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 ~~September 30, 2021~~March 31, 2022

☐ 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

Newpark Resources, Inc.

(Exact name of registrant as specified in its charter)


Delaware		72-1123385
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9320 Lakeside Boulevard,	Suite 100
The Woodlands,	Texas	77381
(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NR	New 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 filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller 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 ~~November 1, 2021,~~May 2, 2022, a total of ~~92,257,408~~92,353,104 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

~~SEPTEMBER 30, 2021~~MARCH 31, 2022


PART I	FINANCIAL INFORMATION	2
ITEM 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1615
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3025
ITEM 4.	Controls and Procedures	3025
PART II	OTHER INFORMATION	3126
ITEM 1.	Legal Proceedings	3126
ITEM 1A.	Risk Factors	3126
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3126
ITEM 3.	Defaults Upon Senior Securities	3227
ITEM 4.	Mine Safety Disclosures	3227
ITEM 5.	Other Information	3227
ITEM 6.	Exhibits	3329
	Signatures	3430

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; 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 this Quarterly Report on Form 10-Q ~~our Quarterly Report on Form 10-Q for the period ended June 30, 2021,~~ and our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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)	September 30, 2021		December 31, 2020		(In thousands, except share data)	March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	31,242	$	24,197	Cash and cash equivalents	$	21,307	$	24,088
Receivables, net	Receivables, net	163,309		141,045		Receivables, net	187,609		194,296
Inventories	Inventories	148,194		147,857		Inventories	169,968		155,341
Prepaid expenses and other current assets	Prepaid expenses and other current assets	17,124		15,081		Prepaid expenses and other current assets	14,305		14,787
Total current assets	Total current assets	359,869		328,180		Total current assets	393,189		388,512

Property, plant and equipment, net	Property, plant and equipment, net	262,856		277,696		Property, plant and equipment, net	257,980		260,256
Operating lease assets	Operating lease assets	27,352		30,969		Operating lease assets	26,305		27,569
Goodwill	Goodwill	42,393		42,444		Goodwill	47,411		47,283
Other intangible assets, net	Other intangible assets, net	22,511		25,428		Other intangible assets, net	23,407		24,959
Deferred tax assets	Deferred tax assets	3,864		1,706		Deferred tax assets	2,260		2,316
Other assets	Other assets	2,267		2,769		Other assets	1,834		1,991
Total assets	Total assets	$	721,112	$	709,192	Total assets	$	752,386	$	752,886

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current debt	Current debt	$	21,875	$	67,472	Current debt	$	20,767	$	19,210
Accounts payable	Accounts payable	73,567		49,252		Accounts payable	95,309		84,585
Accrued liabilities	Accrued liabilities	40,736		36,934		Accrued liabilities	37,302		46,597
Total current liabilities	Total current liabilities	136,178		153,658		Total current liabilities	153,378		150,392

Long-term debt, less current portion	Long-term debt, less current portion	71,869		19,690		Long-term debt, less current portion	95,475		95,593
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	22,505		25,068		Noncurrent operating lease liabilities	21,431		22,352
Deferred tax liabilities	Deferred tax liabilities	15,102		13,368		Deferred tax liabilities	6,370		11,819
Other noncurrent liabilities	Other noncurrent liabilities	9,745		9,376		Other noncurrent liabilities	10,589		10,344
Total liabilities	Total liabilities	255,399		221,160		Total liabilities	287,243		290,500

Commitments and contingencies (Note 9)		0		0
Commitments and contingencies (Note 8)						Commitments and contingencies (Note 8)	0		0

Common stock, $0.01 par value (200,000,000 shares authorized and 109,233,315 and 107,587,786 shares issued, respectively)		1,092		1,076
Common stock, $0.01 par value (200,000,000 shares authorized and 109,335,733 and 109,330,733 shares issued, respectively)						Common stock, $0.01 par value (200,000,000 shares authorized and 109,335,733 and 109,330,733 shares issued, respectively)	1,093		1,093
Paid-in capital	Paid-in capital	632,569		627,031		Paid-in capital	636,397		634,929
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(59,486)		(54,172)		Accumulated other comprehensive loss	(62,708)		(61,480)
Retained earnings	Retained earnings	28,026		50,937		Retained earnings	26,866		24,345
Treasury stock, at cost (16,976,680 and 16,781,150 shares, respectively)		(136,488)		(136,840)
Treasury stock, at cost (16,982,629 and 16,981,147 shares, respectively)						Treasury stock, at cost (16,982,629 and 16,981,147 shares, respectively)	(136,505)		(136,501)
Total stockholders’ equity	Total stockholders’ equity	465,713		488,032		Total stockholders’ equity	465,143		462,386
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	721,112	$	709,192	Total liabilities and stockholders’ equity	$	752,386	$	752,886

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(In thousands, except per share data)	(In thousands, except per share data)	2021		2020		2021		2020		(In thousands, except per share data)		2022		2021
Revenues	Revenues	$	151,797	$	96,424	$	435,218	$	362,920	Revenues		$	176,438	$	141,172
Cost of revenues	Cost of revenues	132,273		99,301		376,370		357,675		Cost of revenues		150,988		119,991
Selling, general and administrative expenses	Selling, general and administrative expenses	23,864		20,597		67,755		66,230		Selling, general and administrative expenses		24,433		20,911
Other operating (income) loss, net	Other operating (income) loss, net	1,723		(820)		(141)		(1,906)		Other operating (income) loss, net		50		(274)
Impairments		—		3,038		—		3,038
Operating loss		(6,063)		(25,692)		(8,766)		(62,117)
Operating income										Operating income		967		544

Foreign currency exchange (gain) loss	Foreign currency exchange (gain) loss	25		580		(83)		3,343		Foreign currency exchange (gain) loss		64		(332)
Interest expense, net	Interest expense, net	2,176		2,411		6,748		8,524		Interest expense, net		1,206		2,408
(Gain) loss on extinguishment of debt		210		—		1,000		(419)
Loss on extinguishment of debt										Loss on extinguishment of debt		—		790
Loss before income taxes	Loss before income taxes	(8,474)		(28,683)		(16,431)		(73,565)		Loss before income taxes		(303)		(2,322)

Provision (benefit) for income taxes	Provision (benefit) for income taxes	2,011		(4,813)		5,414		(11,303)		Provision (benefit) for income taxes		(2,824)		3,040
Net loss		$	(10,485)	$	(23,870)	$	(21,845)	$	(62,262)
Net income (loss)										Net income (loss)		$	2,521	$	(5,362)

Net loss per common share - basic:		$	(0.11)	$	(0.26)	$	(0.24)	$	(0.69)
Net loss per common share - diluted:		$	(0.11)	$	(0.26)	$	(0.24)	$	(0.69)
Net income (loss) per common share - basic:										Net income (loss) per common share - basic:		$	0.03	$	(0.06)
Net income (loss) per common share - diluted:										Net income (loss) per common share - diluted:		$	0.03	$	(0.06)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,
(In thousands) 2021 2020 2021 2020
Net loss $ (10,485) $ (23,870) $ (21,845) $ (62,262)
Foreign currency translation adjustments (net of tax benefit (expense) of $222, $(330), $408, $268) (2,700) 3,461 (5,314) (1,900)
Comprehensive loss $ (13,185) $ (20,409) $ (27,159) $ (64,162)


	Three Months Ended March 31,
(In thousands)		2022		2021

Net income (loss)		$	2,521	$	(5,362)

Foreign currency translation adjustments (net of tax benefit of $99 and $276)		(1,228)		(3,284)

Comprehensive income (loss)		$	1,293	$	(8,646)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)


(In thousands)	(In thousands)	Common Stock		Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total		(In thousands)	Common Stock		Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total
Balance at June 30, 2021		$	1,090	$	629,833	$	(56,786)	$	38,510	$	(136,403)	$	476,244
Net loss		—		—		—		(10,485)		—		(10,485)
Employee stock options, restricted stock and employee stock purchase plan		2		288		—		1		(85)		206
Stock-based compensation expense		—		2,448		—		—		—		2,448
Foreign currency translation, net of tax		—		—		(2,700)		—		—		(2,700)
Balance at September 30, 2021		$	1,092	$	632,569	$	(59,486)	$	28,026	$	(136,488)	$	465,713

Balance at June 30, 2020		$	1,074	$	623,269	$	(73,308)	$	93,292	$	(136,890)	$	507,437
Net loss		—		—		—		(23,870)		—		(23,870)
Employee stock options, restricted stock and employee stock purchase plan		2		267		—		—		(6)		263
Stock-based compensation expense		—		1,792		—		—		—		1,792
Foreign currency translation, net of tax		—		—		3,461		—		—		3,461
Balance at September 30, 2020		$	1,076	$	625,328	$	(69,847)	$	69,422	$	(136,896)	$	489,083

Balance at December 31, 2020	Balance at December 31, 2020	$	1,076	$	627,031	$	(54,172)	$	50,937	$	(136,840)	$	488,032	Balance at December 31, 2020	$	1,076	$	627,031	$	(54,172)	$	50,937	$	(136,840)	$	488,032
Net loss	Net loss	—		—		—		(21,845)		—		(21,845)		Net loss	—		—		—		(5,362)		—		(5,362)
Employee stock options, restricted stock and employee stock purchase plan	Employee stock options, restricted stock and employee stock purchase plan	16		(183)		—		(1,066)		352		(881)		Employee stock options, restricted stock and employee stock purchase plan	1		242		—		(21)		35		257
Stock-based compensation expense	Stock-based compensation expense	—		5,721		—		—		—		5,721		Stock-based compensation expense	—		1,279		—		—		—		1,279
Foreign currency translation, net of tax	Foreign currency translation, net of tax	—		—		(5,314)		—		—		(5,314)		Foreign currency translation, net of tax	—		—		(3,284)		—		—		(3,284)
Balance at September 30, 2021		$	1,092	$	632,569	$	(59,486)	$	28,026	$	(136,488)	$	465,713
Balance at March 31, 2021														Balance at March 31, 2021	$	1,077	$	628,552	$	(57,456)	$	45,554	$	(136,805)	$	480,922

Balance at December 31, 2019		$	1,067	$	620,626	$	(67,947)	$	134,119	$	(139,220)	$	548,645
Cumulative effect of accounting change		—		—		—		(735)		—		(735)
Net loss		—		—		—		(62,262)		—		(62,262)
Balance at December 31, 2021														Balance at December 31, 2021	$	1,093	$	634,929	$	(61,480)	$	24,345	$	(136,501)	$	462,386
Net income														Net income	—		—		—		2,521		—		2,521
Employee stock options, restricted stock and employee stock purchase plan	Employee stock options, restricted stock and employee stock purchase plan	9		(167)		—		(1,700)		2,324		466		Employee stock options, restricted stock and employee stock purchase plan	—		—		—		—		(4)		(4)
Stock-based compensation expense	Stock-based compensation expense	—		4,869		—		—		—		4,869		Stock-based compensation expense	—		1,468		—		—		—		1,468
Foreign currency translation, net of tax	Foreign currency translation, net of tax	—		—		(1,900)		—		—		(1,900)		Foreign currency translation, net of tax	—		—		(1,228)		—		—		(1,228)
Balance at September 30, 2020		$	1,076	$	625,328	$	(69,847)	$	69,422	$	(136,896)	$	489,083
Balance at March 31, 2022														Balance at March 31, 2022	$	1,093	$	636,397	$	(62,708)	$	26,866	$	(136,505)	$	465,143

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Newpark Resources, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
(In thousands)	(In thousands)	2021		2020		(In thousands)	2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss		$	(21,845)	$	(62,262)
Adjustments to reconcile net loss to net cash provided by operations:
Impairments and other non-cash charges		—		13,024
Net income (loss)						Net income (loss)	$	2,521	$	(5,362)
Adjustments to reconcile net income (loss) to net cash provided by operations:						Adjustments to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization	Depreciation and amortization	32,009		34,186		Depreciation and amortization	10,452		10,830
Stock-based compensation expense	Stock-based compensation expense	5,721		4,869		Stock-based compensation expense	1,468		1,279
Provision for deferred income taxes	Provision for deferred income taxes	282		(19,023)		Provision for deferred income taxes	(5,202)		1,569
Credit loss expense	Credit loss expense	426		1,304		Credit loss expense	185		50
Gain on sale of assets	Gain on sale of assets	(6,863)		(2,916)		Gain on sale of assets	(1,606)		(3,283)
Gain on insurance recovery		(849)		—
(Gain) loss on extinguishment of debt		1,000		(419)
Loss on extinguishment of debt						Loss on extinguishment of debt	—		790
Amortization of original issue discount and debt issuance costs	Amortization of original issue discount and debt issuance costs	3,062		3,962		Amortization of original issue discount and debt issuance costs	178		1,082
Change in assets and liabilities:	Change in assets and liabilities:					Change in assets and liabilities:
(Increase) decrease in receivables		(26,382)		77,004
Decrease in receivables						Decrease in receivables	5,795		2,414
(Increase) decrease in inventories	(Increase) decrease in inventories	(2,536)		26,566		(Increase) decrease in inventories	(14,812)		6,694
Increase in other assets		(2,535)		(2,912)
Increase (decrease) in accounts payable		25,292		(34,606)
Increase in accrued liabilities and other		6,888		1,516
Decrease in other assets						Decrease in other assets	17		1,275
Increase in accounts payable						Increase in accounts payable	11,246		11,437
Decrease in accrued liabilities and other						Decrease in accrued liabilities and other	(7,452)		(1,002)
Net cash provided by operating activities	Net cash provided by operating activities	13,670		40,293		Net cash provided by operating activities	2,790		27,773

