HomeMy WebLinkAboutRES NO 80-82RESOLUTION NO.80-82
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF BAKERSFIELD CONDITIONALLY APPROVING THE
L.O.R. INC. PROJECT
WHEREAS, L.O.R. Inc., a wholly owned subsidiary of Newport
Resources, Inc., has submitted its application for industrial
development financing .(the "Application") to the City's
Industrial Development Authority; and
WHEREAS, said Application seeks the issuance of bonds in
order to finance the construction of a 30,000 square foot
manufacturing facility with related improvements to be built on
4.4 acres of land located in the Stockdale Industrial Park at
Stine Road and White Lane in the City of Bakersfield (the
"Site");
WHEREAS, the Industrial Development Authority of the City
of Bakersfield has accepted this Application by its Resolution
No. , and appropriate notice thereof has been
published; and
WHEREAS, pursuant to Government Code Section 91529(f) the
City Council desires to conditionally approve the Project,
including the issuance of bonds therefor in accordance with the
application and the requirements of the Industrial Development
Authority; and
WHEREAS, said approval is to be contingent upon
satisfaction of all requirements of the City of Bakersfield and
other applicable agencies,
NOW, THEREFORE, the City Council of the City of Bakersfield
does resolve as follows:
SECTION 1: The L.O.R. Inc. Project, as defined in
Resolution No. of the Industrial Development Authority
of the City of Bakersfield, and as further defined in the
Application of L.O.R. Inc. on file with the City Clerk, is
hereby approved. Such approval includes approval of the
issuance of bonds pursuant to the California Industrial
Development Financing Act (California Government Code Section
91500 et seq.) for the purpose of financing the Project.
SECTION 2: Said approval is expressly conditioned upon
compliance by L.O.R. Inc. with all planning, zoning, building,
and other requirements of the City of Bakersfield and other
applicable jurisdictions which are prerequisite to the
construction and operation of the Facility. Said approval is
granted without prejudice to the City's right to exercise
independent review of the Company's compliance with each and
every one of such applicable requirements.
SECTION 3: The negative declaration prepared by Staff
in connection with this Project is hereby approved by the City,
which finds that the proposed financing will not have a
significant effect on the.environment. The City Clerk shall
cause a Notice of Determination to be filed in accordance with
the requirements of CEQA.
SECTION 4: The' City Clerk shall certify this approval
to the Industrial Development Authority, and copies of all
environmental assessments required in connection with the
Project shall be transmitted to the Authority as soon as they
are available.
PASSED AND ADOPTED this21st day of July
, 1982.
AYES: COUNCILMEN: BARTON, CHRISTENSEN, MEANS, PAYNE, RATI'Y, ROCKOFF, c~'2, Ch~G
NOES: COUNCILMEN: c..~O'
ABSENT: COUNCILMEN: ."~/',,C-5,~'~.~,- .... '
ABSTAINING: COUNCILMEN=
ATTEST:
City Clerk, City of Bakersfield
APPROVAL AS TO FORM:
APPROVAL AS TO CONTENT:
Mayor, City of B~aker. sfield
2ss?P/216o/o
- 2 -
APPLICATION .TO THE CALIFORNIA INDUSTRIAL
DEVELOPMENT FINANCING ADVISORY COMMISSION
This application was approved by the City of Bakers-field~s Industrial
Development AUtho'rity on May 25, 1982.
A. Company Identification
LOR Incorporated '
Executive Plaza Building
Suite 720-E
4615 Southwest Freeway
HouSton, Texas 77027
LOR does business in California only as LOR,' Inc'.'
LOR Incorporated (.California Headquarters)
2433 South Fruitvale Avenue, Bay #10
Bakersfield, California 93308
LOR Incorporated
801 East 33rd Street
Long Beach, California 90807
LOR Incorporated
633 North Ventura
Ventura, California.
93001
LOR is a Louisiana Corporation (1962)
B. Corporation Structure
[OR, Incorporated; Officers-
Chairman of the Board .............................. Charles R. Milan
President ........................... ~ ........ --. ....Howard B. Myers
Vice-President ..................................... Frank T. King
Vice-President ..................................... James D. Cole
Controller and Assistant'Secretary ................. James Hobby
Treasurer ' James L Katz
Secretary.... .... ................................... ~. V. Schaff
Assistant Secretary and Assistant Treasurer ........ JoSeph C, Melancon
Assistant Secretary ................................ Edah Keating
Administrative Assistant to the President .......... Richard ·La·ng~er
Assistant Tr surer ........................ ~ .... Lawrence G. ~andwehr
LOR
is a Louisiana Corporation, that is wholly owned ~ffiliate of:
Newpark Resources, !nc~
One Shell Square, Suite 5120
New Orleans, LouiSiana 70139
Newpark Resources, Inc. owns 100% of LOR, Inc., stock~ Newpark Re'sources,
Inc., is a publicly held corporation listed on the New York Stock Exchange,
and as such, has no shareholder who owns 10% or more of the outstand'ing
shares.
-?-
C. Business Relationships
The applicant company is affiliated directly with the below listed
company.
Newpark Resources, Inc.
One Shel 1 Square
Suite 5120
New Orleans, Louisiana
( 805 ) 838-8222
(A Nevada Corporation)
.70139
Newpark is the parent company for the following affiliates. (Information
derived from S.E.C. form IO-K; file no. 1-2960, New York Stock Exchange.)
South Louisiana Contractors, Inc,
LOR, Inc. (.100% Owned)
Chapman Constnuction Cot
ELPAC, Inc. (100% Owned)
(100% Owned)
(applicant company)
(]00% Owned)
,
,
* George ~!- Townsend Lease Service, Inc, '(.100% Owned)
* Maritime Insurance Co., Ltd. (100% Owned)
* The Aztec Corporation (100% Owned)
* Newpark Carriers, Inc. (100% Owned)
* Newpark Drilling Fluids~ Inc, (100% Owned)
* Eisenman Chemical Co, (.100% Owned)
* Eisenman Transport, Inc, (100% O;,med)
* Eagle Mud Service, Inc. (100% Owned)
* Newpark Major, Inc. (100% Owned)'
* Consolidated Mayflower Mines, Inc. (.85% Owned)
* Atlas Mud Co, (.100% O~,:ned)
* Barite Mining, Inc. (.100% Owned)
* Newpa.rk Aviation, Inc~ (!00% Owned)
* Newpark Services, Inc. (=100% Owned)
Company_ Description
LOR is classified under Standard Industrial C~de Number 3490. The Company
specializes in tools· and downhole technology design to meet the d~nands
of the oil exploration and drilling indt:stries. The downhole tools in-
clude stabilizers and reamers.
