SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 24, 1996
BAKER HUGHES INCORPORATED
(Exact name of registrant as specified in charter)
Delaware 1-9397 76-0207995
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3900 Essex Lane, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 439-8600
Not Applicable
(Former name of former address, if changed since last report)
Item 5. Other Events.
The matters set forth in the press release attached as Exhibit
A are incorporated by reference.
SIGNATURE
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 hereunto duly authorized.
BAKER HUGHES INCORPORATED
Date: April 24, 1996 By: /s/ Lawrence O'Donnell, III
----------------------------
Lawrence O'Donnell, III
Vice President, General Counsel
and Corporate Secretary
Exhibit A
Press Release
Contact: Scott B. Gill (713) 439-8666 Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Release: Immediate P. O. Box 4740
Houston, Texas 77210-4740
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BAKER HUGHES REPORTS EARNINGS PER SHARE UP 61% FOR SECOND QUARTER-NEW
TECHNOLOGY AND KEY REGIONAL MARKETS CONTRIBUTE TO GROWTH
April 24, 1996. Houston, Texas - Baker Hughes Incorporated (BHI-NYSE, PSE
and Zurich) reported sharply increased earnings for the second quarter of
its fiscal year. Per share earnings increased 61% to $0.29, compared to
$0.18 for the year-ago quarter. Revenues of $744.8 million were 14% higher
than that of $652.6 million in the same period last year and net income of
$41.6 million was up 49% from $28.0 million in the same period last year.
"Our continued strong results are being driven by our new technology and by
our strong position in geographic markets with growing exploration and
production programs," said James D. Woods, Chairman and Chief Executive
Officer.
Operational Highlights
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Baker Hughes oilfield revenues were $655.6 million for the quarter, the
highest revenue quarter since the company's merger in 1987 and up 15% from
the prior year period. Profit before tax grew 30% to $86.1 million and
margins increased by 150 basis points to 13.1%. All five oilfield
divisions contributed to the growth.
Hughes Christensen continued the successful introduction of its new GT
roller cone and Gold Series PDC drill bits, which significantly outperform
competitive technology. These new product revenues contributed 40% of the
oilfield bit revenues for the quarter compared to only 6% in the year ago
quarter.
Baker Hughes INTEQ increased revenue by 19% compared to the prior year
quarter. The Navi-Drill Ultra Series drilling motors continued to gain
share in the directional drilling segment. The division's synthetic
drilling fluid, the SYN-TEQ system, was used on the 100th customer well and
the new EXCLUDER completion wellscreen has been successfully introduced for
horizontal re-entry applications in the Gulf of Mexico.
Baker Oil Tools achieved a 13% revenue increase compared to the year-ago
quarter. The external casing packer line had its best quarter ever. Baker
Oil Tools continues to be the leader in completion tools, liner hangers and
fishing services in major offshore markets.
Baker Performance Chemicals had an improved quarter, which was highlighted
by the award of the oilfield chemical contract for the Hibernia project off
Eastern Canada.
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The Centrilifit division, a leading supplier of electric submersible pump
(ESP) systems, realized an 11% revenue increase compared to the year ago
quarter led by strong international demand for ESP systems.
Baker Hughes Process Equipment Operations revenues were $79.2 million for
the quarter, up 6% from the prior year period. The outlook continues to be
strong although several major projects have been deferred to later in the
calendar year.
Strong Geographic Markets
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The premium markets of the North Sea, Gulf of Mexico, Venezuela and Nigeria
continued to show strong growth amid a flat worldwide drilling market. In
these four key markets revenues increased 26% from the prior year and we
expect these markets to continue to grow over the balance of 1996.
Integrated Solutions
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Integrated Solutions (IS) revenues continued to post steady gains during
the quarter. Overall Integrated Solutions revenues were $97 million, up
52% from the prior year period. Nearly half of the IS revenue came from
Europe, where Baker Hughes plays an important role in several major North
Sea projects.
Positive Outlook
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"We remain optimistic for strong results over the balance of the year," Mr.
Woods said. "The healthy market is receptive to our new technology, our
innovative systems and our integrated solutions capabilities."
"Our forecasts show continued growth in drilling activity in our key
geographic markets. We believe our customers in these areas will move
forward with their E&P projects even if energy prices drop below recent
high levels."
Stockholder Rights Agreement and Quarterly Dividend
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The Baker Hughes Board of Directors has exercised its option to redeem all
of the rights (a "Right") to purchase one one-hundredth of a share of Baker
Hughes Series One Junior Participating Preferred Stock for the redemption
price of $0.03 per Right (the "Redemption Price"), in accordance with Baker
Hughes' Stockholder Rights Agreement. Additionally, the Baker Hughes Board
of Directors declared a total distribution in the amount of $.115 per share
of Baker Hughes Common Stock, payable May 24, 1996, to holders of record on
May 6, 1996; which distribution includes the Redemption Price.
A table of comparative results follow:
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(In thousands, except per share amounts)
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996 1995
REVENUES:
Sales $ 500,276 $ 447,302 $ 965,231 $ 859,209
Services and rentals 244,546 205,307 474,288 400,317
------- ------- --------- ---------
Total revenues 744,822 652,609 1,439,519 1,259,526
------- ------- --------- ---------
COSTS AND EXPENSES:
Cost of sales 292,928 258,533 560,264 500,349
Cost of services and rentals 126,311 99,880 244,610 194,939
Research and engineering 21,206 20,760 42,614 40,847
Marketing and field service 164,138 149,132 325,377 294,081
General and administrative 48,725 57,288 96,943 101,604
Amortization of goodwill and
other intangibles 7,454 7,463 14,847 15,340
------- ------- --------- ---------
Total costs and expenses 660,762 593,056 1,284,655 1,147,160
------- ------- --------- ---------
Operating income 84,060 59,553 154,864 112,366
Interest expense (14,801) (13,701) (30,228) (25,180)
Interest income 1,303 1,268 1,785 2,075
------- ------- ------- -------
Income before income taxes 70,562 47,120 126,421 89,261
Income taxes (29,003) (19,120) (52,464) (37,030)
------- ------- ------- -------
Income before cumulative effect
of accounting change 41,559 28,000 73,957 52,231
Cumulative effect of
accounting change -
Postemployment benefits
(net of $7,861 income
tax benefit) (14,598)
------- ------- ------- -------
Net income $ 41,559 $ 28,000 $ 73,957 $ 37,633
======= ======= ======= =======
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(In thousands, except per share amounts)
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996 1995
Per share of Common Stock:
Income before cumulative
effect of accounting change * $ .29 $ .18 $ .52 $ .33
Cumulative effect of
accounting change (.10)
------ ------ ------ -------
Net income * $ .29 $ .18 $ .52 $ .23
====== ====== ====== ======
Average shares outstanding
during period 142,654 141,032 142,467 141,005
Depreciation expense $ 29,415 $ 28,746 $ 58,777 $ 57,443
Capital expenditures $ 51,636 $ 32,843 $ 86,312 $ 58,524
* The per share amount for the three and six months ended March 31, 1995 has
been adjusted for dividends on preferred stock of $3.0 million and $6.0
million, respectively.
Baker Hughes is a leading provider of products and services for the oil, gas
and process industries.
* * * * * *
NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL HOLDERS
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