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(19,103)		(14,609)		Capital expenditures	(7,621)		(8,649)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	11,730		10,497		Proceeds from sale of property, plant and equipment	575		8,027
Proceeds from insurance property claim		85		—
Net cash used in investing activities	Net cash used in investing activities	(7,288)		(4,112)		Net cash used in investing activities	(7,046)		(622)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings on lines of credit	Borrowings on lines of credit	166,012		147,987		Borrowings on lines of credit	69,188		51,922
Payments on lines of credit	Payments on lines of credit	(150,132)		(180,440)		Payments on lines of credit	(65,202)		(56,922)
Purchases of Convertible Notes	Purchases of Convertible Notes	(28,137)		(29,124)		Purchases of Convertible Notes	—		(18,107)
Proceeds from term loan	Proceeds from term loan	8,258		—		Proceeds from term loan	—		8,258
Proceeds from financing obligation		8,004		—
Debt issuance costs	Debt issuance costs	(295)		—		Debt issuance costs	—		(196)
Purchases of treasury stock	Purchases of treasury stock	(1,435)		(332)		Purchases of treasury stock	(4)		(6)
Other financing activities	Other financing activities	(458)		1,029		Other financing activities	(2,711)		(1,561)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	1,817		(60,880)		Net cash provided by (used in) financing activities	1,271		(16,612)

Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(1,349)		(1,810)		Effect of exchange rate changes on cash	(376)		(882)

Net increase (decrease) in cash, cash equivalents, and restricted cash	Net increase (decrease) in cash, cash equivalents, and restricted cash	6,850		(26,509)		Net increase (decrease) in cash, cash equivalents, and restricted cash	(3,361)		9,657
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	30,348		56,863		Cash, cash equivalents, and restricted cash at beginning of period	29,489		30,348
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	37,198	$	30,354	Cash, cash equivalents, and restricted cash at end of period	$	26,128	$	40,005

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

NEWPARK RESOURCES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation and Significant Accounting Policies

Newpark Resources, Inc. is a geographically diversified supplier providing environmentally-sensitive products, as well as rentals and services to customers across multiple industries. The accompanying unaudited condensed consolidated financial statements of Newpark Resources, Inc. and our wholly-owned subsidiaries, which we collectively refer to as the “Company,” “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, ~~2020.~~2021. Our fiscal year end is December 31 and our ~~third~~first quarter represents the three-month period ended ~~September 30, and our first nine months represents the nine-month period ended September 30.~~March 31. The results of operations for the ~~third~~first quarter ~~and first nine months~~ of ~~2021~~2022 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 ~~September 30, 2021,~~March 31, 2022 and our results of operations ~~for the third quarter~~ and ~~first nine months of 2021 and 2020, and our~~ cash flows for the first ~~nine months~~quarter of ~~2021~~2022 and ~~2020.~~2021. All adjustments are of a normal recurring nature. Our balance sheet at December 31, ~~2020~~2021 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, ~~2020.~~2021.

We operate our business through 2 reportable segments: Fluids Systems and Industrial Solutions. Our Fluids Systems segment ~~primarily~~ provides customized drilling, completion, and stimulation fluids ~~solutions~~products and related technical services to oil and natural gas exploration and production (“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. We also have industrial mineral grinding operations for barite, a critical raw material in drilling fluids systems, which serve to support our activities in certain regions within the U.S. drilling fluids market and also sell the products to third party users, including other drilling fluids companies. In addition, we sell a variety of other minerals, principally to third-party industrial (non-oil and natural gas) markets. Our Industrial Solutions segment includes our Site and Access Solutions business, ~~(historically reported as the Mats and Integrated Services segment),~~ along with our Industrial Blending operations. Site and Access Solutions provides ~~composite matting system rentals utilized for~~ temporary worksite access, including the rental of our manufactured recyclable composite matting systems, along with related site construction and services to customers in various markets including power transmission, E&P, pipeline, renewable energy, petrochemical, construction and other industries, primarily in the United States and Europe. We also sell our manufactured recyclable composite mats to customers around the world, with power transmission being the primary end-market. ~~Our~~

In February 2022, our management recommended, and our Board of Directors approved a plan to exit our Industrial Blending operations ~~began in 2020, leveraging~~and explore strategic options for our ~~chemical blending capacity and technical expertise to enter targeted industrial end-markets.~~

~~New Accounting Pronouncements~~

~~Standards Adopted in 2021~~U.S. mineral grinding business. See Note 10 for further information.

~~Income Taxes: Simplifying the Accounting for Income Taxes.~~ In December 2019, the Financial Accounting Standards Board (“FASB”) issued new guidance intended to simplify various aspects related to accounting for income taxes. We adopted this new guidance as of January 1, 2021. The adoption of this new guidance had no material impact on our financial statements or related disclosures.

~~Standards Not Yet Adopted~~

~~Debt: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.~~ In August 2020, the FASB issued new guidance which is intended to simplify the accounting for convertible instruments. This guidance will be effective for us in the first quarter of 2022. As our existing convertible instrument matures in December 2021, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or related disclosures.

Note 2 – Earnings Per Share

The following table presents the reconciliation of the numerator and denominator for calculating net ~~loss~~income (loss) per share:


		Third Quarter			First Nine Months							First Quarter
(In thousands, except per share data)	(In thousands, except per share data)		2021		2020		2021		2020		(In thousands, except per share data)		2022		2021
Numerator	Numerator										Numerator
Net loss - basic and diluted			$	(10,485)	$	(23,870)	$	(21,845)	$	(62,262)
Net income (loss) - basic and diluted											Net income (loss) - basic and diluted		$	2,521	$	(5,362)

Denominator	Denominator										Denominator
Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic		91,932		90,535		91,264		90,056		Weighted average common shares outstanding - basic		92,118		90,701
Dilutive effect of stock options and restricted stock awards	Dilutive effect of stock options and restricted stock awards		—		—		—		—		Dilutive effect of stock options and restricted stock awards		1,821		—
Dilutive effect of Convertible Notes			—		—		—		—
Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted		91,932		90,535		91,264		90,056		Weighted average common shares outstanding - diluted		93,939		90,701

Net loss per common share
Net income (loss) per common share											Net income (loss) per common share
Basic	Basic		$	(0.11)	$	(0.26)	$	(0.24)	$	(0.69)	Basic		$	0.03	$	(0.06)
Diluted	Diluted		$	(0.11)	$	(0.26)	$	(0.24)	$	(0.69)	Diluted		$	0.03	$	(0.06)

We excluded the following ~~weighted-average~~weighted average potential shares from the calculations of diluted net ~~loss~~income (loss) per share during the applicable periods because their inclusion would have been anti-dilutive:


		Third Quarter		First Nine Months				First Quarter
(In thousands)	(In thousands)		2021	2020	2021	2020	(In thousands)		2022	2021
Stock options and restricted stock awards	Stock options and restricted stock awards		5,954	5,608	5,708	5,172	Stock options and restricted stock awards		1,867	5,299

For the ~~third~~first quarter ~~and first nine months~~ of 2021, ~~and 2020,~~ 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 these periods. The Convertible Notes (as defined in Note 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. If converted, we will 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.this period.

Note 3 – Repurchase Program

Our repurchase program remains available for repurchases of ~~any combination of~~ our common ~~stock and Convertible Notes.~~stock. 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 Amended ABL Facility (as defined in Note 7)6). 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 ~~September 30, 2021,~~March 31, 2022, we had $23.8 million remaining under the program.

There were no shares of common stock repurchased under the repurchase program during the first quarter of 2022 or 2021. During the first ~~nine months~~quarter of 2021, we repurchased ~~$28.3~~$18.3 million of our Convertible Notes in the open market under the repurchase program for a total cost of ~~$28.1~~$18.1 million. ~~During the first nine months of 2020, we repurchased $33.1 million of our Convertible Notes in the open market under the repurchase program for a total cost of $29.1 million.~~

~~There were no shares of common stock repurchased under the repurchase program during the first nine months of 2021 or 2020.~~

~~Note 4 – Stock-Based and Other Long-Term Incentive Compensation~~

During the second quarter of 2021, our stockholders approved an amendment to the 2015 Employee Equity Incentive Plan (“2015 Plan”) to increase the number of shares authorized for issuance under the 2015 Plan from 12,300,000 to 14,300,000 shares, and also approved an amendment to the 2014 Non-Employee Directors’ Restricted Stock Plan (“2014 Director Plan”) to increase the number of shares authorized for issuance under the 2014 Director Plan from 1,000,000 to 1,200,000 shares.

During the second quarter of 2021, the Compensation Committee of our Board of Directors (“Compensation Committee”) approved equity-based compensation to executive officers and other key employees consisting of ~~2,659,177~~ restricted stock units, which will vest in equal installments over a three-year period. In addition, non-employee directors received a grant of 210,367 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 $3.28 per share for both the restricted stock units and restricted stock awards. During the third quarter of 2021, the Compensation Committee approved additional equity-based compensation to certain executive officers and other key employees consisting of 200,000 restricted stock units, which will vest in equal installments over a three-year period. The weighted average grant-date fair value was $2.09 per share for these restricted stock units. At September 30, 2021, 1,623,607 shares remained available for award under the 2015 Plan and 146,527 shares remained available for award under the 2014 Director Plan.

Also during the second quarter of 2021, the Compensation Committee approved the issuance of performance-based cash awards to certain executive officers with a target value of $3.0 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, 2021 and ends May 31, 2024, with the ending TSR price being equal to the average closing price of our shares over the 30-calendar days ending May 31, 2024 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. During the third quarter of 2021, the Compensation Committee approved the issuance of $1.4 million of time-based cash awards to certain executive officers and other key employees, which will vest in full on September 1, 2023.8

Note 54 – Receivables

Receivables consisted of the following:
(In thousands) September 30, 2021 December 31, 2020
Trade receivables:
Gross trade receivables $ 155,464 $ 133,717
Allowance for credit losses (4,859) (5,024)
Net trade receivables 150,605 128,693
Income tax receivables 5,806 6,545
Other receivables 6,898 5,807
Total receivables, net $ 163,309 $ 141,045


(In thousands)	March 31, 2022		December 31, 2021
Trade receivables:
Gross trade receivables	$	179,016	$	185,065
Allowance for credit losses	(4,456)		(4,587)
Net trade receivables	174,560		180,478
Income tax receivables	3,322		4,167
Other receivables	9,727		9,651
Total receivables, net	$	187,609	$	194,296

Other receivables included ~~$5.1~~$6.0 million and ~~$4.4~~$5.7 million for value added, goods and service taxes related to foreign jurisdictions as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

~~We adopted the new accounting guidance for credit losses~~ In addition, other receivables included an insurance receivable balance resulting from a property insurance claim caused by Hurricane Ida in August 2021 of $2.9 million and $1.9 million as of ~~January 1, 2020.~~March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, the claims related to the hurricane under our property and business interruption insurance programs have not been finalized.

Changes in our allowance for credit losses were as follows:

First Nine Months
(In thousands) 2021 2020
Balance at beginning of period $ 5,024 $ 6,007
Cumulative effect of accounting change — 959
Credit loss expense 426 1,304
Write-offs, net of recoveries (591) (2,517)
Balance at end of period $ 4,859 $ 5,753


	First Quarter
(In thousands)	2022		2021
Balance at beginning of period	$	4,587	$	5,024
Credit loss expense	185		50
Write-offs, net of recoveries	(316)		(356)
Balance at end of period	$	4,456	$	4,718

Note 65 – Inventories

Inventories consisted of the following:
(In thousands) September 30, 2021 December 31, 2020
Raw materials:
Fluids Systems $ 110,522 $ 98,974
Industrial Solutions 4,864 6,315
Total raw materials 115,386 105,289
Blended fluids systems components 26,906 31,744
Finished goods - mats 5,902 10,824
Total inventories $ 148,194 $ 147,857


(In thousands)	March 31, 2022		December 31, 2021
Raw materials:
Fluids Systems	$	128,267	$	119,242
Industrial Solutions	4,757		4,939
Total raw materials	133,024		124,181
Blended fluids systems components	29,894		27,793
Finished goods - mats	7,050		3,367
Total inventories	$	169,968	$	155,341

Raw materials for the Fluids Systems segment ~~consists~~consist primarily of barite, chemicals, and other additives that are consumed in the production of our fluids systems. Raw materials for the Industrial Solutions segment ~~consists~~consist primarily of resins, chemicals, and other materials used to manufacture composite mats, ~~and cleaning products,~~ 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 fluids systems that have been either mixed internally at our blending facilities or purchased from third-party vendors. These base fluids systems require raw materials to be added, as needed to meet specified customer requirements.

The increase in inventories in the first quarter of 2022 was primarily attributable to a combination of activity-driven increases, purchases supporting the start-up of new international contracts in the Fluids Systems segment, the production of mats in the Industrial Solutions segment for anticipated sales in the second quarter of 2022, as well as raw material cost inflation.

