<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
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 1-10570
BJ SERVICES COMPANY
(Exact name of registrant as specified in its charter)
Delaware 63-0084140
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5500 Northwest Central Drive, Houston, Texas 77092
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 462-4239
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
----- -----
There were 26,874,254 shares of the registrant's common stock, $.10 par value,
outstanding as of May 12, 1995.
================================================================================
<PAGE> 2
BJ SERVICES COMPANY
INDEX
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Condensed Statement of Operations - Three
and six months ended March 31, 1995 and 1994 3
Consolidated Condensed Statement of Financial Position -
March 31, 1995 and September 30, 1994 4
Consolidated Condensed Statement of Cash Flows -
Six months ended March 31, 1995 and 1994 5
Notes to Unaudited Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II - OTHER INFORMATION 13
</TABLE>
2
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BJ SERVICES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1995 1994 1995 1994
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 106,668 $ 98,451 $ 226,083 $ 203,208
Operating Expense:
Cost of sales and services 90,665 85,658 190,264 173,300
Research and engineering 2,215 2,468 4,278 4,512
Marketing 4,004 3,221 7,948 6,603
General and administrative 6,349 5,542 12,453 11,177
------------ ------------- ------------- -------------
Total operating expense 103,233 96,889 214,943 195,592
------------ ------------- ------------- -------------
Operating income 3,435 1,562 11,140 7,616
Interest expense (2,311) (1,514) (4,618) (3,056)
Interest income 197 125 334 311
Other income (expense) - net 393 383 940 95
------------ ------------- ------------- -------------
Income before income taxes and
cumulative effect of accounting change 1,714 556 7,796 4,966
Income taxes 336 111 1,674 949
------------ ------------- ------------- -------------
Income before cumulative effect of
accounting change 1,378 445 6,122 4,017
Cumulative effect of change in
accounting principle, net of tax (10,400)
------------ ------------- ------------- -------------
Net income (loss) $ 1,378 $ 445 $ 6,122 $ (6,383)
============ ============= ============= =============
Net income (loss) per common share:
Income per common share before cumulative
effect of accounting change $ .09 $ .03 $ .39 $ .26
Cumulative effect of change in
accounting principle, net of tax (.66)
------------ ------------- ------------- -------------
Net income (loss) per common share $ .09 $ .03 $ .39 $ (.40)
============ ============= ============= =============
Average shares outstanding 15,716 15,663 15,716 15,663
============ ============= ============= =============
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
<PAGE> 4
BJ SERVICES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, September 30,
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 5,698 $ 3,218
Receivables - net 98,053 103,754
Inventories:
Finished goods 31,740 30,970
Work in process 2,366 1,118
Raw materials 8,707 6,591
------------ ------------
Total inventories 42,813 38,679
Deferred income taxes 4,716 4,478
Other current assets 9,544 8,230
------------ ------------
Total current assets 160,824 158,359
Property - net 197,033 198,844
Goodwill 20,413 20,998
Investments and other assets 35,348 31,865
------------ ------------
$ 413,618 410,066
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 48,913 $ 54,609
Short-term borrowings and current
portion of long-term debt 29,291 33,450
Accrued employee compensation and benefits 11,216 10,521
Income and other taxes 8,911 10,678
Accrued insurance 3,097 2,637
Other accrued liabilities 13,344 9,162
------------ ------------
Total current liabilities 114,772 121,057
Long-term debt 74,700 74,700
Deferred income taxes 9,188 6,986
Accrued postretirement benefits and other 17,812 17,396
Stockholders' equity 197,146 189,927
------------ ------------
$ 413,618 $ 410,066
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
4
<PAGE> 5
BJ SERVICES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 6,122 $ (6,383)
Adjustments to reconcile net income (loss) to cash
provided by operating activities:
Cumulative effect of accounting change 10,400
Depreciation and amortization 13,612 12,425
Deferred income taxes (benefit) (2,264) (2,185)
Gain on disposal of property (692) (381)
Amortization of unearned compensation 660 410
Changes in:
Receivables 5,701 4,909
Inventories (4,134) (2,282)
Accounts payable (5,696) (5,100)
Other current assets and liabilities 2,351 (8,605)
Other, net 1,427 (156)
------------ -----------
Net cash provided by operating activities 17,087 3,052
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (15,003) (23,281)
Proceeds from disposal of assets 3,806 1,809
Acquisition of business (2,000)
------------ -----------
Net cash used for investing activities (11,197) (23,472)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 21,024
Reduction of borrowings (4,159)
Proceeds from issuance of stock 749 757
------------ -----------
Net cash provided by (used for) financing activities (3,410) 21,781
Increase in cash and cash equivalents 2,480 1,361
Cash and cash equivalents at beginning of period 3,218 1,620
------------ -----------
Cash and cash equivalents at end of period $ 5,698 $ 2,981
============ ===========
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5
<PAGE> 6
BJ SERVICES COMPANY
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 GENERAL
In the opinion of management, the unaudited consolidated condensed financial
statements for BJ Services Company (the "Company") include all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation of the financial position as of March 31, 1995, the results of
operations for each of the three and six month periods ended March 31, 1995 and
1994 and the cash flows for each of the six month periods then ended. The
consolidated condensed statement of financial position at September 30, 1994 is
derived from the September 30, 1994 audited financial statements. Although
management believes the disclosures in these financial statements are adequate
to make the information presented not misleading, certain information and
footnote disclosures normally included in annual financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. The results of operations for the three and six month periods ended
March 31, 1995 are not necessarily indicative of the results to be expected for
the full year.
