-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ENrbBpUqQSKJalvnp0pnClYMQ99uLNlczKe/DkIyNkGB684haG3ngI9O+c2lPTem l9np4yN8dn/h67/24ODcSQ== 0000008411-94-000011.txt : 19940214 0000008411-94-000011.hdr.sgml : 19940214 ACCESSION NUMBER: 0000008411-94-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATWOOD OCEANICS INC CENTRAL INDEX KEY: 0000008411 STANDARD INDUSTRIAL CLASSIFICATION: 1381 IRS NUMBER: 741611874 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-06352 FILM NUMBER: 94505889 BUSINESS ADDRESS: STREET 1: 15835 PARK TEN PL DR STREET 2: SUITE 200 CITY: HOUSTON STATE: TX ZIP: 77084 BUSINESS PHONE: 7134922929 10-Q 1 PERIOD ENDING 12/31/93 PAGE 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended December 31, 1993 Commission File Number 0-6352 ATWOOD OCEANICS, INC. (Exact name of registrant as specified in its charter) State of Texas 74-1611874 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 15835 Park Ten Place Drive P.O. Box 218350 Houston, Texas 77218 (Address of principal executive offices) Registrant's telephone number, including area code: (713) 492-2929 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 and (2) has been subject to such filings requirements for the past 90 days. Yes x No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of December 31, 1993: 6,582,613 shares of Common Stock $1 par value. PAGE 2 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. FINANCIAL INFORMATION The condensed financial statements herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information not misleading. The financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the quarters ended December 31, 1993 and 1992. All adjustments were of a normal recurring nature. It is suggested these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's September 30, 1993 Annual Report to Shareholders. PAGE 3 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM I - FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, September 30, 1993 1993 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 13,576 $ 10,087 Accounts receivable 11,184 10,768 Current maturities of long-term notes receivable 400 400 Inventories of materials and supplies, at lower of average cost or market 3,971 3,850 Prepaid expenses and other 2,095 1,498 Total Current Assets 31,226 26,603 MARKETABLE SECURITIES AND U.S. TREASURY BONDS 24,949 24,957 LONG-TERM NOTES RECEIVABLE, net of current maturities 6,288 6,389 PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 184,524 182,851 Other 3,952 3,924 188,476 186,775 Less - accumulated depreciation 99,668 96,625 88,808 90,150 DEFERRED COSTS AND OTHER ASSETS 1,028 1,754 $ 152,299 $ 149,853 PAGE 4 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM I - FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, September 30, 1993 1993 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of notes payable by partnership $ 3,000 $ 3,000 Accounts payable 4,465 3,058 Accrued liabilities 6,303 5,842 Total Current Liabilities 13,768 11,900 LONG-TERM NOTES PAYABLE BY PARTNERSHIP, net of current maturities 54,845 55,409 DEFERRED INCOME TAXES 767 --- MINORITY INTEREST IN PARTNERSHIPS 1,569 2,794 SHAREHOLDERS' EQUITY: Preferred stock, no par value; 1,000,000 shares authorized, none outstanding --- --- Common stock, $1 par value; 10,000,000 shares authorized with 6,582,000 shares issued and outstanding 6,582 6,582 Paid-in capital 54,273 54,273 Retained earnings 20,495 18,895 Total Shareholders' Equity 81,350 79,750 $ 152,299 $ 149,853 PAGE 5 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended December 31, 1993 1992 (In thousands, except per) share amounts) REVENUES: Drilling revenues $ 15,373 $ 10,305 Management fee income 485 439 Dividends and interest 615 630 Gain on sale of Indian joint venture 201 --- 16,674 11,374 COSTS AND EXPENSES: Drilling costs 10,849 7,769 Depreciation 3,357 2,935 General and administrative 985 1,034 Interest 680 864 15,871 12,602 INCOME (LOSS) BEFORE MINORITY INTEREST AND INCOME TAXES 803 (1,228) MINORITY INTEREST IN NET LOSS OF PARTNERSHIPS 1,080 916 INCOME (LOSS) BEFORE INCOME TAXES 1,883 (312) PROVISION FOR INCOME TAXES 283 190 NET INCOME (LOSS) $ 1,600 $ (502) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,582 6,582 INCOME (LOSS) PER COMMON SHARE $ .24 $ (.08) PAGE 6 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CASH FLOW Three Months Ended December 31, 1993 1992 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income (Loss) $ 1,600 $ (502) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation 3,357 2,935 Amortization of deferred costs 62 56 Minority interest in net loss of partnership (1,080) (1,072) Changes in assets and liabilities: Decrease (increase) in accounts receivable (416) 3,498 Increase (decrease) in accounts payable and accrued liabilities 1,868 (216) Other (564) 453 Total adjustments 