<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 JUNE 30, 1998
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 (I.R.S. EMPLOYER
OF 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 72,331,795 shares of the registrant's common stock, $.10 par value,
outstanding as of August 13, 1998.
- -------------------------------------------------------------------------------
===============================================================================
<PAGE> 2
BJ SERVICES COMPANY
INDEX
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statement of Operations (Unaudited) - Three
and nine months ended June 30, 1998 and 1997 3
Consolidated Condensed Statement of Financial Position -
June 30, 1998 (Unaudited) and September 30, 1997 4
Consolidated Condensed Statement of Cash Flows (Unaudited) -
Nine months ended June 30, 1998 and 1997 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 14
</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 NINE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue $ 365,343 $ 368,619 $1,176,305 $1,052,697
Operating expenses:
Cost of sales and services 275,615 285,741 872,482 832,659
Research and engineering 7,913 6,367 23,496 18,359
Marketing 13,815 13,342 43,020 37,236
General and administrative 11,455 11,509 37,532 33,715
Goodwill amortization 3,426 3,515 10,466 10,900
---------- ---------- ---------- ----------
Total operating expenses 312,224 320,474 986,996 932,869
---------- ---------- ---------- ----------
Operating income 53,119 48,145 189,309 119,828
Interest expense (6,918) (7,780) (19,657) (24,078)
Interest income 370 300 1,093 603
Other income (expense) - net 121 78 (645) 1,023
---------- ---------- ---------- ----------
Income before income taxes 46,692 40,743 170,100 97,376
Income taxes 13,821 12,632 54,546 29,094
---------- ---------- ---------- ----------
Net income $ 32,871 $ 28,111 $ 115,554 $ 68,282
========== ========== ========== ==========
Net income per share:
Basic $ .44 $ .37 $ 1.53 $ .89
Diluted $ .41 $ .34 $ 1.40 $ .84
Average shares outstanding:
Basic 73,886 76,710 75,420 76,585
Diluted 80,919 82,340 82,732 81,706
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
<PAGE> 4
BJ SERVICES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1998 1997
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,513 $ 3,900
Receivables - net 314,045 332,851
Inventories:
Finished goods 77,960 73,343
Work in process 4,324 6,969
Raw materials 26,473 23,922
------------ ------------
Total inventories 108,757 104,234
Deferred income taxes 9,943 12,986
Other current assets 20,712 20,773
------------ ------------
Total current assets 455,970 474,744
Property - net 589,066 540,356
Deferred income taxes 158,906 183,076
Goodwill - net 502,901 513,388
Other assets 16,233 15,204
------------ ------------
$ 1,723,076 $ 1,726,768
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 154,417 $ 162,467
Short-term borrowings and current
portion of long-term debt 190,431 102,698
Accrued employee compensation and benefits 28,663 38,807
Income and other taxes 27,487 21,126
Accrued insurance 13,468 15,486
Other accrued liabilities 39,425 44,760
------------ ------------
Total current liabilities 453,891 385,344
Long-term debt 257,414 298,634
Deferred income taxes 9,967 7,598
Other long-term liabilities 73,438 74,965
Stockholders' equity 928,366 960,227
------------ ------------
$ 1,723,076 $ 1,726,768
============ ============
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
4
<PAGE> 5
BJ SERVICES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 115,554 $ 68,282
Adjustments to reconcile net income to cash
provided by operating activities:
Amortization of unearned compensation 3,950 1,125
Depreciation and amortization 67,889 67,364
Deferred income taxes 33,479 19,962
Changes in:
Receivables 18,806 (21,273)
Inventories (4,523) (6,222)
Accounts payable (8,050) (595)
Other current assets and liabilities (13,392) 4,477
Other - net 9,192 (38,954)
---------- ----------
Net cash provided by operating activities 222,905 94,166
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (116,468) (60,043)
Proceeds from disposal of assets 6,981 26,126
Acquisition of business, net of cash acquired (13,464)
---------- ----------
Net cash used for investing activities (109,487) (47,381)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - net 46,513
Reduction of borrowings - net (52,236)
Purchase of treasury stock (167,008)
Proceeds from issuance of stock 5,690 6,037
---------- ----------
Net cash used for financing activities (114,805) (46,199)
Increase (decrease) in cash and cash equivalents (1,387) 586
Cash and cash equivalents at beginning of period 3,900 2,897
---------- ----------
Cash and cash equivalents at end of period $ 2,513 $ 3,483
========== ==========
</TABLE>
SEE NOTES TO UNAUDITED 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 June 30, 1998, the results of
operations for each of the three-month and nine-month periods ended June 30,
1998 and 1997 and cash flows for each of the nine-month periods ended June 30,
1998 and 1997. The consolidated condensed statement of financial position at
September 30, 1997 is derived from the September 30, 1997 audited consolidated
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
and the cash flows for the nine-month period ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
Certain amounts for fiscal 1997 have been reclassified to conform to the current
year presentation.