LOR presently utilizes a 2 acre site in Bakersfield which serves as the·
primary service center for LOR in the city. Contained within this facility
is the administrative offices, sales offices, machine shop and service
office. Approximately one-half of this site is used as equipment storage
a r ea.
The attached illustration represents a schematic rendering of the proposed
improvements to the site.
Project Description
The proposed project will be located in the
Stockdal e Industrial Park
Stine Road & ~,lhite Lane
City of Bakersfield 93309
The site will be approximately 4.4 acres in area, and is fully served by
utilities and roads. The land is presently vacant industrially zone
property.
The applicant has taken an option·to purc}~ase the site. This option must
be exercised by August 30, ·1982. Upon the approval of this application by
the Local Authority, the app. licant will exercise his option and enter
into an agreement to purchase the site.
Appendix Item B, attached to this application, illustrates the location
and improvements. The property is identified as:
Parcel No. 6 of parcel map 5968
There are no certified financial statements available for LOR since
they are part of the Newpark Resources group. The certified financial
statements for Newpark, Inc. are attached as; Attachement "A" Annual
IO-K reports for guarantor, Newpark Resources for the past three years.
are submitted for this purpose.
LILLLLI_
I.T,,T~,USTRAT]UO'..,"T !
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· . ;//LI
"'~'~ y,_,_,f_
22 ,~
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F. Propgsed Project
The project site will be improved with a 3,000-square foot steel
structure, including a small administrative office. This represents
a significant expansion in both site and plant.
New ~nachinery and equipment including:
* Two hollow spindle lathes complete with attachments and gauges;
* Turning and grinding lathe
* Heavy duty O/S metal grinder
* Dust col 1 ectors
* Tools, racks and rollers
* Drill Collars
* Two, 3 ton overhead cranes
* One, 5 ton O/S crane
Total Estimated Cost $1,200,000
The estimated construction timing fQr the project results in the
commencement of construction on August 30, 1982, with completion
scheduled for November, 1982.
Property Acquisition
* Purchase agreement signed June 10, 1982
* Earnest money deposit of $79',763 made June 24, I982
* Final closing act of sale to be on July 15, 1982; balance to
be paid on same date.
Pri nc i pal Products
LOR is principally involved in the manufacture, reconditioning, sales
and distribution of downhole drilling tools including stabilizers,
reamers and service tools. LOR is involved in the design and'improve-
ment of tools to meet the new problems encountered in c!eeper,' more
severe drilling conditions.
LOR has become a leader in the design and manufacture of drill collars,
spiral drill collars, and square drill collars in heat-treated steel
or nonmagnetic materialS. A list of the various tools manufactured
by LOR are contained in Appendix C.
The funds raised through issuance. of this bond s'ale will finance
manufacturing and service activities under SIC 3a. 90.
It is estimated by knowledgeable persons that the proposed structures
will have a useful life of 30+ years. The building will be constructed
of steel columns and beams clad with steel sheet and tilt-up concrete
infill panels. ..
The Bakersfield Industrial Development Authority has-established certain
standards and guidelines for determining the worthwhile character of a
proposed project. Uppermost in priority is the strengthening of our
basic economy -oil 'and agriculture. The completion of this project
will enable an existing company, whose contribution.is important to our
oil exploration and drilling efforts, to expand their facilities, service
and employment.
H. Project Uses: Statenlent of Eligibility'
The proposed project, when completed, will result in the establishrqent
of a facility that will process and manufacture products related to the
exploration and extraction of oil, and would thus be an eligible project
under Section 91503 of the California Industrial Development Financing
Act ('the "Act").
The project will not result in uses nor projects described under
Paragraph (b)of Section 91503 of the Act.
There are no known restrictions, covenants or terms implied, or contained
as a part of, the terms agreed upon 'For the purchase of the subject proper~y
that would restrict or alter the appropriate development of this project.
-7-
Cos c
].
of the Project
Land Estimated Costs
Contract Price ......................... $280,000
Legal, Filing, Msc ..................... $10,000
Fees, Permits and Taxes ................ $10,000
Sub Total ...................... $300,000
Architectural and Engineering .... : ................. $50,000
Construction Costs
Site Preparation ....................... $20,000
Materials ............................. ~$415,000
Labor .................................. $100,000
'Construction Contracts ................. $25,000
Utilities Connection ................... 510,000
Paving and-Landscaping ................. $25,000
Sub Total ......... ' .............$500,000
4. Machinery and Equipment .......................... $1,200,000
5. Interest During Construction.(EST) .......... · ..... (unknown at
6. Financing, Legal, Costs .......................... (unk'nown at
present)
present)
All costs noted are estimates based upon costs of other similar projects
developerd by the applicant. No precise values have been developed for
this project on the date of this application.
Proposed Schedule:
A. Begin Construction 7~15~82
B. Complete Facility 11=30~82
C. Occupy Facility 12~15-.82
D. Start-up .1~1-83
J. Description of Bond Issue
2.
3.
4.
5.
6.
8.