Note 76 – Financing Arrangements and Fair Value of Financial Instruments

Financing arrangements consisted of the following:
September 30, 2021 December 31, 2020
(In thousands) Principal Amount Unamortized Discount and Debt Issuance Costs Total Debt Principal Amount Unamortized Discount and Debt Issuance Costs Total Debt
Convertible Notes $ 38,567 $ (464) $ 38,103 $ 66,912 $ (4,221) $ 62,691
ABL Facility 24,100 — 24,100 19,100 — 19,100
Term loan 6,569 (130) 6,439 — — —
Financing obligation 7,953 (91) 7,862 — — —
Other debt 17,240 — 17,240 5,371 — 5,371
Total debt 94,429 (685) 93,744 91,383 (4,221) 87,162
Less: Current portion (21,875) — (21,875) (71,693) 4,221 (67,472)
Long-term debt $ 72,554 $ (685) $ 71,869 $ 19,690 $ — $ 19,690


	March 31, 2022						December 31, 2021
(In thousands)	Principal Amount		Unamortized Discount and Debt Issuance Costs		Total Debt		Principal Amount		Unamortized Discount and Debt Issuance Costs		Total Debt
ABL Facility	$	87,900	$	—	$	87,900	$	86,500	$	—	$	86,500
Term loan	5,443		(89)		5,354		6,094		(110)		5,984
Financing obligations	5,838		(66)		5,772		6,688		(78)		6,610
Other debt	17,216		—		17,216		15,709		—		15,709
Total debt	116,397		(155)		116,242		114,991		(188)		114,803
Less: Current portion	(20,767)		—		(20,767)		(19,210)		—		(19,210)
Long-term debt	$	95,630	$	(155)	$	95,475	$	95,781	$	(188)	$	95,593

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 ~~$38.6 million principal amount was outstanding at September 30, 2021. The notes bear~~bore interest at a rate of 4.0% per year ~~payable semiannually~~and matured in ~~arrears on June 1 and~~ December 12021. A total of ~~each year.~~

Until the close of business on the business day immediately preceding the maturity date, holders may convert their notes at any time. If any notes are converted, we will settle the converted notes at the maturity date with a combination of cash and shares of common stock in accordance with the terms of the indenture governing the Convertible Notes. The conversion rate is 107.1381 shares$38.6 million 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. As of November 1, 2021, no holders have converted their notes. The Convertible Notes ~~are classified as long-term debt in the September 30, 2021 balance sheet as we intend to settle the notes~~were repaid at ~~maturity utilizing borrowings under our ABL Facility.~~

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 September 30, 2021, the carrying amount of the debt component was $38.1 million, which is net of the unamortized debt discount and debt issuance costs of $0.5 million. Including the impact of the unamortized debt discount and debt issuance costs, the effective interest rate on the notes is approximately 11.3%.

maturity. During the first ~~nine months~~quarter of 2021, we repurchased ~~$28.3~~$18.3 million of our Convertible Notes in the open market for a total cost of ~~$28.1~~$18.1 million, and recognized a net loss of ~~$1.0~~$0.8 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,~~October 2017, we entered into an asset-based revolving credit agreement, which was amended in ~~October 2017 and~~ March 2019 ~~(as amended, the~~(the “ABL Facility”). ~~The~~As of March 31, 2022, the ABL Facility ~~provides~~provided financing of up to $200.0 million available for borrowings (inclusive of letters of credit) and ~~can~~could be increased up to a maximum capacity of $275.0 million, subject to certain conditions. The ABL Facility ~~terminates~~was scheduled to terminate in March 2024. As of ~~September 30, 2021,~~March 31, 2022, our total availability under the ABL Facility was ~~$106.2~~$116.0 million, of which ~~$24.1~~$87.9 million was drawn ~~$39.3 million was reserved for settlement of the Convertible Notes,~~ and $1.1 million was used for outstanding letters of credit, resulting in remaining availability of ~~$41.7~~$27.0 million. As of March 31, 2022, the weighted average interest rate for the ABL Facility was 1.9% and the applicable commitment fee on the unused portion of the ABL Facility was 0.375% per annum.

In May 2022, we amended and restated the ABL Facility (the “Amended ABL Facility”). The Amended ABL Facility provides financing of up to $175.0 million available for borrowings (inclusive of letters of credit), which can be increased up to $250.0 million, subject to certain conditions. The Amended ABL Facility has a five-year term expiring May 2027, expands available borrowing capacity associated with the Industrial Solutions rental mat fleet, replaces the LIBOR-based pricing grid with a BSBY-based pricing grid, and includes a mechanism to incorporate a sustainability-linked pricing framework with the consent of the required lenders (as defined in the Amended ABL Facility). As of May 2, 2022, after giving effect to the Amended ABL Facility, our total availability under the Amended ABL Facility was $133.5 million, of which $94.1 million was drawn and $1.1 million was used for outstanding letters of credit, resulting in remaining availability of $38.4 million.

Borrowing availability under the Amended 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 subject to limits on ~~such~~certain of the assets included in the borrowing base calculation. To the extent pledged by ~~us,~~the borrowers, the borrowing base calculation also includes the amount of eligible pledged cash. The ~~lender~~administrative agent may establish ~~such~~ reserves in accordance with the Amended ABL Facility, in part based on appraisals of the asset base, and other limits atin its discretion, which could reduce the amounts otherwise available under the Amended 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 at least $1.0 million of operating income for the Site and Access Solutions business, each calculated based on a trailing twelve-month period.

rate of Bank of America, N.A., and (c) ~~LIBOR, subject to~~BSBY for a ~~floor of zero,~~one-month interest period plus ~~100 basis points,~~1.00%, plus, in each case, an applicable margin per annum. The applicable margin ranges from ~~150~~1.50% to ~~200 basis points~~2.00% per annum for ~~LIBOR~~BSBY borrowings, and 500.50% to ~~100 basis points~~1.00% per annum for base rate borrowings, based on the consolidated ~~fixed charge coverage~~leverage ratio as(as defined in the Amended ABL ~~Facility. As~~Facility) as of ~~September 30, 2021,~~ 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.~~last day of the most recent fiscal quarter. The ~~weighted average interest rate for the ABL Facility was 1.65% at September 30, 2021. In addition, we are~~Company is also required to pay a commitment fee onequal to (i) 0.375% per annum at any time the average daily unused portion of the ~~ABL Facility ranging from 25 to 37.5 basis points, based on~~commitments is less than 50% and (ii) 0.25% per annum at any time the ~~level~~average daily unused portion of ~~outstanding borrowings, as defined in~~ the ~~ABL Facility. As of September 30, 2021, the applicable commitment fee was 37.5 basis points.~~commitments is greater than 50%.

property of the ~~capital stock~~borrowers, including a first priority lien on certain equity interests of ~~our non-U.S.~~direct or indirect domestic subsidiaries ~~has also been pledged as collateral.~~ of the borrowers and certain equity interests issued by certain foreign subsidiaries of the borrowers.

The Amended ABL Facility contains customary ~~operating~~representations, warranties and covenants ~~and certain restrictions including,~~that, among other things, and subject to certain specified circumstances and exceptions, restrict or limit the ~~incurrence~~ability of ~~additional debt,~~the borrowers and certain of their subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends ~~asset sales, investments, mergers, acquisitions, affiliate transactions,~~or distributions with respect to capital stock ~~repurchases~~ and make other restricted ~~payments.~~ payments, make prepayments on certain indebtedness, engage in mergers or other fundamental changes, dispose of property, and change the nature of their business.

The Amended ABL Facility ~~also~~ requires compliance with the following financial covenants: (i) a minimum ~~consolidated~~ fixed charge coverage ratio of ~~1.0~~1.00 to ~~1.0 calculated based on~~1.00 for the most recently completed four fiscal quarters and (ii) while a ~~trailing twelve-month~~leverage covenant trigger period ~~if availability under~~(as defined in the Amended ABL Facility) is in effect, a maximum consolidated leverage ratio of 4.00 to 1.00 as of the last day of the most recently completed fiscal quarter.

The Amended ABL Facility ~~falls below $22.5 million. In addition, the ABL Facility contains~~includes customary events of default including ~~without limitation, a failure~~non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross-default to ~~make payments under the facility, acceleration~~other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of ~~more than $25.0 million~~security interests or invalidity of ~~other indebtedness,~~loan documents, certain ~~bankruptcy~~ERISA events, unsatisfied or unstayed judgments and ~~certain~~ change of ~~control events.~~control.

Other Debt.In August 2021, we completed sale-leaseback transactions related to certain vehicles and other equipment for net proceeds of approximately $7.9 million. The transactions have been accounted for as financing arrangements as they did not qualify for sale accounting. As a result, the vehicles and other equipment continue to be reflected on our balance sheet in property, plant and equipment, net. The financing arrangements have a weighted average annual interest rate of 5.4% and are payable in monthly installments with varying maturities through October 2025. We had ~~an $8.0~~$5.8 million in financing ~~obligation~~obligations outstanding under these arrangements at ~~September 30, 2021.~~March 31, 2022.

In February 2021, a U.K. subsidiary entered a £6.0 million (approximately $8.3 million) term loan facility that ~~matures~~was scheduled to mature in February ~~2024,~~2024. Effective January 1, 2022, the ~~proceeds of which were used to pay down the ABL Facility. The~~ term loan ~~bears~~had an interest at a rate of ~~LIBOR~~SONIA plus a margin of ~~3.4%~~3.5% per ~~year,~~year. The term loan was payable in quarterly installments of £375,000 plus interest beginning March 2021 and a £1.5 million payment due at maturity. We had ~~$6.6~~$5.4 million outstanding under this arrangement at ~~September 30, 2021.~~March 31, 2022. In April 2022, this facility was amended to increase the term loan to £7.0 million (approximately $9.1 million) and add a £2.0 million (approximately $2.6 million) revolving credit facility. Both the amended term loan and revolving credit facility mature in April 2025 and bear interest at a rate of SONIA plus a margin of 3.25% per year. The term loan is payable in quarterly installments of £350,000 plus interest beginning June 2022 and a £2.8 million payment due at maturity. We had $11.2 million outstanding under these arrangements at May 2, 2022.

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 ~~$12.6~~$14.5 million and ~~$3.5~~$11.8 million outstanding under these arrangements at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

In addition, at ~~September 30, 2021,~~March 31, 2022, we had ~~$43.1~~$47.0 million in outstanding letters of credit, performance bonds, and other guarantees for which certain of the letters of credit are collateralized by ~~$6.0~~$4.8 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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020. The estimated fair value of our Convertible Notes was $38.6 million at September 30, 2021 and $61.1 million at December 31, 2020, based on quoted market prices at these respective dates.~~2021.

Note 87 – Income Taxes

The benefit for income taxes was $2.8 million for the first quarter of 2022, which includes an income tax benefit of $3.1 million related to the restructuring of certain subsidiary legal entities within Europe, as the undistributed earnings for an international subsidiary are no longer subject to certain taxes upon future distribution. The provision for income taxes was ~~$5.4~~$3.0 million for the first ~~nine months~~quarter of 2021, despite reporting a pretax loss for the period, primarily reflecting the impact of the geographic composition of our pretax loss. The tax expense in 2021 primarily ~~relates~~related to earnings from our international operations since we ~~are currently~~were unable to recognize the tax benefit from our U.S. losses as they may not be realized. The benefit for income taxes was $11.3 million for the first nine months of 2020, where the tax benefit from losses in the U.S was partially offset by the tax expense related to earnings from our international operations.

Note 98 – 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.

Note 109 – Supplemental Disclosures to the Statements of Cash Flows

Supplemental disclosures to the statements of cash flows are presented below:
First Nine Months
(In thousands) 2021 2020
Cash paid for:
Income taxes (net of refunds) $ 5,765 $ 4,733
Interest $ 3,414 $ 4,160


	First Quarter
(In thousands)	2022		2021
Cash paid for:
Income taxes (net of refunds)	$	3,268	$	1,810
Interest	$	998	$	889

Cash, cash equivalents, and restricted cash in the consolidated statements of cash flows consisted of the following:
(In thousands) September 30, 2021 December 31, 2020
Cash and cash equivalents $ 31,242 $ 24,197
Restricted cash (included in prepaid expenses and other current assets) 5,956 6,151
Cash, cash equivalents, and restricted cash $ 37,198 $ 30,348


(In thousands)	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	21,307	$	24,088
Restricted cash (included in prepaid expenses and other current assets)	4,821		5,401
Cash, cash equivalents, and restricted cash	$	26,128	$	29,489

1312

Note 1110 – Segment Data

Summarized operating results for our reportable segments are shown in the following table (net of inter-segment transfers):


		Third Quarter			First Nine Months							First Quarter
(In thousands)	(In thousands)		2021		2020		2021		2020		(In thousands)		2022		2021
Revenues	Revenues										Revenues
Fluids Systems	Fluids Systems		$	107,955	$	67,711	$	292,897	$	275,178	Fluids Systems		$	141,014	$	87,849
Industrial Solutions	Industrial Solutions		43,842		28,713		142,321		87,742		Industrial Solutions		35,424		53,323
Total revenues	Total revenues		$	151,797	$	96,424	$	435,218	$	362,920	Total revenues		$	176,438	$	141,172

Operating income (loss)	Operating income (loss)										Operating income (loss)
Fluids Systems	Fluids Systems		$	(6,646)	$	(18,957)	$	(19,944)	$	(46,284)	Fluids Systems		$	3,374	$	(6,767)
Industrial Solutions	Industrial Solutions		8,103		(139)		31,376		3,928		Industrial Solutions		5,472		13,130
Corporate office	Corporate office		(7,520)		(6,596)		(20,198)		(19,761)		Corporate office		(7,879)		(5,819)
Total operating loss			$	(6,063)	$	(25,692)	$	(8,766)	$	(62,117)
Total operating income											Total operating income		$	967	$	544

The following table presents further disaggregated revenues for the Fluids Systems segment:


		Third Quarter				First Nine Months					First Quarter
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021
United States	United States	$	56,783	$	40,314	$	161,237	$	156,644	United States	$	70,843	$	47,670
Canada	Canada	13,781		1,961		31,400		18,287		Canada	22,235		12,663
Total North America	Total North America	70,564		42,275		192,637		174,931		Total North America	93,078		60,333

EMEA	EMEA	32,380		23,207		90,801		91,380		EMEA	44,175		25,459
Other	Other	5,011		2,229		9,459		8,867		Other	3,761		2,057
Total International	Total International	37,391		25,436		100,260		100,247		Total International	47,936		27,516

Total Fluids Systems revenues	Total Fluids Systems revenues	$	107,955	$	67,711	$	292,897	$	275,178	Total Fluids Systems revenues	$	141,014	$	87,849

The following table presents further disaggregated revenues for the Industrial Solutions segment:


		Third Quarter				First Nine Months					First Quarter
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021
Product sales revenues	Product sales revenues	$	14,240	$	5,917	$	44,459	$	15,243	Product sales revenues	$	4,423	$	20,037
Rental revenues	Rental revenues	15,343		9,327		51,655		31,999		Rental revenues	17,615		17,079
Service revenues	Service revenues	12,393		13,469		37,919		40,500		Service revenues	13,386		11,654
Industrial blending revenues ~~(1)~~	Industrial blending revenues ~~(1)~~	1,866		—		8,288		—		Industrial blending revenues ~~(1)~~	—		4,553
Total Industrial Solutions revenues	Total Industrial Solutions revenues	$	43,842	$	28,713	$	142,321	$	87,742	Total Industrial Solutions revenues	$	35,424	$	53,323

~~(1) Industrial blending operations began~~With ongoing support from outside financial and other advisors, we have continuously reviewed our portfolio during the oil and natural gas cycle of the last couple of years. These reviews have focused on evaluating changes in the ~~second quarter~~outlook for our served markets and customer priorities, while identifying opportunities for value-creating options in our portfolio, placing investment emphasis in markets where we generate strong returns and where we see greater long-term viability and stability. As part of ~~2020. Results~~our ongoing review of our portfolio, our management recommended, and our Board of Directors approved two actions in February 2022 intended to enhance liquidity available for investment in higher returning businesses.

