<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________to ______________
Commission File Number
1-8514
Smith International, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 95-3822631
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification
Number)
16740 HARDY STREET
HOUSTON, TEXAS 77032
(Address of principal executive offices) (Zip Code)
(281) 443-3370
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if
changed since last report)
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 X NO
----------------- -----------------
The number of shares outstanding of the Registrant's common stock as
of May 7, 1997 was 40,207,730.
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Statements of Operations -
For the Three Months Ended March 31, 1997 and 1996 ...........3
Consolidated Balance Sheets -
As of March 31, 1997 and December 31, 1996 ...................4
Consolidated Statements of Cash Flows -
For the Three Months Ended March 31, 1997 and 1996 ...........5
Notes to Consolidated Financial Statements........................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.................................9
PART II: OTHER INFORMATION
ITEMS 1 - 6....................................................................13
SIGNATURES..........................................................................14
</TABLE>
2
<PAGE> 3
SMITH INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
----------- -----------
<S> <C> <C>
REVENUES ......................................... $ 357,484 $ 238,820
COSTS AND EXPENSES:
Cost of Revenues ............................... 236,219 157,911
Selling Expenses ............................... 56,287 41,826
General and Administrative Expenses ............ 19,953 14,033
----------- -----------
Total Costs and Expenses .................. 312,459 213,770
----------- -----------
INCOME BEFORE INTEREST AND TAXES ................. 45,025 25,050
INTEREST EXPENSE, NET ............................ 5,234 3,039
----------- -----------
INCOME BEFORE INCOME TAXES AND MINORITY
INTERESTS ...................................... 39,791 22,011
INCOME TAX PROVISION ............................. 9,967 5,015
----------- -----------
INCOME BEFORE MINORITY INTERESTS ................. 29,824 16,996
MINORITY INTERESTS ............................... 8,711 4,048
----------- -----------
NET INCOME ....................................... $ 21,113 $ 12,948
=========== ===========
EARNINGS PER SHARE ............................... $ 0.53 $ 0.33
=========== ===========
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING .................. 40,068 39,719
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
SMITH INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PAR VALUE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ............................................. $ 23,918 $ 25,540
Receivables, net ...................................................... 349,686 309,062
Inventories, net ...................................................... 304,950 295,041
Deferred tax assets, net .............................................. 8,959 8,979
Prepaid expenses and other ............................................ 23,293 26,655
----------- -----------
Total current assets ................................................ 710,806 665,277
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, NET ...................................... 208,279 205,251
OTHER ASSETS ............................................................ 43,955 43,257
GOODWILL, NET ........................................................... 163,204 160,797
----------- -----------
TOTAL ASSETS ............................................................ $ 1,126,244 $ 1,074,582
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion of long-term debt ........... $ 71,729 $ 74,983
Accounts payable ...................................................... 109,810 106,962
Accrued payroll costs ................................................. 42,040 42,836
Income taxes payable .................................................. 21,407 19,706
Other ................................................................. 57,106 56,014
----------- -----------
Total current liabilities ......................................... 302,092 300,501
----------- -----------
LONG-TERM DEBT .......................................................... 242,769 228,443
OTHER LONG-TERM LIABILITIES ............................................. 27,356 22,361
MINORITY INTERESTS ...................................................... 165,677 154,741
SHAREHOLDERS' EQUITY:
Preferred Stock, $1 par value; 5,000 shares authorized; no shares
issued or outstanding in 1997 or 1996 ................................ -- --
Common Stock, $1 par value; 60,000 shares authorized; 40,205 shares
issued and outstanding in 1997 (40,157 in 1996) ...................... 40,205 40,157
Additional paid-in capital ............................................ 279,947 278,955
Retained earnings ..................................................... 83,595 62,482
Cumulative translation adjustments .................................... (7,695) (5,356)
Less - treasury securities, at cost; 656 common shares in 1997 and 1996 (7,702) (7,702)
----------- -----------
Total shareholders' equity ........................................ 388,350 368,536
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............................. $ 1,126,244 $ 1,074,582
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
SMITH INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................................... $ 21,113 $ 12,948
Adjustments to reconcile net income to net cash provided
by (used in) operating activities, excluding the net effects of acquisitions:
Depreciation and amortization ............................................. 9,166 7,093
Minority interests ........................................................ 8,711 4,048
Provision for losses on receivables ....................................... 231 216
Gain on disposal of property, plant and equipment ......................... (125) (1,223)
Foreign currency translation losses ....................................... 41 37
Changes in operating assets and liabilities:
Receivables ............................................................... (41,904) (6,976)
Inventories, net .......................................................... (9,178) (12,437)
