-----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, b9e6MwCDTOEbhFEwIEV9nU/6LsibD2mm8spMcChMQOYiL7cdttSHlRjNXyJIlz7z XMcfKEk4XsZAYCSvz53tXQ== 0000008411-94-000018.txt : 19940516 0000008411-94-000018.hdr.sgml : 19940516 ACCESSION NUMBER: 0000008411-94-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 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: 1934 Act SEC FILE NUMBER: 000-06352 FILM NUMBER: 94528123 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 10-Q 31 MARCH 1994 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 March 31, 1994 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 March 31, 1994: 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 March 31, 1994 and 1993. 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) March 31, September 30, 1994 1993 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 13,542 $ 10,087 Accounts receivable 11,769 10,768 Current maturities of long-term notes receivable 400 400 Inventories of materials and supplies, at lower of average cost or market 3,990 3,850 Prepaid expenses and other 1,987 1,498 Total Current Assets 31,688 26,603 MARKETABLE SECURITIES AND U.S. TREASURY BONDS 24,942 24,957 LONG-TERM NOTES RECEIVABLE, net of current maturities 6,187 6,389 PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 184,971 182,851 Other 3,994 3,924 188,965 186,775 Less - accumulated depreciation 102,557 96,625 86,408 90,150 DEFERRED COSTS AND OTHER ASSETS 937 1,754 $ 150,162 $ 149,853 PAGE 4 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM I - FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, September 30, 1994 1993 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of notes payable by partnership $ 3,000 $ 3,000 Accounts payable 3,006 3,058 Accrued liabilities 5,780 5,842 Total Current Liabilities 11,786 11,900 LONG-TERM NOTES PAYABLE BY PARTNERSHIP, net of current maturities 54,280 55,409 DEFERRED INCOME TAXES 767 --- MINORITY INTEREST IN PARTNERSHIPS 674 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 21,800 18,895 Total Shareholders' Equity 82,655 79,750 $ 150,162 $ 149,853 PAGE 5 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 1994 1993 (In thousands, except per) share amounts) REVENUES: Drilling revenues $ 15,985 $ 11,605 Management fee income 534 382 Dividends and interest 598 809 Gain on Sale of Indian Joint Venture --- --- 17,117 12,796 COSTS AND EXPENSES: Drilling costs 11,124 9,638 Depreciation 3,385 3,280 General and administrative 1,094 1,002 Interest 675 791 16,278 14,711 INCOME (LOSS) BEFORE MINORITY INTEREST AND INCOME TAXES 839 (1,915) MINORITY INTEREST IN LOSS OF PARTNERSHIPS 714 1,384 INCOME (LOSS) BEFORE INCOME TAXES 1,553 (531) PROVISION FOR INCOME TAXES 248 616 NET INCOME (LOSS) $ 1,305 $ (1,147) INCOME (LOSS) PER COMMON SHARE $ .20 $ (.17) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,582 6,582 PAGE 6 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. PART 1 - FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Six Months Ended March 31, 1994 1993 (In thousands, except per) share amounts) REVENUES: Drilling revenues $ 31,358 $ 21,910 Management fee income 1,019 821 Dividends and interest 1,213 1,439 Gain on Sale of Indian Joint Venture 201 --- 33,791 24,170 COSTS AND EXPENSES: Drilling costs 21,973 17,407 Depreciation 6,742 6,215 General and administrative 2,079 2,036 Interest 1,355 1,655 32,149 27,313 INCOME (LOSS) BEFORE MINORITY INTEREST AND INCOME TAXES 1,642 (3,143) MINORITY INTEREST IN LOSS OF PARTNERSHIPS 1,794 2,300 INCOME (LOSS) BEFORE INCOME TAXES 3,436 (843) PROVISION FOR INCOME TAXES 531 806 NET INCOME (LOSS) $ 2,905 $ (1,649) INCOME (LOSS) PER COMMON SHARE $ .44 $ (.25) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,582 6,582 PAGE 7 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CASH FLOW Six Months Ended March 31, 1994 1993 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income (Loss) $ 2,905 $ (1,649) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation 6,742 6,215 Amortization of deferred costs 263 11 Minority interest in loss of partnerships (1,794) (2,300) Changes in assets and liabilities: Decrease (increase) in accounts receivable (1,001) 6,138 Decrease in accounts payable and accrued liabilities (114) (1,484) Other (541) 422 TOTAL ADJUSTMENTS 3,555 9,002 Net Cash Provided by Operating Activities 6,460 7,353 CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from sale of Indian Joint Venture 1,300 --- Capital expenditures (3,007) (4,039) Payment received on notes receivable 