UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 2020
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-02960
nr-20200930_g1.jpg 
Newpark Resources, Inc.
(Exact name of registrant as specified in its charter)
Delaware72-1123385
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
9320 Lakeside Boulevard,Suite 100 
The Woodlands,Texas77381
(Address of principal executive offices)(Zip Code)
 
(281) 362-6800
(Registrant’s telephone number, including area code)
 Not Applicable    
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueNRNew York Stock Exchange
Rights to Purchase Series D Junior Participating Preferred StockN/ANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes       No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
    Yes       No   
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company




If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
    Yes      No       
As of May 4,October 30, 2020, a total of 89,899,05390,803,610 shares of common stock, $0.01 par value per share, were outstanding.



NEWPARK RESOURCES, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE AND NINE MONTHS ENDED
MARCH 31,SEPTEMBER 30, 2020


 
 
 
 
 
 
 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. We also may provide oral or written forward-looking statements in other materials we release to the public. Words such as “will,” “may,” “could,” “would,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying them. These forward-looking statements reflect the current views of our management as of the filing date of this Quarterly Report on Form 10-Q and include statements regarding the impact of the COVID-19 pandemic;pandemic, as well as our future operating results related to compliance with certain financial covenants under our ABL Facility; however, various risks, uncertainties, contingencies, and other factors, some of which are beyond our control, are difficult to predict and could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, these statements.
We assume no obligation to update, amend, or clarify publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by securities laws. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed in this Quarterly Report on Form 10-Q might not occur.
For further information regarding these and other factors, risks, and uncertainties that could cause actual results to differ, we refer you to the risk factors set forth in Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, and in Part II Item 1A “Risk Factors” in thisour Quarterly Report on Form 10-Q.10-Q for the period ended March 31, 2020.
1


PART I     FINANCIAL INFORMATION
ITEM 1.    Financial Statements
Newpark Resources, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands, except share data)(In thousands, except share data)March 31, 2020December 31, 2019(In thousands, except share data)September 30, 2020December 31, 2019
ASSETSASSETS  ASSETS  
Cash and cash equivalentsCash and cash equivalents$49,064  $48,672  Cash and cash equivalents$24,028 $48,672 
Receivables, netReceivables, net197,440  216,714  Receivables, net127,957 216,714 
InventoriesInventories187,979  196,897  Inventories159,567 196,897 
Prepaid expenses and other current assetsPrepaid expenses and other current assets16,241  16,526  Prepaid expenses and other current assets17,327 16,526 
Total current assetsTotal current assets450,724  478,809  Total current assets328,879 478,809 
Property, plant and equipment, netProperty, plant and equipment, net305,732  310,409  Property, plant and equipment, net287,332 310,409 
Operating lease assetsOperating lease assets32,049  32,009  Operating lease assets32,306 32,009 
GoodwillGoodwill42,108  42,332  Goodwill42,234 42,332 
Other intangible assets, netOther intangible assets, net28,032  29,677  Other intangible assets, net26,103 29,677 
Deferred tax assetsDeferred tax assets5,077  3,600  Deferred tax assets3,264 3,600 
Other assetsOther assets3,110  3,243  Other assets2,927 3,243 
Total assetsTotal assets$866,832  $900,079  Total assets$723,045 $900,079 
LIABILITIES AND STOCKHOLDERS’ EQUITYLIABILITIES AND STOCKHOLDERS’ EQUITY      LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current debtCurrent debt$6,981  $6,335  Current debt$10,149 $6,335 
Accounts payableAccounts payable69,940  79,777  Accounts payable44,013 79,777 
Accrued liabilitiesAccrued liabilities36,335  42,750  Accrued liabilities35,923 42,750 
Total current liabilitiesTotal current liabilities113,256  128,862  Total current liabilities90,085 128,862 
Long-term debt, less current portionLong-term debt, less current portion155,965  153,538  Long-term debt, less current portion92,206 153,538 
Noncurrent operating lease liabilitiesNoncurrent operating lease liabilities26,546  26,946  Noncurrent operating lease liabilities26,371 26,946 
Deferred tax liabilitiesDeferred tax liabilities32,614  34,247  Deferred tax liabilities14,513 34,247 
Other noncurrent liabilitiesOther noncurrent liabilities8,092  7,841  Other noncurrent liabilities10,787 7,841 
Total liabilitiesTotal liabilities336,473  351,434  Total liabilities233,962 351,434 
Commitments and contingencies (Note 8)
Commitments and contingencies (Note 9)Commitments and contingencies (Note 9)
Common stock, $0.01 par value (200,000,000 shares authorized and 106,696,719 and 106,696,719 shares issued, respectively)1,067  1,067  
Common stock, $0.01 par value (200,000,000 shares authorized and 107,587,786 and 106,696,719 shares issued, respectively)Common stock, $0.01 par value (200,000,000 shares authorized and 107,587,786 and 106,696,719 shares issued, respectively)1,076 1,067 
Paid-in capitalPaid-in capital622,115  620,626  Paid-in capital625,328 620,626 
Accumulated other comprehensive lossAccumulated other comprehensive loss(75,440) (67,947) Accumulated other comprehensive loss(69,847)(67,947)
Retained earningsRetained earnings120,501  134,119  Retained earnings69,422 134,119 
Treasury stock, at cost (16,797,666 and 16,958,418 shares, respectively)(137,884) (139,220) 
Treasury stock, at cost (16,786,446 and 16,958,418 shares, respectively)Treasury stock, at cost (16,786,446 and 16,958,418 shares, respectively)(136,896)(139,220)
Total stockholders’ equityTotal stockholders’ equity530,359  548,645  Total stockholders’ equity489,083 548,645 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$866,832  $900,079  Total liabilities and stockholders’ equity$723,045 $900,079 
 
See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

2


Newpark Resources, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In thousands, except per share data)(In thousands, except per share data)20202019(In thousands, except per share data)2020201920202019
RevenuesRevenues$164,550  $211,473  Revenues$96,424 $202,763 $362,920 $630,648 
Cost of revenuesCost of revenues146,084  174,976  Cost of revenues99,301 169,429 357,675 522,338 
Selling, general and administrative expensesSelling, general and administrative expenses24,696  30,742  Selling, general and administrative expenses20,597 27,017 66,230 85,796 
Other operating (income) loss, netOther operating (income) loss, net(344) 76  Other operating (income) loss, net(820)29 (1,906)(367)
ImpairmentsImpairments3,038 3,038 
Operating income (loss)Operating income (loss)(5,886) 5,679  Operating income (loss)(25,692)6,288 (62,117)22,881 
Foreign currency exchange (gain) loss1,982  (1,062) 
Foreign currency exchange lossForeign currency exchange loss580 828 3,343 756 
Interest expense, netInterest expense, net3,201  3,656  Interest expense, net2,411 3,628 8,524 10,807 
Loss on extinguishment of debt915  —  
Gain on extinguishment of debtGain on extinguishment of debt(419)
Income (loss) before income taxesIncome (loss) before income taxes(11,984) 3,085  Income (loss) before income taxes(28,683)1,832 (73,565)11,318 
Provision for income taxes164  1,803  
Provision (benefit) for income taxesProvision (benefit) for income taxes(4,813)3,273 (11,303)7,171 
Net income (loss)Net income (loss)$(12,148) $1,282  Net income (loss)$(23,870)$(1,441)$(62,262)$4,147 
Net income (loss) per common share - basic:Net income (loss) per common share - basic:$(0.14) $0.01  Net income (loss) per common share - basic:$(0.26)$(0.02)$(0.69)$0.05 
Net income (loss) per common share - diluted:Net income (loss) per common share - diluted:$(0.14) $0.01  Net income (loss) per common share - diluted:$(0.26)$(0.02)$(0.69)$0.05 
 
See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
3


Newpark Resources, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)

Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In thousands)(In thousands)20202019(In thousands)2020201920202019
Net income (loss)Net income (loss)$(12,148) $1,282  Net income (loss)$(23,870)$(1,441)$(62,262)$4,147 
Foreign currency translation adjustments (net of tax benefit of $272 and $70)(7,493) (1,921) 
Foreign currency translation adjustments (net of tax benefit (expense) of $(330), $713, $268, $604)Foreign currency translation adjustments (net of tax benefit (expense) of $(330), $713, $268, $604)3,461 (3,897)(1,900)(4,097)
Comprehensive loss$(19,641) $(639) 
Comprehensive income (loss)Comprehensive income (loss)$(20,409)$(5,338)$(64,162)$50 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

4


Newpark Resources, Inc.
Condensed Consolidated Statements of Stockholders Equity
(Unaudited)

(In thousands)(In thousands)Common StockPaid-In CapitalAccumulated Other Comprehensive LossRetained EarningsTreasury StockTotal(In thousands)Common StockPaid-In CapitalAccumulated Other Comprehensive LossRetained EarningsTreasury StockTotal
Balance at December 31, 2018$1,064  $617,276  $(67,673) $148,802  $(129,788) $569,681  
Net income—  —  —  1,282  —  1,282  
Balance at June 30, 2020Balance at June 30, 2020$1,074 $623,269 $(73,308)$93,292 $(136,890)$507,437 
Net lossNet loss— — — (23,870)— (23,870)
Employee stock options, restricted stock and employee stock purchase planEmployee stock options, restricted stock and employee stock purchase plan267 — — (6)263 
Stock-based compensation expenseStock-based compensation expense— 1,792 — — — 1,792 
Foreign currency translation, net of taxForeign currency translation, net of tax— — 3,461 — — 3,461 
Balance at September 30, 2020Balance at September 30, 2020$1,076 $625,328 $(69,847)$69,422 $(136,896)$489,083 
Balance at June 30, 2019Balance at June 30, 2019$1,067 $618,626 $(67,873)$153,395 $(139,086)$566,129 
Net lossNet loss— — — (1,441)— (1,441)
Employee stock options, restricted stock and employee stock purchase planEmployee stock options, restricted stock and employee stock purchase plan—  309  —  —  481  790  Employee stock options, restricted stock and employee stock purchase plan— (2,495)— (651)2,979 (167)
Stock-based compensation expenseStock-based compensation expense—  4,969  —  —  —  4,969  Stock-based compensation expense— 2,501 — — — 2,501 
Treasury shares purchased at costTreasury shares purchased at cost—  —  —  —  (5,013) (5,013) Treasury shares purchased at cost— — — — (3,494)(3,494)
Foreign currency translation, net of taxForeign currency translation, net of tax—  —  (1,921) —  —  (1,921) Foreign currency translation, net of tax— — (3,897)— — (3,897)
Balance at March 31, 2019$1,064  $622,554  $(69,594) $150,084  $(134,320) $569,788  
Balance at September 30, 2019Balance at September 30, 2019$1,067 $618,632 $(71,770)$151,303 $(139,601)$559,631 
Balance at December 31, 2019Balance at December 31, 2019$1,067  $620,626  $(67,947) $134,119  $(139,220) $548,645  Balance at December 31, 2019$1,067 $620,626 $(67,947)$134,119 $(139,220)$548,645 
Cumulative effect of accounting changeCumulative effect of accounting change—  —  —  (735) —  (735) Cumulative effect of accounting change— — — (735)— (735)
Net lossNet loss—  —  —  (12,148) —  (12,148) Net loss— — — (62,262)— (62,262)
Employee stock options, restricted stock and employee stock purchase planEmployee stock options, restricted stock and employee stock purchase plan—  (103) —  (735) 1,336  498  Employee stock options, restricted stock and employee stock purchase plan(167)— (1,700)2,324 466 
Stock-based compensation expenseStock-based compensation expense—  1,592  —  —  —  1,592  Stock-based compensation expense— 4,869 — — — 4,869 
Foreign currency translation, net of taxForeign currency translation, net of tax—  —  (7,493) —  —  (7,493) Foreign currency translation, net of tax— — (1,900)— — (1,900)
Balance at March 31, 2020$1,067  $622,115  $(75,440) $120,501  $(137,884) $530,359  
Balance at September 30, 2020Balance at September 30, 2020$1,076 $625,328 $(69,847)$69,422 $(136,896)$489,083 
Balance at December 31, 2018Balance at December 31, 2018$1,064 $617,276 $(67,673)$148,802 $(129,788)$569,681 
Net incomeNet income— — — 4,147 — 4,147 
Employee stock options, restricted stock and employee stock purchase planEmployee stock options, restricted stock and employee stock purchase plan(8,019)— (1,646)9,218 (444)
Stock-based compensation expenseStock-based compensation expense— 9,375 — — — 9,375 
Treasury shares purchased at costTreasury shares purchased at cost— — — — (19,031)(19,031)
Foreign currency translation, net of taxForeign currency translation, net of tax— — (4,097)— — (4,097)
Balance at September 30, 2019Balance at September 30, 2019$1,067 $618,632 $(71,770)$151,303 $(139,601)$559,631 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