Certain amounts for fiscal 1994 have been reclassified in the accompanying
consolidated condensed financial statements to conform to current year
presentation.
NOTE 2 SUBSEQUENT EVENT
In April 1995, the Company acquired The Western Company of North America
("Western") for total consideration, including transaction costs, of
approximately $514 million in cash and shares of the Company's common stock
and warrants to purchase common stock. The following unaudited pro forma
summary presents the consolidated results of operations of the Company as if
the acquisition had occurred at the beginning of fiscal year 1995.
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1995
(In thousands, except
per share amounts)
<S> <C>
Revenue $400,005
Net income from continuing operations 10,158
Net income per share from continuing operations 0.37
</TABLE>
6
<PAGE> 7
On April 13, 1995, the Company canceled its committed, unsecured credit
facilities and the outstanding borrowings were repaid by funding from the
Company's newly restructured committed unsecured credit facility, executed on
April 14, 1995 to accommodate the acquisition of Western (the "Bank Credit
Facility"). The Bank Credit Facility consists of a five-year $175.0 million
revolving credit facility and a six-year $265.0 million term loan, providing
an aggregate of $440.0 million in principal borrowings to the Company.
Waivers have been obtained with respect to the Company's $30.0 million 9.2%
Notes Due August 1, 1998 (the "Notes") regarding the noncompliance that would
have occurred, as a result of the consummation of the Bank Credit Facility,
in respect of certain restrictive covenants included in the note agreements.
Such waivers are effective for three months after the closing of the Bank
Credit Facility, subject to earlier termination upon the occurrence of any
event of default under the Bank Credit Facility. The Company is currently
engaged in negotiations to modify such restrictive covenants and other
provisions of the note agreements. If an amended note agreement is not
consummated, the Company intends to prepay the Notes with funds available under
its Bank Credit Facility.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's operations are primarily driven by the number of oil and gas
wells being drilled, the depth and drilling conditions of such wells, the
number of well completions and the level of workover activity worldwide.
Drilling activity, in turn, is largely dependent on the price of oil and
natural gas. This is especially true in the United States, where the Company
generates approximately half of its revenues (approximately two-thirds after
giving effect to the acquisition of Western).
Due to weak energy prices and declining production, drilling activity in the
United States has declined more than 75% from its peak in 1981, and record low
drilling activity levels were experienced in 1986 and 1992. These events have
led to the withdrawal by the Company from several low activity areas, including
Casper and Riverton, Wyoming and Abilene, Texas in 1994. In addition, pumping
service companies have been unable to recapitalize their aging United States
fleets due to the inability, under current market conditions, to generate
adequate returns on new capital investments.
The U.S. averaged 708 and 767 active drilling rigs for the respective three and
six month periods ended March 31, 1995. This represents a decline of 7% and 5%
compared with the same periods in 1994. For the most recent quarter, most of
the activity decline occurred from reduced drilling for natural gas. It is
anticipated that natural gas drilling activity will continue to show
unfavorable comparisons over at least the next several quarters due to
currently weak natural gas prices.
