-----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, JURgoWHiLtXU/qPFx3UmdxRiUvgS5hg/W+P3oPZPVTYs8/pVyxeXiB1POC8FPxaV GRXvOB5d6ZkMiQJIZoaIvQ== 0000008411-98-000004.txt : 19980212 0000008411-98-000004.hdr.sgml : 19980212 ACCESSION NUMBER: 0000008411-98-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980211 SROS: NYSE 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: SEC FILE NUMBER: 001-13167 FILM NUMBER: 98530870 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 ================================================================================ 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, 1997 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: 281-492-2929 --------------- 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 December 31, 1997 13,551,626 shares of Common Stock $1 par value ================================================================================ PART I. FINANCIAL INFORMATION ATWOOD OCEANICS, INC. AND SUBSIDIARIES The condensed consolidated financial statements herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, these financial statements and related information have been prepared without audit and certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although management believes that the disclosures are adequate to make the information not misleading. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of December 31, 1997 and September 30, 1997, and the results of its operations and cash flows for the three months ended December 31, 1997 and 1996, respectively. All adjustments were of a normal recurring nature. The interim financial results may not be indicative of results that could be expected for a full year. It is suggested these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's September 30, 1997 Annual Report to Shareholders. PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, September 30, 1997 1997 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 8,919 $ 19,264 Accounts receivable 22,704 16,353 Inventories of materials and supplies, at lower of average cost or market 6,750 7,004 Deferred tax assets 1,820 1,820 Prepaid expenses 2,136 2,610 ----- ----- Total Current Assets 42,329 47,051 ------ ------ SECURITIES HELD FOR INVESTMENT: Held-to-maturity, at amortized cost 22,582 22,581 Available-for-sale, at fair value 440 389 --- --- 23,022 22,970 ------ ------ PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 273,697 249,496 Other 5,616 5,363 ----- ----- 279,313 254,859 Less-accumulated depreciation 114,800 110,936 ------- ------- Net Property and Equipment 164,513 143,923 ------- ------- DEFERRED COSTS AND OTHER ASSETS 1,252 1,386 ----- ----- $231,116 $215,330 ======== ======== PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, September 30, 1997 1997 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 750 $ 750 Accounts payable 3,856 5,323 Accrued liabilities 14,603 13,429 ------ ------ Total Current Liabilities 19,209 19,502 ------ ------ LONG-TERM DEBT, net of current maturities 65,000 58,750 ------ ------ DEFERRED CREDITS: Income taxes 2,628 1,810 Other 12,847 12,579 ------ ------ 15,475 14,389 ------ ------ SHAREHOLDERS' EQUITY: Preferred stock, no par value; 1,000,000 shares authorized, none outstanding --- --- Common stock, $1 par value; 20,000,000 share authorized with 13,552,000 and 13,546,000 shares issued and outstanding 13,552 13,546 Paid-in capital 50,131 50,104 Net unrealized holding loss on available-for-sale securities (79) (112) Retained earnings 67,828 59,151 ------ ------ Total Shareholders' Equity 131,432 122,689 ------- ------- $ 231,116 $ 215,330 ========= ========= PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended December 31, 1997 1996 (In thousands except per share amounts) REVENUES: Contract drilling $ 35,768 $ 21,667 Contract management 456 426 --- --- 36,224 22,093 ------ ------ COSTS AND EXPENSES: Contract drilling 16,069 12,406 Contract management 354 254 Depreciation 4,072 2,302 General and administrative 1,984 1,511 ----- ----- 22,479 16,473 ------ ------ OPERATING INCOME 13,745 5,620 ------ ----- OTHER INCOME (EXPENSE) Interest expense (1,039) (532) Interest income 583 646 --- --- (456) 114 ---- --- INCOME BEFORE INCOME TAXES 13,289 5,734 PROVISION