5


Newpark Resources, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended March 31, Nine Months Ended September 30,
(In thousands)(In thousands)20202019(In thousands)20202019
Cash flows from operating activities:Cash flows from operating activities:  Cash flows from operating activities:  
Net income (loss)Net income (loss)$(12,148) $1,282  Net income (loss)$(62,262)$4,147 
Adjustments to reconcile net income (loss) to net cash provided by operations:Adjustments to reconcile net income (loss) to net cash provided by operations:      Adjustments to reconcile net income (loss) to net cash provided by operations:  
Impairments and other non-cash chargesImpairments and other non-cash charges13,024 
Depreciation and amortizationDepreciation and amortization11,453  11,438  Depreciation and amortization34,186 34,891 
Stock-based compensation expenseStock-based compensation expense1,592  4,969  Stock-based compensation expense4,869 9,375 
Provision for deferred income taxesProvision for deferred income taxes(2,801) (438) Provision for deferred income taxes(19,023)(787)
Credit loss expenseCredit loss expense20  386  Credit loss expense1,304 1,044 
Gain on sale of assetsGain on sale of assets(1,033) (2,339) Gain on sale of assets(2,916)(5,779)
Loss on extinguishment of debt915  —  
Gain on extinguishment of debtGain on extinguishment of debt(419)
Amortization of original issue discount and debt issuance costsAmortization of original issue discount and debt issuance costs1,573  1,481  Amortization of original issue discount and debt issuance costs3,962 4,589 
Change in assets and liabilities:Change in assets and liabilities:   Change in assets and liabilities: 
Decrease in receivablesDecrease in receivables10,652  5,300  Decrease in receivables77,004 17,065 
Decrease in inventoriesDecrease in inventories5,466  10,139  Decrease in inventories26,566 11,873 
Increase in other assetsIncrease in other assets(644) (273) Increase in other assets(2,912)(3,621)
Decrease in accounts payableDecrease in accounts payable(9,842) (15,149) Decrease in accounts payable(34,606)(11,806)
Decrease in accrued liabilities and other(815) (14,527) 
Increase (decrease) in accrued liabilities and otherIncrease (decrease) in accrued liabilities and other1,516 (7,805)
Net cash provided by operating activitiesNet cash provided by operating activities4,388  2,269  Net cash provided by operating activities40,293 53,186 
Cash flows from investing activities:Cash flows from investing activities:      Cash flows from investing activities:  
Capital expendituresCapital expenditures(6,649) (17,467) Capital expenditures(14,609)(35,803)
Proceeds from sale of property, plant and equipmentProceeds from sale of property, plant and equipment3,673  1,771  Proceeds from sale of property, plant and equipment10,497 7,116 
Net cash used in investing activitiesNet cash used in investing activities(2,976) (15,696) Net cash used in investing activities(4,112)(28,687)
Cash flows from financing activities:Cash flows from financing activities:      Cash flows from financing activities:  
Borrowings on lines of creditBorrowings on lines of credit74,909  80,656  Borrowings on lines of credit147,987 237,093 
Payments on lines of creditPayments on lines of credit(58,948) (61,524) Payments on lines of credit(180,440)(242,263)
Purchases of Convertible NotesPurchases of Convertible Notes(13,775) —  Purchases of Convertible Notes(29,124)
Debt issuance costsDebt issuance costs—  (927) Debt issuance costs(1,214)
Proceeds from employee stock plansProceeds from employee stock plans—  330  Proceeds from employee stock plans1,236 
Purchases of treasury stockPurchases of treasury stock(32) (5,013) Purchases of treasury stock(332)(21,678)
Other financing activitiesOther financing activities(1,218) (1,169) Other financing activities1,029 1,336 
Net cash provided by financing activities936  12,353  
Net cash used in financing activitiesNet cash used in financing activities(60,880)(25,490)
Effect of exchange rate changes on cashEffect of exchange rate changes on cash(2,576) (581) Effect of exchange rate changes on cash(1,810)(1,526)
Net decrease in cash, cash equivalents, and restricted cashNet decrease in cash, cash equivalents, and restricted cash(228) (1,655) Net decrease in cash, cash equivalents, and restricted cash(26,509)(2,517)
Cash, cash equivalents, and restricted cash at beginning of periodCash, cash equivalents, and restricted cash at beginning of period56,863  64,266  Cash, cash equivalents, and restricted cash at beginning of period56,863 64,266 
Cash, cash equivalents, and restricted cash at end of periodCash, cash equivalents, and restricted cash at end of period$56,635  $62,611  Cash, cash equivalents, and restricted cash at end of period$30,354 $61,749 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
6


NEWPARK RESOURCES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation and Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements of Newpark Resources, Inc. and our wholly-owned subsidiaries, which we collectively refer to as “we,” “our,” or “us,” have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission (“SEC”), and do not include all information and footnotes required by the accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. Our fiscal year end is December 31, our third quarter represents the three- month period ended September 30, and our first quarternine months represents the three-monthnine-month period ended March 31.September 30. The results of operations for the third quarter and first quarternine months of 2020 are not necessarily indicative of the results to be expected for the entire year. Unless otherwise noted, all currency amounts are stated in U.S. dollars.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of March 31,September 30, 2020, and our results of operations for the third quarter and first nine months of 2020 and 2019, and our cash flows for the first quarternine months of 2020 and 2019. All adjustments are of a normal recurring nature. Our balance sheet at December 31, 2019 is derived from the audited consolidated financial statements at that date.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For further information, see Note 1 in our Annual Report on Form 10-K for the year ended December 31, 2019.
New Accounting Pronouncements
Standards Adopted in 2020
Credit Losses. In 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance which requires financial assets measured at amortized cost basis, including trade receivables, to be presented at the net amount expected to be collected. The new guidance requires an entity to estimate its lifetime “expected credit loss” for such assets at inception, which will generally result in the earlier recognition of allowances for losses. Under previous guidance, reserves for uncollectible accounts receivable were determined on a specific identification basis when we believed that the required payment of specific amounts owed to us was not probable. Under the new guidance, our allowance for credit losses reflects losses that are expected over the contractual life of the asset, and takes into account historical loss experience, current and future economic conditions, and reasonable and supportable forecasts.
We adopted this new guidance as of January 1, 2020 using the modified retrospective transition method, and recorded a net reduction of $0.7 million to opening retained earnings to reflect the cumulative effect of adoption. Results for reporting periods beginning after December 31, 2019 are presented under the new guidance, while prior period amounts were not adjusted and continue to be reported in accordance with previous guidance. See Note 45 for additional required disclosures.
The cumulative effect of the changes made to our consolidated balance sheet for the adoption of the new accounting guidance for credit losses were as follows:

(In thousands)Balance at December 31, 2019Impact of Adoption of New Credit Losses GuidanceBalance at January 1, 2020
Receivables, net$216,714 $(959)$215,755 
Deferred tax assets3,600 59 3,659 
Deferred tax liabilities34,247 (165)34,082 
Retained earnings134,119 (735)133,384 
7


Standards Not Yet Adopted
Income Taxes: Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued new guidance which is intended to simplify various aspects related to accounting for income taxes. This guidance is effective for us in the first quarter of 2021 with early2021. We do not expect the adoption permitted. We are currently evaluating theof this guidance to have a material impact of the new guidance on our consolidated financial statements andor related disclosures.
7


Note 2 – Earnings Per Share
The following table presents the reconciliation of the numerator and denominator for calculating net income (loss) per share:
First Quarter Third QuarterFirst Nine Months
(In thousands, except per share data)(In thousands, except per share data)20202019(In thousands, except per share data)2020201920202019
NumeratorNumerator Numerator 
Net income (loss) - basic and dilutedNet income (loss) - basic and diluted $(12,148) $1,282  Net income (loss) - basic and diluted$(23,870)$(1,441)$(62,262)$4,147 
DenominatorDenominatorDenominator
Weighted average common shares outstanding - basicWeighted average common shares outstanding - basic89,645  90,111  Weighted average common shares outstanding - basic90,535 89,675 90,056 89,863 
Dilutive effect of stock options and restricted stock awardsDilutive effect of stock options and restricted stock awards—  2,267  Dilutive effect of stock options and restricted stock awards1,676 
Dilutive effect of Convertible NotesDilutive effect of Convertible Notes—  —  Dilutive effect of Convertible Notes
Weighted average common shares outstanding - dilutedWeighted average common shares outstanding - diluted89,645  92,378  Weighted average common shares outstanding - diluted90,535 89,675 90,056 91,539 
Net income (loss) per common shareNet income (loss) per common shareNet income (loss) per common share
BasicBasic$(0.14) $0.01  Basic$(0.26)$(0.02)$(0.69)$0.05 
DilutedDiluted$(0.14) $0.01  Diluted$(0.26)$(0.02)$(0.69)$0.05 
We excluded the following weighted-average potential shares from the calculations of diluted net income (loss) per share during the applicable periods because their inclusion would have been anti-dilutive:
First Quarter Third QuarterFirst Nine Months
(In thousands)(In thousands)20202019(In thousands)2020201920202019
Stock options and restricted stock awardsStock options and restricted stock awards4,835  1,712  Stock options and restricted stock awards5,608 4,989 5,172 1,812 
For the third quarter and first nine months of 2020, as well as the third quarter of 2020,2019, we excluded all potentially dilutive stock options and restricted stock awards in calculating diluted earnings per share as the effect was anti-dilutive due to the net loss incurred for this period.these periods. The Convertible Notes (as defined in Note 6)7) only impact the calculation of diluted net income per share in periods that the average price of our common stock, as calculated in accordance with the terms of the indenture governing the Convertible Notes, exceeds the conversion price of $9.33 per share. We have the option to pay cash, issue shares of common stock, or any combination thereof for the aggregate amount due upon conversion of the Convertible Notes as further described in Note 6.7. If converted, we currently intend to settle the principal amount of the notes in cash and as a result, only the amounts payable in excess of the principal amount of the notes, if any, would be assumed to be settled with shares of common stock for purposes of computing diluted net income per share.

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Note 3 – Capital Stock and Repurchase Program
Our securities repurchase program remains available for repurchases of any combination of our common stock and our Convertible Notes. The repurchase program has no specific term. Repurchases are expected to be funded from operating cash flows, available cash on hand, and borrowings under our ABL Facility (as defined in Note 6)7). As part of the share repurchase program, our management has been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934. As of March 31,September 30, 2020, we had $67.2$51.9 million remaining under the program.
During the first quarternine months of 2020, we repurchased $14.5$33.1 million of our Convertible Notes in the open market under the repurchase program for a total cost of $13.8$29.1 million. There were 0 Convertible Notes repurchased under the program during 2019.
There were 0 shares of common stock repurchased under the repurchase program during the first quarternine months of 2020. During the first quarternine months of 2019, we repurchased an aggregate of 655,6662,537,833 shares of our common stock under the program for a total cost of $5.0$19.0 million.
On May 27, 2020, our Board of Directors adopted a limited duration stockholder rights agreement which expires on May 1, 2021, whereby a dividend distribution of 1 right (each, a “Right”) for each outstanding share of our common stock was paid to holders of record as of the close of business on June 12, 2020. Each Right entitles the registered holder to purchase from us one one-thousandth of a share of Series D Junior Participating Preferred Stock, par value $0.01 per share, at a purchase price of $12.00, subject to adjustment. Subject to certain exceptions, if a person or group acquires more than 10% of our outstanding common stock, the Rights will become exercisable for common stock having a value equal to two times the purchase price.

Note 4 – Stock-Based and Other Long-Term Incentive Compensation
During the second quarter of 2020, the Compensation Committee of our Board of Directors (“Compensation Committee”) approved equity-based compensation to executive officers and other key employees consisting of 2,474,377 restricted stock units which will primarily vest in equal installments over a three-year period. At September 30, 2020, 1,622,532 shares remained available for award under the 2015 Employee Equity Incentive Plan (“2015 Plan”). In addition, non-employee directors received a grant of 156,886 restricted stock awards which will vest in full on the earlier of the day prior to the next annual meeting of stockholders following the grant date or the first anniversary of the grant date. The weighted average grant-date fair value was $2.06 per share for both the restricted stock units and restricted stock awards.
Also during the second quarter of 2020, the Compensation Committee approved the issuance of performance-based cash awards to certain executive officers with a target amount of $2.6 million. The performance-based cash awards will be settled based on the relative ranking of our total shareholder return (“TSR”) as compared to the TSR of our designated peer group over a three-year performance period. The performance period began May 2, 2020 and ends May 31, 2023, with the ending TSR price being equal to the average closing price of our shares over the 30-calendar days ending May 31, 2023 and the cash payout for each executive ranging from 0% to 200% of target. The performance-based cash awards are accrued as a liability award over the performance period based on the estimated fair value. The fair value of the performance-based cash awards is remeasured each period using a Monte-Carlo valuation model with changes in fair value recognized in the consolidated statements of operations.