3,227 5,654 Net cash provided by operating activities 4,827 5,152 CASH FLOW FROM INVESTING ACTIVITIES; Proceeds from sale of Indian Joint Venture 1,300 --- Capital expenditures (1,989) (2,011) Payment received on notes receivable 101 101 Net cash used by investing activities (588) (1,910) CASH FLOW FROM FINANCING ACTIVITIES: Principal payment on long term notes payable (750) (750) Short-term note payable --- 3,000 Net cash (used) provided by financing activities (750) 2,250 NET INCREASE IN CASH AND CASH EQUIVALENTS 3,489 5,492 CASH AND CASH EQUIVALENTS, at beginning of period 10,087 8,859 CASH AND CASH EQUIVALENTS, at end of period $ 13,576 $ 14,351 PAGE 7 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total revenues increased $5.3 million (47 percent) and $.7 million (4 percent) in the first quarter of fiscal year 1994 compared to the first and fourth quarters of fiscal year 1993. The significant increase from the first quarter of fiscal year 1993 is primarily due to a $5.1 million (50 percent) increase in drilling revenues coupled with a $201,000 gain on sale of the Company's forty percent interest in an Indian Corporation. A comparative analysis of drilling revenues is as follows: QUARTERS ENDED December 31, September 30, December 31, 1993 1993 1992 (In Thousands) SEAHAWK $ 2,763 $ 2,779 $ --- HUNTER 2,407 2,406 2,200 EAGLE 1,774 2,259 2,270 FALCON 3,546 2,917 2,950 VICKSBURG 1,027 1,049 1,050 RIG-19 1,683 1,729 1,150 RICHMOND 1,462 1,451 --- OTHER 711 $ 26 $ 685 $15,373 $14,616 $10,305 Since its commencement of operations in February 1993, the SEAHAWK has been a significant contributor to the Company's improved operating results. The HUNTER had 100 percent utilization during the quarters ended December 31 and September 30, 1993 compared to 77 percent utilization during the quarter ended December 31, 1992, which accounts for the improvement in revenues from this rig. During December 1993, the EAGLE was mobilized from Malaysia to the "Zone of Cooperation" (an area between Indonesia and Australia) to commence drilling under a multiple well contract for Marathon Petroleum Timor Gap West, Ltd. The downtime incurred in relocating the EAGLE accounts for the decrease in revenues. The increase in revenues for the FALCON is due to the rig being 100 percent utilized during the first quarter of fiscal 1994 as compared to incurring some downtime during both the fourth and first quarters of fiscal 1993. RIG-19 has encountered no downtime since it was relocated to a new platform during the quarter ended December 31, 1992, which accounts for the increase in revenues from this rig. The RICHMOND has worked continuously since its return to work in March 1993. The increase in "other" relates primarily to the commencement in November 1993 of a short-term labor contract in Australia. The Company's current contract status for its drilling operations is as follows: PAGE 8 NAME OF RIG LOCATION CONTRACT STATUS SEAHAWK Malaysia Commenced drilling in February, 1993 under a contract with primary term of 600 days plus multiple options. HUNTER Malaysia Drilling under a contract providing for six firm wells plus six options wells. Without option wells, contract could terminate in July, 1994. EAGLE Indonesia- Drilling under a contract providing for five Australia firm wells plus seven option wells. "Zone of Estimated completion is December 1994. Cooperation" FALCON Malaysia Commencing to drill under a contract for three firm wells plus one optional well. Estimated completion is July 1994. VICKSBURG Australia Drilling under a contract estimated to extend to January 1995. RIG-19 Australia Drilling under a term contract estimated to extend into 1997. RICHMOND U.S. Gulf Drilling under a contract estimated to terminate in April 1994. For the three months ended December 31, 1993 compared to the three months ended December 31, 1992, drilling costs increased $3.1 million or 40 percent. This increase is primarily due to the operations of the SEAHAWK, and increases in utilization of the RICHMOND and FALCON, offset somewhat by refunds of certain payroll related foreign taxes. An analysis of drilling costs by rigs is as follows: QUARTERS ENDED December 31, September 30, December 31, 1993 1993 1992 (In Thousands) SEAHAWK $ 1,538 $ 1,614 $ --- HUNTER 1,691 1,593 1,837 EAGLE 1,539 1,492 1,471 FALCON 2,819 2,717 1,875 VICKSBURG 201 554 717 RIG-19 1,151 1,114 714 RICHMOND 882 1,003 120 OTHER 1,028 796 1,035 $10,849 $10,883 $ 7,769 PAGE 9 As previously stated, the SEAHAWK commenced its operations in February 1993. Even though, the EAGLE revenues declined in the first quarter of fiscal 1994 due to the rig being relocated from Malaysia to Australia - Indonesian "Zone of Cooperation", its operating costs continued at virtually the same level due to the costs associated with this relocation. During the first quarter