FOR INCOME TAXES 4,612 1,815 ----- ----- NET INCOME $8,677 $3,919 ====== ====== EARNINGS PER SHARE Basic $ .64 $ .29 Fully Dilutive $ .63 $ .29 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 13,550 13,414 Fully Dilutive 13,855 13,711 See accompanying notes to financial statements. PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended December 31, 1997 1996 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $8,677 $3,919 ------ ------ Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 4,072 2,302 Amortization of deferred items 208 287 Changes in assets and liabilities: Increase in accounts receivable (6,351) (1,860) Increase (decrease) in accounts payable and accrued liabilities (293) 2,036 Deferred mobilization revenues 1,200 4,500 Other 1,360 (1,523) ------- ------- Total adjustments 196 5,742 ----- ----- Net cash provided by operating activities 8,873 9,661 ------- ----- CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (25,501) (6,000) Investment in RIG-200 --- (378) --- ----- Net cash used by investing activities (25,501) (6,378) -------- ------- CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from revolving credit facility 7,000 --- Proceeds from exercises of stock options 33 247 Principal payments on long-term debt (750) (3,683) ---- ------ Net cash used by financing activities (6,283) (3,436) ------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS (10,345) (153) CASH AND CASH EQUIVALENTS, at beginning of period 19,264 17,565 ------- ------- CASH AND CASH EQUIVALENTS, at end of period $8,919 $17,412 ======== ======= Supplemental disclosure of cash flow information: Cash paid during the quarter for domestic and foreign income tax $ 1,022 $ --- ========= ======== Cash paid during the quarter for interest $ 1,034 $ 659 ========= ======== PART I. ITEM 2 ATWOOD OCEANICS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS All non-historical information set forth herein is based upon expectations and assumptions deemed reasonable by the Company. The Company can give no assurance that such expectations and assumptions will prove to have been correct, and actual results could differ materially from the information presented herein. The Company's periodic reports filed with the Securities and Exchange Commission should be consulted for a description of risk factors associated with an investment in the Company. RESULTS OF OPERATIONS Contract revenues and net income for the three months ended December 31, 1997 increased 64% and 121%, respectively, compared to the three months ended December 31, 1996. This improvement in operating results reflect the impact of the ATWOOD HUNTER and the ATWOOD SOUTHERN CROSS commencing drilling operation after upgrades and of increases in dayrate revenues for the ATWOOD EAGLE, RICHMOND and ATWOOD FALCON coupled with RIG-200 and RIG-19 having reduced revenues in the first quarter of fiscal 1997 due to offshore platform installations. A comparative analysis of contract revenues is as follows: CONTRACT REVENUES ---------------- ----------------- ------------- First Quarter First Quarter Fiscal 1998 Fiscal 1997 Variance ---------------- ----------------- ------------- (In millions) ATWOOD HUNTER $ 9.3 $ 3.5 $ 5.8 ATWOOD EAGLE 7.4 4.7 2.7 RIG-200 2.0 0.4 1.6 SOUTHERN CROSS 1.4 0.0 1.4 RIG-19 1.9 0.9 1.0 RICHMOND 2.7 2.0 0.7 VICKSBURG 1.9 1.3 0.6 ATWOOD FALCON 4.5 4.2 0.3 SEAHAWK 2.8 2.8 0.0 NORTH RANKIN 'A' 0.5 0.4 0.1 GOODWYN 'A' 1.8 1.9 (0.1) ---------------- ----------------- ------------- $36.2 $22.1 $14.1 ================ ================= ============= The VICKSBURG is currently in a Singapore shipyard undergoing upgrade and cantilever conversion. The ATWOOD EAGLE should finish its present contract around the end of February 1998, at which time it will be mobilized to the Mediterranean Sea to commence a minimum 200-day program at higher dayrates. The ATWOOD FALCON is currently drilling phase-one of its long-term contract in the Philippines, and the rig should enter a Southeast Asia shipyard to undergo its required water-depth upgrade around May/June, 1998. Preparations are being made to move RIG-19 to another platform. Contract drilling and management costs increased 29% during the first quarter of fiscal 1998 compared to the