202 716 Net Cash Used by Investing Activities (1,505) (3,323) CASH FLOW FROM FINANCING ACTIVITIES: Principal payment on long-term notes payable (1,500) (1,500) Repayment of short-term note payable --- (2,500) Net advances by limited partner --- 262 Net Cash Used by Financing Activities (1,500) (3,738) NET INCREASE IN CASH AND CASH EQUIVALENTS 3,455 292 CASH AND CASH EQUIVALENTS, at beginning of period 10,087 8,859 CASH AND CASH EQUIVALENTS, at end of period $ 13,542 $ 9,151 PAGE 8 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 $4.3 million (34 percent) in the second quarter of fiscal year 1994 compared to the second quarter of fiscal year 1993. This increase is primarily due to an increase in drilling revenues. A comparative analysis of drilling revenues by rig is as follows: QUARTERS ENDED March 31, December 31, March 31, 1994 1993 1993 (In Thousands) HUNTER $ 2,533 $ 2,407 $ --- EAGLE 3,218 1,774 2,318 FALCON 2,311 3,546 4,157 VICKSBURG 1,044 1,027 1,239 RIG-19 1,744 1,683 1,759 SEAHAWK 2,684 2,763 811 RICHMOND 1,487 1,462 647 OTHER 964 711 674 $15,985 $15,373 $11,605 Thus far in fiscal year 1994, the HUNTER has incurred no idle days. The rig was idle the entire second quarter of fiscal year 1993. 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. The downtime incurred in December in relocating the rig coupled with a higher dayrate contract accounts for the significant increase in revenues for the EAGLE in the second quarter as compared to the first quarter of fiscal year 1994. Due to higher labor costs, dayrate revenue levels are higher in Australia than in Malaysia. This difference in dayrate levels is reflected in the comparison of FALCON revenues. The FALCON was relocated from Australia to Malaysia during the second quarter of fiscal year 1994 which accounts for its reduction in revenues. Since its relocation from the Gulf of Mexico to Australia in 1987, the VICKSBURG has worked continuously for the same customer. RIG-19 has also had continuous employment since its acquisition in 1989. Since its commencement of operations in February 1993, the SEAHAWK has been a significant contributor to the Company's improved operating results. The RICHMOND has worked continuously since its return to employment 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 drilling rigs wholly or partially owned is as follows: PAGE 9 NAME OF RIG LOCATION CONTRACT STATUS HUNTER Malaysia Rig has four remaining firm wells to drill under current contract which also provides for six option wells. If no option wells are drilled, contract could terminate in July 1994. EAGLE Indonesia- Drilling under a contract providing for five Australia firm wells plus seven option wells. "Zone of If no options wells are drilled, contract Cooperation" could terminate in July 1994. FALCON Malaysia Drilling under a contract for three firm wells plus one option well. If option well not drilled, contract could terminate in 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. SEAHAWK Malaysia Commenced drilling in February, 1993 under a contract with primary term of 600 days plus multiple options. RICHMOND U.S. Gulf Drilling under a contract estimated to terminate in June 1994. SOUTHERN CROSS Australia Remains idle while the Company pursues future contract opportunities. For the three months ended March 31, 1994 compared to the three months ended March 31, 1993, drilling costs increased $1.5 million or 15 percent. An analysis of drilling costs by rig is as follows: QUARTERS ENDED March 31, December 31, March 31, 1994 1993 1993 (In Thousands) HUNTER $ 1,823 $ 1,691 $ 1,133 EAGLE 2,430 1,539 1,560 FALCON 1,422 2,819 2,606 VICKSBURG 610 201 856 RIG-19 1,242 1,151 1,212 SEAHAWK 1,451 1,538 959 RICHMOND 885 882 455 OTHER 1,261 1,028 857 $11,124 $10,849 $ 9,638 The increase in the HUNTER's drilling costs for the first two quarters of fiscal 1994 compared to the second quarter of fiscal 1993 is directly related to its 100 percent utilization in 1994. The increase in EAGLE's PAGE 10 related to its 100 percent utilization, thus far, in fiscal 1994. The increase in EAGLE's drilling costs is due to its relocation from Malaysia to Australia - Indonesia "Zone of Cooperation". Operating costs are less in Malaysia due to lower labor expenses. The reduction in FALCON drilling costs is due to its relocation from Australia to Malaysia. Even though operating costs are lower in Malaysia compared to Australia, current dayrate levels are also less; thereby, resulting in approximately the same operating margins. 