of fiscal 1993, the FALCON was moved between drilling sites within Australia, which accounts for the lower drilling costs during this period. During the first quarter of fiscal 1994, the Company received refunds of approximately $500,000 related to personnel taxes paid in prior periods for certain rig personnel. Virtually all of these refunds were recorded as a reduction in the drilling costs of the VICKSBURG. Drilling costs of RIG-19 was low in the quarter ended December 31, 1992 due to the rig being relocated to a new drilling site within Australia. The increase in drilling costs for the RICHMOND is due to its 100 percentage utilization since March 1993. The increase in depreciation expense is directly related to the commencement of the SEAHAWK operations. The decline in interest expense is due primarily to a reduction in interest rates coupled with some reduction in outstanding principal. As required, the Company adopted the Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes", in the first quarter of fiscal year 1994. The adoption had no impact on the Company's statement of operations and minimally increased assets and liabilities by approximately $800,000 on the Company's balance sheet. The key to the Company continuing its profitable operations in subsequent quarters is maintaining high utilization of the HUNTER, FALCON and RICHMOND. These rigs have relatively short-term contracts and could incur some idle time toward the end of fiscal 1994. For the remainder of fiscal year 1994, the Company will continue its focus of achieving high utilization of its fleet. LIQUIDITY AND CAPITAL RESOURCES In October, 1993, the Company sold its forty percent interest in an Indian joint venture company for $1.3 million which resulted in the Company recognizing a gain of $201,000. The Company used the proceeds from this sale to help fund the $1.5 million purchase of the SOUTHERN CROSS, a semisubmersible built in 1976. This vessel remains idle in Australia as the Company pursues future contract opportunities. At this time, the Company has no significant capital commitments; however, the Company is currently pursuing and bidding additional expansion opportunities. During the quarter, the Company's working capital increased approximately $3 million. The Company continues to experience no difficulties in collecting its accounts receivable. Subject to investing in new opportunities, the Company's cash reserves should increase as a result of anticipated improvement in cash flows. PAGE 10 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 2 TO OUR SHAREHOLDERS AND EMPLOYEES: The Company earned a profit of $1,600,000 in its first fiscal quarter of 1994. First quarter results were enhanced by refunds of foreign personnel taxes totalling $500,000 related to prior periods and by a gain of $200,000 on the sale of the Company's forty-percent equity in an Indian corporation. Even without these contributions, first quarter results still reflect a significant improvement over the results for the first quarter of 1993. Earnings, before depreciation, interest and taxes, increased from $1,454,000 for the first quarter of 1993 to $3,301,000 for the first quarter of 1994. Compared to the first quarter of 1993, operating cash flow increased from $1,417,000 to $3,239,000. Drilling revenues increased by 49 percent and equipment utilization (excluding the SOUTHERN CROSS, since it has not been placed in service) increased from 83 percent to 99 percent. Continuing high utilization of our three partnership semisubmersibles and the RICHMOND are key factors in the Company maintaining profitability. The EAGLE, FALCON and HUNTER now have firm contract commitments which should keep those units employed through our third fiscal quarter. The RICHMOND also has firm commitments which should keep it employed through our second fiscal quarter. In view of currently lower oil prices, we are closely monitoring market developments for the second half of 1994 with a continuing focus on achieving high utilization of our fleet. The Company has been active during its first quarter in pursuing and bidding additional expansion opportunities. Profitable opportunities for the SOUTHERN CROSS are being sought along with other opportunities requiring new investment. We continue to earnestly strive for enhancement of our safety and environmental efforts. Maintaining and developing effective operating relationships with our clients is also an important goal in building our business. /s/ John R. Irwin JOHN R. IRWIN PRESIDENT PAGE 11 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION None. 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 thereunto duly authorized. ATWOOD OCEANICS, INC. (Registrant) Date: 2/9/94 s/JAMES M. HOLLAND James M. Holland Senior Vice President and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----