Accounts payable .......................................................... 1,882 1,809
Other current assets and liabilities ...................................... 7,662 (4,935)
Other non-current assets and liabilities .................................. 1,939 896
--------- ---------
Net cash provided by (used in) operating activities ........................... (462) 1,476
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of businesses, net of cash acquired ............................... (4,880) --
Property, plant and equipment additions ....................................... (14,708) (14,075)
Proceeds from disposal of property, plant and equipment ....................... 1,366 3,435
--------- ---------
Net cash used in investing activities ......................................... (18,222) (10,640)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt ...................................... 25,857 25,463
Repayments of long-term debt .................................................. (10,000) (10,000)
Net decrease in short-term borrowings ......................................... (1,994) (9,379)
Proceeds from exercise of stock options ....................................... 526 1,607
Contributions from minority interest partner, net ............................. 2,880 --
--------- ---------
Net cash provided by financing activities ..................................... 17,269 7,691
--------- ---------
Effect of exchange rate changes on cash ....................................... (207) (58)
--------- ---------
Decrease in cash and cash equivalents ......................................... (1,622) (1,531)
Cash and cash equivalents at beginning of period .............................. 25,540 14,845
--------- ---------
Cash and cash equivalents at end of period .................................... $ 23,918 $ 13,314
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest ........................................................ $ 2,523 $ 2,238
Cash paid for income taxes .................................................... $ 2,214 $ 3,291
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
SMITH INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1) BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of Smith
International, Inc. and subsidiaries (the "Company") have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These financial
statements should be read in conjunction with the audited financial statements
and accompanying notes included in the Company's 1996 Annual Report on Form
10-K.
The unaudited consolidated financial statements reflect all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for a fair presentation of the interim periods. All
significant intercompany balances and transactions have been eliminated in the
accompanying financial statements. Results for the interim periods are not
necessarily indicative of results for the year.
Certain prior year amounts have been reclassified to conform to the
current year presentation.
2) EARNINGS PER SHARE
Earnings per share is computed using the weighted average number of
shares of common stock and common stock equivalents outstanding during the
period. Common stock equivalents include the number of shares issuable upon
exercise of stock options, less the number of shares that could have been
repurchased with the exercise proceeds using the treasury stock method.
The number of shares used in the computation was determined as follows
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1997 1996
------ ------
<S> <C> <C>
Weighted average number of
shares outstanding ..................... 39,539 39,296
Common stock equivalents .................... 529 423
------ ------
Average common and common
equivalent shares outstanding ........... 40,068 39,719
====== ======
</TABLE>
6
<PAGE> 7
3) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is
determined by the last-in, first-out ("LIFO") method for substantially all U.S.
inventories and by the first-in, first-out ("FIFO") method for all other
inventories. Inventory costs, consisting of materials, labor and factory
overhead, are as follows (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------- ---------
<S> <C> <C>
Raw Materials ...................................... $ 24,114 $ 30,614
Work in Process .................................... 59,456 45,985
Finished Goods ..................................... 236,675 233,139
--------- ---------
320,245 309,738
Reserves to state certain domestic inventories
($125,480 and $117,360 in 1997 and 1996,
respectively) on a LIFO basis ............... (15,295) (14,697)
--------- ---------
Inventories, net ................................... $ 304,950 $ 295,041
========= =========
</TABLE>
4) PROPERTY, PLANT AND EQUIPMENT, NET
Property, Plant and Equipment consists of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
Land ............................................. $ 17,697 $ 17,880
Buildings ........................................ 38,803 40,170
Machinery and equipment .......................... 312,898 305,491
----------- -----------
369,398 363,541
Less-accumulated depreciation .................... (161,119) (158,290)
----------- -----------
Net property, plant and equipment ................ $ 208,279 $ 205,251
=========== ===========
</TABLE>
7
<PAGE> 8
5) DEBT
The following summarizes the Company's outstanding debt (in
thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
Current:
Short-term bank borrowings ..................... 46,315 49,178
Current portion of long-term debt .............. 25,414 25,805
----------- -----------
71,729 74,983
----------- -----------
Long-term:
Notes payable .................................. 106,000 116,000
Bank revolvers payable ......................... 117,900 92,200
Term loans ..................................... 43,095 44,626
Other .......................................... 1,188 1,422
----------- -----------
268,183 254,248
Less current portion of long-term debt ......... (25,414) (25,805)
----------- -----------
Long-term debt ................................. $ 242,769 $ 228,443
=========== ===========
</TABLE>
On April 8, 1997, the Company and M-I Drilling Fluids L.L.C. ("M-I")
amended their revolving line of credit agreements increasing the amounts
available under the Company's and M-I's U.S. lines from $120.0 million to
$200.0 million. The new credit agreements expire in March 2002 and carry
generally the same terms and covenants.