Project cost estimated at $1,700,000
Legal, printing and related fees estimated at $50,000
Financing, cost and fees estimated at $10,000 annually
Capitalized interest estimated at $50,000
Issuance and other costs estimated at $75,000
Estimated target date of financing ~ 12/1/82
Estimated terms of financing is 30.years
Description of bond sale
The bonds will be sold i.n a public offering basis. The -Firm of
Howard, ~eil, Labouisse,.Friedrichs, Inc. New Orleans, LouiSiana
will be the underwriter for the bond issue. The bonds will be
issued with a backup 7 year Letter of Credit issued by a triple A
rated bank (Manufacturers Hanover, New York). The bonds will be
fully guaranteed by tt~e full faith and credit of Newpark Resources
Inc. The bonds will be for a 30 year tenor with semi-annual interest
payments at an annually adjusted interest rate. The bonds will also
ca,rry a put feature which wi'll allow the bondholder to put the bond
back to the underwriter once a year at 100% of par plus interest'.
Public Benefits Derived From Project
The completion of this project will allow the applicant to move
approximately 4~ miles froin a leased facility of 2.0 acres that
will be owned and improved by the applicant.
Current employment is 14 people, including four management individuals.
The present payroll is approximately $300,'000 per year.
Upon completion of this project, the appl icant 's payroll will increase
to 30-35 employees with an annual payroll of $650,000. The l~ulk of
the new positions will occur in the areas of transportation, machine
operators and labor.
The completion of this project will expand and strengthen the' applicant's. '
ability to serve the r. egion's mineral extraction industry, The appli-
cant's service and pro'ducts represent high technology in the field oil
exploration and extraction.. At present, the applicant's operation is
disbursed throughout the state, thus adding additional cost and time to
the oil company's operation -cost that is ultimately passed on to the
consumer. ~,iith the completion of this-project, the applicant will be
able to provide a very critical service in a significantly more effecient
manner.
The applicant has estimated a savings of over 50% in transportation
costs; a significant savings in overhead,. even ~viththe purchase and
development of the proposed site, because of more efficient facilities,
and; a savings o-F both cost and time to the consumers by eliminating
or shortening down time for drilling operations.
L. "Public Detr~niemL!om Issuance of Bonds·
~ ~ ~ ~.---~ . . ~ ~ · ,' 7'-~ - . - . . -, ~ . . ,~ . , - ....~ -. · -..-~ ~
1. '; The s~le of this bond issue and the completion of this p~oject'
will -not result in any employment displacement at any other opera-
tion of the applicant. This project will result only in the expan-
sion of employment of the applicant.
.2.
The completion of this project will not result in any signifi'cant
or adverse environmental impacts upon the air quality or waste
displosal capacity of the.-~egiQn. There will be no increased cost
to the publ.ic due to increased utilization.
No additional Services or cost to the public will occur because of
this project. The site is an existing industrially zoned property
with all roadway and Dtility improvements installed.
M, State~wide Operation of'Applicants
1. The applicant presently has four sites engaged in business;
* LOR Inc.
2433 South Fruitvale Ave~ Bay//10·
Bakersfield, California 93308
Machine shop, .sales'and service, with major storage facility
* LOR Inc..
801 East 33rd Street'
Long Beach, California· 90807
Sales and service only
* LOR Inc,
633 North ~entura
Ventura, California
Sales Office only
93001
The present state-.Wide employment level is 40=45 persons with a total
payroll of $800,000~
After completion of this project, the total state~wide employment will
reach+~pproximately 65 people w.ith an annual payroll of $1,200,000.
This employment level should be reached shortly after completion of
the project and will be maintained at basically that level,
No relocation of jobs, operations or facilities will occur other than
the .move required to relocate the business approximately 4.5 miles to
the new- facil i'ties. ..
2
Capital e×penditures in Bakersfield in past three years:
Property~ plant $60,000
LeasehOld improvements 21~000
Furn'iture & fixtures 3,090
Shop equipment 36,00d
To ta 1 . $12 0
prior' bond issues in SL,.-.,~te of Cali'fornia
"APPENDIX ITEM A':
YORb'~ 10~-,<
Annual Pepoft Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December.31, 1981 Commission Fi].e No.
1-2960
NB~AtK P£SCXE{k~q, INC.
(Exact na~.e of registrant as s~ifi~ in its charter)
(State or' o~.er' juri~i~io~ o~ (I.R.S.
in~'~a~io. or org~iza~on) :
2980 ~dgel~e ~ive, Mekairie, ~uisi~a
(~d~s o~ pr~ci~al exe~kive offices)
87-015871'0 ·
Enployer Identification "-
70002
(Zip Code)
(504) 83818222
}L=gistran~'s tel_~phone number, including area code
Securities registered pursuant to Sec~uion 12(b) of the Act:
Title of E~ch Class
Nar~of Each Exchange on
P~ich P~gistered
Comr~Dn Stod<, $2.00 par value New York Stock Exchange
Securities registered pursue~qt to Section 12(g) of the Act: - None
Indicate by chE~k mark whether the regikotrant (1) has filed all
reports r~uired to be filed by Se~ion 13 or 15(d) of the. Securrlties
Exdnange Act of 1934 during the preceding 12 months (or for such sJnorter
pe_riod that the registrant was required to fine sudn reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X
Indicate the n~ber of shares outstanding of each of the issuer's
classes of common stock as of the close of the pa_riod coveredby this
report.
Common stock, $2.00 par value: 13,052,074 shares at Dece..mber31,
1981.
State the aggregate market value oE the voting stock held by
non-affiliates of the registrant: $143,572,814. 'fne aggregate market
value has been co~Tputed by reference to the last reixarted sales price of
such stock on the New York StockExchange'on March ]5, ]982.
Documents Incorporate<] by Peference
7hose sections or portions of the registrant's 1981 Annual Pepoft
to Shareholders and of registrant's Proxy Statedneat for the ar:nual
rc~et-Lr:g o~ ahaceho!de~s to be held on June 3, 1982, Cescrih<~d in the
cross reference sheet attache] hereto, are inc~q~}rate<:l by ref{esence in
this re~y_'}~t.
Information incorporated by reference from the registrant's 198'1'
Annual Report to Shareholders (the "Annual Report") or Proxy Staterant
for the annual meeting of shareholders to be held June 3, 1982 (the
"Proxy Statement"), is herein identified by page.
Item Number and Caption
Paragraph or Caption
PAt~CI
Item 1.
