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, 2004
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 incorporation or organization) |
(I.R.S. Employer 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2. of the Exchange Act.) YES x NO ¨
There were 161,508,419 shares of the registrant’s common stock, $.10 par value, outstanding as of August 10, 2004.
INDEX
2
FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
| Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Revenue |
$ | 658,662 | $ | 546,576 | $ | 1,906,521 | $ | 1,554,280 | ||||||||
| Operating expenses: |
||||||||||||||||
| Cost of sales and services |
498,484 | 423,210 | 1,440,320 | 1,213,974 | ||||||||||||
| Research and engineering |
11,923 | 10,606 | 34,256 | 30,285 | ||||||||||||
| Marketing |
20,788 | 18,976 | 60,218 | 54,450 | ||||||||||||
| General and administrative |
20,133 | 17,634 | 58,041 | 52,956 | ||||||||||||
| Loss on disposal of assets |
1,117 | 329 | 2,045 | 598 | ||||||||||||
| Total operating expenses |
552,445 | 470,755 | 1,594,880 | 1,352,263 | ||||||||||||
| Operating income |
106,217 | 75,821 | 311,641 | 202,017 | ||||||||||||
| Interest expense |
(3,975 | ) | (3,982 | ) | (12,321 | ) | (11,724 | ) | ||||||||
| Interest income |
1,279 | 442 | 2,997 | 1,305 | ||||||||||||
| Other income/(expense) - net |
83,604 | (275 | ) | 83,008 | (3,625 | ) | ||||||||||
| Income before income taxes |
187,125 | 72,006 | 385,325 | 187,973 | ||||||||||||
| Income tax expense |
57,838 | 22,462 | 121,262 | 60,151 | ||||||||||||
| Net income |
$ | 129,287 | $ | 49,544 | $ | 264,063 | $ | 127,822 | ||||||||
| Earnings per share: |
||||||||||||||||
| Basic |
$ | .80 | $ | .31 | $ | 1.65 | $ | .81 | ||||||||
| Diluted |
$ | .79 | $ | .31 | $ | 1.62 | $ | .79 | ||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
160,882 | 158,097 | 159,735 | 157,827 | ||||||||||||
| Diluted |
163,915 | 161,770 | 163,034 | 161,162 | ||||||||||||
The accompanying notes are an integral part of these consolidated condensed financial statements
3
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
(In thousands)
| June 30, 2004 |
September 30, 2003 | |||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 307,170 | $ | 277,666 | ||
| Short-term investments |
229,774 | — | ||||
| Receivables - net |
526,974 | 469,656 | ||||
| Inventories: |
||||||
| Products |
120,652 | 109,383 | ||||
| Work in process |
2,173 | 2,048 | ||||
| Parts |
51,540 | 51,137 | ||||
| Total inventories |
174,365 | 162,568 | ||||
| Deferred income taxes |
8,066 | 718 | ||||
| Other current assets |
34,232 | 31,100 | ||||
| Total current assets |
1,280,581 | 941,708 | ||||
| Property - net |
884,717 | 850,340 | ||||
| Deferred income taxes |
36,286 | 66,877 | ||||
| Goodwill |
885,816 | 879,710 | ||||
| Other assets |
42,077 | 47,322 | ||||
| $ | 3,129,477 | $ | 2,785,957 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 227,353 | $ | 220,031 | ||
| Short-term borrowings |
1,526 | 5,888 | ||||
| Current portion of long-term debt |
18,399 | — | ||||
| Accrued employee compensation and benefits |
67,818 | 69,205 | ||||
| Income and other taxes |
107,983 | 82,192 | ||||
| Accrued insurance |
17,001 | 14,772 | ||||
| Other accrued liabilities |
78,272 | 78,573 | ||||
| Total current liabilities |
518,352 | 470,661 | ||||
| Commitments and contingencies (Note 7) |
||||||
| Long-term debt |
478,924 | 493,754 | ||||
| Deferred income taxes |
15,482 | 7,475 | ||||
| Other long-term liabilities |
151,951 | 163,435 | ||||
| Stockholders’ equity |
1,964,768 | 1,650,632 | ||||
| $ | 3,129,477 | $ | 2,785,957 | |||
The accompanying notes are an integral part of these consolidated condensed financial statements
4
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(In thousands)
| Common Stock Shares |
Common Stock |
Capital In Excess of Par |
Treasury Stock |
Unearned Compensation |
Retained Earnings |
Accumulated Other Comprehensive Income |
Total |
||||||||||||||||||||||
| Balance, September 30, 2003 |
158,306 | $ | 17,376 | $ | 964,348 | $ | (348,277 | ) | $ | — | $ | 1,026,832 | $ | (9,647 | ) | $ | 1,650,632 | ||||||||||||
| Comprehensive income: |
|||||||||||||||||||||||||||||
| Net income |
61,513 | ||||||||||||||||||||||||||||
| Other comprehensive income, net of tax: |
|||||||||||||||||||||||||||||
| Cumulative translation adjustments |
6,916 | ||||||||||||||||||||||||||||
| Forward foreign exchange contracts |
368 | ||||||||||||||||||||||||||||
| Total comprehensive income |
68,797 | ||||||||||||||||||||||||||||
| Reissuance of treasury stock for: |
|||||||||||||||||||||||||||||
| Stock option plan |
45 | 1,020 | (48 | ) | 972 | ||||||||||||||||||||||||
| Stock purchase plan |
495 | 11,157 | (217 | ) | 10,940 | ||||||||||||||||||||||||
| Stock incentive plan |
95 | (3,103 | ) | 2,144 | 898 | (61 | ) | ||||||||||||||||||||||
| Stock incentive plan grant |
7,273 | (7,273 | ) | ||||||||||||||||||||||||||
| Recognition of unearned compensation |
606 | 606 | |||||||||||||||||||||||||||
| Balance, December 31, 2003 |
158,941 | $ | 17,376 | $ | 968,518 | $ | (333,956 | ) | $ | (6,667 | ) | $ | 1,088,978 | $ | (2,363 | ) | $ | 1,731,886 | |||||||||||
| Comprehensive income: |
|||||||||||||||||||||||||||||
| Net income |
73,264 | ||||||||||||||||||||||||||||
| Other comprehensive income, net of tax: |
|||||||||||||||||||||||||||||
| Cumulative translation adjustments |
(549 | ) | |||||||||||||||||||||||||||
| Forward foreign exchange contracts |
(147 | ) | |||||||||||||||||||||||||||
| Total comprehensive income |
72,568 | ||||||||||||||||||||||||||||
| Reissuance of treasury stock for: |
|||||||||||||||||||||||||||||
| Stock option plan |
1,703 | 38,162 | (12,216 | ) | |||||||||||||||||||||||||