First, in consideration of broader strategic priorities and the timeline and efforts required to further develop the industrial blending ~~component are presented~~business, our Board of Directors approved a plan in February 2022 to exit our Industrial ~~Solutions beginning in the fourth quarter of 2020. Results prior to the fourth quarter of 2020 were reported in Fluids Systems and not adjusted as they were not material.~~

~~In March 2020, oil prices collapsed due to geopolitical events along with the worldwide effects~~Blending operations. As part of the ~~COVID-19 pandemic, which led to a rapid decline in customer activity in~~exit plan, we completed the ~~E&P industry. In response to these market changes, we initiated workforce reductions and other cost reduction programs late~~wind down of the Industrial Blending business in the first quarter of ~~2020~~2022 and ~~continued these actions throughout 2020.~~

~~As part~~are currently pursuing the sale of the ~~cost reduction programs, we reduced our global employee base by approximately 620 (28%)~~industrial blending and warehouse facility and related equipment located in ~~the first nine months~~Conroe, Texas. The Industrial Blending business had no significant revenues and incurred an operating loss of ~~2020. As a result of these workforce reductions, our operating results~~$0.9 million for the third quarter of 2020 included $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~~

1413

~~months~~quarter of ~~2020 included $3.9~~2022, and contributed $5 million of ~~total severance costs ($3.3 million in Fluids Systems~~revenues with approximately break-even operating income for the first quarter of 2021. As of March 31, 2022, the carrying value of the long-lived assets associated with the Industrial Blending business was $19 million.

As a result of the plan to exit and ~~$0.6 million~~dispose of the assets used in the ~~corporate office), with $2.6 million~~Industrial Blending business, we estimated in ~~cost of revenues~~February 2022 and ~~$1.3 million~~disclosed in ~~selling, general and administrative expenses. These costs were substantially paid as of September 30, 2020.~~

~~We recognized $4.7 million of total charges~~our Annual Report on Form 10-K for the ~~impairment of certain fixed assets and other non-cash~~year ended December 31, 2021 that we may incur pre-tax charges in the ~~third quarter~~range of ~~2020, with $4.5~~approximately $4 million into $8 million primarily related to the ~~Fluids Systems segment and $0.2 million in~~non-cash impairment of long-lived assets related to the ~~corporate office. We recognized $18.0 million of total charges for inventory write-downs, severance costs, fixed asset impairments, and facility exit costs~~Industrial Blending business, which we anticipated recognizing in the first ~~nine months~~quarter of ~~2020,~~2022. In March 2022, we shut down the Industrial Blending business and initiated a sales process to market the industrial blending and warehouse facility and related equipment. As a result of the ongoing sales process and revised estimates for the expected net proceeds from the ultimate disposition, we now anticipate recovering the $19 million carrying value of the long-lived assets associated with ~~$17.4 million~~the Industrial Blending business. Accordingly, 0 impairment has been recognized for these assets in the ~~Fluids Systems segment and $0.6 million in the corporate office.~~

In August 2021, Hurricane Ida negatively impacted our Gulf of Mexico operations, including damage to certain inventory, equipment and warehouse facilities, at our Fourchon, Louisiana Fluids Systems operating base. While this event is covered by our property and business interruption insurance programs, these programs contain self-insured retentions, which remain our financial obligations. During the thirdfirst quarter of ~~2021,~~2022, though it remains possible that we may incur a future impairment or loss related to the ongoing sales process.

Second, our ~~Fluids Systems segment incurred hurricane-related costs~~Board of ~~$2.6~~Directors also approved management’s plan to explore strategic options, including the potential sale, for our U.S. mineral grinding business. The U.S. mineral grinding business contributed third-party revenues of $14 million substantially all of which is our self-insured retention under our property insurance policy representing preliminary estimates for property damage and initial costs incurred for property-related repairs, cleanup and other costs. This $2.6 million charge is recognized in other operating (income) loss, net, for the ~~third~~first quarter of 2022 and $7 million for the first quarter of 2021. Additional costs for property-related repairs, cleanup and other costs that may be incurred beyond the initial estimates are expected to be substantially recoverable under our property insurance policy. As of ~~September 30, 2021,~~March 31, 2022, the ~~claims related to the hurricane under our property and~~U.S. mineral grinding business ~~interruption insurance programs have not been finalized.~~

~~Fluids Systems operating results for the third quarter and first nine months of 2021 also includes $1.7~~had approximately $50 million of ~~charges related to facility exit and other costs included in cost~~net capital employed, including approximately $28 million of ~~revenues, as well as a $0.8 million gain included in other operating (income) loss,~~ net related to the final insurance settlement associated with the July 2018 fire at our Kenedy, Texas drilling fluids facility. Industrial Solutions operating results for the first nine months of 2021 includes a $1.0 million gain in other operating (income) loss, net, related to a legal settlement.

~~See below for details of charges in the Fluids Systems segment.~~

Third Quarter First Nine Months
(In thousands) 2021 2020 2021 2020
Fourchon, Louisiana hurricane-related costs $ 2,596 $ — $ 2,596 $ —
Facility exit and other costs 1,691 286 1,691 1,086
Severance costs 564 189 1,177 3,288
Kenedy, Texas facility fire insurance settlement (849) — (849) —
Inventory write-downs — 990 — 9,986
Property, plant and equipment impairments — 3,038 — 3,038
Total Fluids Systems impairments and other charges $ 4,002 $ 4,503 $ 4,615 $ 17,398
working capital.

1514

ITEM 2. Management’s 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, ~~2020.~~2021. Our ~~third~~first quarter represents the three-month period ended ~~September 30 and our first nine months represents the nine-month period ended September 30.~~March 31. 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~~Newpark Resources, Inc. (the “Company,” “we,” “our,” or “us”) is a geographically diversified supplier providing environmentally-sensitive products, as well as rentals and services to customers across multiple industries. We operate our business through two reportable segments: ~~Fluids Systems,~~Industrial Solutions, which ~~primarily~~ serves various markets including power transmission, oil and natural gas exploration and production (“E&P”) ~~customers, and Industrial Solutions, which serves various markets including power transmission, E&P,~~, pipeline, renewable energy, petrochemical, construction and other ~~industries.~~industries, and Fluids Systems, which primarily serves E&P customers.

Our long-term strategy includes key foundational elements that are intended to enhance long-term shareholder value creation:

•End-market diversification – To help reduce our dependency on customers in the volatile E&P industry, improve the stability in cash flow generation and returns on invested capital, and provide growth opportunities into new markets, we have focused our efforts over the past several years on diversifying our presence outside of our historical E&P customer base. These efforts have been primarily focused within our Site and Access Solutions business, where we have prioritized growth in power transmission, pipeline, renewable energy, and construction markets. ~~In the first nine months of 2021, our Industrial Solutions segment generated~~ ~~$142~~ ~~million~~The continued expansion of revenues ~~including approximately~~ ~~$117~~ ~~million from power transmission~~in industrial markets, and ~~other industrial markets. The continued diversification of our revenues, including~~particularly end-markets that are likely to benefit from ongoing energy transition efforts around the world, such as power transmission, renewable energy, and geothermal, remains a strategic priority going forward, and we anticipate that our capital investments will primarily focus on ~~industrial end-market expansion.~~supporting this objective.

•Provide products that enhance environmental sustainability – ~~Our~~The Company has a long history of providing ~~environmentally-friendly~~environmentally-sensitive technologies to our customers. In the Industrial Solutions segment, we believe the lightweight design of our fully recyclable DURA-BASE® matting system provides a distinct environmental advantage for our customers as compared to alternative wood mat products in the market, by eliminating deforestation required to produce wood mat products while also reducing ~~CO2~~CO2 emissions associated with product transportation. In our Fluids Systems segment, our family of high-performance water-based fluids systems, which we market as Evolution® and DeepDrill® systems, are designed to enhance drilling performance while also providing a variety of environmental benefits relative to traditional oil-based fluids. ~~Our~~More recently, our Fluids Systems segment has also developed athe TerraThermTM water-based fluids system designed specifically for clean-energy geothermal ~~applications that we market~~drilling, as ~~TerraTherm~~well as the TransitionTM. family of brine-tolerant stimulation chemicals, which reduce the freshwater required for well stimulation applications. The continued advancement of technology that provides our customers with economic benefits, while also enhancing their environmental and safety programs, remains a priority for our research and development efforts.

Segment Overview

Industrial Solutions - Our Industrial Solutions segment, which generated $35.4 million of revenues and $5.5 million of operating income for the first quarter of 2022, provides temporary worksite access solutions, including the rental of our manufactured recyclable composite matting systems, along with related site construction and services to customers in various markets including power transmission, E&P, pipeline, renewable energy, petrochemical, construction and other industries, primarily in the United States and Europe. We also sell our manufactured recyclable composite mats to customers around the world, with power transmission being the primary end-market.

Our Industrial Solutions segment has been a primary source of operating income and cash generation for us in recent years, and has also been the primary focus for growth investments. The expansion of our Industrial Solutions segment into the power transmission and other industrial markets remains a strategic priority for us due to such markets’ relative stability compared to E&P, as well as the magnitude of growth opportunity in these markets, including the potential positive impact from the energy transition. We expect customer activity, particularly in the power transmission sector, will remain robust in the coming years, driven in part by the impacts of the energy transition and the increasing investment in grid reliance initiatives.

In 2020, we began leveraging our chemical blending capacity and technical expertise into industrial blending operations, and in response to the increasing market demand for cleaning products resulting from the COVID-19 pandemic, began producing disinfectants and industrial cleaning products in 2020. Despite our initial success, a key blue-chip customer experienced a significant decline in product demand and cancelled all orders of disinfectants and cleaning products in the third quarter of 2021. In February 2022, in consideration of broader strategic priorities and the timeline and efforts required to further develop the Industrial Blending business, our management recommended, and our Board of Directors approved a plan to exit our Industrial Blending operations. As part of the exit plan, we completed the wind down of the Industrial Blending business in the first quarter of 2022 and are currently pursuing the sale of the industrial blending and warehouse facility and related equipment located in Conroe, Texas. Although we currently anticipate recovering the $19 million carrying value of the long-lived assets associated with the Industrial Blending business with expected net proceeds from the ultimate disposition, it is possible that we may incur a future impairment or loss related to the ongoing sales process. The Industrial Blending business had no significant revenues and incurred an operating loss of $0.9 million for the first quarter of 2022, and contributed $5 million of revenues with approximately break-even operating income for the first quarter of 2021.

Fluids Systems - Our Fluids Systems segment, which generated $141.0 million of revenues and $3.4 million of operating income for the first quarter of 2022, provides drilling, completion, and stimulation fluids products and related technical services to customers for oil, natural gas, and geothermal projects primarily in North America and Europe, the Middle East and Africa (“EMEA”), as well as certain countries in Asia Pacific and Latin America. Our Fluids Systems operating results remain dependent 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 Fluids Systems 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~~first quarter ~~and first nine months~~ of ~~2021~~2022 as compared to the ~~same periods~~first quarter of ~~2020~~2021 is as follows:


		Third Quarter		2021 vs 2020				First Quarter		2022 vs 2021
		2021	2020	Count	%			2022	2021	Count	%
U.S. Rig Count	U.S. Rig Count	496	254	242	95	%	U.S. Rig Count	633	390	243	62	%
Canada Rig Count	Canada Rig Count	151	47	104	221	%	Canada Rig Count	198	138	60	43	%
North America Rig Count	North America Rig Count	647	301	346	115	%	North America Rig Count	831	528	303	57	%

		First Nine Months		2021 vs 2020
		2021	2020	Count	%
U.S. Rig Count		445	477	(32)	(7)	%
Canada Rig Count		120	89	31	35	%
North America Rig Count		565	566	(1)	—	%

Source: Baker Hughes Company

During March 2020, oil prices collapsed due to geopolitical events along with the worldwide effects of the COVID-19 pandemic. As a result, U.S. rig count declined significantly beginning in ~~late~~ March 2020 before reaching a low of 244 in ~~mid-August~~August 2020. ~~Oil~~During 2021, oil prices ~~have since~~ rebounded, and ~~currently are~~the average U.S. rig count gradually increased, ending 2021 at ~~multi-year highs, while~~586 rigs. During the first quarter of 2022, oil prices significantly increased due to geopolitical events, and the average U.S. rig count has continued to gradually ~~increased over the past year, resulting in a 95% year-over-year third quarter improvement in U.S. rig count, though still 7% below prior year for the first nine months.~~increase. We anticipate that market activity will continue to improve ~~from current~~in 2022, although U.S. activity is expected to remain below 2019 levels ~~although~~as many of our customers maintain stronger capital discipline and prioritize cash flow generation over growth. Further, in the ~~ongoing impacts~~wake of ~~the~~ COVID-19, ~~variants,~~ an uncertain economic environment, including widespread supply chain disruptions, as well as enacted and proposed legislative changes in the U.S. impacting the oil and natural gas industry, make the timing and pace of recovery difficult to predict. The Canada rig count ~~reflects~~was 95 as of April 29, 2022, largely reflecting

the normal seasonality for this market, with the highest rig count levels generally observed in the first quarter of each year, prior to ~~spring~~Spring break-up.