Business-General de-
velopment of business
'and narrative descrip-
tion of businessby
industry segment
Annual Report, pages 5-16, sec-
tions entitled "Introduction",
"Drilling Fluids", "Oilfield
Tools and Equipment", "Site
Preparation", "Waste Treatment
Operation", "Marine Repair and
Cleaning" and "Mineral Proper-
ties", and page 26, sections
entitled "Notes to Consolidated
Financial State~.ents-Note B.
Acquisitions" and "Note C.
Discontinued Operations",
Business-Financial in-
fomation about indus-
try seg~,.nents
Annual Paport, pages 18'and 19,
section entitled "Management's
Discussion and Analysis of
Financial Condition and Results
of Operations", page 20, section
entitled "Revenues and Operating
Profit from Continuing
Operationsby Industry Seg. ent"
and page 29, section entitled
"Notes to Consolidated Financial
Statements - Note K. Industry
Segment Infornk~tion".
Sources and availability
of raw materials
Annual }~port, page 29, section
entitled "Notes to Consolidated
Financial Statements~Note J.
Litigation".
Business-~,brking
capital practices
AnnualReport, page 18, section
entitled "Li~aidity and Capital
Resources" and page 27, section
entitled "Notes to Consolidated
Financial Statements-Note E.
Lines of Credit".
Item 2.
Description of Property
Annual Report, page 16, section
entitle<] "Mineral PrOperties",
page 29, section entitled "Notes
to Consolidated Financial
-1-~
Ite~n N,~ber and Caption_
Item 3. Legal Proceedings
Item 4.
Security C~nership of
Certain Beneficial (~ners
and Management
Ite~ 5.
PE II
Market for the Regis-
trant'sComr~3n Stod<
and Related Security
Holder Matters
Item 6.
Item 7.
Item 8.
Selected Financial
Data
M-~nagement's Discus-
sion and Analysis of
Financial Condition
and Results of Opera-
tions
Financial Statements
and SupplementaryData
item 9.
PART III
Directors and ExeCu-
tive Officers
Item 10. Management Remunera-
tion and Transactions
Paragraph or Cap, tio.n' ~.:
Statements-Note J. Litigation"
and page 32, section entitled
~Newpark Locations".
Annual Report, page 29, section
entitled "Notes to Consolidated
Financial State~nents-Note J.
Litigation" o
Proxy Statement, sections
entitled "No..~inees and Voting",
"Shares O~ned by Certain
Stockholders" and "Shares C~ned
by Manage~rant".
Annual Pepoft, page 21, sections
entitled "Selected Financial
Data" and "Con.Tron Stock Trading
Range" and page 30, section
entitled "Dividends on Common
Stock".
Annual tieport, page 21, section
entitled "S-~lected Financial
Data" o
Annual Report, pages 18 and 1 ~,
section entitled "Managercent ' s
Discussion and Analysis of
Financial Condition and Results
of qperations".
Annual Report, page 20, section
entitled "Quarterly. Financial
Pesults", pages 22-25, section
entitled "Financial Statements"
and pages 26-29, section
entitled "Notes to Consolidated
Financial Statements"-
Proxy Statement, section
entitled "Business Experience of
Directors During Past Five
Years".
Proxy Statement, sections
entitled "Ren?aneration", "Stock
Options" and "Certain
't~zansactions'' ,
-2-
Ite, 1. Business
-General Develct~ent of Business
NewparkResources, Inc. (Newpark) serves the oil and gas drilling
indusEry as an integrated manufacturer and distributor of oilfield
products and services. Principal products and services include drilling
fluids and specialty chemicals; downhole tools, wellhead equipment and
tubular supplies; drilling site preparation; marine repair, barg~
cleaning and construction; and waste treatment of mad pits. Newpark
also owns interests in a non-operating gold and silver mine, uranium
prope~ies, and undeveloped oil and gas leaseholds. "
For information concerning the historical development of Newpark
and developments of the current year see pages 5-16 and "Notes to
Consolida~_ed Financial Statements~Note B. Acquisitions" and "Note C.
Discontinued Operations" on page 26 in the Annual Pepoft, herein
incorporated by reference. Newpark was incorporated in 1932 under the
laws of the State of Nevada.
Financial Informaticn about !Dx]uskry. Segp~=nts
Financial info~nration concerning Newpark's industry seg~r. ents can be
found under the sections entitled "Manage.ment's Discussion and Analysis
of Financial Condition and Results of Operation", pages 18 and 19;
"Revenues and Operating Profit from Continuing Operations by Industry
Segment", page 28 annd "Notes to Consolidated Financial Statements - Note
K. Industry Sediment Information", page 29; ~atl in the Annual Report,
herein incorporated by reference.
NarrativeDescription of Business
· A narrative descrfphion of N~park's business by industry segment
canbe found on pages 5-16 of the knnual P~porh, herein incorporated by
reference.
Sources ar~] Availability of Raw Materials
Drilling fluids - ~he principal rawmaterial'used in drilling
fluids is ba-cium sulfate (barite). Newpark mines from and is
developing numerous barite deposits near Carlin, Nevada. In
addition, N~park has entered into a contracEual supply
arrangef~nt with a do.mestic company ~ich ~nines barite, and
purchases ore imported from foreign countries. For additional
information see "Notes to Consolidated Financial Statements-Note
J. Litigation" on page 29 in the Annual Report, herein
inco~porated by reference-
. Oilfield tools and equipment - Ne,~jark's dcy~nhole tools are
manufactured from high-grade steel purchased from domestic and
foreign steel co~ies; wellhead equipnent is purchased new or
ac~]uired used and reconditioned; and tubular supplies are
purchased from various sources for used pipe and primarily from
Japanese trading co,~panies for new pipe.
. Oilfield site preparation - The major raw materials used in site
preparation are hardT~ood lumber and limestone. Newpark obtains
the majority of its lumber from its o~n sawTnill. Limestone is
obtained from another N~park subsidia~f-
Newpark believes that its sources of supply for these and any other
materials are adequate for its needs and that it is not dependent upon
any o~& supplier. No serious 'shortages or delays have been encountered
in obtaining any raw materials.
