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
Date of Report (Date of earliest event reported): March 2, 1999
HEWLETT-PACKARD COMPANY
(Exact name of registrant as specified in its charter)
Delaware 001-04423 94-1081436
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
3000 Hanover Street, Palo Alto, California 94304
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 857-1501
NA
------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 5. Other Events
On March 2, 1999, Hewlett-Packard Company ("HP") announced that its
Board of Directors approved plans to pursue a strategic realignment under
which it would separate into two independent companies. One will be
focused on the measurement businesses, the other on the computing and
imaging businesses. Chairman, President and Chief Executive Officer Lewis
E. Platt will lead the realignment. Edward W. (Ned) Barnholt, currently
HP executive vice president and general manager of the Measurement
Organization has been named chief executive officer of the to-be-formed
new measurement company. Platt, together with three other members of HP's
Board of Directors will constitute a special committee of the HP Board of
Directors that will conduct a search for a chief executive officer for the
computing and imaging businesses. The news release is attached as Exhibit
99.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
99 News release dated March 2, 1999
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
HEWLETT-PACKARD COMPANY
Dated: March 2, 1999 By:/s/D. Craig Nordlund
--------------------------
D. Craig Nordlund
Associate General Counsel
and Secretary
EDITORIAL CONTACTS: PRGP0000903
Lee Bonds
(650) 857-2882
lee_bonds@hp.com
Anne McGrath
(650) 857-5960
anne_mcgrath@hp.com
HP ANNOUNCES STRATEGIC REALIGNMENT
TO CREATE TWO COMPANIES
Platt to Lead Realignment as HP Chairman, President and CEO;
Barnholt Named CEO of New Measurement Company;
Search Begins for CEO of New Computing and Imaging Company
PALO ALTO, Calif., March 2, 1999 -- Hewlett-Packard Company
Chairman, President and Chief Executive Officer Lewis E. Platt today
announced plans for a strategic realignment of Hewlett-Packard Company
that will create two independent companies.
"We are taking this action to sharpen the strategic focus of our
businesses, improve their agility and increase their responsiveness to
customers and partners," said Platt. "This will offer exciting
opportunities for our employees and will enhance the two new companies'
growth and earnings potential."
The HP Board of Directors approved pursuing the realignment plan at
a special meeting this morning. Under the plan, HP stockholders will hold
shares in each company.
"We are creating two distinct and strategically focused enterprises,
one focused on the measurement businesses, the other on the computing and
imaging businesses," said Platt. "These new companies will be financially
strong and independently managed, each with its own board of directors and
its own central research-and-development organization. Both companies
will be able to better focus on growth in their individual markets. They
will be well-positioned to build value for their stockholders, customers
and employees."
The new measurement company will comprise Hewlett-Packard Company's
industry-leading test-and-measurement, components, chemical-analysis and
medical businesses. These businesses represented $7.6 billion of HP's
total revenue of $47.1 billion in fiscal 1998. With leading positions in
multiple market segments, this technology-based company will be focused on
high-growth opportunities such as communications and life sciences. A
name has not yet been selected for the new measurement company.
Edward W. (Ned) Barnholt, currently HP executive vice president and
general manager of the Measurement Organization, has been named chief
executive officer of the new measurement company. "I've asked Ned to take
on this critical leadership role," said Platt. "He has the vision,
experience and enthusiasm to position the company for accelerated growth
and success."
Hewlett-Packard Company is considering an initial public offering
(IPO) for approximately 15 percent of the measurement company's
outstanding shares by year-end. This offering would be the largest
technology IPO in Silicon Valley history. Subsequent to the IPO, HP
would expect to distribute the remaining shares to its stockholders in a
tax-free transaction.
The new computing and imaging company will continue to operate under
the Hewlett-Packard name and will include all of HP's enterprise computing
systems, software and services, personal computer, and printing and
imaging solutions businesses. These businesses will operate more
autonomously and will adapt quickly to changing market needs.
Platt, who drove the plan to create two companies, will continue as
HP chairman, president and chief executive officer, and will manage the
transformation until the separation is completed. Platt and HP Board
members John B. Fery, Sam Ginn and Richard A. Hackborn will constitute a
special committee of the HP Board of Directors that will conduct a search
for a chief executive officer for the new computing and imaging company.