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Note 45 – Receivables
Receivables consisted of the following:
(In thousands)(In thousands)March 31, 2020December 31, 2019(In thousands)September 30, 2020December 31, 2019
Trade receivables:Trade receivables:Trade receivables:
Gross trade receivablesGross trade receivables$188,576  $207,554  Gross trade receivables$119,705 $207,554 
Allowance for credit lossesAllowance for credit losses(6,141) (6,007) Allowance for credit losses(5,753)(6,007)
Net trade receivablesNet trade receivables182,435  201,547  Net trade receivables113,952 201,547 
Income tax receivablesIncome tax receivables6,263  7,393  Income tax receivables4,403 7,393 
Other receivablesOther receivables8,742  7,774  Other receivables9,602 7,774 
Total receivables, netTotal receivables, net$197,440  $216,714  Total receivables, net$127,957 $216,714 
Other receivables included $7.0$8.4 million and $6.2 million for value added, goods and service taxes related to foreign jurisdictions as of March 31,September 30, 2020 and December 31, 2019, respectively.
We adopted the new accounting guidance for credit losses as of January 1, 2020 (see Note 1 for additional information). To measure expected credit losses, we evaluate our receivables on a collective basis for assets that share similar risk characteristics. Our allowance for credit losses reflects losses that are expected over the contractual life of the asset, and takes into account historical loss experience, current and future economic conditions, and reasonable and supportable forecasts.
Changes in our allowance for credit losses were as follows:
First QuarterFirst Nine Months
(In thousands)(In thousands)20202019(In thousands)20202019
Balance at beginning of periodBalance at beginning of period$6,007  $10,034  Balance at beginning of period$6,007 $10,034 
Cumulative effect of accounting changeCumulative effect of accounting change959  —  Cumulative effect of accounting change959 
Credit loss expenseCredit loss expense20  386  Credit loss expense1,304 1,044 
Write-offs, net of recoveriesWrite-offs, net of recoveries(845) (861) Write-offs, net of recoveries(2,517)(2,530)
Balance at end of periodBalance at end of period$6,141  $9,559  Balance at end of period$5,753 $8,548 

Note 56 – Inventories
Inventories consisted of the following:
(In thousands)(In thousands)March 31, 2020December 31, 2019(In thousands)September 30, 2020December 31, 2019
Raw materials:Raw materials:  Raw materials:  
Fluids systemsFluids systems$124,623  $141,314  Fluids systems$106,484 $141,314 
Mats and integrated servicesMats and integrated services4,451  5,049  Mats and integrated services3,724 5,049 
Total raw materialsTotal raw materials129,074  146,363  Total raw materials110,208 146,363 
Blended fluids systems componentsBlended fluids systems components40,892  39,542  Blended fluids systems components34,221 39,542 
Finished goods - matsFinished goods - mats18,013  10,992  Finished goods - mats15,138 10,992 
Total inventoriesTotal inventories$187,979  $196,897  Total inventories$159,567 $196,897 
Raw materials for the Fluids Systems segment consists primarily of barite, chemicals, and other additives that are consumed in the production of our fluids systems. Raw materials for the Mats and Integrated Services segment consists primarily of resins, chemicals, and other materials used to manufacture composite mats, as well as materials that are consumed in providing spill containment and other services to our customers. Our blended fluids systems components consist of base fluid systems that have been either mixed internally at our blending facilities or purchased from third-party vendors. These base fluid systems require raw materials to be added, as needed to meet specified customer requirements.

Fluids Systems segment cost of revenues includes a total of $10.0 million of charges for the first nine months of 2020 for inventory write-downs, primarily attributable to the reduction in carrying values of certain inventory to their net realizable value.
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Note 67 – Financing Arrangements and Fair Value of Financial Instruments
Financing arrangements consisted of the following:
March 31, 2020December 31, 2019September 30, 2020December 31, 2019
(In thousands)(In thousands)Principal AmountUnamortized Discount and Debt Issuance CostsTotal DebtPrincipal AmountUnamortized Discount and Debt Issuance CostsTotal Debt(In thousands)Principal AmountUnamortized Discount and Debt Issuance CostsTotal DebtPrincipal AmountUnamortized Discount and Debt Issuance CostsTotal Debt
Convertible NotesConvertible Notes$85,500  $(9,261) $76,239  $100,000  $(12,291) $87,709  Convertible Notes$66,912 $(5,262)$61,650 $100,000 $(12,291)$87,709 
ABL FacilityABL Facility79,000  —  79,000  65,000  —  65,000  ABL Facility29,900 — 29,900 65,000 — 65,000 
Other debtOther debt7,707  —  7,707  7,164  —  7,164  Other debt10,805 — 10,805 7,164 — 7,164 
Total debtTotal debt172,207  (9,261) 162,946  172,164  (12,291) 159,873  Total debt107,617 (5,262)102,355 172,164 (12,291)159,873 
Less: Current portionLess: Current portion(6,981) —  (6,981) (6,335) —  (6,335) Less: Current portion(10,149)(10,149)(6,335)(6,335)
Long-term debtLong-term debt$165,226  $(9,261) $155,965  $165,829  $(12,291) $153,538  Long-term debt$97,468 $(5,262)$92,206 $165,829 $(12,291)$153,538 
Convertible Notes. In December 2016, we issued $100.0 million of unsecured convertible senior notes (“Convertible Notes”) that mature on December 1, 2021, of which $85.5$66.9 million principal amount was outstanding at March 31,September 30, 2020. The notes bear interest at a rate of 4.0% per year, payable semiannually in arrears on June 1 and December 1 of each year.
Holders may convert the notes at their option at any time prior to the close of business on the business day immediately preceding June 1, 2021, only under the following circumstances:
during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our common stock for at least 20 trading days (regardless of whether consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the notes in effect on each applicable trading day;
during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day was less than 98% of the last reported sale price of our common stock on such date multiplied by the conversion rate on each such trading day; or
upon the occurrence of specified corporate events, as described in the indenture governing the notes, such as a consolidation, merger, or share exchange.
On or after June 1, 2021 until the close of business on the business day immediately preceding the maturity date, holders may convert their notes at any time, regardless of whether any of the foregoing conditions have been satisfied. As of May 4,October 30, 2020, the notes were not convertible.
The notes are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods, as described above. If converted, we currently intend to pay cash for the principal amount of the notes converted. The conversion rate is 107.1381 shares of our common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of $9.33 per share of common stock), subject to adjustment in certain circumstances. We may not redeem the notes prior to their maturity date.
In accordance with accounting guidance for convertible debt with a cash conversion option, we separately accounted for the debt and equity components of the notes in a manner that reflected our estimated nonconvertible debt borrowing rate. As of March 31,September 30, 2020, the carrying amount of the debt component was $76.2$61.7 million, which is net of the unamortized debt discount and debt issuance costs of $9.3$5.3 million. Including the impact of the unamortized debt discount and debt issuance costs, the effective interest rate on the notes is approximately 11.3%.
During the first quarternine months of 2020, we repurchased $14.5$33.1 million of our Convertible Notes in the open market for a total cost of $13.8$29.1 million, and recognized a net lossgain of $0.9$0.4 million reflecting the difference in the amount paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs.
Asset-Based Loan Facility. In May 2016, we entered into an asset-based revolving credit agreement which replaced our previous credit agreement. In October 2017, we entered into an Amended and Restated Credit Agreement and in March 2019, we entered into a First Amendment to Amended and Restated Credit Agreement (as amended, the “ABL Facility”). The ABL Facility provides financing of up to $200.0 million available for borrowings (inclusive of letters of credit) and can be increased up to a maximum capacity of $275.0 million, subject to certain conditions. As of March 31,September 30, 2020, our total availability under the ABL Facility was $151.0$99.0 million, of which $79.0$29.9 million was drawn, resulting in remaining availability of $72.0$69.1 million.
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The ABL Facility terminates in March 2024; however, the ABL Facility has a springing maturity date that will accelerate the maturity of the ABL Facility to September 1, 2021 if, prior to such date, the Convertible Notes have not been repurchased, redeemed, refinanced, exchanged or otherwise satisfied in full or we have not escrowed an amount of funds, that together with the amount that we establish as a reserve against our borrowing capacity, is sufficient for the future settlement of the Convertible Notes at their maturity. The ABL Facility requires compliance with a minimum consolidated fixed charge coverage ratio of 1.25 to 1.0 calculated based on the trailing twelve-month period ended June 30, 2021 and minimumremaining unused availability of at least $25.0 million to utilize borrowings or assignment of availability under the ABL Facility towards funding the repayment of the Convertible Notes.
Borrowing availability under the ABL Facility is calculated based on eligible U.S. accounts receivable, inventory, and, subject to satisfaction of certain financial covenants as described below, composite mats included in the rental fleet, net of reserves and limits on such assets included in the borrowing base calculation. To the extent pledged by us, the borrowing base calculation also includes the amount of eligible pledged cash. The lender may establish such reserves, in part based on appraisals of the asset base, and other limits at its discretion which could reduce the amounts otherwise available under the ABL Facility. Availability associated with eligible rental mats will also be subject to maintaining a minimum consolidated fixed charge coverage ratio of 1.5 to 1.0 and a minimum levelat least $1.0 million of operating income for the Mats and Integrated Services segment.segment, each calculated based on a trailing twelve-month period.
As of November 3, 2020, our total availability under the ABL Facility was $112.3 million, of which $29.0 million was drawn, resulting in remaining availability of $83.3 million. As of November 3, 2020, our total availability under the ABL Facility included $25.3 million from eligible rental mats. After the filing of our quarterly compliance certificate under the ABL Facility for the third quarter of 2020 in November, we will not satisfy the minimum consolidated fixed charge coverage ratio that is required to continue including eligible rental mats in the borrowing availability under the ABL Facility. While this does not represent a default, it would reduce the borrowing availability under the ABL Facility noted above as of November 3, 2020 by $25.3 million.
Under the terms of the ABL Facility, we may elect to borrow at a variable interest rate based on either, (1) LIBOR subject to a floor of zero or (2) a base rate equal to the highest of: (a) the federal funds rate plus 50 basis points, (b) the prime rate of Bank of America, N.A. and (c) LIBOR, subject to a floor of zero, plus 100 basis points, plus, in each case, an applicable margin per annum. The applicable margin ranges from 150 to 200 basis points for LIBOR borrowings, and 50 to 100 basis points for base rate borrowings, based on the consolidated fixed charge coverage ratio as defined in the ABL Facility.Facility calculated based on a trailing twelve-month period. As of March 31,September 30, 2020, the applicable margin for borrowings under our ABL Facility was 150 basis points with respect to LIBOR borrowings and 50 basis points with respect to base rate borrowings. The weighted average interest rate for the ABL Facility was 2.4%1.9% at March 31,September 30, 2020. In November 2020, the applicable margins for borrowings under our ABL Facility will increase 50 basis points based on the consolidated fixed charge coverage ratio. In addition, we are required to pay a commitment fee on the unused portion of the ABL Facility ranging from 25 to 37.5 basis points, based on the level of outstanding borrowings, as defined in the ABL Facility. As of March 31,September 30, 2020, the applicable commitment fee was 37.5 basis points.
The ABL Facility is a senior secured obligation, secured by first liens on substantially all of our U.S. tangible and intangible assets, and a portion of the capital stock of our non-U.S. subsidiaries has also been pledged as collateral. The ABL Facility contains customary operating covenants and certain restrictions including, among other things, the incurrence of additional debt, liens, dividends, asset sales, investments, mergers, acquisitions, affiliate transactions, stock repurchases and other restricted payments. The ABL Facility also requires compliance with a minimum consolidated fixed charge coverage ratio of 1.0 to 1.0 calculated based on a trailing twelve-month period if availability under the ABL Facility falls below $22.5 million. In addition, the ABL Facility contains customary events of default, including, without limitation, a failure to make payments under the facility, acceleration of more than $25.0 million of other indebtedness, certain bankruptcy events, and certain change of control events.
Other Debt. Certain of our foreign subsidiaries maintain local credit arrangements consisting primarily of lines of credit or overdraft facilities which are generally renewed on an annual basis. We utilize local financing arrangements in our foreign operations in order to provide short-term local liquidity needs. We had $6.7$7.9 million and $4.8 million outstanding under these arrangements at March 31,September 30, 2020 and December 31, 2019, respectively.
In addition, at March 31,September 30, 2020, we had $49.8$57.5 million in outstanding letters of credit, performance bonds, and other guarantees for which certain of the letters of credit are collateralized by $7.6$6.3 million in restricted cash.
Our financial instruments include cash and cash equivalents, receivables, payables, and debt. We believe the carrying values of these instruments, with the exception of our Convertible Notes, approximated their fair values at March 31,September 30, 2020 and December 31, 2019. The estimated fair value of our Convertible Notes was $63.8$59.2 million at March 31,September 30, 2020 and $101.4 million at December 31, 2019, based on quoted market prices at these respective dates.