Principal payments of long-term debt on a calendar year basis are as
follows:
<TABLE>
<S> <C>
1998............................................................ $ 29,950
1999............................................................ 19,799
2000............................................................ 19,799
2001............................................................ 48,311
Thereafter...................................................... 124,910
---------
$ 242,769
=========
</TABLE>
6) SUBSEQUENT EVENTS
Subsequent to March 31, 1997 the Company finalized the acquisition of
Tri-Tech Fishing Services, L.L.C. ("Tri-Tech") and M-I completed the
acquisition of Branath Oilfield Services, Inc. ("Branath"). Tri-Tech is a
supplier of fishing and other downhole remedial products and services to the
U.S. Gulf Coast region. Branath is a supplier of solids control equipment to
the Canadian oil and gas industry. Both transactions, which are expected to be
accounted for as purchases, were funded with borrowings against available lines
of credit.
7) RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS 128") "Earnings Per
Share" effective for fiscal periods ending after December 15, 1997. This
standard revises the method of computing weighted average shares used in the
earnings per share calculation.
The impact of adopting SFAS 128 is not expected to have a material
impact upon the Company's reported earnings per share amounts.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The following "Management's Discussion and Analysis of Financial
Condition and Results of Operations" is provided to assist readers in
understanding the Company's financial performance during the periods presented
and significant trends which may impact the future performance of the Company.
It should be read in conjunction with the Consolidated Financial Statements of
the Company and the related notes thereto.
The Company's primary business is the manufacture and sale of premium
products and services to the oil and gas industry's exploration and production
sectors. The Company's business units provide products and engineering services
including drilling and completion fluid systems, solids-control equipment,
waste management services, three- cone drill bits, diamond drill bits, drilling
tools, underreamers, sidetracking systems and liner hangers.
The Company's worldwide operations are largely driven by the level of
exploration and production activity in major energy producing areas and the
depth and drilling conditions of these projects. The level of worldwide
drilling activity is influenced by the prices of oil and natural gas but may
also be affected by political actions and uncertainties, environmental
concerns, capital expenditure plans of exploration and production companies and
the overall level of global economic growth and activity.
RESULTS OF OPERATIONS
REVENUES
The Company operates through five business units which market the
products manufactured and provide services throughout the world. The following
table presents revenue and average rig count information for the periods shown.
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-----------------------------------------
1997 1996
-----------------------------------------
Amount % Amount %
-----------------------------------------
<S> <C> <C> <C> <C>
Revenues by Business Unit:
M-I - Fluids ......................... $206,101 58 $133,699 56
Smith Tool ........................... 58,242 16 45,227 19
Smith Drilling & Completions ......... 47,738 13 30,775 13
M-I - SWACO .......................... 27,538 8 17,024 7
Smith Diamond Technology ............. 17,865 5 12,095 5
-------- --- -------- ---
Total ........................ $357,484 100 $238,820 100
======== === ======== ===
Revenues by Area:
U.S. ................................. $135,705 38 95,382 40
Export ............................... 20,260 6 13,121 5
Non-U.S. ............................. 201,519 56 130,317 55
-------- --- -------- ---
Total ........................ $357,484 100 $238,820 100
======== === ======== ===
Average Active Rig Count:
U.S. ................................. 856 709
Canada ............................... 395 336
Non-North America .................... 804 780
-------- --------
Total ........................ 2,055 1,825
======== ========
</TABLE>
9
<PAGE> 10
M-I - FLUIDS
M-I - Fluids, a division of M-I Drilling Fluids L.L.C. ("M-I"),
provides drilling fluid and completion fluid systems, engineering and technical
services to the oil and gas industry. M-I - Fluids revenues increased $72.4
million, or 54 percent, over the first quarter of 1996. The majority of the
revenue growth over the first quarter of the prior year relates to the
increased level of deep-water drilling activity in the U.S. Gulf Coast area and
incremental revenues associated with the Anchor Drilling Fluids A.S. ("Anchor")
operations, which were acquired in June 1996.