Outside of North America land markets, drilling activity is generally more stable as this drilling activity is based on longer-term economic projections and multi-year drilling programs, which typically reduces 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~~early 2020 and continuing inthrough 2021, driven by government-imposed restrictions on movements of personnel, quarantines of staffing, and logistical limitations as a result of the COVID-19 pandemic. WeRevenues and profitability from our international Fluids Systems business gradually recovered in 2021, with revenues for the first quarter 2022 near pre-COVID levels. However, the impacts of global supply chain disruptions have caused significant cost inflation to many hydrocarbon-based products and chemicals used in our fluids systems, and in many cases, we are unable to adjust our customer pricing due to the long-term contracts in place. Consequently, the inflationary impacts are negatively impacting the profitability of our international operations, and we expect ~~these disruptions and project delays will~~this trend to continue ~~to impact international activity levels in the near-term, and while there has been a general improvement in customer activity as we have progressed through 2021,~~throughout 2022, though the impact ~~from the duration and magnitude~~ of ~~the ongoing health pandemic and related government responses are~~cost inflation is very difficult to predict.

In response to the 2020 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 took a number of actions during 2020 and continuing into 2021 aimed at conserving cash and protecting our liquidity, which included 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 effective April 1, 2020 for a significant portion of U.S. employees, including executive officers and the annual cash retainers paid to all non-employee members of the Board of Directors. We recognized $18.0 million of charges during the first nine months of 2020 for inventory write-downs, severance costs, fixed asset impairments, and facility exit costs.employees. Beginning in the second quarter of 2021, we restored salaries to pre-reduction levels for a portion of our non-executive U.S. employees and reinstituted the Company matching contribution for our U.S. defined contribution ~~plan. Beginning in~~plan, with the remainder of the temporary salary reductions restored by the third quarter of 2021, we restored salaries to pre-reduction levels for the remaining non-executive U.S. employees and our executive officers as well as the annual cash retainers paid to all non-employee members of the Board of Directors. We recognized total charges of $4.6 million during the first nine months of 2021, including $4.0 million in the third quarter of 2021, primarily related to self-insured costs associated with Hurricane Ida damage to our Fourchon, Louisiana Fluids Systems operating base, facility exit, and severance costs.2021.

With ongoing support from outside financial and other advisors, we have continuously reviewed our portfolio during ~~this~~the oil and natural gas ~~market downturn.~~cycle of the last couple of years. These reviews have focused on evaluating changes in the outlook for our served markets and customer priorities, while identifying opportunities for value-creating options in our portfolio, ~~as well as~~ placing investment emphasis in markets where we generate strong returns and where we see greater long-term viability and stability. 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 expense. In February 2022, our Board of Directors approved management’s plan to explore strategic options, including the potential sale, for our U.S. mineral grinding business. The U.S. mineral grinding business contributed third-party revenues of $14 million for the first quarter of 2022 and $7 million for the first quarter of 2021.

We continue to evaluate other under-performing areas of our business, ~~including~~particularly within the U.S. and Gulf of Mexico oil and natural gas markets, which necessitates consideration of broader structural changes to transform this business for the new market realities. In the absence of a longer-term increase in activity levels, we may incur future charges related to these efforts or potential asset impairments, which may negatively impact our future results.

~~Segment Overview~~

~~Fluids Systems~~ ~~– Our Fluids Systems segment, which generated~~ ~~67%~~ of consolidated revenues for the first nine months of 2021, provides drilling, completion, and stimulation fluids products and related technical services to customers for oil, natural gas, and geothermal projects primarily in North America and Europe, the Middle East and Africa (“EMEA”), as well as certain countries in Asia Pacific and Latin America. Despite the continuing effects of COVID-19 impacting international customer activity, expansion outside of North America, including the penetration of international oil companies (“IOCs”) and national oil companies (“NOCs”), remains 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 29% of Fluids Systems segment revenues for the first nine months of 2021 compared to approximately 43% for the first nine months of 2020, with the decrease primarily due to COVID-related activity disruptions and project delays, as well as changes in customer drilling and completion activity levels in the Gulf of Mexico. Consistent with our strategy, during 2021, we secured multi-year tender awards in Bahrain and Thailand, both of which began in the third quarter of 2021.

~~Industrial Solutions~~ ~~– Our Industrial Solutions segment, which generated~~ ~~33%~~ of consolidated revenues for the first nine months of 2021, provides engineered composite matting system rentals utilized for temporary worksite access, along with related site construction and services to customers in various markets including power transmission, E&P, pipeline, renewable energy, petrochemical, construction and other industries, primarily in the United States and Europe. We also sell our manufactured composite mats to customers around the world, with power transmission being the primary end-market. In addition, we began leveraging our chemical blending capacity and technical expertise into industrial blending operations, and in response to the increasing market demand for cleaning products resulting from the COVID-19 pandemic, began producing disinfectants and industrial cleaning products in 2020. The scale-up of production was completed by the end of the third quarter of 2020, which effectively repositioned our chemical blending operation located in Conroe, Texas to support industrial end-markets. Beginning prospectively in the fourth quarter of 2020, the assets and operating results associated with these industrial blending operations are included in the Industrial Solutions segment, while the historical results from earlier in 2020, which were immaterial, are included in the Fluids Systems segment.

The expansion of our rental and service activities in power transmission and other industrial markets remains a strategic priority for us due to such markets’ relative stability compared to E&P, as well as the magnitude of growth opportunity in these markets, including the potential positive impact from the energy transition. During 2020, our business was impacted by the COVID-19 pandemic, as customers delayed purchases and planned projects citing COVID-related market uncertainty, permitting delays, and logistical restrictions. The Industrial Solutions segment rental and service revenues from power transmission and other industrial markets increased to approximately ~~$64~~ ~~million for the~~ ~~first nine months~~ ~~of 2021, compared to approximately $45 million for the~~ ~~first nine months~~ of 2020. Product sales revenues largely reflect sales to power transmission customers and other industrial markets, and typically fluctuate based on the timing of customer orders. Total segment revenues from power transmission and other industrial markets were ~~$117~~ ~~million (82% of segment revenues) for the~~ ~~first nine months~~ ~~of 2021, more than doubling the $58 million (66% of segment revenues) generated in the~~ ~~first nine months~~ of 2020, benefiting from the market recovery, including some level of pent-up demand associated with COVID-related project delays in 2020, particularly in the power transmission sector. We expect customer activity, particularly in the power transmission sector, will remain robust in the coming years, driven in part by the impacts of the energy transition and the increasing investment in grid reliance initiatives.

1817

~~Third~~First Quarter of ~~2021~~2022 Compared to ~~Third~~First Quarter of ~~2020~~2021

Consolidated Results of Operations

Summarized results of operations for the ~~third~~first quarter of 2022 compared to the first quarter of 2021 ~~compared to the third quarter of 2020~~ are as follows:
Third Quarter 2021 vs 2020
(In thousands) 2021 2020 $ %
Revenues $ 151,797 $ 96,424 $ 55,373 57 %
Cost of revenues 132,273 99,301 32,972 33 %
Selling, general and administrative expenses 23,864 20,597 3,267 16 %
Other operating (income) loss, net 1,723 (820) 2,543 NM
Impairments — 3,038 (3,038) NM
Operating loss (6,063) (25,692) 19,629 76 %
Foreign currency exchange loss 25 580 (555) (96) %
Interest expense, net 2,176 2,411 (235) (10) %
Loss on extinguishment of debt 210 — 210 NM
Loss before income taxes (8,474) (28,683) 20,209 70 %
Provision (benefit) for income taxes 2,011 (4,813) 6,824 NM
Net loss $ (10,485) $ (23,870) $ 13,385 (56) %


	First Quarter				2022 vs 2021
(In thousands)	2022		2021		$		%
Revenues	$	176,438	$	141,172	$	35,266	25	%
Cost of revenues	150,988		119,991		30,997		26	%
Selling, general and administrative expenses	24,433		20,911		3,522		17	%
Other operating (income) loss, net	50		(274)		324		NM
Operating income	967		544		423		78	%

Foreign currency exchange (gain) loss	64		(332)		396		NM
Interest expense, net	1,206		2,408		(1,202)		(50)	%
Loss on extinguishment of debt	—		790		(790)		NM
Loss before income taxes	(303)		(2,322)		2,019		87	%

Provision (benefit) for income taxes	(2,824)		3,040		(5,864)		NM
Net income (loss)	$	2,521	$	(5,362)	$	7,883	NM

Revenues

Revenues ~~increase~~d ~~57%~~increased 25% to ~~$151.8 million~~ ~~for the third quarter of 2021, compared to $96.4~~$176.4 million for the ~~third~~first quarter of ~~2020.~~2022, compared to $141.2 million for the first quarter of 2021. This ~~$55.4~~$35.3 millionincrease includes a ~~$42.2~~$17.4 million (~~62%~~ (16%) increase in revenues in North America, comprised of a ~~$28.3~~$32.7 million increase in the Fluids Systems segment ~~and~~partially offset by a ~~$13.9~~$15.3 million ~~increase~~decrease in the Industrial Solutions segment. Revenues from our North America operations increased primarily due to the ~~115%~~ ~~increase~~improvement in North America rig count, which favorably impacted our Fluids Systems segment, ~~as well as~~partially offset by a ~~recovery of activity~~decline in ~~the power transmission sector, which favorably impacted~~revenues from product sales in our Industrial Solutions ~~segment.~~segment, which typically fluctuate based on the timing of mat orders from customers and were favorably impacted in the first quarter of 2021 by pent-up demand following the peak of the COVID-19 pandemic. Revenues from our international operations ~~increase~~dincreased by ~~$13.2~~$17.9 million (~~46%~~ (53%), ~~but continues~~as the prior year continued to be unfavorably impacted by activity disruptions and project delays resulting from the COVID-19 pandemic. Additional information regarding the change in revenues is provided within the operating segment results below.

Cost of revenues

Cost of revenues ~~increase~~d ~~33%~~increased 26% to ~~$132.3 million~~ ~~for the third quarter of 2021, compared to $99.3~~$151.0 million for the ~~third~~first quarter of ~~2020. The Fluids Systems segment cost of revenues~~2022, compared to $120.0 million for the ~~third~~first quarter of ~~2021 includes $2.0~~2021. This $31.0 million ~~of charges primarily related to facility exit and severance costs, and the third quarter of 2020 included $1.1 million of charges related to inventory write-downs and severance costs. The~~ increase ~~in cost of revenues~~ was primarily driven by the ~~57%~~25% increase in revenues described ~~above.~~above, along with inflationary cost pressures impacting materials, transportation, and labor.

Selling, general and administrative expenses

Selling, general and administrative expenses ~~increase~~d ~~$3.3~~increased $3.5 million to ~~$23.9 million~~ ~~for the third quarter of 2021, compared to $20.6~~$24.4 million for the ~~third~~first quarter of ~~2020.~~2022, compared to $20.9 million for the first quarter of 2021. This increase was primarily driven by higher performance-based incentive and stock-based compensation expense, ~~as well as~~and the restoration of ~~certain~~ U.S. salary and retirement benefits, ~~partially offset by a reduction in~~as well as higher legal ~~costs.~~and professional expenses. Selling, general and administrative expenses as a percentage of revenues was ~~15.7%~~13.8% for the ~~third~~first quarter of ~~2021~~2022 compared to ~~21.4%~~14.8% for the ~~third~~first quarter of ~~2020~~2021.

~~Other operating (income) loss, net~~

In August 2021, Hurricane Ida caused damage to our Fourchon, Louisiana Fluids Systems operating base. While this event is covered by our property and business interruption insurance programs, these programs contain self-insured retentions, which remain our financial obligations, resulting in $2.6 million of charges for the third quarter of 2021. Additional costs for property-related repairs, cleanup and other costs that may be incurred beyond the initial estimates are expected to be substantially recoverable under our property insurance policy. As of September 30, 2021, the claims related to the hurricane under our property and business interruption insurance programs have not been finalized.

The third quarter of 2021 also includes a $0.8 million gain related to the final insurance settlement associated with the July 2018 fire at our Kenedy, Texas drilling fluids facility. Other operating (income) loss, net, also includes gains on sales of assets.

~~Impairments~~

~~Fluids Systems segment included a $3.0 million impairment charge in the third quarter of 2020, attributable to the abandonment of certain property, plant and equipment.~~

Foreign currency exchange

Foreign currency exchange was a $0.1 million loss for the first quarter of 2022 compared to a $0.3 million gain for the first quarter of 2021, 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 ~~$2.2~~$1.2 million for the ~~third~~first quarter of ~~2021~~2022 compared to $2.4 million for the ~~third~~first quarter of ~~2020.~~2021. Interest expense for the ~~third~~first quarter of 2022 and 2021 ~~and 2020~~ includes ~~$1.0~~$0.2 million and ~~$1.2~~$1.1 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.~~the 2021 repayment of our Convertible Notes with borrowings under the ABL Facility.