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Note 78 – Income Taxes
The provisionbenefit for income taxes was $0.2$11.3 million for the first quarternine months of 2020, despite reporting a pretax loss.reflecting an effective tax benefit rate of 15%. This result primarily reflects the impact of the geographic composition of our pretax loss, where the tax benefit from losses in the U.S was more thanpartially offset by the tax expense related to earnings from our international operations. The provision for income taxes was $1.8$7.2 million for the first quarternine months of 2019, reflecting an effective tax rate of 58%63%. The 2019 effective tax rate was negatively impacted by $0.7 millionthe geographic composition of discrete tax adjustmentsour pretax income as well as non-deductible expenses relative to the amount of pre-taxpretax income.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted onin March 27, 2020 in the United States. The CARES Act contains several tax provisions, including but not limited to additional carryback opportunities for net operating losses, temporary increases in the interest deductibility threshold, and the acceleration of refunds for any remaining alternative minimum tax (“AMT”) carryforwards. While there was no material impact from the CARES Act in our provision for income taxes for the first quarternine months of 2020, we are continuing to evaluate the provisions of the CARES Act and currently anticipate filingAct. In addition, we filed an amendment to our 2018 U.S. federal income tax return in the second quarter of 2020 to accelerate theand received a refund of $0.7 million offor AMT carryforwards.carryforwards in July 2020.
The CARES Act also permits most companies to defer paying their portion of certain applicable payroll taxes from the date the CARES Act was signed into law through December 31, 2020. The deferred amount will be due in two equal installments on December 31, 2021 and December 31, 2022. While we anticipate deferralsThe deferred amount of applicable payroll taxes through December 31, 2020, there were no deferralswas $2.3 million at March 31,September 30, 2020.

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Note 89 – Commitments and Contingencies
In the ordinary course of conducting our business, we become involved in litigation and other claims from private party actions, as well as judicial and administrative proceedings involving governmental authorities at the federal, state, and local levels. While the outcome of litigation or other proceedings against us cannot be predicted with certainty, management does not expect that any loss resulting from such litigation or other proceedings, in excess of any amounts accrued or covered by insurance, will have a material adverse impact on our consolidated financial statements.
Kenedy, Texas Drilling Fluids Facility Fire
In July 2018, a fire occurred at our Kenedy, Texas drilling fluids facility, destroying the distribution warehouse, including inventory and surrounding equipment. In addition, nearby residences and businesses were evacuated as part of the response to the fire. In order to avoid any customer service disruptions, we implemented contingency plans to supply products from alternate facilities in the area and region. Subsequently, we received petitions seeking payment for alleged bodily injuries, property damage, and punitive damages claimed to have been incurred as a result of the fire and the subsequent efforts we undertook to remediate any potential smoke damage. As of March 31,September 30, 2020, there are openall plaintiffs' claims remaining with 4 plaintiffs. We have been advised by our insurer that these claims are insuredsettled under our insurance programs.program and the matter is closed. As of March 31,September 30, 2020, theour claims related to the fire under our property, business interruption, and general liability insurance programs have not been finalized.

Note 910 – Supplemental Disclosures to the Statements of Cash Flows
Supplemental disclosures to the statements of cash flows are presented below:
First QuarterFirst Nine Months
(In thousands)(In thousands)20202019(In thousands)20202019
Cash paid for:Cash paid for:  Cash paid for:  
Income taxes (net of refunds)Income taxes (net of refunds)$1,888  $3,868  Income taxes (net of refunds)$4,733 $10,095 
InterestInterest$991  $1,514  Interest$4,160 $5,702 
Cash, cash equivalents, and restricted cash in the consolidated statements of cash flows consisted of the following:
(In thousands)(In thousands)March 31, 2020December 31, 2019(In thousands)September 30, 2020December 31, 2019
Cash and cash equivalentsCash and cash equivalents$49,064  $48,672  Cash and cash equivalents$24,028 $48,672 
Restricted cash (included in prepaid expenses and other current assets)Restricted cash (included in prepaid expenses and other current assets)7,571  8,191  Restricted cash (included in prepaid expenses and other current assets)6,326 8,191 
Cash, cash equivalents, and restricted cashCash, cash equivalents, and restricted cash$56,635  $56,863  Cash, cash equivalents, and restricted cash$30,354 $56,863 


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Note 1011 – Segment Data
Summarized operating results for our reportable segments are shown in the following table (net of inter-segment transfers):
First Quarter Third QuarterFirst Nine Months
(In thousands)(In thousands)20202019(In thousands)2020201920202019
RevenuesRevenuesRevenues
Fluids systemsFluids systems$132,805  $160,653  Fluids systems$67,711 $152,547 $275,178 $485,744 
Mats and integrated servicesMats and integrated services31,745  50,820  Mats and integrated services28,713 50,216 87,742 144,904 
Total revenuesTotal revenues$164,550  $211,473  Total revenues$96,424 $202,763 $362,920 $630,648 
Operating income (loss)Operating income (loss)Operating income (loss)
Fluids systemsFluids systems$(2,268) $3,874  Fluids systems$(18,957)$5,893 $(46,284)$21,951 
Mats and integrated servicesMats and integrated services3,062  13,538  Mats and integrated services(139)10,049 3,928 32,863 
Corporate officeCorporate office(6,680) (11,733) Corporate office(6,596)(9,654)(19,761)(31,933)
Total operating income (loss)Total operating income (loss)$(5,886) $5,679  Total operating income (loss)$(25,692)$6,288 $(62,117)$22,881 
    The following table presents further disaggregated revenues for the Fluids Systems segment:
First QuarterThird QuarterFirst Nine Months
(In thousands)(In thousands)20202019(In thousands)2020201920202019
United StatesUnited States$73,660  $103,059  United States$40,314 $98,140 $156,644 $318,353 
CanadaCanada13,260  13,266  Canada1,961 8,029 18,287 26,283 
Total North AmericaTotal North America86,920  116,325  Total North America42,275 106,169 174,931 344,636 
EMEAEMEA42,137  37,765  EMEA23,207 41,126 91,380 123,346 
OtherOther3,748  6,563  Other2,229 5,252 8,867 17,762 
Total InternationalTotal International45,885  44,328  Total International25,436 46,378 100,247 141,108 
Total Fluids Systems revenuesTotal Fluids Systems revenues$132,805  $160,653  Total Fluids Systems revenues$67,711 $152,547 $275,178 $485,744 
The following table presents further disaggregated revenues for the Mats and Integrated Services segment:
First QuarterThird QuarterFirst Nine Months
(In thousands)(In thousands)20202019(In thousands)2020201920202019
Service revenuesService revenues$14,101  $21,150  Service revenues$13,469 $18,930 $40,500 $59,989 
Rental revenuesRental revenues13,502  21,580  Rental revenues9,327 16,700 31,999 55,955 
Product sales revenuesProduct sales revenues4,142  8,090  Product sales revenues5,917 14,586 15,243 28,960 
Total Mats and Integrated Services revenuesTotal Mats and Integrated Services revenues$31,745  $50,820  Total Mats and Integrated Services revenues$28,713 $50,216 $87,742 $144,904 

We recognized $1.4 million of charges for inventory write-downs and severance costs in the first quarter of 2020, with $1.2 million in the Fluids Systems segment and $0.2 million in the Corporate office. During March 2020, oil prices collapsed due to geopolitical events along with the worldwide effects of the COVID-19 pandemic.pandemic, which led to a rapid decline in customer activity in the oil and natural gas exploration and production (“E&P”) industry. As of May 1,September 30, 2020, the U.S. active rig count was 408,261, reflecting a 48%67% decline from the first quarter 2020 average level,level. The average U.S. active rig count was 477 for the first nine months of 2020 reflecting a 52% decline from the first nine months of 2019. In addition, international activity levels have also been negatively impacted by the COVID-19 pandemic and is expected to continue to significantly decline in the coming months.oil prices. In response to the deteriorating U.S. land oil and natural gasthese market changes, we initiated certain headcountworkforce reductions and other cost reduction programs late in the first quarter of 2020, and continued these actions throughout 2020.
As part of the cost reduction programs, we have continued intoreduced our global employee base by approximately 620 (28%) in the second quarterfirst nine months of 2020. As a result of these workforce reductions, our operating results for the third quarter of 2020 include $0.4 million of total severance costs ($0.2 million in Fluids Systems and $0.2 million in the Corporate office), with $0.1 million in cost of revenues and $0.3 million in selling, general and administrative expenses. Our operating results for the first nine months of 2020 include $3.9 million of total severance costs ($3.3 million in Fluids Systems and $0.6 million in the Corporate
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office), with $2.6 million in cost of revenues and $1.3 million in selling, general and administrative expenses. These costs have been substantially paid as of September 30, 2020.
For the third quarter of 2020, we expect to recognize additionalrecognized $4.7 million of total charges primarily for the impairment of certain fixed assets and other non-cash charges, with $4.5 million in the Fluids Systems segment and $0.2 million in the Corporate Office. For the first nine months of 2020, we recognized $18.0 million of total charges primarily for inventory write-downs, severance chargescosts, fixed asset impairments, and certain facility exit costs, with $17.4 million in the second quarterFluids Systems segment and $0.6 million in the Corporate office. See below for details of 2020; however, such amounts are not currently estimable.charges in the Fluids Systems segment.
Third QuarterFirst Nine Months
(In thousands)2020201920202019
Inventory write-downs$990 $$9,986 $
Severance costs189 284 3,288 1,152 
Property, plant and equipment impairments3,038 3,038 
Facility exit costs and other286 1,086 
Total Fluids Systems impairments and other charges$4,503 $284 $17,398 $1,152 

We also made the decision in late 2019 to wind down our Brazil operations. At March 31,September 30, 2020, we had $11.6$11.8 million of accumulated translation losses related to our subsidiary in Brazil. As such, we will reclassify these losses and recognize a charge to income at such time when we have substantially liquidated our subsidiary in Brazil.
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As of March 31,September 30, 2020, our consolidated balance sheet includes $42.1$42.2 million of goodwill, all of which relates to the Mats and Integrated Services segment. Goodwill and other indefinite-lived intangible assets are tested for impairment annually as of November 1, or more frequently, if indicators of impairment exists. In March 2020, primarily as a result of the collapse in oil prices and the expected declines in the U.S. land E&P markets, along with a significant decline in the quoted market prices of our common stock, we considered these developments to be a potential indicator of impairment that required us to complete an interim goodwill impairment evaluation. As such, in March 2020, we estimated the fair value of our Mats and Integrated Services reporting unit based on our current forecasts and expectations for market conditions and determined that even though the estimated fair value had decreased, the fair value remained substantially in excess of its net carrying value, and therefore, no impairment was required. During the second quarter and third quarter of 2020, we determined that there were no further indicators of events or changes in circumstances that would more likely than not reduce the fair value below its carrying amount.
As of March 31,September 30, 2020, our consolidated balance sheet also includes $305.7$287.3 million of property, plant and equipment, net, and $27.5$25.6 million of finite-lived intangible assets, net, which combined includes $170.8$159.6 million in the Fluids Systems segment and $150.8$143.6 million in the Mats and Integrated Services segment. We review property, plant and equipment, finite-lived intangible assets and certain other assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We assess recoverability based on expected undiscounted future net cash flows. WithDue to the changes in market uncertainty as discussed above,conditions, we completed anhave reviewed these assets for impairment reviewduring the first nine months of such assets in March 2020 which indicatedand determined that the estimated undiscounted cash flows exceeded the carrying value, and therefore, no impairment was required. Fluids Systems segment includes a $3.0 million impairment charge for the first nine months of 2020, attributable to the abandonment of certain property, plant and equipment.
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ITEM 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition, results of operations, liquidity, and capital resources should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this report as well as our Annual Report on Form 10-K for the year ended December 31, 2019. Our firstthird quarter represents the three-month period ended March 31.September 30 and our first nine months represents the nine-month period ended September 30. Unless otherwise noted, all currency amounts are stated in U.S. dollars. The reference to a “Note” herein refers to the accompanying Notes to Unaudited Condensed Consolidated Financial Statements contained in Item 1 “Financial Statements.”
Overview
We are a geographically diversified supplier providing products, as well as rentals and services. We operate our business through two reportable segments: Fluids Systems, which primarily serves the oil and natural gas exploration and production (“E&P”) industry, and Mats and Integrated Services, which serves a variety of industries, including E&P, electrical transmission & distribution, E&P, pipeline, solar,renewable energy, petrochemical, and construction industries.
Our operating results, particularly for the Fluids Systems segment, depend on oil and natural gas drilling activity levels in the markets we serve and the nature of the drilling operations (including the depth and whether the wells are drilled vertically or horizontally), which governs the revenue potential of each well. Drilling activity levels, in turn, depend on a variety of factors, including oil and natural gas commodity pricing, inventory levels, product demand, and regulatory restrictions. Oil and natural gas prices and activity are cyclical and volatile, and this market volatility has a significant impact on our operating results.
While our revenue potential is driven by a number of factors including those described above, rig count data remains the most widely accepted indicator of drilling activity. Average North American rig count data for the third quarter and first quarternine months of 2020 as compared to the first quartersame periods of 2019 is as follows:
First Quarter2020 vs 2019 Third Quarter2020 vs 2019
20202019Count% 20202019Count%
U.S. Rig CountU.S. Rig Count785  1,043  (258) (25)%U.S. Rig Count254 920 (666)(72)%
Canada Rig CountCanada Rig Count196  183  13  %Canada Rig Count47 132 (85)(64)%
North America Rig CountNorth America Rig Count981  1,226  (245) (20)%North America Rig Count301 1,052 (751)(71)%
First Nine Months2020 vs 2019
20202019Count%
U.S. Rig CountU.S. Rig Count477 984 (507)(52)%
Canada Rig CountCanada Rig Count89 132 (43)(33)%
North America Rig CountNorth America Rig Count566 1,116 (550)(49)%