Patenks andLicenses
Ne;~park c~ns a number of patents and licenses relating ~o the
design and manuEacturing of its products and the equipment used in
providing se~/ices to its custom~_rs. Newpark seeks patents and licenses
on new developments whenever feasible, hc~ever, it does not consider &ny
one or more of its patents or the licenses granted to it to be._ essential
to its business-
Working Capital Practices
Newpark does not have any special working capital practices which
differ significantly from those generally practiced in the oil and gas
drilling service industry. For additional' information on Newpark's
current borrc~ings see "Liquidity and Capital t~esources", pa~e-18 and
"Notes to Consolidated Financial StateF~nts - Note E. Lines of Credit",
page 27 in the Annual Report, herein incorporated kyy reference-
Dependence Upoa Limited Number of Cus~rs '-
Newpark does not have any one custoxr~r or group of related
customers on either a industry se<3ment or a company wide basis which
accounts for 10% or more of consolidated revenues.
Newpa~k is faced with co.~petition from larger and smaller co~Danies
in substantially all of its product and service classes. Co~,ppetition is
generally based on a combination of service, quality, availability,
design or price. Cor~etition is increasing as a result of
diversification by firf~ not previously in Newpark's n~rkets and by
Nc~park entering new markets. Newpark has been able to maintain its
coI[~etitive position in the markets in ~/nich it operates through
increased market penetration, expanded distribution networks',
acquisitions, expansion of productive capacity and development
in-proved prcx~ucts and services.
Enviropj~ental Disclosures
Newpark has sought to c6mply with all applicsble regulatory
requirements concerning enviromTental quality, and has l~de, and expects
to continue to make, the nec~ssa~-y capital expenditures for
enviro~ntal protection. No l~terial capital expenditures for
environmental protection were made during 1981 and no such material ·
expenditures are planned for 1982. It is anticipated that future'
environmental expenditures will not. materially affec~ earnings or
Newpark' s compe_titive position. '
Employees
Newl0ark enploys approximately 2,950 people, none of which are
represe-nted by unions. Newpark considers its relations with its
enployee:Ls to be satisfactory- In general, e~ploymenk in the oilfield
service indust_ry has risen during the past several years, and Newpark
has encountered and' expects to continue to encounter co.~petition fo~-
qualifieK] personnel.
Miscellaneous
~Cne backlog of firm, unfilled cusko,Ta~r orders is not significant to
Newpark as a whole nor any off its businesses individually. Neither
Ne,~park nor any of its businesses derive a significant portion of their
revenues from gove~n%ment cgntrac~.=s 'of any kind.
Item 2. Descri~okion of Property
Ne~ffDark's Drilling Fluids segment a~ns or claims interes~ in 17'
proFrties ~ntaining trite de~sits near Qrlin, Nevada. NeWark
a c~shing and s~eening ~11 and a jig pl~t locat~ on one of these
pr~rties. ~e ore from these ~nes is process~ in N~park's .~ree
grinding pl~ts in Salt L~e City, Ut~; Clinton, Ok!tom and ~us
Qristi, Texas. Drilling Fluids ~rakes a research l~rako~, a
drilling fluids sch~l and a drilling fluids che~cal pl~t in Greeley,
~lorado. ~e distriCtion network includes 54 warehouses, ~d plants
and s~es offices locat~ through~k the following states: ~k~sas,
~lorado, K~sas, ~uisi~a, Mississi~i, New [~xico, North Dakota,
Okl~oma, Texas, Utl and Wyo~ng- For additional info~tion see
"Notes to Consolidated Fin~cial Statemnts- Note J. Litigation" on page
29 in the ~nual Re~rt, herein in~rat~ ~ referene.
~e Oilfield T~ls ~d ~ui~enk s~ent o~rates eight domstic
t~l r~nufacturing and repair plants in Califo~ia, I~uisiana and Texas.
Sales and distribution centers are locate] in I~uisiana, Mississippi,
Oklahoma, Ut~nh and Wyoming. In addition, repair and distrr'~utio~=
facilities are maintained internationally in Singapore and ScxDtland.
The Oilfield Site Preparation segment o~ns or leases offices,
maintenance shops and warehouses in I/~uisiana and Texas. A lt~.ber mill
with office and yard facilities owned by this s~jm~nt is loca-hed in
Texas. · Dock and marine facilities are leased in Louisianna.
The Marine Repair segmenk ope_rates dry docks, marine railways, a
barge cleaning and gas freeing facility and fabrication shops on
approximately 24 acres of an island leased on the Houston Ship C~annel.
Newpark also controls certain mineral interests, as described under
the seckion entitl%<] "Mineral Properties" on page 16 in the Annual
'Repo?~ herein incorporated by reference. These properties have been
owned. for many years or obtained in acquisitions of conpanies. Newpark
is not engaged in operations on the properties, and will seek joint
ventures for their development or exploration. Newpark's n~nera!
interests have bee_n acquired from the apparent record owners. -.
Consistent with prevailing practices in the industry, complete title
exeuninakions and all necessary curative steps may no'h have been
pe_rformi~ with resp~c to certain undeveloped interests; accordingly,
there may be ce~ain outstanding defects or adverse claims with respect
to Newpark's title to some_ of these properties. Newpark's mineral
interests are also subject to royalty ~d other outsh~nding interests
customary in the mining and oil and gas indushries-
Newpark's co~noorate offices are in a b.~ilding constructed during
1981 in Metaltie, Louisiana.
All of New~ark's facilities are suitable for their respective uses
and are adequate for current needs. For a detail listing of Newpark's
locations by city, see page 32 of the Annual Report, herein incorporated
by reference.
Iten 3. Legal Proceedings
Information pertaining
lawsuits canbe found under
Financial Statements - Note
Report, herein incorporated
to Ne~park's involvement in claims and
the section entitled "Notes to Consolidated
J. Litigation" on page 29 in the Annual
by reference.