SMITH TOOL
Smith Tool manufactures and sells three-cone bits for use in the oil
and gas industry and in mining applications. Smith Tool revenues increased
$13.0 million, or 29 percent, from the first quarter of 1996. Increased unit
sales and a favorable shift in the sales mix toward premium bits contributed to
the higher revenues. On a geographic basis, revenue growth in the U.S., related
to higher rig count activity, and Europe/Africa, related to the introduction of
the new Magnum(TM) Bit line in the North Sea area, account for the majority of
the growth in revenues over the first quarter of 1996.
SMITH DRILLING & COMPLETIONS
Smith Drilling & Completions manufactures and markets products and
services used in the oil and gas industry for drilling, workover, well
completion and well re-entry. Smith Drilling & Completions' revenues increased
$17.0 million, or 55 percent, over the first quarter of 1996. The increase is
primarily attributable to the incremental revenues associated with The Red
Baron (Oil Tools Rental) Ltd.'s ("Red Baron") operations, which were acquired
in October 1996, and higher levels of re-entry drilling activity in the U.S.
Gulf Coast area.
M-I - SWACO
M-I - SWACO, a division of M-I, manufactures and markets equipment and
services for solids control, pressure control, rig instrumentation and waste
management. M-I - SWACO revenues increased $10.5 million, or 62 percent, over
the first quarter of 1996. Increased equipment rental revenues, attributable to
higher demand in Latin America, contributed to the majority of the revenue
growth.
SMITH DIAMOND TECHNOLOGY
Smith Diamond Technology manufactures and markets shear bits featuring
cutters made of polycrystalline diamond ("PDC") or natural diamond at its
Geodiamond division. Smith Diamond Technology also manufactures PDC and cubic
boron nitride at its MegaDiamond and SupraDiamant subsidiaries. These ultrahard
materials are used in the Company's three-cone and diamond drill bits and in
other specialized cutting tools. Higher unit sales, primarily in Latin America,
Europe/Africa and the Far East, driven by increased market growth, new product
introductions and continued expansion into markets outside the U.S., account
for the quarter-over-quarter revenue growth.
10
<PAGE> 11
For the periods indicated, the following table summarizes the results
of the Company and presents these results as a percentage of total revenues:
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------------
1997 1996
------------------------------------------
Amount % Amount %
------------------------------------------
<S> <C> <C> <C> <C>
Revenues .................................... $357,484 100 $238,820 100
-------- --- -------- ---
Gross profit ................................ 121,265 34 80,909 34
Operating expenses .......................... 76,240 21 55,859 24
-------- --- -------- ---
Income before interest and taxes ............ 45,025 13 25,050 10
Interest expense, net ....................... 5,234 2 3,039 1
-------- --- -------- ---
Income before income taxes and minority
interests ................................. 39,791 11 22,011 9
Income tax provision ........................ 9,967 3 5,015 2
-------- --- -------- ---
Income before minority interests ............ 29,824 8 16,996 7
Minority interests .......................... 8,711 2 4,048 2
-------- --- -------- ---
Net income .................................. $ 21,113 6 $ 12,948 5
======== === ======== ===
</TABLE>
Total revenues for the first quarter of 1997 increased $118.7 million,
or 50 percent, from the prior year with the Company experiencing growth across
all business units and geographic areas. The variance over the prior year
relates to the increased level of deep-water and re-entry drilling activity in
the U.S. Gulf Coast area and the addition of acquired operations. The impact of
1996 acquisitions, which had significant operations in the Eastern Hemisphere,
resulted in the Company's revenues outside the U.S. increasing from 60 percent
of total revenues in the first quarter of 1996 to 62 percent of total revenues
in the first quarter of 1997.
Gross profit increased $40.4 million, or 50 percent, from the first
quarter of 1996. Gross profit margins equaled 34 percent which were comparable
to the first quarter of 1996. The gross profit increase over the prior year's
results is attributable to the significant revenue growth.
