-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CverE2b6+lVnPnC3KAJmlF3jdTbBXu/XNDwpbchKppfnAc88yHQzbHfDezFfHYO+ +ExZxSnE0EAcz+EycnRCGg== 0000008411-96-000014.txt : 19960508 0000008411-96-000014.hdr.sgml : 19960508 ACCESSION NUMBER: 0000008411-96-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960507 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATWOOD OCEANICS INC CENTRAL INDEX KEY: 0000008411 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [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: 96556926 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 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, 1996 COMMISSION FILE NUMBER 0-6352 ATWOOD OCEANICS, INC. (Exact name of registrant as specified in its charter) TEXAS 74-1611874 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 15835 Park Ten Place Drive 77084 Houston, Texas (Zip Code) (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 15 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, 1996 6,670,988 shares of Common Stock $1 par value PART I. FINANCIAL INFORMATION ATWOOD OCEANICS, INC. AND SUBSIDIARIES 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 PAGE 2 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 to present fairly the financial position as of March 31, 1996 and September 30, 1995, and the results of operations for the three months and six months ended March 31, 1996 and 1995, respectively, and the statements of cash flows for the six months then ended. 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, 1995 Annual Report to Shareholders. PAGE 3 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) March 31, Septemmber 1996 1995 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 11,964 $ 11,984 Accounts receivable 16,240 13,425 Inventories of materials and supplies, at lower of average cost or market 5,114 4,904 Prepaid expenses and other 2,801 3,953 Total Current Assets 36,119 34,266 SECURITIES HELD FOR INVESTMENT: Held for maturity, at amortized cost 22,407 22,422 Available-for-sale, at fair value 4,108 3,516 26,515 25,938 PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 175,950 174,989 Investment in joint venture 10,447 8,182 Other 4,689 4,569 191,086 187,740 Less-accumulated depreciation 101,067 96,313 Net Property and Equipment 90,019 91,427 DEFERRED COSTS AND OTHER ASSETS 1,037 1,222 $153,690 $152,853 See accompanying notes to financial statements.
PAGE 4 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) March 31, September 30, 1996 1995 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term notes payable $ 3,750 $ 3,750 Short-term notes payable --- 1,500 Accounts payable 3,045 6,260 Accrued liabilities 10,401 8,995 Total Current Liabilities 17,196 20,505 LONG-TERM NOTES PAYABLE, net of current maturities 33,319 35,569 DEFERRED CREDITS: Income taxes 1,595 1,334 Other 3,786 553 5,381 1,887 SHAREHOLDERS' EQUITY: Preferred stock, no par value; 1,000,000 shares authorized, none outstanding --- --- Common stock, $1 par value; 10,000,000 share authorized with 6,671,000 and 6,629,000 shares shares issued and outstanding in 1996 and 1995, respectively 6,671 6,629 Paid-in capital 55,247 54,771 Net unrealized holding gains on available-for-sale securities 1,719 1,328 Retained earnings 34,157 32,164 Total Shareholders' Equity 97,794 94,892 $ 153,690 $ 152,853
See accompanying notes to financial statements PAGE 5 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES Consolidated Statement of Operations (Unaudited)
Three Months Ended Six Months Ended March 31, March 31, 1996 1995 1996 1995 (In thousands, except per share amounts) REVENUES: Contract drilling $ 18,878 $ 17,928 $ 36,821 $ 35,565 Contract management 208 386 403 1,055 19,086 18,314 37,224 36,620 COSTS AND EXPENSES: Contract drilling 12,901 12,508 25,789 24,876 Contract management 149 115 295 277 Depreciation 2,433 2,496 5,068 6,038 General and administrative 1,294 1,190 2,354 2,247 16,777 16,309 33,506 33,438 OPERATING INCOME 2,309 2,005 3,718 3,182 OTHER INCOME (EXPENSE) Interest expense (619) (636) (1,309) (1,467) Interest income 591 763 1,180 1,442 (28) 127 (129) (25) INCOME BEFORE MINORITY INTEREST AND INCOME TAXES 2,281 2,132 3,589 3,157 MINORITY INTEREST IN NET LOSS OF PARTNERSHIPS --- --- --- 908 INCOME BEFORE INCOME TAXES 2,281 2,132 3,589 4,065 PROVISION FOR INCOME TAXES Foreign 800 665 1,584 655 Federal 150 180 12 380 950 845 1,596 1,035 NET INCOME $ 1,331 $ 1,287 $ 1,993 $ 3,030 EARNINGS PER COMMON SHARE $ .20 $ .20 $ .30 $ .46 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,648 6,582 6,640 6,582