NOTE 2 EARNINGS PER SHARE
In October 1997, the Company adopted Statement of Financial Accounting Standards
No. 128 "Earnings Per Share ("EPS")." In accordance with this standard, the
Company has replaced the presentation of primary EPS and fully diluted EPS with
the presentation of basic EPS and diluted EPS for all periods presented. Basic
EPS excludes dilution and is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS is based on the weighted-average number of shares
outstanding during each period and the assumed exercise of dilutive stock
options and warrants less the number of treasury shares assumed to be purchased
from the proceeds using the average market price of the Company's common stock
for each of the periods presented.
At the annual meeting of stockholders on January 22, 1998, the Company's
stockholders approved an amendment to the Company's charter increasing the
number of authorized shares of common stock from 80 million to 160 million
shares. As a result, a 2 for 1 stock split approved by the Board of Directors on
December 11, 1997 (to be effected in the form of a stock dividend) was
subsequently distributed on February 20, 1998 to stockholders of record as of
January 30, 1998. Accordingly, all references in the financial statements to
number of shares outstanding and earnings per share amounts have been
retroactively restated for all periods presented to reflect the increased number
of common shares outstanding resulting from the stock split.
6
<PAGE> 7
The following table presents information necessary to calculate earnings per
share for the periods presented (in thousands except earnings per share):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $ 32,871 $ 28,111 $ 115,554 $ 68,282
Average common shares outstanding: 73,886 76,710 75,420 76,585
---------- ---------- ---------- ----------
Basic earnings per share $ .44 $ .37 $ 1.53 $ .89
========== ========== ========== ==========
Average common and dilutive potential common
shares outstanding:
Average common shares outstanding 73,886 76,710 75,420 76,585
Assumed exercise of stock options 1,765 1,714 1,820 1,629
Assumed exercise of warrants 5,268 3,916 5,492 3,492
---------- ---------- ---------- ----------
80,919 82,340 82,732 81,706
---------- ---------- ---------- ----------
Diluted earnings per share $ .41 $ .34 $ 1.40 $ .84
========== ========== ========== ==========
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
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 situation sometimes leads to volatility in the Company's revenues and
profitability, especially in the United States and Canada where the Company
expects to generate over 60% of its revenues during fiscal 1998.
Due to "aging" oilfields and lower-cost sources of oil internationally,
drilling activity in the United States has declined more than 75% from its peak
in 1981. Record low drilling activity levels were experienced in 1986 and 1992.
Relatively stronger oil and gas prices and improved oilfield technology and
equipment recently led to more favorable drilling conditions in the United
States. In August 1997, the U.S. active rig count exceeded 1,000 rigs for the
first time since 1991. In the first nine months of fiscal 1998, the U.S. active
rig count increased 7% over the first nine months of the prior fiscal year. The
increase in activity occurred in drilling for natural gas, which was up 16%
compared with the prior year. More recently, however, lower oil prices caused
the third fiscal quarter active rig count to be 7% below the prior year level.
U.S. drilling activity for the remainder of calendar 1998 is expected to remain
below prior year levels.
With the exception of Canada, international drilling activity has
historically been less volatile than domestic drilling activity. In the first
nine months of fiscal 1998, active international drilling rigs increased 4% over
the comparable period of 1997. For the quarter ended June 30, 1998, however, the
active international rig count decreased 9% from the same period of the prior
year. Canadian drilling activity was 32% below prior year levels during the most
recent fiscal quarter and is expected to remain below prior year levels during
the second half of calendar 1998 due to the weakness in oil prices.
8
<PAGE> 9
RESULTS OF OPERATIONS
The following table sets forth selected key operating statistics
reflecting industry rig count and the Company's financial results for the three
and nine month periods ended June 30, 1998 compared with the same periods of the
prior fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Rig Count: (1)
U.S 865 934 943 878
International 972 1,067 1,167 1,127
Revenue per rig (in thousands) $ 198.9 $ 184.2 $ 557.5 $ 524.8
Revenue per employee (in thousands) $ 41.4 $ 46.1 $ 133.8 $ 136.1
Percentage of gross profit to revenue (2) 24.6% 22.5% 25.8% 20.9%
Percentage of research and engineering
expense to revenue 2.2% 1.7% 2.0% 1.7%
Percentage of marketing expense to
revenue 3.8% 3.6% 3.7% 3.5%
Percentage of general and administrative
expense to revenue 3.1% 3.1% 3.2% 3.2%
</TABLE>
- --------
(1) Industry estimate of average active rigs.
