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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 ! 'i · . ;//LI "'~'~ y,_,_,f_ 22 ,~ I U_-.I P 1 I ,i I"FT' ! .I 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.