Item 4. Security Ownership of Certain Beneficial C~ners and Management
Information related to any holder of over 5% of any class of
Newpark's voting securities and beneficial ~nershipbydirectors
individually and directors and officers as a gr(x~p of any class of
Newpark's equity securities is included in the sections entitled
"Nominees Dnd VOting", "Shares O.~ed by Cerhain Stockholders" and
"Sh~n~.es O~ned by Management"
by reference.
in the Proxy Statement, herein ~ncor~orat~]
P~
Iten 5. Market for the Registrant's ~n Stod~ and Related Security
Holder Matters
InfOrmation with respect to Ne,~park's. Co~Tmon Stod{ can be found
under the sections entitled "Selected Financial Data" and "ConmDn Stock
Trading Range" on page 21 and "Dividends on Conmon Stock" on page 30 in
the Annual Report, herein incorporated by reference. On February 25,
1982 Newpark had approximately 6,475· shareholders of record.
Ite~ 6. Selected Financial Data '
Information with respect to this item can be found under the
se~ion entitled "Selected Financial Data" on page 21 in the Annual
· Report, herein incorporated by reference.
Item 7. Hanagement's Discussion ap~ ~alysis oK Fip~nncial Condition and
Results of Opera'hion
Information ~,~itlq respect to this item can be fc~and under the
section entitled 'T~anagement's Discussion and Analysis of Financial
Condition eund ttesults of Operation" on pages 18 and 19 in. the Annual
tt~oort, herein inco_~rporated by reference.
Ite~ 8. Financial Stak~nenbs ap/3 Sui~p!ementa~y Data
The follu~ing financial statements and accompanying notes of
Newpark are included on, pages 22 through 29 in the ~nnual Pepoft, herein
incorporated by reference:
Consolidated Balance Sheet - December 3t, 1981 and 1980
Consolidated Statements of Earnings - Years ended Decera'per 31,
1981, 1980 and 1979
Consolidated Statements of Shareholders' F~iuity -Years ended
December 31, 1981, 1980 and 1979
Consolidated Statements of Changes in Financial Position - Years
ended December 31, 1981, 1980 and 1979 ..
Notes to Consolidated Financial Statements
/
Selected quarterly finar, ct.ffl data with respect to this ite~ can ~
fc~nd under the sectior~ e~titled "Qaarterly Financial Results" on page
20 in the ~naual Report, herein incorporated by reference.
P~AF/' III
Item 9. Direr{ors apx] Executive Officers
Members of Newpark's Board of DireCtors, including executive
officers of Newpark who are also directors, are identified along with
their business experience during the p~t five years under the section
entitled "Business Experience of Directors During Past Five Years" in
the Proxy Statement, herein incorporated by reference..
The names, ages and positions of all officers 'of Newpark who are
not also directors are listed below, together with their business
experience during the past five years. Officers are re-elected annually
by the Board oE Directors at the annual meeting of directors i~diately
folle~ing the amnual meeting of shareholders.
All other executive officers include:
Frederick A. Carstens, Jr. (age 42) has sea~ed as Ne~park's Vice
President of Minerals since February 1981. From November 1978 to
February 198], Mr. Carstens serve<] as Controller of Newpa~k. For
approximately four years prior thereto, Mr. Carshens served as
Controller of The Louisiana Land and Exploration Co., a conlpany engaged
in oil and gas ex~o!eration, developTent and production.
E. Glen Evans (age 46) joined Newpark as Vice President of its
dg~nho!e tool co.,me. any, LOR, Inc. in April of 1981 before xroving to his
present position as Newpark's Vice President of Engineering~ Prior to
joining Ne~park, Mr. ~vans served as Vice President of Manufacturing for
Reamco, Inc. from 1976 to 1979 and President of ~jnex Industries, Inc.
from 1979 to 1981. Both conpanies were in the dcz. mhole tool business.
Amex Industries, Inc. was acquired by Newpark during 1981.
James C. Halliburton (age 52) has serve] as a Vice President of
Newpark since March 1979. For more than ten years prior thereto, Mr.
Halliburhon was employed by the Halliburton Company as the credit
department manager.
James L. Katz (age 46) joined Ne~park in August of 1981 as Vice
President of Finance and Treasurer. From 1973 to 1980, Mr. Kahz served
in the same capacity with Baxter Travenol Laboratories, Inc., a
maltinational n~.~nufacturer of health care products. From 1980 until he
joined Newpark Mr. Katz was a partner with the international accounting
firm of Alexander Grant & Company.
V. Jay Phillips (age 41) has served as a Vice President~of Neapark
since Nova'~er 1980. ~br ~xore than five years prior thereto, Mr.
Phillips was en]p_loyed by Milchera, Inc. in various executive capacities
related to domestic mineral operations.
Jeffrey H. Larkin (age 31) joined Newpark in 1979 serving as
Assistant Controller until Febnlary 1981 when he was elected Controller.
For seven years prior thereto, Mr. Larkin was e,~ployed by the
international accounting firm of Arthur Y<xmg & Company.
A. V. Scha~E (age 72) has served as Secretary of Newpark since
August 1976. For approximately three years prior thereto, Mr. SchaEf
served as Secretary of Elpac, a company acquired by Newpark in 1976.
Ite~ 10. btanagem~nt Remnneration and TraD3actions
Information with respect to this item is included under the
sections entitled "Renu~,eration", "Stock Options" and "Ce~ain
Transactions" in the Proxy Statement, herein incorported by reference-
PA~PIV
Item 11. Financial Statements, Schedules, P~'por~s on Form 8-~X and
E,v_hibits
Documents filed as part of this Fom 10-K:
Financial Statements
Included in Item 8 of Part II of this Form 10-K are the following
financial stateL~ents, related notes thereto, and auditor's report which
are part of Newpark's 1981 knnual Report and are herein incorporated by
reference: ~
Annual Re~ort
'Page
Consolidated Balance Sheet -DeceWDer 31,
1981 and 1980
22
'Consolidated Statementsof Earnings - Years
ended December 31, 1981, 1980 and 1979
23
Consolidated Statements of Shareholders' Equity
- Years ended December 31, 1981, 1980 and 1979
24
Consolidated State.n~nts of Changes in Financial Position - Years ended December 31, 1981, 1980 and 1979
25
Notes to Consolidated Financial Statements 26-29
Report of Certified Public Accc~.lntants
With the exception of the specific pages listed above and the
items referred to in items 1, 2, 3, 5, 6, 7 and 8, ~qe 1981 Annual
Report to Shareholders is not to bedeemed filedas part of this
report.
