HOUSTON, Dec. 29 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; PCX; CBOE) announced today that it will continue to delay the
filing of its Annual Report on Form 10-K for the fiscal year ended
September 30, 2004. The extended deadline for filing the Form 10-K expires
today.
Chairman, President and CEO Bill Stewart commented, "The Company is
conducting a review of accrued liabilities and certain other balance sheet
accounts for the Asia Pacific Region and a review of certain tax records in
the region and hopes to finish in time to file our 2004 Report on Form 10-K by
January 28, 2005. At present we do not expect material adjustments other than
the $9.0 million income referenced below. If we can meet that filing
schedule, we will hold our annual meeting of stockholders on March 24, 2005.
Today we have set a record date of February 7, 2005 for that meeting."
As previously reported, in October 2004 the Company received a report from
a whistleblower alleging that its Asia Pacific Region Controller had
misappropriated Company funds in fiscal 2001. The Company began an internal
investigation into the misappropriation and whether other inappropriate
actions occurred in the Region. The Region Controller admitted to multiple
misappropriations during a 30-month period ended April 2002. The
misappropriations identified to date total approximately $9.0 million and have
been repaid to the Company. The misappropriated funds were recorded as an
expense in the Consolidated Statement of Operations in prior periods and,
therefore, no restatement is required. As a result, the Company expects to
record $9.0 million as Other Income in the Consolidated Condensed Statement of
Operations for the quarter ending December 31, 2004. The Company is
conducting a review of accrued liabilities and certain other balance sheet
accounts for the Asia Pacific Region and a review of certain tax records in
the region before filing its Form 10-K. As the Company continues its
investigation, further adjustments may be recorded in the Consolidated
Statement of Operations, but are not believed to be material at this time.
The Company also received whistleblower allegations that illegal payments
to foreign officials were made in the Asia Pacific Region. The Audit
Committee of the Board of Directors engaged independent counsel to conduct a
separate investigation to determine whether any such illegal payments were
made. That investigation, which is also continuing, has found information
indicating that illegal payments to government officials in the Asia Pacific
Region aggregating in excess of $1.5 million may have been made over several
years.
Additionally, the Company intends to give notice of default today to the
lenders under its $400 million revolving credit facility for failing to comply
with its covenants to timely provide audited financial statements. Similar
default notices will be due to other lenders on January 13, 2005 if the Form
10-K has not been filed by that date. However, under the Company's debt
instruments, no Event of Default permitting acceleration of indebtedness or
termination of credit facilities by the lenders could occur as a result of the
delay in filing the Form 10-K unless the default continues beyond
January 28, 2005. The Company has no borrowings under its $400 million
Revolving Credit Facility and has cash and cash equivalents and short-term
investments in excess of its other indebtedness.
This press release contains forward-looking statements that anticipate
future performance such as the Company's prospects, expected revenues, and
expenses and profits. These forward-looking statements are based on
assumptions that may prove to be inaccurate, and they are subject to risks and
uncertainties that may cause actual results to differ materially from expected
results. These risk factors include, without limitation, general global
business and economic conditions, drilling activity and rig count, pricing
volatility for oil and gas, reduction in demand for our services and products,
risks from operating hazards such as fire, explosion and oil spills,
unexpected litigation for which insurance and customer agreements do not
provide complete protection, adverse consequences that may be found in or
result from our internal investigation or any governmental investigation or
litigation, including potential consequences from deferring filing of our
annual report on Form 10-K, associated notices and defaults under the
Company's credit facility and other debt agreements, deficiencies identified
by the Company in its internal controls for international operations, the
possible need for a restatement of prior year periods if amounts are
determined to be material, consequences of changes in exchange rates and
declines in the U.S. dollar, and risks associated with our international
operations, including potential instability and hostilities. This list of
risk factors is not intended to be comprehensive. More extensive information
concerning risk factors may be found in our public filings with the Securities
and Exchange Commission.
BJ Services Company is a leading provider of pressure pumping and other
oilfield services to the petroleum industry.
(NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
SOURCE BJ Services Company
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Related links:
http://www.bjservices.com
CONTACT:
Trey Whichard of BJ Services Company,
+1-713-462-4239
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