SMITH INTERNATIONAL, INC.
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
JULY 8, 2004
DATE OF REPORT
(Date of earliest event reported)
SMITH INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-8514 95-3822631
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
411 N. SAM HOUSTON PARKWAY, SUITE 600
HOUSTON, TEXAS
(Address of principal executive offices)
77060
(Zip Code)
(281) 443-3370
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On July 8, 2004 the Registrant issued a press release entitled "CE
Franklin and Smith International Announce Signing of a Letter of Intent." The
text of the press release is as follows:
CE FRANKLIN AND SMITH INTERNATIONAL
ANNOUNCE SIGNING OF A LETTER OF INTENT
HOUSTON, Texas (July 8, 2004)... CE Franklin Ltd. (AMEX: CFK; TSX: CFT)
and Smith International, Inc. (NYSE: SII) today announced the signing of a
non-binding letter of intent related to the purchase by CE Franklin of the
Wilson distribution operations. The proposed transaction would form one of the
world's largest oilfield distribution businesses with combined revenues of
approximately US$1.0 billion for the twelve-month period ended March 31, 2004.
Under the terms of the proposed transaction, CE Franklin would issue
approximately 67 million shares of common stock to Smith and remit certain
amounts to Smith after closing in exchange for the shares of Wilson
International, Inc. Subsequent to the transaction, Smith's ownership interest is
expected to increase from the current 55 percent to approximately 90 percent of
the outstanding shares of CE Franklin. Smith's intention would be to reduce its
ownership interest back to the level currently held; however the timing of such
would be dependent on market conditions and other factors.
The transaction is subject to a number of factors including satisfactory
completion of due diligence, negotiation of a definitive agreement, approval by
the minority shareholders of CE Franklin, ratification by both companies' Board
of Directors and required regulatory approvals. The transaction is expected to
close by September 30, 2004. If completed, the combined operations will be
managed by Michael West and will operate under the Wilson name.
Michael West, President and Chief Executive Officer of CE Franklin,
commented, "This transaction would create a premier North American distributor
of products and services to energy and industrial markets and would provide a
solid platform for worldwide revenue growth. The combination and integration of
the extensive distribution networks and talented employees of both companies
would present a number of opportunities to improve efficiency and enhance our
product offering, thereby creating significant value. The combined entity will
be very well-positioned to pursue significant North America-wide and
international supply arrangements going forward."
Doug Rock, Chairman and CEO of Smith International stated, "After several
quarters of steadily improving distribution results, including the second
quarter of 2004, we felt that now is the time to combine these two businesses
into a single publicly-traded entity. The improved operational and financial
profile of the new company will enable Wilson to accelerate revenue and earnings
growth both organically and by acquisition."
CE Franklin will host a conference call Friday, July 9, 2004 at 9:30 a.m.
Central Time, which is open to the public. The conference call will include a
discussion of the transaction and will have management of both companies
available for a brief question and answer session. Participants may join the
conference call by dialing (800) 814-4859 and requesting the CE Franklin call
hosted by Michael West, President and Chief Executive Officer. A replay of the
conference call will also be available through Friday, July 16, 2004 by dialing
(877) 289-8525 and entering conference call identification number "21056791#". A
live broadcast of the conference call will be available on the Internet with an
archived version accessible after the call. Further information on the broadcast
can be found on CE Franklin's website at www.cefranklin.com.
CE Franklin distributes products and related services to the Canadian oil
and gas industry, including projects involving drilling and completions,
production and maintenance and capital construction, and other resource based
industries. CE Franklin primarily serves customers through a network of 37
branches across Canada.
Smith International, Inc. is a leading worldwide supplier of premium
products and services to the oil and gas exploration and production industry,
the petrochemical industry and other industrial markets through its four
principal business units -- M-I SWACO, Smith Technologies, Smith Services and
Wilson.
Certain comments contained in this news release constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are subject to the safe harbor created by that
Act. Whenever possible, these "forward-looking" statements have been identified
by using words such as "would", "expected", "believe" and similar phrases. The
forward-looking statements are based upon managements' expectations and beliefs
and, although these statements are based upon reasonable assumptions, there can
be no assurances that this transaction will ultimately be consummated or that
the expected results will be achieved. Smith International assumes no obligation
to update publicly any forward-looking statements whether as a result of new
information, future events or otherwise. For a discussion of other risk factors
which could impact Smith International, Inc., please review Smith's Annual
Report on Form 10-K for the year ended December 31, 2003 as filed with the
Securities and Exchange Commission.
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 hereunto duly authorized.
SMITH INTERNATIONAL, INC.
Date: July 8, 2004
/s/ NEAL S. SUTTON
---------------------------------------
By: Neal S. Sutton
Senior Vice President - Administration,
General Counsel and Secretary