Source: Baker Hughes Company
During 2019, U.S. rig countscount steadily declined, exiting the year at 805 active rigs, a 26% decline from the end of 2018. During March 2020, oil prices collapsed due to geopolitical events along with the worldwide effects of the COVID-19 pandemic. As a result, average U.S. rig counts havecount in the second quarter of 2020 declined further, and as of May 1, 2020, the U.S. active rig count was 408, reflecting a 48% decline50% from the first quarter of 2020 and further declined another 35% in the third quarter of 2020 from the average level and is expected to continue to significantly decline in the coming months. With the continued declinesecond quarter of 2020. After reaching a low of 244 in mid-August, the U.S. land market rig count over the past several weeks, we expect revenues from U.S. land markets will significantly decline in the near term, driven by the anticipated reductions in E&P drilling and completion activity.has since increased to 296 as of October 30, 2020. The Canada active rig count was 27reflects both the current weakness in oil prices as of May 1, 2020, largely reflecting thewell as normal seasonality for this market, with the highest rig count levels generally observed in the first quarter of each year, prior to Spring break-up; however,break-up. We anticipate that market activity will continue to modestly improve from current levels, although the current weakness in oil prices are expectedongoing impacts of the COVID-19 pandemic and an uncertain economic environment that will likely persist through the remainder of 2020 and into 2021 make the timing and pace of recovery difficult to lead to lower activity in Canada throughout 2020.predict.
Outside of North America, drilling activity is generally more stable as drilling activity in many countries is based on longer-term economic projections and multi-year drilling programs, which tends to reduce the impact of short-term changes in commodity prices on overall drilling activity. However, operations in several countries in the EMEA region experienced activity disruptions and project delays beginning in March 2020 and continuing through the third quarter of 2020, driven by government-imposed restrictions on movements of personnel, quarantines of staffing, and logistical limitations as a result of the COVID-19 pandemic, and wepandemic. We currently expect these disruptions and project delays will continue to continue throughoutimpact international activity levels through the second quarterremainder of 2020. While2020 before beginning to gradually recover in early 2021, although the impact from the duration and magnitude of the ongoing health pandemic and related government responses are very difficult to predict, we currently estimate our international revenues will decline sequentially by at least $10 million in the second quarter of 2020.predict.
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In response to the deteriorating U.S. land oil and natural gasthese market changes and reduced demand for our products and services as a result of the decline in oil prices and the COVID-19 pandemic, we initiated a number of actions late in the first quarter of 2020 and continuing throughout 2020 aimed at conserving cash and protecting our liquidity, and these actions have continued into the second quarter of 2020, including:
The implementation of cost reduction programs, including workforce reductions, employee furloughs, the suspension of the Company’s matching contributions to its U.S. defined contribution plan, and temporary salary reductions
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effective April 1, 2020 for a significant portion of U.S. employees, including a 15% cut to the salaries paid to executive officers (with a further 10% cut for the CEO effective August 12, 2020) and the annual cash retainers paid to all non-employee members of the Board of Directors;
The initiation of additional actions to further reduce the operational footprint of the Fluids Systems business in U.S. land, to better align our cost structure with expected declines inthe lower market activity levels; and
The elimination of all non-critical capital investments, which reducesinvestments.
As part of the cost reduction programs, we have reduced our expected full yearglobal employee base by approximately 620 (28%) in the first nine months of 2020.
For the first nine months of 2020, capital expenditures to approximately $15 million to $20 million.
Wewe recognized $1.4$18.0 million of total charges primarily for inventory write-downs, and severance costs, in the first quarter of 2020,fixed asset impairments, and facility exit costs, with $1.2$17.4 million in the Fluids Systems segment and $0.2$0.6 million in the Corporate office. In addition, as a resultThe $17.4 million of the ongoing cost reduction programs described above, we expect to recognize additionalFluids Systems charges includes $10.0 million for inventory write-downs, $3.3 million in severance chargescosts, $3.0 million in fixed asset impairments, and certain$1.1 million in facility exit costs in the second quarter of 2020; however, such amounts are not currently estimable. and other.
While we have taken certain actions to reduce our workforce and cost structure, our business contains high levels of fixed costs, including significant facility and personnel expenses. We continue to evaluate under-performing areas as well as opportunities to further enable a more efficient and scalable cost structure. In the absence of a longer-term increase in activity levels, we may incur future charges related to further cost reduction efforts or potential asset impairments, which may negatively impact our future results.
Segment Overview
Our Fluids Systems segment, which generated 81%76% of consolidated revenues for the first quarternine months of 2020, provides customized drilling, completion, and stimulation fluids solutions to E&P customers primarily in North America and Europe, the Middle East and Africa (“EMEA”), as well as certain countries in Asia Pacific and Latin America. International expansion, including the penetration of international oil companies (“IOCs”) and national oil companies (“NOCs”), is a key element of our Fluids Systems strategy, which has historically helped to stabilize segment revenues while North American oil and natural gas exploration activities have fluctuated significantly. Revenues from IOC and NOC customers represented approximately 38%43% of Fluids Systems segment revenues for the first quarternine months of 2020.2020 compared to approximately 31% for the first nine months of 2019.
In addition to our international expansion efforts, we have also expanded our presence in the deepwater Gulf of Mexico, capitalizing on our capabilities, infrastructure, and strong market position, as well as through product line extensions into adjacent product offerings, including completion fluids. Revenues for drilling and completion fluids from offshore Gulf of Mexico increased to $16$37 million for the first quarternine months of 2020 compared to $6$32 million for the first quarternine months of 2019.
In response to the increasing market demand for cleaning products following the COVID-19 pandemic, we arebegan leveraging our chemical blending capacity and technical expertise to begin producing a variety of disinfectants and industrial cleaning products in the second quarter of 2020. In AprilAfter initial production start-up in the second quarter of 2020, revenues from these products tripled in the third quarter of 2020 to nearly $3 million. Following the third quarter 2020 installation of required packaging equipment for these products, we received our first customer order as part of this effort, and we are working with several other potential customers with plansplan to continue to ramp up production over the next several months.
Our Mats and Integrated Services segment, which generated 19%24% of consolidated revenues for the first quarternine months of 2020, provides composite mat rentals utilized for temporary worksite access, along with related site construction and services to customers in various markets including E&P, electrical transmission & distribution, E&P, pipeline, solar,renewable energy, petrochemical, and construction industries across North America and Europe. We also sell composite mats to customers around the world.

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The expansion of our rental and service activities in utility infrastructure and other non-E&P markets remains a strategic priority for us due to the magnitude of this market growth opportunity, as well as the market’s relative stability compared to E&P. The Mats and Integrated Services segment rental and service revenues from non-E&P markets was approximately $15$45 million for the first quarternine months of 2020 compared to approximately $17$50 million for the first quarternine months of 2019. Product sales revenues largely reflect sales to utility customers and other non-E&P markets, and typically fluctuate based on the timing of customer orders. Including product sales, total revenues from non-E&P markets represented approximately 60%66% of total segment revenues for the first quarternine months of 2020 compared to approximately 44%47% of total segment revenues for the first quarternine months of 2019. During the first quarternine months of 2020, our business was impacted by the COVID-19 pandemic, as customers cited COVID-related market uncertainty and logistical restrictions for delays indelayed sales orders and project timing. The ongoing impact of these uncertaintiestiming citing COVID-related market uncertainty, permitting delays, and logistical restrictions onrestrictions. As a result, we reduced our operations are difficultmat production levels during the third quarter of 2020 and expect to predict.continue to do so for the remainder of the year to reduce current inventory levels, which negatively impacts our results due to the high level of fixed costs in our manufacturing operations. We currently believeexpect that increased activity is contingent uponfor both rental projects and product sales remains highly dependent on our customers gaining confidence in the broader economic recovery, asrecovery. While customer quoting activity remains robust both for rental projectshas improved from the lull seen during the second quarter of 2020, the ongoing impact of these uncertainties, permitting delays, and product sales.logistical restrictions are difficult to predict.

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FirstThird Quarter of 2020 Compared to FirstThird Quarter of 2019
Consolidated Results of Operations
Summarized results of operations for the firstthird quarter of 2020 compared to the firstthird quarter of 2019 are as follows:
First Quarter2020 vs 2019 Third Quarter2020 vs 2019
(In thousands)(In thousands)20202019$%(In thousands)20202019$%
RevenuesRevenues$164,550  $211,473  $(46,923) (22)%Revenues$96,424 $202,763 $(106,339)(52)%
Cost of revenuesCost of revenues146,084  174,976  (28,892) (17)%Cost of revenues99,301 169,429 (70,128)(41)%
Selling, general and administrative expensesSelling, general and administrative expenses24,696  30,742  (6,046) (20)%Selling, general and administrative expenses20,597 27,017 (6,420)(24)%
Other operating (income) loss, net(344) 76  (420) NM  
Other operating income, netOther operating income, net(820)29 (849)NM
ImpairmentsImpairments3,038 — 3,038 NM
Operating income (loss)Operating income (loss)(5,886) 5,679  (11,565) NM  Operating income (loss)(25,692)6,288 (31,980)NM
Foreign currency exchange (gain) loss1,982  (1,062) 3,044  NM  
Foreign currency exchange lossForeign currency exchange loss580 828 (248)(30)%
Interest expense, netInterest expense, net3,201  3,656  (455) (12)%Interest expense, net2,411 3,628 (1,217)(34)%
Loss on extinguishment of debt915  —  915  NM  
Income (loss) before income taxesIncome (loss) before income taxes(11,984) 3,085  (15,069) NM  Income (loss) before income taxes(28,683)1,832 (30,515)NM
Provision for income taxes164  1,803  (1,639) NM  
Provision (benefit) for income taxesProvision (benefit) for income taxes(4,813)3,273 (8,086)NM
Net income (loss)Net income (loss)$(12,148) $1,282  $(13,430) NM  Net income (loss)$(23,870)$(1,441)$(22,429)NM
Revenues
Revenues decreased 22%52% to $164.6$96.4 million for the firstthird quarter of 2020, compared to $211.5$202.8 million for the firstthird quarter of 2019. This $46.9$106.3 million decrease includes a $49.1$86.1 million (30%(56%) decrease in revenues in North America, comprised of a $29.4$63.9 million decrease in the Fluids Systems segment and a $19.7$22.2 million decrease in the Mats and Integrated Services segment. Revenues from our North America operations decreased primarily due to the weakening U.S. land market.71% reduction in North America rig count. Revenues from our international operations increaseddecreased by $2.2$20.3 million (5%(41%), primarily driven by increased activity disruptions and project delays resulting from the COVID-19 pandemic in our EMEA region. Additional information regarding the change in revenues is provided within the operating segment results below.
Cost of revenues
Cost of revenues decreased 17%41% to $146.1$99.3 million for the firstthird quarter of 2020, compared to $175.0$169.4 million for the firstthird quarter of 2019. This $28.9$70.1 million decrease was primarily driven by the 22%52% decrease in revenues described above. SeeFluids Systems segment cost of revenues for the operating segment results below for information regarding our ongoing cost reduction actions.third quarter of 2020 includes a total of $1.1 million of charges related to inventory write-downs and severance costs.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased $6.0$6.4 million to $24.7$20.6 million for the firstthird quarter of 2020, compared to $30.7$27.0 million for the firstthird quarter of 2019. This decrease was primarily driven by lower personnel costs, lower stock-based compensation expense, due to a charge of $4.0 million in the first quarter of 2019 associated with the February 2019 retirement policy modification, as well as lower performance-based incentive compensation and lower spending related to legal matters. In addition, the third quarter of 2019 includes higher professional fees related to the October 2019 acquisition of Cleansorb Limited ("Cleansorb") and our long-term strategic planning project. Selling, general and administrative expenses as a percentage of revenues was 15.0%21.4% for the firstthird quarter of 2020 compared to 14.5%13.3% for the firstthird quarter of 2019.
Impairments
Fluids Systems segment includes a $3.0 million impairment charge for the third quarter of 2020, attributable to the abandonment of certain property, plant and equipment.
Foreign currency exchange
Foreign currency exchange was a $2.0$0.6 million loss for the firstthird quarter of 2020 compared to a $1.1$0.8 million gainloss for the firstthird quarter of 2019, and reflects the impact of currency translation on assets and liabilities (including intercompany balances) that are denominated in currencies other than functional currencies.
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Interest expense, net
Interest expense was $3.2$2.4 million for the firstthird quarter of 2020 compared to $3.7$3.6 million for the firstthird quarter of 2019. Interest expense for the firstthird quarter of 2020 and 2019 includes $1.6$1.2 million and $1.5$1.6 million, respectively, in non-cash amortization of original issue discount and debt issuance costs.
Loss The decrease in interest expense is primarily due to lower debt balances as well as a decrease in interest rates on extinguishment of debt
The $0.9 million loss for the first quarter of 2020 reflects the difference in the amount paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs, related to the repurchase of $14.5 million of our Convertible Notes in the open market for $13.8 million.ABL Facility.
Provision (benefit) for income taxes
The provisionbenefit for income taxes was $0.2$4.8 million for the firstthird quarter of 2020, despite reporting a pretax loss.reflecting an effective tax benefit rate of 17%. This result primarily reflects the impact of the geographic composition of our pretax loss, where the tax benefit from losses in the U.S was more thanpartially offset by the tax expense related to earnings from our international operations. The provision for income taxes was $1.8$3.3 million for the firstthird quarter of 2019 and included a $2.0 million charge, primarily reflecting the impact of an effectiveincrease in the projected full year 2019 tax rate of 58%. The 2019 effective tax rate was negatively impacted by $0.7 million of discrete tax adjustments relative to the amount of pre-tax income.resulting from a decline in projected U.S. earnings for 2019.