Loss on extinguishment of debt

In the ~~third~~first quarter of 2021, we repurchased ~~$10.0~~$18.3 million of our Convertible Notes in the open market for ~~$10.0~~$18.1 million. The ~~$0.2~~$0.8 million loss for the ~~third~~first quarter of 2021 reflects the difference in the amount paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs.

Provision (benefit) for income taxes

The benefit for income taxes was $2.8 million for the first quarter of 2022, which includes an income tax benefit of $3.1 million related to the restructuring of certain subsidiary legal entities within Europe, as the undistributed earnings for an international subsidiary are no longer subject to certain taxes upon future distribution. The provision for income taxes was ~~$2.0~~$3.0 million for the ~~third~~first quarter of 2021, despite reporting a pretax loss for the period, primarily reflecting the impact of the geographic composition of our pretax loss. The tax expense in 2021 primarily ~~relates~~related to earnings from our international operations since we ~~are currently~~were unable to recognize the tax benefit from our U.S. losses as they may not be realized. The benefit for income taxes was $4.8 million for the third quarter of 2020, where the tax benefit from losses in the U.S was partially offset by the tax expense related to earnings from our international operations.

2019

Operating Segment Results

Summarized financial information for our reportable segments is shown in the following table (net of inter-segment transfers):


		Third Quarter						2021 vs 2020					First Quarter						2022 vs 2021
(In thousands)	(In thousands)	2021			2020			$		%		(In thousands)	2022			2021			$		%
Revenues	Revenues											Revenues
Fluids Systems	Fluids Systems	$	107,955		$	67,711		$	40,244	59	%	Fluids Systems	$	141,014		$	87,849		$	53,165	61	%
Industrial Solutions	Industrial Solutions	43,842			28,713			15,129		53	%	Industrial Solutions	35,424			53,323			(17,899)		(34)	%
Total revenues	Total revenues	$	151,797		$	96,424		$	55,373	57	%	Total revenues	$	176,438		$	141,172		$	35,266	25	%

Operating income (loss)	Operating income (loss)											Operating income (loss)
Fluids Systems	Fluids Systems	$	(6,646)		$	(18,957)		$	12,311			Fluids Systems	$	3,374		$	(6,767)		$	10,141
Industrial Solutions	Industrial Solutions	8,103			(139)			8,242				Industrial Solutions	5,472			13,130			(7,658)
Corporate office	Corporate office	(7,520)			(6,596)			(924)				Corporate office	(7,879)			(5,819)			(2,060)
Total operating loss		$	(6,063)		$	(25,692)		$	19,629
Total operating income												Total operating income	$	967		$	544		$	423

Segment operating margin	Segment operating margin											Segment operating margin
Fluids Systems	Fluids Systems	(6.2)		%	(28.0)		%					Fluids Systems	2.4		%	(7.7)		%
Industrial Solutions	Industrial Solutions	18.5		%	(0.5)		%					Industrial Solutions	15.4		%	24.6		%

Fluids Systems

Revenues

Total revenues for this segment consisted of the following:

Third Quarter 2021 vs 2020
(In thousands) 2021 2020 $ %
United States $ 56,783 $ 40,314 $ 16,469 41 %
Canada 13,781 1,961 11,820 603 %
Total North America 70,564 42,275 28,289 67 %
EMEA 32,380 23,207 9,173 40 %
Other 5,011 2,229 2,782 125 %
Total International 37,391 25,436 11,955 47 %
Total Fluids Systems revenues $ 107,955 $ 67,711 $ 40,244 59 %

~~North America revenues~~ ~~increase~~d ~~67%~~ to ~~$70.6 million~~ for the third quarter of 2021, compared to $42.3 million for the third quarter of 2020. This increase was primarily attributable to the increase in North America rig count, including a $20.2 million increase from U.S. land markets and a $11.8 million increase in Canada, partially offset by a $1.1 million decrease from offshore Gulf of Mexico driven primarily by changes in customer drilling and completion activity levels, including the impact from Hurricane Ida. For the third quarter of 2021, U.S. revenues include $51.1 million from land markets and $5.7 million from offshore Gulf of Mexico.

Internationally, revenues increased 47% to $37.4 million for the third quarter of 2021, compared to $25.4 million for the third quarter of 2020. The increase was primarily driven by higher activity in Europe, North Africa, and Asia Pacific regions. However, despite these improvements, customer activity levels in several key markets continue to be impacted by the COVID-19 pandemic.

~~Operating loss~~

The Fluids Systems segment incurred an operating loss of $6.6 million for the third quarter of 2021, reflecting a $12.3 million improvement from the $19.0 million operating loss incurred in the third quarter of 2020. The Fluids Systems segment operating loss for the third quarter of 2021 includes $4.0 million of charges primarily related to self-insured costs associated with Hurricane Ida damage to our Fourchon, Louisiana Fluids Systems operating base, facility exit, and severance costs, and the operating loss for the third quarter of 2020 included $4.5 million of charges primarily related to the impairment of certain fixed assets and other non-cash charges. The remaining improvement in the operating loss includes a $8.4 million benefit from North America operations and a $3.5 million benefit from international operations, which are primarily attributable to the changes in revenues described above along with the benefit of cost reduction programs implemented during 2020.

~~Industrial Solutions~~

~~Revenues~~

~~Total revenues for this segment consisted of the following:~~

Third Quarter 2021 vs 2020
(In thousands) 2021 2020 $ %
Product sales revenues $ 14,240 $ 5,917 $ 8,323 141 %
Rental and service revenues 27,736 22,796 4,940 22 %
Industrial blending revenues 1,866 — 1,866 NM
Total Industrial Solutions revenues $ 43,842 $ 28,713 $ 15,129 53 %

In the third quarter of 2020, customer activity across most end-markets was unfavorably impacted by the COVID-19 pandemic and the related operational restrictions and market uncertainty, causing delays in purchases and project execution. As a result of the COVID-19 impact and our expanding customer base in the power transmission market, revenues from product sales, which typically fluctuate based on the timing of mat orders from customers, increased $8.3 million from the third quarter of 2020. In addition, rental and service revenues increased $4.9 million as delayed purchases and projects resumed, including a $3.0 million increase from power transmission and other industrial markets, as well as a $1.9 million increase from the E&P market. The increase from industrial customers reflects our continued expansion into these markets, both in the U.S. and U.K.

~~Operating income (loss)~~

The Industrial Solutions segment generated operating income of $8.1 million for the third quarter of 2021 compared to an operating loss of $0.1 million for the third quarter of 2020, the increase being primarily attributable to the changes in revenues as described above.

~~Corporate Office~~

Corporate office expenses increased $0.9 million to $7.5 million for the third quarter of 2021, compared to $6.6 million for the third quarter of 2020. This increase was primarily driven by higher performance-based incentive and stock-based compensation expense, as well as the restoration of certain U.S. salary and retirement benefits, partially offset by the benefit of cost reduction programs implemented in 2020.

~~First Nine Months of 2021 Compared to First Nine Months of 2020~~

~~Consolidated Results of Operations~~

~~Summarized results of operations for the first nine months of 2021 compared to the first nine months of 2020 are as follows:~~
First Nine Months 2021 vs 2020
(In thousands) 2021 2020 $ %
Revenues $ 435,218 $ 362,920 $ 72,298 20 %
Cost of revenues 376,370 357,675 18,695 5 %
Selling, general and administrative expenses 67,755 66,230 1,525 2 %
Other operating income, net (141) (1,906) 1,765 NM
Impairments — 3,038 (3,038) NM
Operating loss (8,766) (62,117) 53,351 86 %
Foreign currency exchange (gain) loss (83) 3,343 (3,426) NM
Interest expense, net 6,748 8,524 (1,776) (21) %
(Gain) loss on extinguishment of debt 1,000 (419) 1,419 NM
Loss before income taxes (16,431) (73,565) 57,134 78 %
Provision (benefit) for income taxes 5,414 (11,303) 16,717 NM
Net loss $ (21,845) $ (62,262) $ 40,417 65 %

~~Revenues~~

Revenues increased 20% to $435.2 million for the first nine months of 2021, compared to $362.9 million for the first nine months of 2020. This $72.3 million increase includes a $65.7 million (26%) increase in revenues in North America, comprised of a $48.0 million increase in the Industrial Solutions segment and a $17.7 million increase in the Fluids Systems segment. Revenues from our North America operations increased primarily due to the significant growth in power transmission and other industrial markets, which impacts our Industrial Solutions segment, as well as the improvement in North America rig count, which favorably impacted our Fluids Systems segment. Revenues from our international operations were relatively flat, as COVID-19 disruptions have unfavorably impacted customer activity levels in substantially all key markets. Additional information regarding the change in revenues is provided within the operating segment results below.

~~Cost of revenues~~

Cost of revenues increased 5% to $376.4 million for the first nine months of 2021, compared to $357.7 million for the first nine months of 2020. The Fluids Systems segment cost of revenues for the first nine months of 2021 includes $2.3 million of charges primarily related to facility exit and severance costs, and the first nine months of 2020 included a total of $13.4 million of charges related to inventory write-downs, severance costs, and facility exit costs. The remaining increase was primarily driven by the 20% increase in revenues described above, partially offset by the benefit of cost reduction programs implemented in 2020.

~~Selling, general and administrative expenses~~

Selling, general and administrative expenses increased $1.5 million to $67.8 million for the first nine months of 2021, compared to $66.2 million for the first nine months of 2020. This increase was primarily driven by higher performance-based incentive and stock-based compensation expense, partially offset by reduced personnel costs in the first nine months of 2021, including the benefit of cost reduction programs implemented in 2020, as well as lower severance charges and legal costs. Selling, general and administrative expenses as a percentage of revenues was 15.6% for the first nine months of 2021 compared to 18.2% for the first nine months of 2020.

~~Other operating income, net~~

In August 2021, Hurricane Ida caused damage to our Fourchon, Louisiana Fluids Systems operating base. While this event is covered by our property and business interruption insurance programs, these programs contain self-insured retentions, which remain our financial obligations, resulting in $2.6 million of charges for the first nine months of 2021. The first nine months of 2021 also includes a $0.8 million gain related to the final insurance settlement associated with the July 2018 fire at

~~our Kenedy, Texas drilling fluids facility, and a $1.0 million gain related to a legal settlement in the Industrial Solutions segment. Other operating income also includes gains on sales of assets.~~

~~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.~~

~~Foreign currency exchange~~

Foreign currency exchange was a $0.1 million gain for the first nine months of 2021 compared to a $3.3 million loss for the first nine months of 2020, 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 $6.7 million for the first nine months of 2021 compared to $8.5 million for the first nine months of 2020. Interest expense for the first nine months of 2021 and 2020 includes $3.1 million and $4.0 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.

~~(Gain) loss on extinguishment of debt~~

In the first nine months of 2021 and 2020, we repurchased $28.3 million and $33.1 million, respectively, of our Convertible Notes in the open market for $28.1 million and $29.1 million, respectively. The $1.0 million loss and $0.4 million gain for the first nine months of 2021 and 2020, respectively, reflects the difference in the amount paid and the net carrying value of the extinguished debt, including original issue discount and debt issuance costs.

~~Provision (benefit) for income taxes~~

The provision for income taxes was $5.4 million for the first nine months of 2021, despite reporting a pretax loss for the period, primarily reflecting the impact of the geographic composition of our pretax loss. The tax expense primarily relates to earnings from our international operations since we are currently unable to recognize the tax benefit from our U.S. losses as they may not be realized. The benefit for income taxes was $11.3 million for the first nine months of 2020, where the tax benefit from losses in the U.S was partially offset by the tax expense related to earnings from our international operations.

~~Operating Segment Results~~

~~Summarized financial information for our reportable segments is shown in the following table (net of inter-segment transfers):~~

First Nine Months 2021 vs 2020
(In thousands) 2021 2020 $ %
Revenues
Fluids Systems $ 292,897 $ 275,178 $ 17,719 6 %
Industrial Solutions 142,321 87,742 54,579 62 %
Total revenues $ 435,218 $ 362,920 $ 72,298 20 %
Operating income (loss)
Fluids Systems $ (19,944) $ (46,284) $ 26,340
Industrial Solutions 31,376 3,928 27,448
Corporate office (20,198) (19,761) (437)
Total operating loss $ (8,766) $ (62,117) $ 53,351
Segment operating margin
Fluids Systems (6.8) % (16.8) %
Industrial Solutions 22.0 % 4.5 %

~~Fluids Systems~~

~~Revenues~~

~~Total revenues for this segment consisted of the following:~~


		First Nine Months				2021 vs 2020					First Quarter				2022 vs 2021
(In thousands)	(In thousands)	2021		2020		$		%		(In thousands)	2022		2021		$		%
United States	United States	$	161,237	$	156,644	$	4,593	3	%	United States	$	70,843	$	47,670	$	23,173	49	%
Canada	Canada	31,400		18,287		13,113		72	%	Canada	22,235		12,663		9,572		76	%
Total North America	Total North America	192,637		174,931		17,706		10	%	Total North America	93,078		60,333		32,745		54	%

EMEA	EMEA	90,801		91,380		(579)		(1)	%	EMEA	44,175		25,459		18,716		74	%
Other	Other	9,459		8,867		592		7	%	Other	3,761		2,057		1,704		83	%
Total International	Total International	100,260		100,247		13		—	%	Total International	47,936		27,516		20,420		74	%

Total Fluids Systems revenues	Total Fluids Systems revenues	$	292,897	$	275,178	$	17,719	6	%	Total Fluids Systems revenues	$	141,014	$	87,849	$	53,165	61	%

North America revenues increased ~~10%~~54% to ~~$192.6~~$93.1 million for the first ~~nine months~~quarter of ~~2021,~~2022, compared to ~~$174.9~~$60.3 million for the first ~~nine months~~quarter of ~~2020.~~2021. This increase ~~was primarily attributable to~~included a ~~$22.2~~$28.6 million increase from U.S. land markets driven primarily by anthe 62% increase ~~in market share despite the 7% decline~~ in U.S. rig count, partially offset by a ~~$14.3~~$5.4 million decrease from offshore Gulf of Mexico driven primarily by changes in customer drilling and completion activity levels. In addition, Canada increased ~~$13.1~~$9.6 million driven primarily by the ~~35%~~43% increase in Canada rig count ~~and~~along with an increase in market share. For the first ~~nine months~~quarter of ~~2021,~~2022, U.S. revenues ~~include $139.9~~included $68.1 million from land markets, including $14.3 million from the U.S. mineral grinding business, and ~~$21.3~~$2.7 million from offshore Gulf of Mexico.