Financial Statement Schedules
Included in Part IV of this Form 10-K are the follg~ing financial
statement schedules:
Schedule 10-K Page
V
Property, plant and equi~nt
16
VIII
Accumulated depreciation of property, plant
and equi~nt
Valuation and qualifying acco~mts
17
IX Short-termborrowings
X
Supplemental earnings statement
20
All other schedules are omitted since the rec~Aired information is
not present or not present in amounts sufficient to requ_ire submission
of the schedule, or because the inEon~ation recfdired is included in the
consolidated financial statements or the notes thereto.
Separate "Parent Only" financial statements have been omitted as
Newpark has no unconsolidated subsidiaries, no subsidiaries engaged in
diverse financial a~ivities, no subsidiaries ~nose securities are
pledged as collateral, nor any subsidiaries whose restricted assets
exceed 25% of consolidated assets.
Reports on Form 8-K
No re~rts on Form8-K were filed during the fourth quarter of th~
year ended December 31, 1981.
Exhibits
3(a) PestatedArticles of Incorporation*
(b) kmendment to Article IV of the Restated Articles of
Incorporation*
(c) Bylaws*
-10-
.~ 4(a).
Article IV of the Articies of Incorporation~
(b) Resolutions defining the rights of holders of Series A
Preferred Stock*
(c)
10(a)
(b)
11.
13.
(c)
(d)
(e)
Resolutions ame.~-ndingthe rights of holders of Series A
Preferred Stock*
Form ofAgreementAmong Unde%iters, including form of
Underwriting Agreement, dated January 27, 1981'
Agreement and Plan of Reorganization dated January 31, 1981
relating to the acquisition of Drilling Materials, Inc., Mud
Product Sales and Rentals, Inc. and Concentrated Mud
Chemicals, Inc. *
Non-Statutory Stock Option Plan*
Resolutions amending the rights of optionees under the
Non-Statutory StOck Option Plan
AGREK~'NT, dated Febmary 4, 1982, relating to the sale of
Newpark Offshore Marine, Inc. and Newpark Marine Services,
Inc. to Gulf Fleet [,~rine Corporation.
Stahe..me.~nt of coF.~Dutation of per share earnings.
Annual Pepoft to Shareholders for the fiscal year ended
Decembe~.r 31, 198].
22. Subsidiaries of the registrant..-
Exhibits incorporated. by reference -- see EXHIBIT INDEX.
SIGD~A'IIrRES " · .~
Pursuant to the requirements of Section 13 or 15(d) of the
Se~.curities Exchange Act of 1934, the registr~t has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized -
Dated: Marc~h 29, 1982
N~ARK RESOURCES, XNC.
By: /s/J~nes D. Cole
James D. Cole, President
Pursuant to the require~nents of the Securities Exchange Act of
1934, this report has been sign~]' belu~ by the follo'~ing persons on
behalf of the registrant in the capacities and 'on the date
indicated.
Signatures
Title Date..
/s/James D. Cole
James D, Cole
President (Chief Execu-
tive Officer) and
Director
~k~rch ~9,
1982
/s/J~es L. Katz
J~nes L. Katz
Vice President of Finance
and Treasurer (O~ief
Financial Officer)
March 29,
1982
-12-
Signatures
Title
Date
/s/Jeffrey H. I~rkin
Jeffrey H. Larkin
Controller (Chief
Accounting Officer)
March 29, 1982
/s/Fdward J. Eisernman*
Edward J. Eisen~an
Director
~,~rch 29, 1982
/s/W. W. Gocdson*
W. W. C~odson
/s/JobAn J. Graham*
John J. Graham
/s/Frapl< T. King
Frank T. King
Director
Director
'Director
March 29, 1982
March 29, 1982
Mardn 29, 1982
/s/Robert L. Parker*
Robert L. Patter
Director
March 29, 1982
/s/R. Michael Still*
R. Michael Still
/s/Ray~nd M. ~nu. apson*
Raymond M. Tho~Tpson
Director
Director
[[trch 29, 1982
March 29, 1982
/s/Ward W. Woods*
Ward W. Woods
Director
March 29, 1982
/s/John W. York*
John W. York
Director
March 29, 1982
*By/s/A. V. SchafE'
A. V. Schaff as
Attorney-in-Fact
CGNS~ OF CEI~][FIED PUBLIC
The Board of Directors and Shareholders
Newpark Resources, Inc.
We consent to the incorporation by reference in this Annual Report on
Form 10-K of Ne~park Resources, Inc. of our report dated February 19,
1982 included in the 1981 Annual Report to the Shareholders of Newpark
Resources, Inc. '-
We also consent to the addition of the supplementary information and
financial statement schedules, listed in Part IV Item 11, to the
financial statements covered by our report dated February 19, 1982
inco~porated herein by reference.
ARivHUR YOUNG
Ne~ Orleans, I~uisiana
February 19, 1982
Accrued Liabilities
Accrued liabilities included in the consolidated balance sheet at
December 31, 1981 and 1980, are as follows (in thousands of dollars):
1981 1980
Payroll and bonuses $ 3,980
Interest 2,254.
Taxes other than on income 1,035
Profit sharing 956
Insurance reserves (157)
Customer advance payments 63
Other 4,628
$1'962
2,779
519
704
810
569
2,479
$12,759
$9,822
Newpa:k Re~urces, Inc.
