interest expense, net8,181 (4,074)— 4,107 
Income (loss) before income taxes25,182 (3,161)— 22,021 
Provision (benefit) for income taxes10,666 (3,506)— 7,160 
Net income (loss)$14,516 $345 $— $14,861 
Calculation of EPS:
Net income (loss) - basic and diluted$14,516 $14,861 
Weighted average common shares outstanding - basic86,401 86,401 
Weighted average common shares outstanding - diluted88,315 88,315 
Earnings (loss) per common share - basic$0.17 $0.17 
Earnings (loss) per common share - diluted$0.16 $0.17 


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Newpark Resources, Inc.
Condensed Consolidated Statements of Operations
Year Ended December 31, 2022
(Unaudited)
(In thousands, except per share data)HistoricalDiscontinued Operations (Note 1)Pro Forma AdjustmentsPro Forma
Revenues$815,594 $(622,601)$— $192,993 
Cost of revenues694,058 (561,056)— 133,002 
Selling, general and administrative expenses97,618 (51,308)— 46,310 
Other operating (income) loss, net(4,370)1,144 — (3,226)
Impairments and other charges37,322 (29,417)— 7,905 
Operating income (loss)(9,034)18,036 — 9,002 
Foreign currency exchange (gain) loss389 887 — 1,276 
Interest expense, net7,040 (3,530)— 3,510 
Income (loss) before income taxes(16,463)20,679 — 4,216 
Provision (benefit) for income taxes4,371 (2,906)— 1,465 
Net income (loss)$(20,834)$23,585 $— $2,751 
Calculation of EPS:
Net income (loss) - basic and diluted$(20,834)$2,751 
Weighted average common shares outstanding - basic92,712 92,712 
Weighted average common shares outstanding - diluted92,712 92,712 
Earnings (loss) per common share - basic$(0.22)$0.03 
Earnings (loss) per common share - diluted$(0.22)$0.03 


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Newpark Resources, Inc.
Condensed Consolidated Statements of Operations
Year Ended December 31, 2021
(Unaudited)
(In thousands, except per share data)HistoricalDiscontinued Operations (Note 1)Pro Forma AdjustmentsPro Forma
Revenues$614,781 $(420,789)$— $193,992 
Cost of revenues529,552 (397,664)— 131,888 
Selling, general and administrative expenses94,445 (47,003)— 47,442 
Other operating (income) loss, net(391)(1,304)— (1,695)
Operating income (loss)(8,825)25,182 — 16,357 
Foreign currency exchange (gain) loss(397)603 — 206 
Interest expense, net8,805 (4,245)— 4,560 
Loss on extinguishment of debt1,000 — — 1,000 
Income (loss) before income taxes(18,233)28,824 — 10,591 
Provision (benefit) for income taxes7,293 (3,919)— 3,374 
Net income (loss)$(25,526)$32,743 $— $7,217 
Calculation of EPS:
Net income (loss) - basic and diluted$(25,526)$7,217 
Weighted average common shares outstanding - basic91,460 91,460 
Weighted average common shares outstanding - diluted91,460 91,460 
Earnings (loss) per common share - basic$(0.28)$0.08 
Earnings (loss) per common share - diluted$(0.28)$0.08 


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Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
1.    Basis of Pro Forma Presentation
The unaudited pro forma condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”).
The unaudited pro forma condensed consolidated financial information has been derived from the historical consolidated financial statements and accounting records of the Company. The unaudited pro forma condensed consolidated balance sheet at June 30, 2024 was prepared as if the Sale Transaction had occurred on June 30, 2024. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2024 and the years ended December 31, 2023, December 31, 2022, and December 31, 2021, were prepared as if the Sale Transaction had occurred on January 1, 2021.
The unaudited pro forma condensed consolidated financial statements reflect the discontinued operations, including associated assets, liabilities, equity and results of operations attributable to our Fluids Systems segment which were included in the Company’s historical financial statements. Discontinued operations include direct operating expenses incurred that (1) are clearly identifiable as costs of the component being disposed of and (2) will not continue to be recognized on an ongoing basis. Discontinued operations also reflects the allocation of interest expense on corporate debt, based on the ratio of net assets sold to the sum of consolidated net assets as adjusted for debt that will be assumed by the Purchaser or directly attributable to other operations. Such interest expense totaled $0.9 million for the six months ended June 30, 2024, and $2.4 million, $2.3 million, and $3.4 million for the years ended December 31, 2023, 2022, 2021, respectively.
The unaudited pro forma condensed consolidated financial statements and underlying pro forma adjustments are based upon currently available information and include certain estimates and assumptions made by management; accordingly, actual results could differ materially from the pro forma information. Management believes the assumptions provide a reasonable and reliably determinable basis for presenting the significant effects of the Sale Transaction. These unaudited pro forma condensed consolidated financial statements are provided for illustrative purposes only and may or may not provide an indication of results in the future.
2.    Pro Forma Adjustments
Balance Sheet
The unaudited pro forma condensed consolidated balance sheet at June 30, 2024 reflects the following adjustments:
(a) The receipt of pro forma net cash proceeds (after purchase price adjustments) of $65.6 million, subject to adjustment based upon final working capital, accrued taxes and certain other liabilities, debt and cash conveyed at closing. The Company expects to use such net cash proceeds for general corporate purposes, including debt reduction, investment in growth opportunities, and the return of value to shareholders through share repurchases.
Pro forma gross consideration$83,411 
Pro forma deferred consideration (in prepaid expenses and other current assets)(12,813)
Seller note receivable (in other assets)(5,000)
Pro forma net cash proceeds$65,598 
The pro forma net cash proceeds assumes the Sale Transaction had occurred on June 30, 2024. Actual net cash proceeds as of the September 13, 2024 closing date were $70 million, as adjusted for working capital conveyed at closing as compared to the average 2023 net working capital balance, accrued income taxes and certain other liabilities, and outstanding debt.
(b) The recognition of $12.8 million of pro forma deferred consideration to be received from the Purchaser primarily attributable to cash delivered in the Sale Transaction in excess of the agreed target.
(c) The recognition of $17.5 million of pro forma tax benefits related to the effect of the Sale Transaction and resulting impact on deferred tax attributes.
(d) The recognition of $5.0 million note receivable from the Purchaser. The note matures in March 2030 and bears interest at a rate of 12.5% per year.
(e) The recognition of $4.6 million and $3.1 million of estimated non-recurring costs in “Accrued liabilities” and “Other noncurrent liabilities”, respectively. These costs primarily related to investment banker fees, legal and accounting fees, third-party consulting and contractor fees, and other costs directly related to the Sale Transaction, as well as certain estimated post-closing amounts due to the Purchaser.
(f) The effect on stockholders’ equity of the adjustments described in notes (a) through (e) above.
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The following table presents the components of the estimated net loss on the Sale Transaction (in thousands):
Pro forma net cash proceeds (see (a) above)$65,598 
Pro forma deferred consideration (see (b) above)12,813 
Purchaser note receivable (see (d) above)5,000 
Estimated liabilities (see (e) above)(7,700)
Pro forma cash to Purchaser(31,415)
Pro forma debt assumed by Purchaser11,716 
Pro forma net book value of assets sold (excludes cash and debt)(189,179)
(133,167)
Pro forma recognition of cumulative foreign currency translation losses(64,831)
Pro forma pre-tax loss on sale(197,998)
Pro forma deferred tax benefits (see (c) above)17,498 
Pro forma total net loss on sale$(180,500)


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