Internationally, revenues ~~were flat~~increased 74% to $47.9 million for the first ~~nine months~~quarter of ~~2021~~2022, compared to $27.5 million for the first ~~nine months~~quarter of ~~2020, as COVID-19 disruptions have continued to impact customer~~2021. The increase was primarily driven by higher activity ~~levels~~ in ~~substantially all key markets, with~~Europe, Africa, and the ~~most~~Asia Pacific region following a significant impact in 2021 from the ~~Middle East and North Africa.~~COVID-19 pandemic, as described above.

2520

Operating ~~loss~~income (loss)

The Fluids Systems segment ~~incurred an~~generated operating ~~loss~~income of ~~$19.9~~$3.4 million for the first ~~nine months~~quarter of ~~2021,~~2022, reflecting a ~~$26.3~~$10.1 million improvement from the ~~$46.3~~$6.8 million operating loss incurred in the first ~~nine months~~quarter of ~~2020.~~2021. The Fluids Systems segment operating loss for the first nine months of 2021 includes $4.6 million of charges primarily related to self-insured costs associated with Hurricane Ida damage to our Fourchon, Louisiana Fluids Systems operating base, facility exit, and severance costs, and operating loss for the first nine months of 2020 included $17.4 million of charges related to inventory write-downs, severance costs, fixed asset impairments, and facility exit costs. The remaining improvement in ~~the~~ operating loss includes a ~~$14.0~~$6.5 million benefit from North America operations and a $3.6 million benefit from international operations, primarily reflecting the impact of the revenue improvement described above partially offset by ~~a $0.4 million decline from international operations, reflecting the changes in revenues described above and the benefit of~~supply chain related cost ~~reduction programs implemented during 2020.~~pressures.

Industrial Solutions

Revenues

Total revenues for this segment consisted of the following:


		First Nine Months				2021 vs 2020					First Quarter				2022 vs 2021
(In thousands)	(In thousands)	2021		2020		$		%		(In thousands)	2022		2021		$		%
Product sales revenues	Product sales revenues	$	44,459	$	15,243	$	29,216	192	%	Product sales revenues	$	4,423	$	20,037	$	(15,614)	(78)	%
Rental and service revenues	Rental and service revenues	89,574		72,499		17,075		24	%	Rental and service revenues	31,001		28,733		2,268		8	%
Industrial blending revenues	Industrial blending revenues	8,288		—		8,288		NM		Industrial blending revenues	—		4,553		(4,553)		NM
Total Industrial Solutions revenues	Total Industrial Solutions revenues	$	142,321	$	87,742	$	54,579	62	%	Total Industrial Solutions revenues	$	35,424	$	53,323	$	(17,899)	(34)	%

In the first nine months of 2020, customer activity across most end-markets was unfavorably impacted by the COVID-19 pandemic and the related operational restrictions and market uncertainty, causing delays in purchases and project execution. As a result, revenuesRevenues from product sales, which typically fluctuate based on the timing of mat orders from customers, ~~improved $29.2~~decreased by $15.6 million from the first ~~nine months~~quarter of ~~2020, including a favorable impact from~~2021, as the first quarter of 2021 was favorably impacted by pent-up demand following the peak of the COVID-19 ~~pandemic as well as our expanding power transmission customer base.~~

pandemic. Rental and service revenues increased ~~$17.1~~by $2.3 million ~~as delayed purchases and projects resumed,~~from the first quarter of 2021, including a ~~$19.1~~$2.1 million increase from power transmission and other industrial ~~markets, which was partially offset by a $2.0 million decrease from the E&P market.~~markets. The increase from industrial customers reflects our continued expansion into these markets, both in the U.S. and U.K., including an approximately ~~44%~~28% increase in revenues from the power transmission ~~sector. The revenue decrease from E&P customers primarily resulted from the lower U.S. drilling activity, along with~~sector, partially attributable to our ~~focus on supporting the more stable power transmission and other industrial markets.~~December 2021 acquisition.

Operating income

The Industrial Solutions segment generated operating income of ~~$31.4~~$5.5 million for the first ~~nine months~~quarter of ~~2021~~2022 compared to ~~$3.9~~$13.1 million for the first ~~nine months~~quarter of ~~2020,~~2021, the ~~increase~~decrease being primarily attributable to the ~~changes~~change in revenues as described ~~above. In addition,~~above, along with lower average pricing associated with large scale rental projects and the loss attributable to the wind down of the Industrial ~~Solutions operating results for~~Blending operations in the first ~~nine months~~quarter of ~~2021 includes a $1.0 million gain in other operating income related to a legal settlement.~~2022.

Corporate Office

Corporate office expenses increased ~~$0.4~~$2.1 million to ~~$20.2~~$7.9 million for the first ~~nine months~~quarter of ~~2021,~~2022, compared to ~~$19.8~~$5.8 million for the first ~~nine months~~quarter of ~~2020.~~2021. This increase was primarily driven by higher legal costs, including $0.7 million associated with shareholder matters and acquisition and divestiture efforts, along with higher personnel expense, including performance-based incentive and stock-based compensation expense, as well as the restoration of ~~certain~~ U.S. salary and retirement ~~benefits, partially offset by the benefit of cost reduction programs implemented in 2020.~~benefits.

2621

Liquidity and Capital Resources

Net cash provided by operating activities was ~~$13.7~~$2.8 million for the first ~~nine months~~quarter of ~~2021~~2022 compared to ~~$40.3~~$27.8 million for the first ~~nine months~~quarter of ~~2020.~~2021. During the first ~~nine months~~quarter of ~~2021,~~2022, net ~~loss~~income adjusted for non-cash items provided cash of ~~$12.9~~$8.0 million, while changes in working capital ~~provided~~used cash of ~~$0.7~~$5.2 million.

Net cash used in investing activities was ~~$7.3~~$7.0 million for the first ~~nine months~~quarter of ~~2021,~~2022, including capital expenditures of ~~$19.1~~$7.6 million, partially offset by ~~$11.7~~$0.6 million in proceeds from the sale of assets. The majority of the proceeds from the sale of assets reflect used mats from our rental fleet, which are part of the commercial offering of our Site and Access Solutions business. Nearly all of our capital expenditures during the first ~~nine months~~quarter of ~~2021~~2022 were directed to supporting our Industrial Solutions segment, including ~~$13.4~~$6.1 million of investments in the mat rental fleet, ~~replacing mats sold from the fleet and~~ supporting our strategic growth in the power transmission ~~sector.~~sector and replacing mats sold from the fleet.

Net cash provided by financing activities was ~~$1.8~~$1.3 million for the first ~~nine months~~quarter of ~~2021,~~2022, which primarily ~~includes $15.9 million of~~represents net borrowings of $1.4 million on our ~~foreign lines of credit and~~ ABL Facility, $8.1 million of net proceeds from a U.K. term loan facility, and $7.9 million of net proceeds from a sale-leaseback transaction accounted for as financing arrangement, partially offset by $28.1 million in repurchases of our Convertible Notes.Facility.

Substantially all of our ~~$31.2~~$21.3 million of cash on hand at ~~September 30, 2021~~March 31, 2022 resides in our international subsidiaries. Subject to maintaining sufficient cash requirements to support the strategic objectives of these international subsidiaries and complying with applicable exchange or cash controls, we expect to continue to repatriate ~~excess~~available cash from these international subsidiaries. We anticipate that future working capital requirements for our operations will generally fluctuate directionally with revenues. We expect capital expenditures ~~in the near term to~~will remain ~~fairly limited, focusing~~heavily focused on industrial end-market opportunities, primarily reflecting expansion ~~opportunities. We intend~~of our mat rental fleet to ~~repay~~further support our growth in the ~~Convertible Notes at maturity in December 2021 with borrowings under the ABL Facility.~~utilities market.

Availability under our Amended ABL Facility also provides additional liquidity as discussed further below. Total availability under the Amended 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. We expect our available cash on-hand, cash generated by operations, and the expected availability under our Amended ABL Facility and other existing financing arrangements to be adequate to fund our current operations during the next 12 ~~months~~months.

In February 2022, we initiated a plan to wind down our Industrial Blending operations and pursue the ~~repayment~~sale of the ~~2021 Convertible Notes.~~industrial blending and warehouse facility and related equipment, and also made the decision to explore strategic options, including the potential sale, for our U.S. mineral grinding business. Although the timing of any such transactions is not determinable, we expect to use any proceeds for general corporate purposes in support of our strategic initiatives. We also continue to evaluate additional sources of liquidity to support our longer-term needs.

Our capitalization is as follows:


(In thousands)	(In thousands)	September 30, 2021			December 31, 2020			(In thousands)	March 31, 2022			December 31, 2021
Convertible Notes		$	38,567		$	66,912
ABL Facility	ABL Facility	24,100			19,100			ABL Facility	87,900			86,500
Other debt	Other debt	31,762			5,371			Other debt	28,497			28,491
Unamortized discount and debt issuance costs	Unamortized discount and debt issuance costs	(685)			(4,221)			Unamortized discount and debt issuance costs	(155)			(188)
Total debt	Total debt	$	93,744		$	87,162		Total debt	$	116,242		$	114,803

Stockholders’ equity		465,713			488,032
Stockholder's equity								Stockholder's equity	465,143			462,386
Total capitalization	Total capitalization	$	559,457		$	575,194		Total capitalization	$	581,385		$	577,189

Total debt to capitalization	Total debt to capitalization	16.8		%	15.2		%	Total debt to capitalization	20.0		%	19.9		%

2722

~~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 $38.6 million principal amount was outstanding at September 30, 2021. 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.

Until the close of business on the business day immediately preceding the maturity date, holders may convert their notes at any time. If any notes are converted, we will settle the converted notes at the maturity date with a combination of cash and shares of common stock in accordance with the terms of the indenture governing the Convertible Notes. 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. As of November 1, 2021, no holders have converted their notes. The Convertible Notes are classified as long-term debt in the September 30, 2021 balance sheet as we intend to settle the notes at maturity utilizing borrowings under our ABL Facility.

During the first nine months of 2021, we repurchased $28.3 million of our Convertible Notes in the open market for a total cost of $28.1 million, and recognized a net loss of $1.0 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.

Under the terms of the Amended ABL Facility, we may elect to borrow at a variable interest rate based on either, (1) ~~LIBOR subject~~the Bloomberg Short-Term Bank Yield Index (“BSBY”) rate (subject to a floor of ~~zero~~zero) or (2) athe base rate (subject to a floor of zero), equal to the highest ~~of:~~of (a) the federal funds rate plus ~~50 basis points,~~0.50%, (b) the prime rate of Bank of America, N.A., and (c) ~~LIBOR, subject to~~BSBY for a ~~floor of zero,~~one-month interest period plus ~~100 basis points,~~1.00%, plus, in each case, an applicable margin per annum. The applicable margin ranges from ~~150~~1.50% to ~~200 basis points~~2.00% per annum for ~~LIBOR~~BSBY borrowings, and 500.50% to ~~100 basis points~~1.00% per annum for base rate borrowings, based on the consolidated ~~fixed charge coverage~~leverage ratio as(as defined in the Amended ABL ~~Facility. As~~Facility) as of ~~September 30, 2021,~~ 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.~~last day of the most recent fiscal quarter. The ~~weighted average interest rate for the ABL Facility was 1.65% at September 30, 2021. In addition, we are~~Company is also required to pay a commitment fee onequal to (i) 0.375% per annum at any time the average daily unused portion of the ~~ABL Facility ranging from 25 to 37.5 basis points, based on~~commitments is less than 50% and (ii) 0.25% per annum at any time the ~~level~~average daily unused portion of ~~outstanding borrowings, as defined in~~ the ~~ABL Facility. As of September 30, 2021, the applicable commitment fee was 37.5 basis points.~~commitments is greater than 50%.

The Amended ABL Facility is a senior secured obligation of the Company and certain of our U.S. subsidiaries constituting borrowers thereunder, secured by a first ~~liens~~priority lien on substantially all of ~~our U.S. tangible~~the personal property and ~~intangible assets, and a portion~~certain real property of the ~~capital stock~~borrowers, including a first priority lien on certain equity interests of ~~our non-U.S.~~direct or indirect domestic subsidiaries ~~has also been pledged as collateral.~~ of the borrowers and certain equity interests issued by certain foreign subsidiaries of the borrowers.

control.