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Operating Segment Results
Summarized financial information for our reportable segments is shown in the following table (net of inter-segment transfers):
First Quarter2020 vs 2019Third Quarter2020 vs 2019
(In thousands)(In thousands)20202019$%(In thousands)20202019$%
RevenuesRevenues  Revenues  
Fluids systemsFluids systems$132,805  $160,653  $(27,848) (17)%Fluids systems$67,711 $152,547 $(84,836)(56)%
Mats and integrated servicesMats and integrated services31,745  50,820  (19,075) (38)%Mats and integrated services28,713 50,216 (21,503)(43)%
Total revenuesTotal revenues$164,550  $211,473  $(46,923) (22)%Total revenues$96,424 $202,763 $(106,339)(52)%
Operating income (loss)Operating income (loss)      Operating income (loss)  
Fluids systemsFluids systems$(2,268) $3,874  $(6,142) Fluids systems$(18,957)$5,893 $(24,850)
Mats and integrated servicesMats and integrated services3,062  13,538  (10,476) Mats and integrated services(139)10,049 (10,188)
Corporate officeCorporate office(6,680) (11,733) 5,053  Corporate office(6,596)(9,654)3,058 
Total operating income (loss)Total operating income (loss)$(5,886) $5,679  $(11,565) Total operating income (loss)$(25,692)$6,288 $(31,980)
Segment operating marginSegment operating marginSegment operating margin
Fluids systemsFluids systems(1.7)%2.4 %Fluids systems(28.0)%3.9 %
Mats and integrated servicesMats and integrated services9.6 %26.6 %Mats and integrated services(0.5)%20.0 %
Fluids Systems
Revenues
Total revenues for this segment consisted of the following:
First Quarter2020 vs 2019 Third Quarter2020 vs 2019
(In thousands)(In thousands)20202019$%(In thousands)20202019$%
United StatesUnited States$73,660  $103,059  $(29,399) (29)%United States$40,314 $98,140 $(57,826)(59)%
CanadaCanada13,260  13,266  (6) — %Canada1,961 8,029 (6,068)(76)%
Total North AmericaTotal North America86,920  116,325  (29,405) (25)%Total North America42,275 106,169 (63,894)(60)%
EMEAEMEA42,137  37,765  4,372  12 %EMEA23,207 41,126 (17,919)(44)%
OtherOther3,748  6,563  (2,815) (43)%Other2,229 5,252 (3,023)(58)%
Total InternationalTotal International45,885  44,328  1,557  %Total International25,436 46,378 (20,942)(45)%
Total Fluids Systems revenuesTotal Fluids Systems revenues$132,805  $160,653  $(27,848) (17)%Total Fluids Systems revenues$67,711 $152,547 $(84,836)(56)%
North America revenues decreased 25%60% to $86.9$42.3 million for the firstthird quarter of 2020, compared to $116.3$106.2 million for the firstthird quarter of 2019. This decrease was primarily attributable to a $39.0$57.8 million decrease from U.S. land markets driven by the 25%72% decline in U.S. rig count partially offset by a $9.6 millionan increase in market share. Revenues from offshore Gulf of Mexico driven primarily bydecreased $2.4 million, as our expanding market share gains.was more than offset by activity disruptions in 2020 resulting from elevated hurricane activity. For the firstthird quarter of 2020, U.S. revenues included $58.0$30.3 million from land markets and $15.7$7.4 million from offshore Gulf of Mexico.
Internationally, revenues increased 4%decreased 45% to $45.9$25.4 million for the firstthird quarter of 2020, compared to $44.3$46.4 million for the firstthird quarter of 2019. The increasedecrease in EMEA was driven by lower activity primarily attributable to increases in Italy, Tunisia,COVID-19 disruptions and Kuwait, partially offset bythe impact of lower activityoil prices in Algeria, Romania, and Romania.various other countries. The decrease in other international was primarily attributable to the completion of the Baker Hughes Greater Enfield projectlower activity in Australia.
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Operating income (loss)
The Fluids Systems segment incurred an operating loss of $2.3$19.0 million for the firstthird quarter of 2020, reflecting a $6.1$24.9 million change from the $3.9$5.9 million of operating income generated for the firstthird quarter of 2019. Fluids Systems operating loss for the first quarter of 2020 included $1.2 million of charges related to inventory write-downs and severance costs, whereas the first quarter of 2019 included $1.1 million of charges related to severance costs and the February 2019 retirement policy modification. Excluding these charges, theThe decrease in operating income includes an $8.5a $14.0 million decline from North American operations partially offset byand a $2.4$6.4 million increasedecline from international operations. These changes in operating incomeoperations, which are primarily attributable to the changes in revenues described above.above, partially offset by the benefit of cost reduction programs. The Fluids Systems operating loss for the third quarter of 2020 also includes $4.5 million of charges primarily for the impairment of certain fixed assets and other non-cash charges.
During the fourth quarter of 2019, we made the decision to wind down our Brazil operations. We may incur operating losses and asset write-downs as we wind down these operations. In addition, at March 31,September 30, 2020, we had $11.6$11.8 million of accumulated translation losses related to our subsidiary in Brazil, that are reflected in accumulated other comprehensive loss in stockholders’ equity. Accounting guidance requires that we reclassify these accumulated translation losses and recognize a charge to income at such time when we have substantially liquidated the assets of our subsidiary in Brazil.
Mats and Integrated Services
Revenues
Total revenues for this segment consisted of the following:
First Quarter2020 vs 2019 Third Quarter2020 vs 2019
(In thousands)(In thousands)20202019$%(In thousands)20202019$%
Rental and service revenuesRental and service revenues$27,603  $42,730  $(15,127) (35)%Rental and service revenues$22,796 $35,630 $(12,834)(36)%
Product sales revenuesProduct sales revenues4,142  8,090  (3,948) (49)%Product sales revenues5,917 14,586 (8,669)(59)%
Total Mats and Integrated Services revenuesTotal Mats and Integrated Services revenues$31,745  $50,820  $(19,075) (38)%Total Mats and Integrated Services revenues$28,713 $50,216 $(21,503)(43)%
Rental and service revenues decreased $15.1$12.8 million (36%) to $27.6$22.8 million for the firstthird quarter of 2020, compared to $42.7 million for the first quarter of 2019, which includes a $12.0 million decrease in revenues from E&P customers, of $13.9 million, primarily resulting from lower U.S. activity caused by the decline in oil and natural gas prices. In addition, revenues from non-E&P customers decreased $0.8 million as our continued expansion into non-E&P markets, including increased demand to support repairs of hurricane-damaged utility infrastructure along the U.S. Gulf Coast region, was more than offset by the impact of delays in customer project timing resulting from COVID-related market uncertainty, permitting delays, and logistical restrictions. Revenues from product sales, which typically fluctuate based on the timing of mat orders from customers, was negatively impacted in the firstthird quarter of 2020 as certain customers delayed orders due to the uncertainty related to the COVID-19 pandemic.
Operating income (loss)
The Mats and Integrated Services segment generatedincurred an operating incomeloss of $3.1$0.1 million for the firstthird quarter of 2020 compared to $13.5operating income of $10.0 million for the firstthird quarter of 2019, the decrease being primarily attributable to the change in revenues as described above.
Corporate Office
Corporate office expenses decreased $5.1$3.1 million to $6.7$6.6 million for the firstthird quarter of 2020, compared to $11.7$9.7 million for the firstthird quarter of 2019. This decrease was primarily driven by reduced personnel costs and lower spending related to legal matters, as well as higher professional fees incurred in the third quarter of 2019 related to the Cleansorb acquisition and our long-term strategic planning project.
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First Nine Months of 2020 Compared to First Nine Months of 2019
Consolidated Results of Operations
Summarized results of operations for the first nine months of 2020 compared to the first nine months of 2019 are as follows:
 First Nine Months2020 vs 2019
(In thousands)20202019$%
Revenues$362,920 $630,648 $(267,728)(42)%
Cost of revenues357,675 522,338 (164,663)(32)%
Selling, general and administrative expenses66,230 85,796 (19,566)(23)%
Other operating income, net(1,906)(367)(1,539)NM
Impairments3,038 — 3,038 NM
Operating income (loss)(62,117)22,881 (84,998)NM
Foreign currency exchange loss3,343 756 2,587 NM
Interest expense, net8,524 10,807 (2,283)(21)%
Gain on extinguishment of debt(419)— (419)NM
Income (loss) before income taxes(73,565)11,318 (84,883)NM
Provision (benefit) for income taxes(11,303)7,171 (18,474)NM
Net income (loss)$(62,262)$4,147 $(66,409)NM
Revenues
Revenues decreased 42% to $362.9 million for the first nine months of 2020, compared to $630.6 million for the first nine months of 2019. This $267.7 million decrease includes a $228.4 million (47%) decrease in revenues in North America, comprised of a $169.7 million decrease in the Fluids Systems segment and a $58.7 million decrease in the Mats and Integrated Services segment. Revenues from our North America operations decreased primarily due to the 49% reduction in North America rig count. Revenues from our international operations decreased by $39.3 million (26%), primarily driven by activity disruptions and project delays resulting from the COVID-19 pandemic as well as lower oil prices in our EMEA region. Additional information regarding the change in revenues is provided within the operating segment results below.
Cost of revenues
Cost of revenues decreased 32% to $357.7 million for the first nine months of 2020, compared to $522.3 million for the first nine months of 2019. This $164.7 million decrease was primarily driven by the 42% decrease in revenues described above. Fluids Systems segment cost of revenues for the first nine months of 2020 includes a total of $13.4 million of charges related to inventory write-downs, severance costs, and facility exit costs.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased $19.6 million to $66.2 million for the first nine months of 2020, compared to $85.8 million for the first nine months of 2019. The first nine months of 2019 included a $4.0 million charge for stock-based compensation expense including a charge of $3.4 million in the first quarter of 2019 associated with the February 2019 retirement policy modification as well asand $3.7 million in professional fees related to our long-term strategic planning project and the Cleansorb acquisition. The remaining decrease of $11.9 million was primarily driven by reduced personnel costs and lower spending related to legal matters.matters in the first nine months of 2020. Selling, general and administrative expenses as a percentage of revenues was 18.2% for the first nine months of 2020 compared to 13.6% for the first nine months of 2019.
Impairments
Fluids Systems segment includes a $3.0 million impairment charge for the first nine months of 2020, attributable to the abandonment of certain property, plant and equipment.

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Foreign currency exchange
Foreign currency exchange was a $3.3 million loss for the first nine months of 2020 compared to a $0.8 million loss for the first nine months of 2019, and reflects the impact of currency translation on assets and liabilities (including intercompany balances) that are denominated in currencies other than functional currencies.
Interest expense, net
Interest expense was $8.5 million for the first nine months of 2020 compared to $10.8 million for the first nine months of 2019. Interest expense for the first nine months of 2020 and 2019 includes $4.0 million and $4.6 million, respectively, in non-cash amortization of original issue discount and debt issuance costs. The decrease in interest expense is primarily due to lower debt balances as well as a decrease in interest rates on the ABL Facility.
Gain on extinguishment of debt
The $0.4 million gain for the first nine months of 2020 reflects the difference in the amount paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs, related to the repurchase of $33.1 million of our Convertible Notes in the open market for $29.1 million.
Provision (benefit) for income taxes
The benefit for income taxes was $11.3 million for the first nine months of 2020, reflecting an effective tax benefit rate of 15%. This result primarily reflects the impact of the geographic composition of our pretax loss, where the tax benefit from losses in the U.S was partially offset by the tax expense related to earnings from our international operations. The provision for income taxes was $7.2 million for the first nine months of 2019, reflecting an effective tax rate of 63%. The 2019 effective tax rate was impacted by the geographic composition of our pretax income as well as non-deductible expenses relative to the amount of pretax income.