See accompanying notes to financial statements. PAGE 6 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended March 31, 1996 1995 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $ 1,993 $ 3,030 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 5,068 6,038 Amortization of deferred costs 306 238 Minority interest in net loss of partnerships --- (908) Changes in assets and liabilities: Increase in accounts receivable (2,815) (678) Increase (decrease) in accounts payable and accrued liabilities (1,809) 2,024 Other 1,069 1,265 Total adjustments 1,819 7,979 Net cash provided by operating activities 3,812 11,009 CASH FLOW FROM INVESTING ACTIVITIES: Payment received on note receivable --- 202 Investment in joint venture (2,264) (1,708) Capital expenditures (1,336) (1,997) Net cash used by investing activities (3,600) (3,503) CASH FLOW FROM FINANCING ACTIVITIES: Principal payments on long-term notes payable (2,250) (1,500) Proceeds from exercises of stock options 518 --- Payment on short-term note payable (1,500) --- Prepayment of mobilization revenues 3,000 --- Net payments to limited partner --- (100) Net Cash used by financing activities (232) (1,600) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (20) 5,906 CASH AND CASH EQUIVALENTS, at beginning of period 11,984 16,119 CASH AND CASH EQUIVALENTS, at end of period $11,964 $22,025
See accompanying notes to financial statements PAGE 7 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In January 1996, the Company commenced receiving a contribution to its financial results from a dayrate payment on RIG-200 during the delay period prior to its start-up of operations in Australia in late 1996 or early 1997. In December 1995, the Company received a $3 million prepayment of mobilization revenue relating to RIG-200 which was reflected in the Consolidated Balance Sheet as "other deferred credits". 2. For the six months ended March 31, 1996, in accordance with FASB 115, shareholders' equity was increased $391,000 (net of $201,000 increase in deferred income taxes) to reflect the net unrealized increases during the six months ended March 31, 1996 in holding gains on securities classified as available-for-sale. PAGE 8 PART I. ITEM 2 ATWOOD OCEANICS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Excluding the ATWOOD SOUTHERN CROSS, which has not been placed in service, the Company has continued to maintain 100 percent utilization of its equipment. Since October 1993 through March 31, 1996, the Company has incurred only forty-one idle equipment days, a 99.5 percent equipment utilization rate. Contract drilling revenues increased $1.3 million in the first six months of fiscal year 1996 compared to the first six months of fiscal year 1995; however, this increase was offset somewhat by an approximate $650,000 decrease in contract management revenues. The reduction in contract management revenues is due to the commencement in the first quarter of fiscal year 1995 of drilling operations of the GOODWYN 'A' platform rig whereby the Company is currently compensated through dayrate revenues instead of a fixed management fee as was the case prior to commencement of drilling operations. The increase in total contract revenues for the three months and six months ended March 31, 1996 is primarily due to the commencement in January 1996 of dayrate payments on RIG 200. A comparative analysis of drilling revenues is as follows:
QUARTERS ENDED March 31, December 31, March 31, 1996 1995 1995 RIG-200 $ 729 $ --- $ --- SEAHAWK 2,736 2,690 2,601 HUNTER 2,658 2,552 2,542 EAGLE 3,733 3,857 3,878 FALCON 2,515 2,553 2,787 VICKSBURG 1,235 1,249 1,198 RIG-19 2,057 1,939 1,908 RICHMOND 1,494 1,271 1,430 GOODWYN "A" 1,721 1,832 1,584 $18,878 $17,943 $17,928