While international (excluding Canada) drilling activity has historically been
less volatile than domestic activity, the international active rig count has
declined in each of the last four years due to weaker oil prices and economic
and political instability in certain overseas countries. Over the last few
years, the most significant declines in international drilling activity have
occurred in the North Sea, Italy, Nigeria and Mexico.
In both the U.S. and internationally, there has been an increasing trend by oil
and gas companies toward "alliances" with the service companies. These
alliances take various forms including packaged or integrated services, single
source suppliers and turnkey agreements. For the first half of the fiscal year,
approximately $36 million of the Company's U.S. revenue and $5 million of its
international revenue were generated under such alliances.
EXPANSIONS AND ACQUISITIONS
Despite the recent declines in international drilling activity, management
believes the primary opportunities for geographic and product expansion remain
in international markets. As a result, other than the acquisition of Western,
the Company's capital spending and expansion efforts have been primarily
focused outside of the U.S. Most of the Company's expansion efforts during the
past year have been focused on expanding the tubular services and commissioning
and leak detection products, acquired in 1992, into geographic
8
<PAGE> 9
regions outside the North Sea.
On April 13, 1995 the Company completed its transaction to acquire Western
for approximately $514 million, including transaction costs of approximately
$10 million in cash and shares of the Company's common stock and warrants to
purchase common stock. Both the Company and Western are leading providers of
oilfield services. The acquisition gives the Company a greater "critical mass"
with which to compete in the U.S. and international markets and the opportunity
to realize significant consolidation benefits. While merger and consolidation
costs will depress earnings for the next two quarters, the acquisition should
add revenues of up to 70 - 80% to the Company's previous revenue base beginning
in the June quarter. In addition, the majority of the consolidation efforts and
resulting benefits are expected to be in place by the beginning of fiscal 1996.
The realization of consolidation benefits depends upon a number of factors,
including factors relating to general industry conditions and other factors
outside the Company's control and the amount and timing of consolidation costs
and benefits that are ultimately realized remain subject to all such factors
affecting the combined business.
RESULTS OF OPERATIONS
Revenue: Revenue for the quarter ended March 31, 1995 was $106.7 million, an 8%
increase from the prior year's second quarter revenue. For the six months ended
March 31, 1995, revenue was $226.1 million, an 11% increase over the same
period of the previous year.
U.S. revenues for the quarter ended March 31, 1995 were relatively flat with
those of the same period in 1994. For the six month period, U.S. revenues
increased 5% from the prior year due primarily to increased cement unit
placements in the Gulf of Mexico, the addition of a stimulation vessel which
was introduced in mid 1994 and slightly improved pricing. Also contributing to
the year over year increase were alliances with major operators which generated
approximately $8 million of additional revenue during the current six month
period. For the most recent quarter, those increases were offset by lower
revenues in the natural gas regions of South Texas and the Rocky Mountains.
International revenue for the three and six month periods was $60.0 million and
$122.2 million, respectively. Such revenue represented increases of 15% and
17%, respectively, over the same periods of 1994 and occurred despite declines
in overall international drilling activity as measured by the active drilling
rig count. Much of the revenue growth occurred in Latin America as a result of
increased stimulation activity with both private and governmental oil companies
in Argentina, and the addition of a stimulation vessel in 1994 and a coiled
tubing barge in 1995 to service the Lake Maracaibo, Venezuela market. Also
contributing to the revenue increases were revenues from the Company's
operations in Egypt which was previously accounted for as an equity investment
until the Company acquired the remaining ownership from its joint venture
partner in April 1994. In addition, geographic expansion of the Company's
tubular services and casing and leak detection products generated increased
revenues as these products have now been expanded into a total of 13 countries,
including parts of the Middle East, Africa, South America, the Far
9
<PAGE> 10
East and Australia. These gains were partially offset by declines in revenue
from the Company's North Sea operations as a result of a decline in stimulation
vessel activity and the loss of a major cementing contract in Norway.
Operating Income: As a result of the revenue increase, the Company's operating
income of $3.4 million for the three month period ended March 31, 1995 was more
than double the operating earnings of the same period in the previous year.