Other Debt. In August 2021, we completed sale-leaseback transactions related to certain vehicles and other equipment for net proceeds of approximately $7.9 million. The transactions have been accounted for as financing arrangements as they did not qualify for sale accounting. As a result, the vehicles and other equipment continue to be reflected on our balance sheet in property, plant and equipment, net. The financing arrangements have a weighted average annual interest rate of 5.4% and are payable in monthly installments with varying maturities through October 2025. We had ~~an $8.0~~$5.8 million in financing ~~obligation~~obligations outstanding under these arrangements at ~~September 30, 2021.~~March 31, 2022.

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 September 30, 2021 and December 31, 2020. The estimated fair value of our Convertible Notes was $38.6 million at September 30, 2021 and $61.1 million at December 31, 2020, based on quoted market prices at these respective dates.

Critical Accounting Estimates and Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts and ~~disclosure.~~disclosures. Significant estimates used in preparing our consolidated financial statements include estimated cash flows and 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 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.

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, ~~2020. Our~~2021. Except for the following, our critical accounting estimates and policies have not materially changed since December 31, ~~2020.~~2021.

In February 2022, in consideration of broader strategic priorities and the timeline and efforts required to further develop the industrial blending business, our management recommended, and our Board of Directors approved a plan to exit our Industrial Blending operations. As a result of the plan to exit and dispose of the assets used in the Industrial Blending business, we estimated in February 2022 and disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 that we may incur pre-tax charges in the range of approximately $4 million to $8 million primarily related to the non-cash impairment of long-lived assets related to the Industrial Blending business, which we anticipated recognizing in the first quarter of 2022. In March 2022, we shut down the Industrial Blending business and initiated a sales process to market the industrial blending and warehouse facility and related equipment. As a result of the ongoing sales process and revised estimates for the expected net proceeds from the ultimate disposition, we now anticipate recovering the $19 million carrying value of the long-lived assets associated with the Industrial Blending business. Accordingly, no impairment has been recognized for these assets in the first quarter of 2022, though it remains possible that we may incur a future impairment or loss related to the ongoing sales process.

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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 ~~September 30, 2021,~~March 31, 2022, we had total principal amounts outstanding under financing arrangements of ~~$94.4~~$116.4 million, including ~~$38.6 million of borrowings under our Convertible Notes which bear interest at a fixed rate of 4.0%, as well as $24.1~~$87.9 million of borrowings under our ABL Facility and ~~$6.6~~$5.4 million of borrowings under a U.K. term loan which are subject to variable interest rates as determined by the respective debt agreements. The weighted average interest rate at ~~September 30, 2021~~March 31, 2022 for the ABL Facility and the U.K. term loan was ~~1.7%~~1.9% and 3.4%, respectively. Based on the balance of variable rate debt at ~~September 30, 2021,~~March 31, 2022, a 100 basis-point increase in short-term interest rates would have increased annual pre-tax interest expense by ~~$0.3~~$0.9 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, Canadian dollars, Kuwaiti dinar, Algerian dinar, Romanian new leu, ~~Canadian dollars,~~ British pounds, and Australian dollars. 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 ~~September 30, 2021,~~March 31, 2022, 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 ~~September 30, 2021~~March 31, 2022 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

ITEM 1A. Risk Factors

~~Set~~Except as set forth below, ~~are~~there have been no material changes during the period ended ~~September 30, 2021~~March 31, 2022 in our “Risk Factors” as discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2020 and updated in our Quarterly Report on Form 10-Q for the three months ended June 30,~~ 2021.

Risks Related to the ~~Price~~Ongoing Conflict Between Russia and ~~Availability~~Ukraine

Given the nature of ~~Raw Materials~~

~~Our ability to provide products and services to our customers is dependent upon our ability to obtain raw materials necessary to operate our business. Certain of the raw materials essential to~~ our business ~~are sourced globally~~ and ~~require various freight services to transport~~our global operations, the ~~materials to~~current conflict between Russia and Ukraine may adversely affect our ~~jobsites. These services~~business and results of operations. Although we do not have any operations in Russia or Ukraine, the broader consequences of this conflict, which may ~~be impacted by current~~include embargoes, supply chain disruptions, regional instability, and particularly during times of high demand, may cause delays in the arrival of or otherwise constrain our supply of raw materials. These constraints could have a material adverse effect on our business and consolidated results of operations. In addition, price increases imposed by our vendors for raw materials used in our businessgeopolitical shifts, and the ~~inability to pass these increases through to our customers could have a material adverse~~extent of the conflict’s effect on our business and results of ~~operations.~~

Our Industrial Solutions business is highly dependent on the availability of high-density polyethylene (“HDPE”), which is the primary raw material used in the manufacture of our composite mats. The cost of HDPE can vary significantly based on the energy costs of the producers of HDPE, demand for this material, and the capacity or operations ~~of the plants used to make HDPE. Should the cost of HDPE increase, we may not be able to increase our customer pricing to cover our costs, which could result in a reduction in future profitability.~~

In addition, our Fluids Systems business is highly dependent on the availability of barite, which is a naturally occurring mineral that constitutes a significant portion of our fluids systems. We currently secure the majority of our barite ore from foreign sources, primarily China and India. The availability and cost of barite ore is dependent on factors beyond our control, including transportation, political priorities, U.S. tariffs, and government-imposed export fees in the exporting countries, as well as the ~~impact~~global economy, cannot be predicted.

The current conflict between Russia and Ukraine may also have the effect of ~~weather~~heightening many other risks disclosed in our public filings, any of which could materially and adversely affect our business and results of operations. Such risks include, but are not limited to, the volatility of oil and natural ~~disasters. The future supply of barite ore from existing sources may be inadequate to meet the market~~gas prices that can adversely affect demand ~~particularly during periods of increasing world-wide demand, which could ultimately restrict industry~~for our products and services; our customers’ activity orlevels, spending for our products and services, and ability to ~~meet~~pay amounts owed us that could be impacted by the ability of our ~~customers’ needs.~~customers to access equity or credit markets; the price and availability of raw materials; the cost and continued availability of borrowed funds; and cybersecurity breaches or business system disruptions.

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 ~~September 30, 2021:~~March 31, 2022:

Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs ($ in Millions)
July 2021 12,175 $ 2.93 — $ 33.8
August 2021 8,257 $ 2.42 — $ 23.8
September 2021 450 $ 2.61 — $ 23.8
Total 20,882 —


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs ($ in Millions)
January 2022	—	$	—	—	$	23.8
February 2022	—	$	—	—	$	23.8
March 2022	1,482	$	3.15	—	$	23.8
Total	1,482			—

During the three months ended ~~September 30, 2021,~~March 31, 2022, we purchased an aggregate of ~~20,882~~1,482 shares surrendered in lieu of taxes under vesting of restricted shares.

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.~~Notes that matured in 2021.

Our repurchase program ~~authorizes us~~remains available to purchase outstanding shares of our common stock ~~or Convertible Notes~~ in the open market or as otherwise determined by management, subject to certain limitations under the Amended 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 Amended 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 ~~September 30, 2021,~~March 31, 2022, we had $23.8 million remaining under the program.

~~During the three months ended September 30, 2021, we repurchased $10.0 million of our Convertible Notes in the open market under the repurchase program for a total cost of $10.0 million.~~ There were no shares of common stock repurchased under the repurchase program during the three months ended ~~September 30, 2021.~~

March 31, 2022.

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.~~On May 2, 2022, the Company and certain of its U.S. subsidiaries, as borrowers, entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, swing line lender and a letter of credit issuer, and a group of lenders. The Credit Agreement amends and restates the Company’s prior credit agreement dated as of October 17, 2017, as amended, and provides for a senior secured revolving credit facility of up to $175 million (the “Amended ABL Facility”), subject to a borrowing base. The borrowers will have the ability to request the issuance of letters of credit in an aggregate amount of up to $15.0 million and borrow swing line loans in an aggregate principal amount of up to $17.5 million. Amounts borrowed under the Credit Agreement are required to be repaid no later than May 2, 2027.

Borrowing availability under the Amended ABL Facility is subject to a borrowing base, which is calculated based on eligible U.S. accounts receivable, inventory and composite mats included in the rental fleet, net of reserves and subject to limits on certain of the 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 administrative agent may establish reserves, in part based on appraisals of the asset base, and other limits in its discretion, which could reduce the amounts otherwise available under the ABL Facility.

Proceeds of loans under the Amended ABL Facility may be used for the refinancing of existing indebtedness, for working capital and for other general corporate purposes. Subject to customary conditions, the aggregate commitments under the Amended ABL Facility may be increased from time to time at the Company’s request and with the consent of the participating lenders, so long as the aggregate amount of the commitments does not exceed $250 million. The borrowers’ obligations under the Amended ABL Facility are secured by a first priority lien on substantially all of the personal property and certain real property of the borrowers, including a first priority lien on certain equity interests of direct or indirect domestic subsidiaries of the borrowers and certain equity interests issued by certain foreign subsidiaries of the borrowers.

Amounts borrowed under the Amended ABL Facility bear interest, at the Company’s option, at either (1) the Bloomberg Short-Term Bank Yield Index (“BSBY”) rate (subject to a floor of zero) or (2) the base rate (subject to a floor of zero), equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) BSBY for a one-month interest period plus 1.00%, plus, in each case, an applicable margin per annum. The applicable margin ranges from 1.50% to 2.00% per annum for BSBY borrowings, and 0.50% to 1.00% per annum for base rate borrowings, based on the consolidated leverage ratio (as defined in the Credit Agreement) as set forth in the most recent quarterly compliance certificate.

The Company is also required to pay a commitment fee equal to (i) 0.375% per annum at any time the average daily unused portion of the commitments is less than 50% and (ii) 0.25% per annum at any time the average daily unused portion of the commitments is greater than 50%.

The Credit Agreement contains customary representations, warranties and covenants that, among other things, and subject to certain specified circumstances and exceptions, restrict or limit the ability of the borrowers and certain of their subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, pay dividends or distributions with respect to capital stock and make other restricted payments, make prepayments on certain indebtedness, engage in mergers or other fundamental changes, dispose of property, and change the nature of their business. In addition, the Credit Agreement contains certain affirmative covenants, including reporting requirements such as delivery of financial statements, borrowing base compliance and other certificates and notices of certain events, maintaining insurance, and providing additional guarantees and collateral in certain circumstances.

The Amended ABL Facility requires compliance with the following financial covenants: (i) a minimum fixed charge coverage ratio of 1.00 to 1.00 for the most recently completed four fiscal quarters and (ii) while a leverage covenant trigger period (as defined in the Amended ABL Facility) is in effect, a maximum consolidated leverage ratio of 4.00 to 1.00 as of the last day of the most recently completed fiscal quarter.

The Credit Agreement includes provisions permitting the Company to amend the Credit Agreement to establish specific metrics and performance targets with respect to certain environmental, social and governance targets of the Company and its subsidiaries and upon the effectiveness of any such amendment, those specific metrics and performance targets will be used, together with the pricing grid, to determine pricing under the Credit Agreement.

The Credit Agreement includes customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross-default to other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of security interests or invalidity of loan documents, certain ERISA events, unsatisfied or unstayed judgments and change of control.

The foregoing summary of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Credit Agreement, a copy of which is attached as Exhibit 10.3 to this quarterly report and incorporated herein by reference.

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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.


†10.1			~~Amendment to Employment~~Cooperation Agreement, ~~dated August 17, 2021,~~by and between Newpark Resources, Inc., Bradley L. Radoff and ~~Matthew Lanigan~~,The Radoff Family Foundation, dated February 17, 2022, incorporated by reference to Exhibit 10.1 to the ~~Company's~~Company’s Current Report on Form 8-K filed on ~~August 23, 2021~~February 18, 2022 (SEC File No. 001-02960)
†10.2			~~Retirement~~Amended and ~~Restrictive Covenant~~Restated Employment Agreement ~~and General Release dated August 17, 2021,~~effective March 1, 2022, between Newpark Resources, Inc. and ~~Paul L. Howes,~~Matthew Lanigan, incorporated by reference to Exhibit ~~10.2~~10.1 to the ~~Company's~~Company’s Current Report on Form 8-K filed on ~~August 23, 2021~~March 4, 2022 (SEC File No. 001-02960)
†*10.3			~~Form of Cash Retention Award~~Second Amended and Restated Credit Agreement dated ~~August 17, 2021, incorporated~~as of May 2 , 2022 by ~~reference to Exhibit 10.3 to~~ and among Newpark Resources, Inc., Newpark Drilling Fluids LLC, Newpark Mats & Integrated Services LLC, Excalibar Minerals LLC, Newpark Industrial Blending Solutions LLC, and Dura-Base Nevada, Inc., as borrowers, Bank of America, N.A., as the ~~Company's Current Report on Form 8-K filed on August 23, 2021 (SEC File No. 001-02960)~~Administrative Agent, Swing Line Lender and an L/C Issuer, and the other Lenders party hereto
*31.1			Certification of ~~Paul L. Howes~~Matthew S. Lanigan pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2			Certification of Gregg S. Piontek pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
**32.1			Certification of ~~Paul L. Howes~~Matthew S. Lanigan pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**32.2			Certification of Gregg S. Piontek pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*95.1			Reporting requirements under the Mine Safety and Health Administration
*101.INS			XBRL 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.SCH			Inline XBRL Schema Document
*101.CAL			Inline XBRL Calculation Linkbase Document
*101.DEF			Inline XBRL Definition Linkbase Document
*101.LAB			Inline XBRL Label Linkbase Document
*101.PRE			Inline XBRL Presentation Linkbase Document
*104			Cover 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: ~~November 3, 2021~~May 4, 2022


NEWPARK RESOURCES, INC.
(Registrant)

By:			/s/ ~~Paul L. Howes~~Matthew S. Lanigan
			~~Paul L. Howes~~Matthew S. Lanigan 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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