Operating expenses, consisting of selling expenses and general and
administrative expenses, increased $20.4 million over the first quarter of
1996; however, as a percentage of revenues, operating expenses decreased from
24 percent in the first quarter of 1996 to 21 percent in the first quarter of
1997. The increase in absolute dollars relates to increased variable costs
associated with the higher level of revenues and incremental costs associated
with the Anchor and Red Baron operations for which no amounts were included in
the first quarter of the prior year.
Net interest expense, which represents interest expense less interest
income, increased $2.2 million from the first quarter of 1996. The increase
relates to the higher level of borrowings to fund the business acquisitions. To
a lesser extent, borrowings required to finance general working capital needs,
which increased as a result of the revenue growth experienced by the Company,
also contributed to the increase.
The Company's effective tax rate for the first quarter of 1997
approximated 25 percent, which is higher than the rate for the comparable
period in the prior year and lower than the U.S. statutory rate. The effective
rate increase over the prior year relates primarily to increased profitability
in tax jurisdictions with higher statutory rates. The effective rate was lower
than the statutory rate, due primarily to the utilization of U.S. net operating
loss carryforwards and alternative minimum tax credits.
Minority interests represent the share of M-I's profits associated
with the 36 percent minority partner's interest in those operations and, to a
lesser extent, minority interests in investments in other joint ventures held
by M-I. Minority interests increased $4.7 million from the first quarter of
1996 due to the increased profitability of the M-I operations.
11
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition remained strong at March 31, 1997.
Working capital at March 31, 1997 increased $43.9 million, or 12 percent, from
December 31, 1996.
The Company's primary internal source of liquidity is cash flow
generated from operations. External sources of liquidity include debt and, if
needed, equity financing. The Company has U.S. and non-U.S. borrowing
facilities for operating and financing needs. Subsequent to March 31, 1997, the
Company and M-I amended their revolving line of credit agreements increasing
available borrowing capacity to $200.0 million. At March 31, 1997, including
the effect of the new line of credit agreements, the Company had approximately
$82.9 million of funds available under its $200.0 million and other long-term
revolving line of credit facilities. Additionally, the Company has
approximately $40.0 million of non-U.S. short-term borrowing facilities with
various banks which had available borrowing capacity of $24.8 million. The
Company believes funds generated from operations, cash on hand and amounts
available under existing credit facilities will be sufficient to finance
capital expenditures and other working capital needs for the foreseeable
future.
Subsequent to March 31, 1997 the Company finalized the acquisition of
Tri-Tech Fishing Services, L.L.C. and M-I completed the acquisition of Branath
Oilfield Services, Inc. Both transactions, which are expected to be accounted
for as purchases, were funded with borrowings against available lines of
credit. Aside from these acquisitions, management regularly evaluates
opportunities to acquire products or businesses complementary to the Company's
operations. These acquisitions, if they arise, may involve the use of cash or,
depending on the size and terms of the acquisition, may require debt or equity
financing
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
None.
13
<PAGE> 14
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.
SMITH INTERNATIONAL, INC.
Registrant
Date: May 15, 1997 By: /s/ Douglas L. Rock
----------------- --------------------------------------
Douglas L. Rock
Chairman of the Board, Chief Executive
Officer, President and Chief Operating
Officer
Date: May 15, 1997 By: /s/ John J. Kennedy
----------------- --------------------------------------
John J. Kennedy
Senior Vice President and
Chief Financial Officer
(Principal Accounting Officer)
14
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 23,918
<SECURITIES> 0
<RECEIVABLES> 355,465
<ALLOWANCES> 5,779
<INVENTORY> 304,950
<CURRENT-ASSETS> 710,806
<PP&E> 369,398
<DEPRECIATION> 161,119
<TOTAL-ASSETS> 1,126,244
<CURRENT-LIABILITIES> 302,092
<BONDS> 242,769
<COMMON> 40,205
0
0
<OTHER-SE> 348,145
<TOTAL-LIABILITY-AND-EQUITY> 1,126,244
<SALES> 357,484
<TOTAL-REVENUES> 357,484
<CGS> 236,219
<TOTAL-COSTS> 236,219
<OTHER-EXPENSES> 76,240
<LOSS-PROVISION> 231
<INTEREST-EXPENSE> 5,234
<INCOME-PRETAX> 39,791
<INCOME-TAX> 9,967
<INCOME-CONTINUING> 21,113
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,113
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.53
</TABLE>