Since its commencement of operation in February 1993, the SEAHAWK has been a significant contributor to the Company's profitability. The ATWOOD HUNTER has experienced 100 percent utilization since April 1993. The ATWOOD FALCON has experienced 100 percent utilization while working in China and the "Joint Development Area" between Thailand and Malaysia. The increase in revenue for the RICHMOND in the second quarter of fiscal year 1996 compared to the first quarter of fiscal year 1996 is due to higher dayrate levels. In October 1994, the Australian operator-owned GOODWYN 'A' platform rig commenced PAGE 9 drilling operations. Since July 1989, the Company, on a management fee basis, directed the design, construction and offshore commissioning of the GOODWYN 'A' drilling facilities. The Company now has responsibility for the operations and maintenance of these facilities and is compensated on a dayrate basis. Current status of the Company's drilling contracts is as follows: NAME OF RIG LOCATION CONTRACT STATUS RIG-200 United States Currently waiting for notice to transport rig to Australia. Estimate drilling to commence late 1996 or early 1997. Firm two year term with anticipated drilling program of five years. SEAHAWK Malaysia Term contract (estimated completion February 1997). ATWOOD Malaysia Rig has six remaining option wells on HUNTER its current contract, which, if drilled, could result in the dayrate revenue remaining approximately at current level. If all option wells are drilled, contract could extend to the end of 1996. ATWOOD Equatorial Guinea Preparing to commence drilling under a EAGLE one year firm plus two six-month options contract. ATWOOD Thailand/Malaysia Drilling the fourth of four firm wells FALCON "Joint with three option wells (estimated Development Area" completion October 1996 if all option wells drilled). VICKSBURG Australia Under contract until January 1997 (with a one year option). RIG-19 Australia Should complete work on current platform in August 1996. Discussions ongoing whereby rig could be moved to a new platform with drilling work of 9 to 18 months. RICHMOND United States Firm commitment through June 1996 in the Gulf of Mexico (anticipate continuous work with current client through remainder of fiscal year 1996.) GOODWYN 'A' Australia Term contract (estimated completion December 1996). For the six months ended March 31, 1996 compared to the six months ended March 31, 1995, contract drilling costs increased $913,000 or 4 percent. An analysis of contract drilling costs by rig is as follows: PAGE 10
QUARTERS ENDED March 31, December 31, March 31, 1996 1995 1995 (In thousands) SEAHAWK $ 1,654 $ 1,593 $ 1,377 ATWOOD HUNTER 1,821 1,758 1,769 ATWOOD EAGLE 2,519 2,939 3,138 ATWOOD FALCON 1,663 1,638 1,543 VICKSBURG 705 786 770 RIG-19 1,613 1,435 1,552 RICHMOND 1,235 1,111 1,008 GOODWYN "A" 1,379 1,384 1,219 OTHER 312 244 132 $12,901 $12,888 $12,508
The increase in drilling costs for the SEAHAWK and ATWOOD HUNTER is primarily due to general increases in equipment maintenance costs. The reduction in drilling costs for the ATWOOD EAGLE is attributable to the rig completing its drilling program in Australia in early March 1996 and being mobilized to Equatorial Guinea. For the six months ended March 31, 1996 compared to the same period in fiscal year 1995, depreciation decreased $970,000. This decrease is attributable to an increase in the depreciable lives of the ATWOOD HUNTER, ATWOOD EAGLE and ATWOOD FALCON of five additional years upon the Company's acquisition of the limited partner's interest in these rigs effective December 31, 1994. An analysis of depreciation expense by rig is as follows:
QUARTERS ENDED March 31, December 31, March 31, 1996 1995 1995 (In thousands) ATWOOD HUNTER $ 410 $ 404 $ 396 ATWOOD EAGLE 482 481 478 ATWOOD FALCON 659 656 651 SEAHAWK 552 585 576 RIG-19 159 340 287 OTHER 171 169 108 $ 2,433 $ 2,635 $ 2,496
As a result of the Company's buyout of its limited partner's interest effective as of December 31, 1994, the limited partner had no interest in the operating results of the ATWOOD HUNTER, ATWOOD EAGLE and ATWOOD FALCON for the six months ended March 31, 1996; therefore, no minority interest is reflected in the 1996 financial statements. The increase in provision for income taxes for the six months ended March 31, 1996 is due primarily to increases in foreign taxes in Malaysia and Australia. As a result of profitable operations in recent times in both of these countries, most tax carryforward attributes have been utilized, thereby, increasing exposure to foreign taxes. Thus, PAGE 11 operating results for the 1995 compared to 1996 were enhanced by the positive impact of minority interest and a lower tax provision. Due