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Operating Segment Results
Summarized financial information for our reportable segments is shown in the following table (net of inter-segment transfers):
First Nine Months2020 vs 2019
(In thousands)20202019$%
Revenues  
Fluids systems$275,178 $485,744 $(210,566)(43)%
Mats and integrated services87,742 144,904 (57,162)(39)%
Total revenues$362,920 $630,648 $(267,728)(42)%
Operating income (loss)  
Fluids systems$(46,284)$21,951 $(68,235)
Mats and integrated services3,928 32,863 (28,935)
Corporate office(19,761)(31,933)12,172 
Total operating income (loss)$(62,117)$22,881 $(84,998)
Segment operating margin
Fluids systems(16.8)%4.5 %
Mats and integrated services4.5 %22.7 %
Fluids Systems
Revenues
Total revenues for this segment consisted of the following:
 First Nine Months2020 vs 2019
(In thousands)20202019$%
United States$156,644 $318,353 $(161,709)(51)%
Canada18,287 26,283 (7,996)(30)%
Total North America174,931 344,636 (169,705)(49)%
EMEA91,380 123,346 (31,966)(26)%
Other8,867 17,762 (8,895)(50)%
Total International100,247 141,108 (40,861)(29)%
Total Fluids Systems revenues$275,178 $485,744 $(210,566)(43)%
North America revenues decreased 49% to $174.9 million for the first nine months of 2020, compared to $344.6 million for the first nine months of 2019. This decrease was primarily attributable a $169.5 million decrease from U.S. land markets driven by the 52% decline in U.S. rig count, partially offset by a $5.0 million increase from offshore Gulf of Mexico driven primarily by the completion fluids product line extension. For the first nine months of 2020, U.S. revenues included $116.4 million from land markets and $36.9 million from offshore Gulf of Mexico.
Internationally, revenues decreased 29% to $100.2 million for the first nine months of 2020, compared to $141.1 million for the first nine months of 2019. The decrease in EMEA was driven by lower activity primarily attributable to COVID-19 disruptions and the impact of lower oil prices in Algeria, Romania, and various other countries, partially offset by increases in Tunisia, Italy, and Kuwait, as well as the October 2019 acquisition of Cleansorb. The decrease in other international was primarily attributable to lower activity in Australia, including the completion of the Baker Hughes Greater Enfield project in the third quarter of 2019.
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Operating income (loss)
The Fluids Systems segment incurred an operating loss of $46.3 million for the first nine months of 2020, reflecting a $68.2 million change from the $22.0 million of operating income generated for the first nine months of 2019. The decrease in operating income includes a $41.5 million decline from North American operations and a $11.1 million decline from international operations, which are primarily attributable to the changes in revenues described above, partially offset by the benefit of cost reduction programs. The Fluids Systems operating loss for the first nine months of 2020 also includes $17.4 million of charges primarily related to inventory write-downs, severance costs, fixed asset impairments, and facility exit costs, whereas the first nine months of 2019 included $1.8 million of charges related to severance costs and the February 2019 retirement policy modification.
Mats and Integrated Services
Revenues
Total revenues for this segment consisted of the following:
 First Nine Months2020 vs 2019
(In thousands)20202019$%
Rental and service revenues$72,499 $115,944 $(43,445)(37)%
Product sales revenues15,243 28,960 (13,717)(47)%
Total Mats and Integrated Services revenues$87,742 $144,904 $(57,162)(39)%
Rental and service revenues decreased $43.4 million (37%) to $72.5 million for the first nine months of 2020, which includes a $38.4 million decrease from E&P customers, primarily resulting from lower U.S. activity caused by the decline in oil and natural gas prices. In addition, revenues from non-E&P customers decreased $5.0 million as our continued expansion into non-E&P markets was more than offset by the impact of delays in customer project timing resulting from COVID-related market uncertainty, permitting delays, and logistical restrictions. Revenues from product sales, which typically fluctuate based on the timing of mat orders from customers, was negatively impacted in the first nine months of 2020 as certain customers delayed orders due to the market uncertainty related to the COVID-19 pandemic.
Operating income
The Mats and Integrated Services segment generated operating income of $3.9 million for the first nine months of 2020 compared to $32.9 million for the first nine months of 2019, the decrease being primarily attributable to the change in revenues as described above.
Corporate Office
Corporate office expenses decreased $12.2 million to $19.8 million for the first nine months of 2020, compared to $31.9 million for the first nine months of 2019. The first nine months of 2019 included a $3.4 million charge for stock-based compensation expense associated with the February 2019 retirement policy modification and $3.7 million in professional fees related to our long-term strategic planning project and the Cleansorb acquisition. The remaining decrease of $5.1 million is primarily driven by reduced personnel costs and lower spending related to legal matters in the first nine months of 2020.
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Liquidity and Capital Resources
Net cash provided by operating activities was $4.4$40.3 million for the first quarternine months of 2020 compared to $2.3$53.2 million for the first quarternine months of 2019. During the first quarternine months of 2020, net incomeloss adjusted for non-cash items used cash of $0.4$27.3 million, while changes in working capital provided cash of $4.8$67.6 million.
Net cash used in investing activities was $3.0$4.1 million for the first quarternine months of 2020, including capital expenditures of $6.6$14.6 million. Capital expenditures during the first quarternine months of 2020 included $3.2$7.6 million for the Mats and Integrated Services segment, including investments in the mat rental fleet as well as new products, and $2.3$5.5 million for the Fluids Systems segment.
Net cash provided byused in financing activities was $0.9$60.9 million for the first quarternine months of 2020, which primarily includes net borrowings of $14.0 million on our ABL Facility offset by $13.8$29.1 million in repurchases of our Convertible Notes and a net repayment of $35.1 million on our ABL Facility (as defined below).
WeSubstantially all our $24.0 million of cash on hand at September 30, 2020 resides in our international subsidiaries, and we expect to continue to repatriate excess cash from these international subsidiaries, subject to exchange or cash controls and the cash requirements to support the strategic objectives of these international subsidiaries. In addition, we may continue to purchase our Convertible Notes under our existing repurchase program from time to time.
Our revenues and operating results will bein 2020 have been negatively impacted by the decrease in demand for our products and services fromfollowing the dramatic decline in the price of and demand for oil as well as the COVID-19 pandemic and related economic shutdowns around the world. We have initiatedtaken a number of actions aimed at conserving cash and protecting our liquidity, including workforce and salary reductions, elimination of all non-critical capital expenditures, as well as actions to reduce our operational footprint to match current and anticipated activity levels by operating region. We currently expect total 2020 capital expenditures to remain limited for the foreseeable future. We anticipate that revenues will begin to increase in the fourth quarter of 2020 as market activity improves from current levels, although the ongoing impacts of the COVID-19 pandemic and an uncertain economic environment that will likely persist through the remainder of 2020 and into early 2021 make the timing and pace of recovery difficult to predict. We anticipate that our near-term working capital requirements to support the revenue growth will largely be approximately $15.0 millionoffset by the benefit from our on-going efforts to $20.0 million. Wereduce inventory levels and international receivables, which remain elevated from historical levels. As we progress through 2021, we anticipate that future working capital requirements for our operations will fluctuate directionally with revenues. As such, we anticipate that our near-term working capital requirements will decrease as a result of expected declines in revenues as well as on-going efforts to reduce inventory levels.
Availability under our ABL Facility also provides additional liquidity as discussed further below. Total availability under the ABL Facility will fluctuate directionally based on the level of eligible U.S. accounts receivable, inventory, and, subject to satisfaction of certain financial covenants as described below, composite mats included in the rental fleet. As of May 5,November 3, 2020, our total availability under the ABL Facility was $154.3$112.3 million, of which $72.0$29.0 million was drawn, resulting in remaining availability of $82.3$83.3 million. As of November 3, 2020, our total availability under the ABL Facility included $25.3 million from eligible rental mats. As discussed further below, in November 2020, we will no longer satisfy a financial covenant required for the composite mats to be included in the borrowing availability under the ABL Facility, and therefore, the adjusted total availability under the ABL Facility would be reduced by such amount. Based on our current projections of operating results through the first half of 2021, we currently anticipate satisfying the financial covenants required such that the eligible rental mats would again be included in the borrowing availability under the ABL Facility following the second quarter of 2021.
While substantially all our $49.1 million of cash on hand at March 31, 2020 resides in our international subsidiaries,Considering the above, we expect to continue to repatriate excess cash from these international subsidiaries, subject to exchange or cash controls and the cash requirements to support the strategic objectives of these international subsidiaries. We expect our available cash on-hand, cash generated by operations, and remaining availability under our ABL Facility to be adequate to fund current operations during the next 12 months, and wemonths. We also continue to evaluate access to capital and other sources of additional liquidity to support our longer-term liquidity options. In addition, we may continue to purchaseoptions, which include possible financing or alternative arrangements secured by certain assets in the U.S. or our common stock or Convertible Notes under our existing repurchase program from time to time.international operations.

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Our capitalization is as follows:
(In thousands)(In thousands)March 31, 2020December 31, 2019(In thousands)September 30, 2020December 31, 2019
Convertible NotesConvertible Notes$85,500  $100,000  Convertible Notes$66,912 $100,000 
ABL FacilityABL Facility79,000  65,000  ABL Facility29,900 65,000 
Other debtOther debt7,707  7,164  Other debt10,805 7,164 
Unamortized discount and debt issuance costsUnamortized discount and debt issuance costs(9,261) (12,291) Unamortized discount and debt issuance costs(5,262)(12,291)
Total debtTotal debt$162,946  $159,873  Total debt$102,355 $159,873 
Stockholder's equityStockholder's equity530,359  548,645  Stockholder's equity489,083 548,645 
Total capitalizationTotal capitalization$693,305  $708,518  Total capitalization$591,438 $708,518 
Total debt to capitalizationTotal debt to capitalization23.5 %22.6 %Total debt to capitalization17.3 %22.6 %
Convertible Notes. In December 2016, we issued $100.0 million of unsecured convertible senior notes (“Convertible Notes”) that mature on December 1, 2021, of which $85.5$66.9 million principal amount was outstanding at March 31,September 30, 2020. The notes bear interest at a rate of 4.0% per year, payable semiannually in arrears on June 1 and December 1 of each year.
Holders may convert the notes at their option at any time prior to the close of business on the business day immediately preceding June 1, 2021, only under the following circumstances:
during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our common stock for at least 20 trading days (regardless of whether consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the notes in effect on each applicable trading day;
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during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day was less than 98% of the last reported sale price of our common stock on such date multiplied by the conversion rate on each such trading day; or
upon the occurrence of specified corporate events, as described in the indenture governing the notes, such as a consolidation, merger, or share exchange.
On or after June 1, 2021 until the close of business on the business day immediately preceding the maturity date, holders may convert their notes at any time, regardless of whether any of the foregoing conditions have been satisfied. As of May 4,October 30, 2020, the notes were not convertible.
The notes are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods, as described above. If converted, we currently intend to pay cash for the principal amount of the notes converted. The conversion rate is 107.1381 shares of our common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of $9.33 per share of common stock), subject to adjustment in certain circumstances. We may not redeem the notes prior to their maturity date.
During the first quarternine months of 2020, we repurchased $14.5$33.1 million of our Convertible Notes in the open market for a total cost of $13.8$29.1 million, and recognized a net lossgain of $0.9$0.4 million reflecting the difference in the amount paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs.
Asset-Based Loan Facility. In May 2016, we entered into an asset-based revolving credit agreement which replaced our previous credit agreement. In October 2017, we entered into an Amended and Restated Credit Agreement and in March 2019, we entered into a First Amendment to Amended and Restated Credit Agreement (as amended, the “ABL Facility”). The March 2019 amendment increased the amount available for borrowings, reduced applicable borrowing rates, and extended the term. The ABL Facility provides financing of up to $200.0 million available for borrowings (inclusive of letters of credit) and can be increased up to a maximum capacity of $275.0 million, subject to certain conditions. As of March 31, 2020, our total availability under the ABL Facility was $151.0 million, of which $79.0 million was drawn, resulting in remaining availability of $72.0 million.
The ABL Facility terminates in March 2024; however, the ABL Facility has a springing maturity date that will accelerate the maturity of the ABL Facility to September 1, 2021 if, prior to such date, the Convertible Notes have not been repurchased, redeemed, refinanced, exchanged or otherwise satisfied in full or we have not escrowed an amount of funds, that together with the amount that we establish as a reserve against our borrowing capacity, is sufficient for the future settlement of the Convertible Notes at their maturity. The ABL Facility requires compliance with a minimum consolidated fixed charge coverage ratio of 1.25 to 1.0 calculated based on the trailing twelve-month period ended June 30, 2021 and minimumremaining unused availability of at least $25.0 million to utilize borrowings or assignment of availability under the ABL Facility towards funding the repayment of the Convertible Notes.
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Borrowing availability under the ABL Facility is calculated based on eligible U.S. accounts receivable, inventory, and, subject to satisfaction of certain financial covenants as described below, composite mats included in the rental fleet, net of reserves and limits on such assets included in the borrowing base calculation. To the extent pledged by us, the borrowing base calculation also includes the amount of eligible pledged cash. The lender may establish such reserves, in part based on appraisals of the asset base, and other limits at its discretion which could reduce the amounts otherwise available under the ABL Facility. Availability associated with eligible rental mats will also be subject to maintaining a minimum consolidated fixed charge coverage ratio of 1.5 to 1.0 and a minimum levelat least $1.0 million of operating income for the Mats and Integrated Services segment.segment, each calculated based on a trailing twelve-month period.
As noted above, we will not satisfy the minimum consolidated fixed charge coverage ratio that is required to continue including eligible rental mats in the borrowing availability under the ABL Facility after the filing of our quarterly compliance certificate under the ABL Facility for the third quarter of 2020 in November 2020. While this does not represent a default, it would reduce the borrowing availability under the ABL Facility noted above as of November 3, 2020 by $25.3 million. We anticipate regaining compliance with the minimum consolidated fixed charge coverage ratio as required to include eligible rental mats in the borrowing availability under the ABL Facility following the second quarter of 2021. As such, we currently believe that we will be able to utilize borrowings or assignment of availability under the ABL Facility towards funding the repayment of the Convertible Notes prior to September 1, 2021. If we are unable to regain compliance with the minimum consolidated fixed charge coverage ratio following the second quarter of 2021, we would further evaluate options, which may include a waiver or amendment to our ABL Facility. Any waiver or amendment to the ABL Facility, if required, may increase the cost of our borrowings and impose additional limitations over certain types of activities, and we can give no assurance that we will be able to obtain such amendment or waiver on favorable terms or at all.
Under the terms of the ABL Facility, we may elect to borrow at a variable interest rate based on either, (1) LIBOR subject to a floor of zero or (2) a base rate equal to the highest of: (a) the federal funds rate plus 50 basis points, (b) the prime rate of Bank of America, N.A. and (c) LIBOR, subject to a floor of zero, plus 100 basis points, plus, in each case, an applicable margin per annum. The applicable margin ranges from 150 to 200 basis points for LIBOR borrowings, and 50 to 100 basis points for base rate borrowings, based on the consolidated fixed charge coverage ratio as defined in the ABL Facility. As of March 31,September 30, 2020, the applicable margin for borrowings under our ABL Facility was 150 basis points with respect to LIBOR borrowings and 50 basis points with respect to base rate borrowings. The weighted average interest rate for the ABL Facility was 2.4%1.9% at March 31,September 30, 2020. In November 2020, the applicable margins for borrowings under the ABL Facility will increase 50 basis points based on the consolidated fixed charge coverage ratio. In addition, we are required to pay a commitment fee on the unused portion of the ABL Facility ranging from 25 to 37.5 basis points, based on the level of outstanding borrowings, as defined in the ABL Facility. As of March 31,September 30, 2020, the applicable commitment fee was 37.5 basis points.
The ABL Facility is a senior secured obligation, secured by first liens on substantially all of our U.S. tangible and intangible assets, and a portion of the capital stock of our non-U.S. subsidiaries has also been pledged as collateral. The ABL Facility contains customary operating covenants and certain restrictions including, among other things, the incurrence of additional debt, liens, dividends, asset sales, investments, mergers, acquisitions, affiliate transactions, stock repurchases and other restricted payments. The ABL Facility also requires compliance with a minimum consolidated fixed charge coverage ratio of 1.0 to 1.0 calculated based on a trailing twelve-month period if availability under the ABL Facility falls below $22.5 million. Based on our current projections, we do not anticipate availability under the ABL Facility falling below $22.5 million. In addition, the ABL Facility contains customary events of default, including,
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without limitation, a failure to make payments under the facility, acceleration of more than $25.0 million of other indebtedness, certain bankruptcy events, and certain change of control events.
Other Debt. Certain of our foreign subsidiaries maintain local credit arrangements consisting primarily of lines of credit or overdraft facilities which are generally renewed on an annual basis. We utilize local financing arrangements in our foreign operations in order to provide short-term local liquidity needs. We had $6.7$7.9 million and $4.8 million outstanding under these arrangements at March 31,September 30, 2020 and December 31, 2019, respectively.
In addition, at March 31,September 30, 2020, we had $49.8$57.5 million in outstanding letters of credit, performance bonds, and other guarantees for which certain of the letters of credit are collateralized by $7.6$6.3 million in restricted cash.