(2) Gross profit represents revenue less cost of sales and services.
Revenue: The Company's revenue decreased slightly for the quarter ended
June 30, 1998 compared with the same period of 1997. The growth experienced in
the first half of the fiscal year subsided due to a slowdown in oil related
drilling activity, primarily in the U.S., Canada and Latin America. Revenues
increased by 12% compared with the same nine-month period of the previous year
due primarily to strength in natural gas drilling activity, improved pricing and
revenue increases resulting from the Company's growth initiatives in, coiled
tubing, downhole tools and international stimulation. Revenues for the fourth
quarter of the current fiscal year, however, are expected to continue to be
negatively impacted by the current weakness in oil-related drilling activity.
United States Revenues
The Company's third quarter U.S. revenues decreased by 2% compared to the
prior year's third fiscal quarter due primarily to reduced drilling and workover
activity in the primarily oil-related Pacific and Permian Basin Regions. Revenue
in these two regions declined by 30% and 33%, respectively, during the quarter.
Revenue in the Company's Gulf Coast Region, however, increased by 18% due to a
record number of offshore cementing skids working during the quarter.
9
<PAGE> 10
Pricing for the Company's pressure pumping services improved by approximately
17% compared to the prior year's third quarter. On a product line basis, coiled
tubing and downhole tool operations improved 4%, and 50%, respectively, during
the quarter while cementing revenues were flat and fracturing revenues decreased
9% from the prior year period. For the nine-month period ended June 30, 1998,
U.S. revenues increased by 13% over the comparable period of fiscal 1997, with
each of the Company's U.S. regions increasing over the prior nine month period.
The most significant increases were in the Rocky Mountains and in the Gulf of
Mexico.
International Revenues
The Company's international revenues increased slightly from the prior
year's third fiscal quarter. Pressure pumping revenues outside North America
increased by 11% compared to the prior year's period due primarily to
double-digit revenue gains during the quarter in the Company's Europe/Africa,
Middle East and Far East regions. Mostly offsetting these gains was a 31%
reduction in the Company's Canadian operations caused by lower oil-related
drilling activity, a more severe spring breakup season and unusually rainy
weather that restricted the ability to move drilling rigs. For the nine-month
period ended June 30, 1998, the Company's international revenues increased 11%
compared to the same period in the prior year. Each of the Company's
international pressure pumping regions, excluding Canada, showed revenue
increases. The Middle East and Far East regions showed the largest percentage
gains due to revenues from well-kill and stimulation operations, respectively.
Latin American revenues expanded slightly on the strength of stimulation
activity in Venezuela, Brazil and Colombia, which offset the decline in oil
related drilling activity in the region.
Operating Income: Operating income increased by 10% and 58% for the three
and nine-month periods, respectively, compared to the same periods in the prior
year due to benefits from the Company's growth initiatives in coiled tubing,
downhole tools and international stimulation, and for the nine-month period also
due to the increased activity and better pricing. Operating income margins for
the quarter, exclusive of goodwill amortization, increased to 15.5% of revenues
from 14.0% in the prior year's third quarter due to results of the Company's
growth initiatives in coiled tubing, downhole tools and international
stimulation. For the nine-month period, the gross margin improvement was due to
the Company's North American pumping operations running at high utilization
levels for the first half of the fiscal year. In addition, continued strength in
international markets, especially the high margin North Sea stimulation business
and well-kill operation, contributed to the nine-month margin improvement. For
the quarter, marketing and general and administrative expenses were relatively
flat with the prior year, while research and engineering expenses increased by
24%, due primarily to additional spending to support the Company's growth plan
initiatives. Although increasing significantly on an absolute basis, the other
operating expenses (research and engineering, marketing, and general
administrative) for the nine months ended June 30, 1998 increased only
marginally as a percentage of revenue. The increases are reflective of increased
support costs from the higher activity levels, as well as increased spending on
coiled tubing and downhole tool research, international commissions, information
systems and incentives.