Operating earnings for the six month period ended March 31, 1995 increased 46%
over the same period of the previous year. For the quarter, the cost of sales
and services as a percentage of revenue was 2.0% lower than that of the
previous year's second quarter and 1.1% lower for the six month period
primarily as a result of approximately $1.5 million in unusual or nonrecurring
expenses which were incurred in the second quarter of fiscal 1994. Such
expenses included startup costs associated with the Company's new stimulation
vessels in the Gulf of Mexico and Venezuela, mobilization costs for geographic
expansions and offshore skid placements, and severance and other costs
associated with the downsizing of selected international locations. Other
operating expenses increased by $1.4 million and $2.4 million, respectively, for
the three and six month periods as compared to the same periods of the prior
year primarily as a result of marketing expenses related to international
expansions and computer system costs.
Net interest expense increased by $.7 million and $1.5 million, respectively,
over the same three and six month periods of the previous year as a result of
increased interest rates on the Company's floating rate debt obligations and
interest rate swap agreement which effectively converts the fixed interest rate
on the Company's 9.2% notes to a variable rate. The net other income of $.9
million for the six months ended March 31, 1995 resulted from royalty income
from certain of the Company's products, a nonrecurring gain on the sale of a
duplicate facility in Scotland during the first quarter and a gain in the
second quarter on the sale of certain non revenue generating assets in the Far
East region.
The effective tax rate increased from 19% in the prior year's first six month
period to 21% in the current year due to marginal tax rates on higher
profitability during the current year. The prior year's results also reflect
the cumulative effect of an accounting change for retiree health benefits which
resulted in a net loss for the six month period.
FINANCIAL CONDITION
Capital resources and liquidity: Net cash provided by operating activities
during the first six months of 1995 was $17.1 million compared to $3.1 million
in the same prior year period. The improvement was due to higher profitability
and a smaller increase in working capital compared with the year earlier
period.
Management strives to maintain low cash balances while utilizing available
credit facilities to meet the Company's capital needs. Any excess cash
generated is used to pay down outstanding borrowings.
10
<PAGE> 11
At March 31, 1995, the Company maintained committed, unsecured credit
facilities of $88.0 million, under which $74.2 million was outstanding. The
commitments were subsequently canceled and the outstanding borrowings were
repaid by funding from the Company's newly restructured committed unsecured
credit facility, executed on April 14, 1995 to accommodate the acquisition of
Western. The Bank Credit Facility consists of a five-year $175.0 million
revolving credit facility and a six-year $265.0 million term loan, providing an
aggregate of $440.0 million in principal borrowings to the Company. The credit
facility specifically allocates $40.0 million of the term loan for redemption
of the 7 1/4% convertible subordinated debentures originally issued by Western
and assumed by the Company as a result of the acquisition. The Company
subsequently called the outstanding debt for redemption, and holders of all but
$111,000 principal amount of the debentures elected to convert their debentures
into the right to receive cash, Company stock and warrants to purchase common
stock. Accordingly, the Company has provided notice to the banks under its Bank
Credit Facility of its intention to reduce the aggregate commitment and the
term loan thereunder by $40.0 million to $400.0 million and $225.0 million,
respectively. At March 31, 1995 the Company had $35.0 million in available
discretionary lines of credit, under which $5.8 million was outstanding. The
Company has subsequently increased its available discretionary lines of credit
to $55.0 million.
The Company's interest bearing debt represented 34.5% of its total
capitalization at March 31, 1995, compared to 36.3% at the previous fiscal year
end. The improvement reflects cash flows from operations which were used to pay
down short term borrowings.
Management believes that the restructured credit facilities described above,
combined with other discretionary credit facilities and cash flows from
operations, will provide the Company with sufficient capital resources and
liquidity to manage its routine operations and fund projected capital
expenditures.
The Company's 9.2% note agreement and Bank Credit Facility agreement contain
various customary covenants, including the maintenance of certain profitability
and solvency ratios. Waivers have been obtained with respect to the Company's
$30.0 million 9.2% Notes Due August 1, 1998, regarding the noncompliance that
would have occurred, as a result of the consummation of the Company's credit
agreement, in respect of certain restrictive covenants included in the note
agreements. Such waivers are effective for three months after the closing of
the Bank Credit Facility, subject to earlier termination upon the occurrence of
any event of default under the Bank Credit Facility. The Company is currently
engaged in negotiations to modify such restrictive covenants and other
provisions of the note agreements. If an amended note agreement is not
consummated, the Company intends to prepay the Notes with funds available under
its Bank Credit Facility.