to lower tax attribute carryforwards, the Company anticipates that tax expense in 1996 will be higher than 1995. LIQUIDITY AND CAPITAL RESOURCES Except for general capital maintenance (estimated to range between $3 million and $6 million for fiscal year 1996) the Company currently has no other capital commitments. However, the Company has five drilling vessels that have upgrade potential. The ATWOOD FALCON, ATWOOD HUNTER and ATWOOD EAGLE are currently equipped to drill in water depths of 2,500, 1,500 and 2,500 feet, respectively, and can be upgraded to drill in deeper water depths. The Company is currently exploring opportunities which, if successful, could require an upgrade investment of between $10 and $20 million per rig to drill in 3,000 feet of water and a significantly higher investment to reach a deeper water depth drilling capacity. The ATWOOD SOUTHERN CROSS (a second-generation semisubmersible) remains idle in Australia as the Company continues to market the rig. Before this unit can be placed in service, an additional capital investment of approximately $20 million will be required to enable the rig to drill in water depths up to 2,000 feet. The VICKSBURG, a jackup, is also a candidate for upgrade investment. This rig is currently committed under a drilling contract until 1997. The construction of RIG-200 was completed on time and within cost estimates. The rig is currently stacked in the United States awaiting notification for delivery of the rig to Australia. Due to certain delays unrelated to the Company's activities, the rig is now not scheduled to commence drilling operations until late 1996 or early 1997. On January 1, 1996, the Company commenced receiving a "holding period" dayrate on RIG-200. In December 1995, the Company received a $3 million prepayment of mobilization revenues related to RIG-200, which will not be recognized into income until the rig is delivered to Australia. The Company continues to experience no difficulties in collecting its accounts receivable, with no requirement for an allowance for doubtful accounts. Currently the Company has no outstanding borrowings under a $10 million short-term line of credit it has with a bank. In accordance with Financial Accounting Standard Board Statement No. 115, available for sale securities are reflected in the Consolidated Balance Sheet at fair value, with the aggregate unrealized gain, net of related deferred tax liability included in shareholders' equity. Fiscal year 1996 second quarter results were enhanced by the commencement in January 1996 of dayrate payments on RIG-200. With the relocation of the ATWOOD EAGLE to Equatorial Guinea to commence a drilling program at a significantly increased dayrate level, coupled with revenues from RIG-200, management anticipates that the level of profitability for the last two quarters of fiscal year 1996 will reflect continuing improvement. The Company should be able to continue to maintain a high level of equipment utilization. Management will continue to pursue contract opportunities for the ATWOOD SOUTHERN CROSS, as well as higher dayrate contracts for the ATWOOD HUNTER and ATWOOD FALCON which should enhance the operating results of these two rigs in fiscal year 1997. 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 8, 1996, at which the shareholders voted on the election of six directors (each to serve a one year term) and to act upon a shareholder's proposal. Of the 6,330,958 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 are as follows:
NAME CAST FOR VOTES WITHHELD Robert W. Burgess 6,281,824 52,074 George S. Dotson 6,283,824 48,074 Walter H. Helmerich III 6,284,754 46,214 Hans Helmerich 6,268,544 78,614 John R. Irwin 6,284,764 46,194 William J. Morrissey 6,281,824 52,074
The vote on the shareholder's proposal was as follows:
SHARES VOTED FOR SHARES VOTED AGAINST SHARES ABSTAINED FROM VOTING 335,722 5,469,628 16,710
PAGE 13 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: 5/6/96 James M. Holland Senior Vice President and Chief Accounting Officer EX-27 2
5 0000008411 ATWOOD OCEANICS, INC. 1,000 3-MOS SEP-30-1996 OCT-01-1995 MAR-31-1996 11,964 26,515 16,240 0 5,114 36,119 191,086 101,067 153,690 17,196 33,319 0 0 6,671 56,966 153,690 37,224 38,404 26,084 28,438 5,068 0 1,309 3,589 1,596 1,993 0 0 0 1,993 .30 .30
-----END PRIVACY-ENHANCED MESSAGE-----