10
<PAGE> 11
Other: Interest expense decreased by $.9 million and $4.4 million compared
with the same three and nine month periods of the previous year due to a
reduction in borrowings resulting from strong operating cash flows and the
effects of a financing transaction in the fourth quarter of the prior fiscal
year. These items were partially offset by an additional $167 million utilized
to fund the repurchase of stock during the first nine months of fiscal 1998. For
the nine months ended June 30, 1998, "other income (expense) - net" resulted in
a net expense compared to the prior year's other net income as a result of the
higher profitability from the Company's international joint ventures
attributable to its minority partners and nonrecurring gains in the previous
year periods. The Company's effective tax rate decreased to 30% for the quarter
and 32% for the year-to-date period as a result of the expected lower U.S. and
Canadian profitability for the year.
Net Income and Earnings Per Share: Net income and diluted earnings per
share increased by 17% and 21%, respectively for the quarter (69% and 67%,
respectively, for the nine month period). Due to the current weakness in oil
related drilling activity, however, management expects net income and diluted
earnings per share for the fourth quarter of its fiscal year to be below prior
years' figures of $39.6 million and $.47, respectively. Given the current
uncertainty surrounding the Company's customers' spending plans, cost reduction
efforts are underway with field operating budgets being adjusted in accordance
with activity levels. Additionally, plans for reductions in overhead and capital
spending are being reviewed and will be implemented as business conditions
warrant.
Year 2000 Compliance: To determine the Company's exposure concerning Year
2000 compliance, corporate personnel along with an outside firm specializing in
Year 2000 concerns conducted a formal evaluation of the tasks necessary to
become Year 2000 compliant. The costs of this evaluation, testing, and minor
modifications for Year 2000 compliance (expected to be approximately $2 million
to $4 million) will be charged against earnings as incurred. The costs of new
software and major upgrades to the Company's existing software will be
capitalized and amortized over the software's useful life. The Company is making
efforts to ensure that the Year 2000 problem will not significantly impact its
ability to conduct business, however no assurances can be given that total Year
2000 compliance can be achieved because of the significant degree of
interdependence with third party suppliers, service providers and customers.
CAPITAL RESOURCES AND LIQUIDITY
Net cash provided from operating activities for the nine months ended June
30, 1998 increased by $128.7 million from the prior year's figure due primarily
to higher profitability, deferred income taxes and increased collections of
receivables. Due to the slowdown in activity, the Company expects to generate
additional cash flows from operating activities through the liquidation of
working capital for the next several quarters.
Net cash used for investing activities for the nine-month period increased
$62.1 million over the same period of the prior year due to increased capital
spending related primarily to additional fracturing capacity for the Company's
international growth initiatives, and upgrades to the
11
<PAGE> 12
Company's U.S. pumping fleet and information systems. The lower amount in net
cash used for investing activities in the first nine months of fiscal 1997 also
reflects nonrecurring proceeds from the sale of the hull of the Renaissance
stimulation vessel in the second quarter of fiscal 1997, partially offset by the
acquisition in the first quarter of fiscal 1997 of the remaining 51% ownership
interest in the Company's previously unconsolidated joint venture in Argentina.
Due to the current slowdown in drilling activity, the Company expects to reduce
its fiscal 1999 property additions compared with 1998 levels.
The Company has utilized net cash flows from operating and financing
activities to repurchase $167.0 million of its common stock during the nine
months ended June 30, 1998. The common stock was purchased under a stock
repurchase program approved by the Company's Board of Directors in December 1997
and increased in May 1998 authorizing purchases up to $300 million at the
discretion of the Company's management.
Management strives to maintain low cash balances while utilizing available
credit facilities to meet the Company's capital needs. Any excess cash generated
has historically been used to pay down outstanding borrowings or fund the
Company's stock repurchase program. The Company has a committed, unsecured bank
credit facility (the "Bank Credit Facility") which consists of a six-year term
loan of approximately $232.0 million (currently drawn in both U.S. and Canadian
dollars under a provision which is renewed annually at the option of the banks),
which is repayable in 22 quarterly installments that began in March 1997, and a
five year U.S. $225.0 million revolving facility. At June 30, 1998, borrowings
outstanding under the Bank Credit Facility totaled $169.8 million, consisting of
$126.2 million in Canadian borrowings and $43.6 million in U.S. borrowings under
the term loan. Principal reductions of term loans under the Bank Credit Facility
are due in aggregate annual installments of $8.0 million; $40.9 million; $43.9
million; $43.9 million; and $33.1 million in the years ending September 30,
1998, 1999, 2000, 2001 and 2002, respectively.
In addition to the committed facility, the Company had $326.8 million in
various unsecured, discretionary lines of credit at June 30, 1998, which expire
at various dates in 1998. There are no requirements for commitment fees or
compensating balances in connection with these lines of credit. Interest on
borrowings is based on prevailing market rates. At June 30, 1998, there were
$153.6 million in outstanding borrowings under these lines of credit, consisting
of $97.5 million in Canadian borrowings, $55.0 million in U.S. borrowings and
$1.1 million in other currencies.