Ginn will chair the committee.
"The two new companies we're creating compete in fast-moving, highly
competitive markets," said Platt. "This realignment positions each new
company to deliver enhanced growth in revenue and earnings."
The New Measurement Company
---------------------------
The new measurement company, which includes the original HP
businesses, will be one of the world's premier technology-based companies
focusing on high-growth opportunities such as communications and life
sciences. Its products and services are used widely to design, build and
manage today's most advanced communications networks, including the
Internet. In addition, the company also has leadership positions in
fiber-optic, wireless and optoelectronics components. The company is a
leader in certain segments of the medical-product and chemical-analysis
markets, and will be pursuing new opportunities for growth in healthcare
and biosciences.
"We are building an exciting new company based on the strong
heritage of HP technology, a culture of innovation and the excellent
people throughout our organization," said Barnholt. "We will focus our
strength on high-growth opportunities and extensions into new markets."
The New Computing and Imaging Company
-------------------------------------
"Our computing and imaging company will be focused on providing
unique solutions for the computer, printer and information-services
markets," said Platt. Under the banner of the recently articulated
e-services initiative, all of the computing and imaging businesses will
capitalize on the opportunities in the second chapter of the Internet, the
mass proliferation of electronic services.
"The first chapter of the Internet was about access to information
and self-service transactions," said Platt. "In the second chapter,
modular electronic services will proliferate. HP will provide the
fundamental innovations and solutions that will make it easier for
companies to build and deploy e-services, including enabling technologies
that allow these services to interact with and leverage each other. One
of my top priorities is to drive the implementation of this strategy.
We're confident that this will create exciting growth opportunities for
our customers and for HP."
In addition to delivering solutions with the e-service initiative,
the computing and imaging businesses will continue to develop products for
their individual markets. The businesses include the following:
o LaserJet Solutions Group;
o Inkjet Products Group;
o Enterprise Computing Solutions Organization; and
o Personal Systems Group.
About the Realignment
---------------------
Hewlett-Packard Company does not expect any significant overall
workforce reductions as a result of the realignment. "This announcement is
not about major short-term cost reductions," said Robert P. Wayman, HP
executive vice president and chief financial officer. "Where we need to
realign our workforce to support the new companies, we will manage this,
as we have in the past, through our traditional approaches, such as
redeployment, flex-force adjustments and attrition.
Hewlett-Packard Company will seek any required tax and regulatory
approvals worldwide and expects to complete the realignment during the
first half of next year.
The investment banking firms of Morgan Stanley Dean Witter and
Goldman, Sachs & Co. are serving as advisors to Hewlett-Packard Company.
About HP
--------
Hewlett-Packard Company is a leading global provider of computing,
Internet and intranet solutions, services, communications products and
measurement solutions, all of which are recognized for excellence in
quality and support. HP has 122,800 employees and had revenue of $47.1
billion in its 1998 fiscal year.
Information about HP, its products and the company's Year 2000
Program can be found on the World Wide Web at http://www.hp.com.
Additional information about the realignment can be found on the HP Web
site on March 4, 1999.
# # #
This news release contains forward-looking statements, based on
current expectations, that involve risks and uncertainties that could
cause results of Hewlett-Packard Company and the measurement company to
differ materially from management's current expectations. These risks
include: the ability of HP to successfully manage and complete the
realignment process, including the ability to retain and motivate key
employees; the potential for business disruption; risks relating to the
worldwide allocation of assets and people between the two companies during
the process; and risks that the IPO of the new measurement company may not
be completed in a timely manner or at all. In addition, other risks that
HP faces in running its operations include: the timely development,
production and acceptance of new products and services and their feature
sets; the challenge of managing asset levels, including inventory; the
flow of products into third-party distribution channels; the difficulty of
keeping expense growth at modest levels while increasing revenues; the
impact on customers and suppliers as they prepare for the year 2000; and
other risks detailed from time to time in Hewlett-Packard's Securities and
Exchange Commission reports, including but not limited to the annual
report on Form 10-K for the year ended Oct. 31, 1998 and the quarterly
report on Form 10-Q for the fiscal quarter ended Jan. 31, 1999.
# # #