Requirements for Capital: Capital expenditures for the six months ended March
31, 1995 were $15.0 million, or $8.2 million below the spending in the same
period of the previous year. The current year's spending relates primarily to
offshore operations both in the U.S. and abroad. The prior year's spending
included approximately $9 million for the construction of two offshore
stimulation vessels
11
<PAGE> 12
completed during the Company's second fiscal quarter of 1994. Fiscal 1995
capital expenditures, which are expected to be approximately $26 million
(excluding the Western acquisition), will be focused primarily on international
growth opportunities, including product and geographic expansions. The first
six months' investing activities included $3.8 million of proceeds from the
sale of a duplicate facility and other disposals of assets. The cash generated
from such sales is not of a recurring nature, and the disposals of these assets
will not have a material effect on future revenue or operating profits.
The actual amount of 1995 capital expenditures will be primarily dependent upon
the availability of expansion opportunities and will be funded from cash flows
from operating activities and available credit facilities. Management believes
cash flows from operating activities and available lines of credit, if
necessary, will be sufficient to fund projected capital expenditures.
12
<PAGE> 13
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As a result of the Merger, the Company assumed responsibility
for certain claims and proceedings made against Western in
connection with its business. Some, but not all, of such claims
and proceedings will continue to be covered under insurance
policies of Western which were in place at the time of the
merger. Although the outcome of the claims and proceedings
against the Company (including Western) cannot be predicted with
certainty, management believes that there are no existing claims
or proceedings that are likely to have a materially adverse
effect on the Company.
Shortly after the public announcement in September 1994 of the
proposed acquisition of Western by the Company (the "Proposed
Acquisition"), four actions were commenced against Western and
its directors in the Delaware Court of Chancery, styled Croyden
Associates v. Sheldon R. Erikson, et al., and The Western
Company of North America, C.A. No. 13740, filed September 13,
1994; Reggie P. Judice v. Sheldon R. Erikson, et al., and The
Western Company of North America, C.A. No. 13742, filed
September 14, 1994; William T. Henderson v. Sheldon R. Erikson,
et al., and The Western Company of North America, C.A. No.
13743, filed September 14, 1994, and Russ Seger v. Sheldon R.
Erikson, et al., and The Western Company of North America, C.A.
No. 13769, filed September 27, 1994. The allegations in these
lawsuits, all of which were filed as alleged class action
complaints, are substantially the same and relate to the
rejection of the Proposed Acquisition by the Board of Directors
of Western. The purported class of plaintiffs on whose behalf
the class action complaints were filed is all stockholders of
Western. Among the claims included in these lawsuits is the
claim that, by failing to accept the Proposed Acquisition,
Western and its directors breached their fiduciary duties to the
stockholders of Western. In their complaints, the plaintiffs
sought equitable relief to compel Western and its directors to
perform their fiduciary duties, as construed by the plaintiffs,
and unspecified damages. Three former directors of Western,
Michael E. Patrick, William J. Johnson, and David A.B. Brown,
are now directors of the Company.
Item 2. Changes in Securities
Upon effectiveness of the Merger, by execution of a supplemental
indenture (the "Senior Note Supplement") with respect to
Western's 12 7/8% Senior Notes due December 1, 2002, and a
supplemental indenture (the "Debenture Supplement") with respect
to Western's 7 1/4% Convertible Subordinated Debentures due
January 15, 2015 (the "Debentures"), the Company assumed the
covenants and obligations of Western under the respective
indentures.
13
<PAGE> 14
Pursuant to the indenture for the Debentures, as supplemented by
the Debenture Supplement, each holder of a Debenture was
permitted to convert each $1,000 principal amount debenture into
(i) $588.235 in cash, (ii) 29.49 shares of BJ Common Stock
and (iii) 11.76 BJ Warrants. Cash will be paid in lieu of
fractional shares of BJ Common Stock (on the basis of $19.9438
per share) and fractions of BJ Warrants (on the basis of $5.00
per warrant). On April 20, 1995, the Company announced the
redemption, effective May 9, 1995, of the remaining outstanding
Debentures, which, per the announcement, ceased to be convertible
as of the close of business on May 4, 1995. Holders of all but
$111,000 principal amount of the Debentures converted their
Debentures prior to the close of business on May 4, 1995. The
redemption price is 103.625% of the principal amount of the
Debentures plus accrued interest to May 9, 1995, for a total
amount of $1,059.21 per $1,000 principal amount of the
Debentures.
