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Smith International Reports $25.3-Million Loss for Quarter

Times Staff Writer

Smith International Inc., the Irvine-based oil well equipment maker that recently announced plans to close down its Irvine drill bit plant and move its headquarters to Houston, reported a third-quarter loss of $25.3 million.

Expenses associated with the move and plant closing accounted for $23.4 million of that loss.

Costs related to the closing include the transfer of 150 to 200 workers from Irvine to Houston or to Smith’s Ponca City, Okla., manufacturing plant, Warren Nelson, assistant controller, said.

Also, a 30% bonus will be paid to Smith employees who remain with the company until it shuts down the Irvine plant in March, and several million dollars will be spent to move equipment from Irvine to Ponca City.

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Smith announced last month that, in order to cut costs, it had decided to pull out of Orange County after 52 years of doing business here. The decision affects nearly 500 workers, most of whom will be laid off.

At the time of the announcement, analysts estimated that the consolidation could save the company up to $14 million a year in reduced operating costs.

The charge to earnings, which is being held in a reserve fund to be used as necessary, was widely anticipated by the investment community. Smith stock closed unchanged Tuesday at $7.875.

The loss came on revenue of $84.4 million. During the same period a year earlier, Smith earned $6.2 million on $70.8 million in revenue.

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In addition to the charge to earnings, Smith suffered an $886,000 operating loss as a result of the continued slump in domestic oil drilling, Nelson said.


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