Prope. rty, Plant ap~ Equi~.r~..nt
Years Ended December 31, 1981,
1980 and 1979
(In thousands of dollars)
Balance at
begirning
of year
1981
Lapid $ 3,059
Buildings amd
imp ro yemen t s
'6,820
Additions
at cost
Retiren~_nts
or sales
$ 2,169 $ (14)
Boats and equipment .
30,176
7,289
Machinery and equil~nent 44,598
2,717
Construction in progress 1,892
33,075
10,082
Other 1,135 838
= $87,680 $56,.170
$ 1,889
$ 1,170
1980
La,~d
3,018
3,883
Buildings and
improv_.~me.~.nts
32,152
2,300
Boats and equi~ment
33,344
1,266
760.
$72,429
15,951
4,869
427
$28,600
Machine,l(. ~c~nd ecfaipment
Construction in progress
Other
322
1979
Land $ 1,.155
441
Buildings and
inprov~-~m. ents 2, 614
29,782
2,953
Boats and equipment
10,00l
Machinery and equipment 24,374
1,065
Construction in progress
Other 570 206
~58,495
$14,988
(A) Acc~aisitions of[~3sinesses.
(B) ~ans~e~ to net assets of
d:Ls<xonti~u~d oi>efations,
(C) Transfer to othe~ assets.
(16 )
'(1,275)
(4,295)
(8,149)
j_s6
$(13,950)
(343)
(1,083)
(5,079)
(4,243)
(82)
$(10,830)
$
(780)
(583)
(3,167)
(31)
$ (4,579)
SCEtEDOtE V
Other
changes
141
860
(26,665)
7,866
503
83
$(17,212)
Balance
at end
of year
(A) $ 5,355
(A) 14,808
(B) 4,953
(A) 81,24~
(A) 4,328
(A) 2,000
$112,688
$ - $' 3,059
262 (A) 6,820
5 (A). 30,176,
(3,198)(C)
382 (A) 44,598
- 1,892
30 (A) 1,135
$ (~,'~19) $ 87,680
$ '430 (A) $ 1,889
792 (A) 3,018
(49)(C)
- 32,152
6,764 (A) 33,344
(4,628)(C)
201 (A) 1,266
76 (A) 760
(61)(C)
'3,525 $ 72,429
Newpark ~esour~es, Inc.
Acc~m.,~alated bepreciatfc~
Years Ended December 31,
(In thousands of dollars)
1981
Buildings and
'improvements
Boats and equipment
Madninery and equi~ent
Other
1981, 1980, 1979
Balance at
b_~gi~ning
of. year
$ 1,010
10,241
12,668
368
$24,287
Additions
'chargedto
earnings
1980
Buildings and
improve~.ents $ 931
Boats an.d equipn~nt 9,114
r,~chinery and equipment 11,023
Other. 301
$21,369
$ 579
3,209
8,678
181
$12,647
$ 260
2,777
4,716
111
$ 7,864
1979
Buildings and
improvements $ 872 $ 193
Boats and equipr~nt 7,046 2,532
MaQhinery and equipment 9,650 3,541
Other 251 81
~17,819 $ 6,347
Retirements
or'sales
$ (118)
(1,166)
(2,252)
(18)
$ (3,554)
$ (235)
(875)
(3,220)
(59)
$ (4,389)
$ (289)
(464)
(1,577)
(17)
$ (2,347)
C~her
chaungeS
Balance
at end
of year
$ 99 (A) $
(9,617)(B)
2,318 (A)
25 (A)
$.(7,175)
1,570
2,667
21,4t2
556
26,205
$ 54 (A) $ 1,010
2 (A) 10,241
(777)(C)
149 .12,668
15 (A) 368
'(557) $ 24,287
$ 185 (A) $ 931
(30)(C)
9,11~
1,536 (A) 11~023
(2,127)(C)
19 (A) 30i
(33)(C)
$ (450) $ 21,369
(A) Acquisitions of businesses.
(B) Transfer to net assets of discontinued ope-rations..
(C) ~Yansfer to o~er assets.
-17-
Newp~rk Pe~ources, Inc.
Viluatlon and Qualifying Acco~mts
Years Ended Decent~._r 31, 1981, 1980,
(In thousands of dollars)
1979
.I
SCHED(IL~ VIII
1981
Allowance for doubtful
accounts
Balance at
beginning
of year
$ 3,120
Additions
charged
to earnings
$ 414
Deductions
from
reserves
$ (694)
Other
$ 344(A)
Balance a
end
of year.
$ 3,184'
1980
Allowance for doubtful
accounts
$ 1,178
$ 1,971
$ (289) $ 260(A)
$ 3, 120
1979
Allowance for doubtful
accounts
$ 738
548
$ (294)
186(A)
$ 1,178
(A) Acquisitions of businessesl
-18-
Newpark- ResouTces f Inc.
Shorh-rferm Borrcwings
Years End'e~3 December 31,
(In thousands of dollars)
1981,
'1980, 1979
~ SCHEUD',LZ IK
·i981
Notes payable to
baD3{s
Balance at
end
of year
$7,025
Weighted
average
interest rate
14.12%
Maximam amount
outstanding
during year
$20,251
Average amount
outstanding
during year
$9,698
Weighted3 average
interest rate
during year
19.13%
1980
Notes payable to
ba~<s
1979
Notes payable to
banks
$4,856
$4,167
21.04%
17.30%
$ 5,356
$ 5,110
$4,61 9
$3,144
16~17%
14.33%
-1
Ne~park Pesources, Inc.
Supp. l~-nkal Earnings Statement
Years Ended Decembe~r 31, 1981, 1980, 1979
(In thousands of dollars)
x
Maintenance and repairs
1981 1980 1979
$ 8,085 $ 6,227 $ 5,435
Taxes, other than income taxes:
Payroll. $ 3,831
Property $ 385
'(~uher $ 598
$ 2,692 $ 2,081
$ 316 $ 230
$ 391 $ 265
Amounts cha~ged to costs and expe_nses for depreciation
and ~orkization o~ intangible assets, preoperating costs and similiar
deferrals, royalties ~nd advertising costs have been omitted since each
represents less tha~ 1% of nee consolidated revenues.