Critical Accounting Estimates and Policies
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires us to make estimates and assumptions that affect the reported amounts and disclosures. Significant estimates used in preparing our condensed consolidated financial statements include fair values used for impairments of long-lived assets, including goodwill and other intangibles, and valuation allowances for deferred tax assets. Our estimates are based on historical experience and on our future expectations that we believe to be reasonable. The
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combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our current estimates and those differences may be material.
As of March 31,September 30, 2020, our consolidated balance sheet includes $42.1$42.2 million of goodwill, all of which relates to the Mats and Integrated Services segment. Goodwill and other indefinite-lived intangible assets are tested for impairment annually as of November 1, or more frequently, if indicators of impairment exists. In March 2020, primarily as a result of the collapse in oil prices and the expected declines in the U.S. land E&P markets, along with a significant decline in the quoted market prices of our common stock, we considered these developments to be a potential indicator of impairment that required us to complete an interim goodwill impairment evaluation. As such, in March 2020, we estimated the fair value of our Mats and Integrated Services reporting unit based on our current forecasts and expectations for market conditions and determined that even though the estimated fair value had decreased, the fair value remained substantially in excess of its net carrying value, and therefore, no impairment was required. During the second quarter and third quarter of 2020, we determined that there were no further indicators of events or changes in circumstances that would more likely than not reduce the fair value below its carrying amount.
In addition, we review property, plant and equipment, finite-lived intangible assets and certain other assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We assess recoverability based on expected undiscounted future net cash flows. WithDue to the changes in market uncertainty as discussed above,conditions, we completed anhave reviewed these assets for impairment reviewduring the first nine months of such assets in March 2020 which indicatedand determined that the estimated undiscounted cash flows exceeded the carrying value, and therefore, no impairment was required. Fluids Systems segment includes a $3.0 million impairment charge for the first nine months of 2020, attributable to the abandonment of certain property, plant and equipment.
For additional discussion of our critical accounting estimates and policies, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2019. Our critical accounting estimates and policies have not materially changed since December 31, 2019.
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ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates and changes in foreign currency exchange rates. A discussion of our primary market risk exposure in financial instruments is presented below.
Interest Rate Risk
At March 31,September 30, 2020, we had total principal amounts outstanding under financing arrangements of $172.2$107.6 million, including $85.5$66.9 million of borrowings under our Convertible Notes which bear interest at a fixed rate of 4.0% and $79.0$29.9 million of borrowings under our ABL Facility. Borrowings under our ABL Facility are subject to a variable interest rate as determined by the ABL Facility. The weighted average interest rate at March 31,September 30, 2020 for the ABL Facility was 2.4%1.9%. Based on the balance of variable rate debt at March 31,September 30, 2020, a 100 basis-point increase in short-term interest rates would have increased annual pre-tax interest expense by $0.8$0.3 million.
Foreign Currency Risk
Our principal foreign operations are conducted in certain areas of EMEA, Canada, Asia Pacific, and Latin America. We have foreign currency exchange risks associated with these operations, which are conducted principally in the foreign currency of the jurisdictions in which we operate including European euros, Algerian dinar, Romanian new leu, Canadian dollars, British pounds, Australian dollars, and Brazilian reais. Historically, we have not used off-balance sheet financial hedging instruments to manage foreign currency risks when we enter into a transaction denominated in a currency other than our local currencies.

ITEM 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31,September 30, 2020, the end of the period covered by this quarterly report.
Changes in Internal Control Over Financial Reporting
There were no changes in internal control over financial reporting during the quarter ended March 31,September 30, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II         OTHER INFORMATION
ITEM 1.    Legal Proceedings
None.

ITEM 1A.    Risk Factors
Except as set forth below, thereThere have been no material changes during the period ended March 31, 2020 into our “Risk Factors” as discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019.
Risks Related to the COVID-19 Pandemic
The effects of the COVID-19 (coronavirus) pandemic, including actions taken by businesses and governments, have resulted2019, except as discussed in a significant and swift reduction in U.S. and international economic activity. These effects have adversely affected the demand for and price of oil and natural gas, as well as the demand for our products and services. The collapse in the demand for oil caused by this unprecedented global health and economic crisis, coupled with oil oversupply, has had, and is reasonably likely to continue to have, an adverse impact on our customers’ demand for the products and services we provide, which in turn could have a material and adverse impact on our financial condition, results of operations, and cash flows.
While the full impact of the COVID-19 outbreak is not yet known, we are closely monitoring the effects of the pandemic on commodity demands, our customers and suppliers, as well as our operations and employees. These effects have included, and may continue to include, adverse revenue and profitability effects; disruptions to our operations; customer shutdowns of oil and natural gas exploration and production; employee impacts from illness, school closures and other community response measures; and temporary closuresPart II, Item 1A of our facilities or the facilities of our customers and suppliers.
The extent to which our operating and financial results are affected by COVID-19 will depend on various factors beyond our control, such as the duration and scope of the pandemic; additional actions by businesses and governments in response to the pandemic; and the speed and effectiveness of responses to combat the virus, and how quickly and to what extent normal economic activity can resume, all of which are highly uncertain and cannot be predicted. COVID-19, and the volatile regional and global economic conditions stemming from the pandemic and the collapse in the demand for and price of oil, could also give rise to or aggravate the risk factors that we identified in our AnnualQuarterly Report on Form 10-K10-Q for the fiscal yearthree months ended December 31, 2019. COVID-19 could also materially and adversely impact our operating and financial results in a manner that is not currently known to us or that we do not currently consider to present significant risks to our operations.
Risks Related to Compliance with the New York Stock Exchange’s Requirements for the Continued Listing of Our Common Stock
We are listed on the New York Stock Exchange (the “NYSE”) and are required to meet the NYSE’s continued listing standards, including a requirement that the average closing price of our common stock not be below $1.00 per share over any consecutive thirty trading-day period. During March and April 2020, the price of our common stock has at times closed below $1.00 per share. The closing price of our common stock on May 5, 2020 was $1.30 per share and the average closing price of our common stock over the thirty trading-day period ended May 5, 2020 was $1.02 per share.
If we are unable to meet these listing standards and are unable to cure any such non-compliance within the applicable cure period provided by the NYSE, the NYSE could delist our common stock. A delisting of our common stock could negatively impact us by, among other things, reducing the liquidity and market price of our common stock; reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; limiting our ability to issue additional securities or obtain additional financing in the future; decreasing the amount of news and analyst coverage of us; and causing us reputational harm with investors, our employees, and parties conducting business with us. A delisting of our common stock would constitute a “fundamental change” under the terms of our Convertible Notes, requiring us to make an offer to repurchase the Convertible Notes at par. As of March 31, 2020, $85.5 million aggregate principal amount of our Convertible Notes was outstanding, and there can be no assurance we would have sufficient funds available to us to repurchase the Convertible Notes if required to do so. Failure to repurchase the Convertible Notes also could cause a cross-default under our ABL Facility, which would permit the holders of the indebtedness to accelerate the maturity thereof and proceed against their collateral and could have a material adverse effect on our business and financial condition.2020.

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ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds
a)Not applicable
b)Not applicable
c)The following table details our repurchases of shares of our common stock for the three months ended March 31,September 30, 2020:
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs ($ in Millions)
January 20205,188  $5.49  —  $81.0  
February 2020—  $—  —  $78.7  
March 2020593  $3.51  —  $67.2  
Total5,781  —     
PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsMaximum Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs ($ in Millions)
July 20201,217 $2.11 — $51.9 
August 2020— $— — $51.9 
September 2020— $— — $51.9 
Total1,217 —  
In November 2018, our Board of Directors authorized changes to our securities repurchase program. These changes increased the authorized amount under the repurchase program to $100.0 million, available for repurchases of any combination of our common stock and our Convertible Notes.
Our repurchase program authorizes us to purchase our outstanding shares of common stock or Convertible Notes in the open market or as otherwise determined by management, subject to certain limitations under the ABL Facility and other factors. The repurchase program has no specific term. Repurchases are expected to be funded from operating cash flows, available cash on hand, and borrowings under our ABL Facility. As part of the share repurchase program, our management has been authorized to establish trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934. As of March 31,September 30, 2020, we had $67.2$51.9 million remaining under the program.
During the three months ended March 31, 2020, we repurchased $14.5 million of ourThere were no Convertible Notes in the open market under the repurchase program for a total cost of $13.8 million. There wereand no shares of common stock repurchased under the repurchase program during the three months ended March 31,September 30, 2020.
In addition, duringDuring the three months ended March 31,September 30, 2020, we purchased an aggregate of 5,7811,217 shares surrendered in lieu of taxes under vesting of restricted shares.

ITEM 3.    Defaults Upon Senior Securities
None.

ITEM 4.    Mine Safety Disclosures
The information concerning mine safety violations and other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 of this Quarterly Report on Form 10-Q, which is incorporated by reference.

ITEM 5.    Other Information
None.
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ITEM 6.    Exhibits
The exhibits listed are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
3.1
†10.1
*10.2
†10.3
†10.4
†10.5
*31.1
*31.2
**32.1
**32.2
*95.1
*101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*101.SCHInline XBRL Schema Document
*101.CALInline XBRL Calculation Linkbase Document
*101.DEFInline XBRL Definition Linkbase Document
*101.LABInline XBRL Label Linkbase Document
*101.PREInline XBRL Presentation Linkbase Document
*104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
†     Management compensation plan or agreement.
*     Filed herewith.
**   Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Date: May 6,November 4, 2020
  
NEWPARK RESOURCES, INC.
(Registrant)
  
By:/s/ Paul L. Howes
 Paul L. Howes
President and Chief Executive Officer
(Principal Executive Officer)
 
By:/s/ Gregg S. Piontek
 Gregg S. Piontek
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
 
By:/s/ Douglas L. White
 Douglas L. White
Vice President, Chief Accounting Officer and Treasurer
(Principal Accounting Officer)

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