In connection with the Merger, stockholders of Western received
4.38 million warrants ("Warrants") to purchase common stock of
the Company ("Common Stock") at an initial exercise price of
$30.00, subject to certain adjustments. The Warrants may be
exercised at any time prior to the close of business on April
13, 2000, and, upon exercise, would increase the number of
shares of Common Stock outstanding.
Item 3. Defaults upon Senior Securities
Waivers have been obtained with respect to the Company's $30.0
million 9.2% Notes Due August 1, 1998 (the "Notes"), regarding
the noncompliance that would have occurred, as a result of the
consummation of the Company's credit agreement, in respect of
certain restrictive covenants included in the note agreements.
Such waivers are effective for three months after the closing of
the Bank Credit Facility, subject to earlier termination upon
the occurrence of any event of default under the Bank Credit
Facility. The Company is currently engaged in negotiations to
modify such restrictive covenants and other provisions of the
note agreements. If an amended note agreement is not
consummated, the Company intends to prepay the Notes with funds
available under its Bank Credit Facility.
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting, Don D. Jordan and Michael McShane were
elected as Class II Directors of the Company. The following
table sets forth the results of the voting with respect to the
election of directors at the Annual Meeting of Stockholders on
January 26, 1995.
14
<PAGE> 15
<TABLE>
<CAPTION>
Against
Or Brokers
For (Withheld) Abstentions Non-Votes
--- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Election of Directors
Don D. Jordan 13,785,153 8,062 0 0
Michael McShane 13,742,719 50,496 0 0
</TABLE>
Messrs. Jordan and McShane were elected to serve as Class II
Directors for a three-year term. The Directors whose terms
continued after the Annual Meeting were L. William Heiligbrodt,
James E. McCormick, J. W. Stewart, John R. Huff, and R. A.
LeBlanc.
On April 13, 1995, a Special Meeting of Stockholders was held (i)
to approve and adopt the Merger Agreement between the Company and
Western, (ii) to amend the Certificate of Incorporation of the
Company in order to increase the number of authorized shares of
Common Stock from 40,000,000 to 80,000,000; and (iii) to approve
the BJ Services Company 1995 Incentive Plan. The following table
sets forth the results of the voting with respect to the matters
acted upon at the Special Meeting of Stockholders on April 13,
1995.
<TABLE>
<CAPTION>
Against
Or Brokers
For (Withheld) Abstentions Non-Votes
--- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Merger Agreement 12,776,674 65,550 28,200 6,065
Amendment to
Certificate of Incorporation 12,624,796 222,419 29,274 0
1995 Incentive Plan 8,587,367 3,227,418 1,061,704 0
</TABLE>
By the votes shown above, the Company's Stockholders approved the
Merger Agreement, the amendment to the Certificate of
Incorporation to increase the authorized number of shares of
Common Stock to 80,000,000 shares, and the 1995 Incentive Plan.
15
<PAGE> 16
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
A report on Form 8-K was filed on March 7, 1995, reporting other events
under Item 5 regarding the approval by the Department of Justice of the
merger between the Company and Western, and attaching as an exhibit
under Item 7 the related press release.
16
<PAGE> 17
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.
BJ Services Company
(Registrant)
Date: May 13, 1994 BY /s/ Margaret B. Shannon
--------------------------------
Margaret B. Shannon
Vice President - General Counsel
Date: May 13, 1994 BY /s/ Matthew D. Fitzgerald
--------------------------------
Matthew D. Fitzgerald
Controller and Chief
Accounting Officer
17
<PAGE> 18
INDEX TO EXHIBITS
Exhibit
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 5,698
<SECURITIES> 0
<RECEIVABLES> 98,053
<ALLOWANCES> 2,666
<INVENTORY> 42,813
<CURRENT-ASSETS> 160,824
<PP&E> 501,474
<DEPRECIATION> 304,441
<TOTAL-ASSETS> 413,618
<CURRENT-LIABILITIES> 114,772
<BONDS> 74,700
<COMMON> 1,572
0
0
<OTHER-SE> 195,574
<TOTAL-LIABILITY-AND-EQUITY> 413,618
<SALES> 226,083
<TOTAL-REVENUES> 226,083
<CGS> 190,264
<TOTAL-COSTS> 190,264
<OTHER-EXPENSES> 24,679
<LOSS-PROVISION> 406
<INTEREST-EXPENSE> 4,618
<INCOME-PRETAX> 7,796
<INCOME-TAX> 1,674
<INCOME-CONTINUING> 6,122
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,122
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