The Company has issued and outstanding $125.0 million of unsecured 7%
Notes due 2006. The net proceeds from the issuance of the 7% Notes ($123.3
million) in August 1996 were used by the Company to repay indebtedness
outstanding under the term loan portion of the Company's then existing bank
credit facility. The guarantees of the 7% Notes by certain subsidiaries of the
Company were released in accordance with their terms in December 1997.
The $6.0 million outstanding balance of the Company's 9.2% Notes and the
$2.2 million outstanding balance of the Company's 12 7/8% Notes were repaid in
December 1997.
12
<PAGE> 13
The Company's interest-bearing debt increased to 32.5% of its total
capitalization at June 30, 1998, compared to 29.5% at September 30, 1997, due to
the repurchases of the Company's stock. The Bank Credit Facility includes
various customary covenants and other provisions including the maintenance of
certain profitability and solvency ratios and restrictions on dividend payments
under certain circumstances. Management believes that the Bank Credit Facility,
combined with other discretionary credit facilities and cash flow from
operations, provides the Company with sufficient capital resources and liquidity
to manage its routine operations and fund projected capital expenditures.
This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 and Section 21E of the
Securities Exchange Act of 1934 concerning, among other things, the Company's
prospects, expected revenues, expenses and profits, developments and business
strategies for its operations, all of which are subject to certain risks,
uncertainties and assumptions. These forward-looking statements are identified
by their use of terms and phrases such as "expect," "estimate," "project,"
"believe," and similar terms and phrases. These statements are based on certain
assumptions and analyses made by the Company in light of its experience and its
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate under the
circumstances. Such statements are subject to general economic and business
conditions, conditions in the oil and gas industry, the business opportunities
that may be presented to and pursued by the Company, changes in law or
regulations and other factors, many of which are beyond the control of the
Company. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those expected, estimated or projected.
13
<PAGE> 14
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
To be considered for inclusion in the Company's proxy
statement and form of proxy relating to the 1999 Annual Meeting of
Stockholders, proposals of stockholders submitted for consideration at
such annual meeting must be received by the Secretary no later than
August 24, 1998 at 5500 Northwest Central Drive, Houston, Texas 77092.
Pursuant to the Company's Bylaws, as amended, stockholder nominations
for director and stockholder proposals submitted for consideration at
the Company's 1999 Annual Meeting of Stockholders (but not for
inclusion in the proxy statement and form of proxy) must be received by
the Secretary at the Company, 5500 Northwest Central Drive, Houston,
Texas 77092 no later than October 21, 1998. If such timely notice of a
stockholder proposal is not given, the proposal may not be brought
before the Annual Meeting. If timely notice of a stockholder proposal
is given but is not accompanied by a written statement and compliance
with applicable securities laws, the Company may exercise discretionary
voting authority over proxies with respect to such proposal if
presented at the Company's 1999 Annual Meeting of Stockholders.
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBITS.
27.1 FINANCIAL DATA SCHEDULE
(b) REPORTS ON FORM 8-K.
None
15
<PAGE> 16
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: August 14, 1998 BY \s\ Michael McShane
------------------------------------
Michael McShane
Senior Vice President, Finance and
Chief Financial Officer
Date: August 14, 1998 BY \s\ Matthew D. Fitzgerald
------------------------------------
Matthew D. Fitzgerald
Vice President, Controller and Chief
Accounting Officer
16
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> JUN-30-1998
<CASH> 2,513
<SECURITIES> 0
<RECEIVABLES> 314,045
<ALLOWANCES> 6,314
<INVENTORY> 108,757
<CURRENT-ASSETS> 455,970
<PP&E> 1,012,572
<DEPRECIATION> 423,506
<TOTAL-ASSETS> 1,723,076
<CURRENT-LIABILITIES> 453,891
<BONDS> 0
0
0
<COMMON> 7,638
<OTHER-SE> 920,728
<TOTAL-LIABILITY-AND-EQUITY> 1,723,076
<SALES> 1,176,305
<TOTAL-REVENUES> 1,176,305
<CGS> 872,482
<TOTAL-COSTS> 872,482
<OTHER-EXPENSES> 114,514
<LOSS-PROVISION> 277
<INTEREST-EXPENSE> 19,657
<INCOME-PRETAX> 170,100
<INCOME-TAX> 54,546
<INCOME-CONTINUING> 115,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 115,554
<EPS-PRIMARY> 1.53
<EPS-DILUTED> 1.40
</TABLE>