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 which accounts for its low costs in the quarter ended December 31, 1993. As previously stated, the SEAHAWK commenced its operation in February 1993. The increase in drilling costs for the RICHMOND is due to its 100 percent utilization since March 1993. The increase in "Other" is due to the commencement of the Australian labor contract in November 1993. The decline in interest expense during 1994 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 primary reason for the Company's profitable results in 1994 has been its ability to maintain high equipment utilization. For the first six months of fiscal year 1994, the Company, excluding the SOUTHERN CROSS, has only incurred eleven idle equipment days (99 percent utilization) compared to 259 idle equipment days (80 percent utilization) for the same period in fiscal year 1993. The key to the Company continuing its profitable operations in subsequent quarters is maintaining high utilization of its equipment. The HUNTER, EAGLE, FALCON and RICHMOND are working under contracts that could end during the current fiscal year. Should any of these contracts terminate, there is no guarantee of immediate on-going work; thus the Company could incur significant idle equipment days toward the end of fiscal year 1994. For the remainder of fiscal year 1994, the Company will continue its emphasis on maintaining high equipment utilization. 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 first half of fiscal 1994 the Company's working capital increased approximately $5 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 continuing improvement in cash flows. PAGE 11 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART I. ITEM 2 TO OUR SHAREHOLDERS AND EMPLOYEES: May 12, 1994 To Our Shareholders and Employees: The Company had 100 percent utilization of its drilling equipment during the second quarter of fiscal 1994 excluding the SOUTHERN CROSS, which has not been placed in service. The primary reason for the Company's profitable results to date in 1994 has been its ability to maintain high equipment utilization. For the first six months of fiscal year 1994, the Company, excluding the SOUTHERN CROSS, has only incurred eleven idle equipment days (99 percent utilization) compared to 259 idle equipment days (80 percent utilization) for the same period in fiscal year 1993. Earnings, including investment income, before depreciation, interest and taxes, but after adjustment for minority interest, were $7.7 million for the six months ended March 31, 1994, compared to $3.0 million for the same period in 1993. Drilling revenues for the second quarter of fiscal year 1994 increased $4.38 million or 38 percent compared to the same period in 1993. Firm contract commitments already in place should permit the Company to maintain high fleet utilization during its third quarter of fiscal year 1994. However, uncertainties relating to oil prices, possible deferrals in exploration programs and international rig relocations for the second half of calendar 1994 continue to persist. Ongoing opportunities for our three semisubmersibles and the RICHMOND commencing in the third and fourth quarters of calendar 1994 are being aggressively pursued with a view to maintaining high utilization. Our overall safety and operational performances during the quarter have been given strong emphasis and have progressed favorably. In keeping with our positive longer-term view, we have also recently submitted bids for term opportunities that, if successful, would require investment in new equipment or major upgrade improvements in existing equipment. /s/ John R. Irwin JOHN R. IRWIN PRESIDENT PAGE 12 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security-Holders. The Company's Annual Meeting of Shareholders was held on February 10, 1994, at which the shareholders voted on the election of six directors. Of the 5,348,602 shares of Common Stock present in person or by proxy, the number of shares voted for or withheld in connection with the election of each director is as follows: Votes Votes Name Cast For Withheld Robert W. Burgess 5,341,042 7,560 George S. Dotson 5,341,042 7,560 Walter H. Helmerich III 5,341,042 7,560 Hans Helmerich 5,341,042 7,560 John R. Irwin 5,341,042 7,560 William J. Morrissey 5,341,042 7,560 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: 5/12/94 s/JAMES M. HOLLAND James M. Holland Senior Vice President and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----