first quarter of fiscal 1997. This increase was primarily due to commencement of drilling operations for the ATWOOD HUNTER and the ATWOOD SOUTHERN CROSS following upgrades, RIG-200 having no active drilling costs in the first quarter of fiscal 1997, RIG-19 being relocated to a new platform during the first quarter of fiscal 1997 with no revenues or costs being recognized during the relocation period and the VICKSBURG incurring increased costs in preparation for its mobilization to a shipyard for upgrade. A comparative analysis of contract drilling and management costs is as follows: CONTRACT DRILLING AND MANAGEMENT COSTS ------------------------------------------------- First Quarter First Quarter Fiscal 1997 Fiscal 1996 Variance ------------------------------------------------- (In millions) SOUTHERN CROSS $ 1.1 $ 0.0 $ 1.1 RIG-200 0.7 0.0 0.7 RIG-19 1.5 0.8 0.7 VICKSBURG 1.4 0.8 0.6 ATWOOD HUNTER 2.2 1.9 0.3 RICHMOND 1.5 1.3 0.2 ATWOOD FALCON 1.8 1.7 0.1 SEAHAWK 1.7 1.7 0.0 GOODWYN `A'/NORTH RANKIN`A' 1.7 1.7 0.0 ATWOOD EAGLE 2.1 2.5 (0.4) OTHER 0.7 0.3 0.4 ------------------------------------------------- $16.4 $12.7 $3.7 ================================================= The reduction in operation cost for the ATWOOD EAGLE was due to a decline in repair and maintenance costs for the quarter. The increase in other costs was primarily due to currency exchange losses in Southeast Asia. Since most of the Company's drilling contracts provide for payments in US dollars, the Company's exposure to currency exchange losses is limited. The increase in depreciation expense was due to the commencement of upgrade cost depreciation of the ATWOOD HUNTER and ATWOOD SOUTHERN CROSS coupled with RIG-200 having no depreciation expense during the quarter ended December 31, 1996 since it did not start active drilling operation until January 1997. General and administrative expenses increased 31% primarily due to higher payroll related costs. A summary of the contract status of each of the Company's wholly or partially owned drilling rigs as of February 10, 1998 is as follows: NAME OF RIG LOCATION CONTRACT STATUS ATWOOD FALCON Philippines Currently drilling under a two phase program. Phase one estimated to extend to June 1998. Upon completion of the Phase one program, the rig will be transported to Singapore to undergo an upgrade to enable the rig to operate in up to 3,500 feet of water. When the upgrade is completed (estimated the first quarter of fiscal 1999), the rig will be transported back to the Philippines to commence the three-year phase two drilling program. ATWOOD HUNTER United States Gulf of Mexico Term contract (estimated completion September 2000). ATWOOD EAGLE Equatorial Guinea Estimated completion of contract is February/March, 1998. Upon completion of the current drilling contract, the rig will be mobilized to the Mediterranean Sea for a minimum 200-day drilling program. RIG-200 Australia Term contract (minimum duration of two-years from January 1997). SEAHAWK Malaysia Term contract (estimated completion March 1999). VICKSBURG Singapore Undergoing upgrade and refurbishment which is estimated to extend into the fourth quarter of fiscal 1998. RIG-19 Australia Term contract (estimated drilling work of between 9 and 12 months from February 1998). RICHMOND United States Term contract (estimated completion Gulf of Mexico May 1998). ATWOOD SOUTHERN CROSS Australia In November 1997, the rig commenced drilling under a 300-day plus option contract. LIQUIDITY AND CAPITAL RESOURCES During the first quarter of fiscal 1998, operating cash flows (before changes in working capital and other assets and liabilities) increased 88% from $6.5 million in fiscal 1997 to $12.2 million. During the first quarter of fiscal 1998, the Company utilized its internally generated funds plus an additional $7 million borrowed under the $125 million revolving credit facility to invest approximate $10.8 million in completing the upgrade and refurbishment of the ATWOOD SOUTHERN CROSS, to invest approximately $7.4 million in commencing the upgrade and refurbishment of the VICKSBURG, to invest approximately $5.6 million in equipment to be used for the upgrade of the ATWOOD FALCON, and to fund approximately $1.7 million in other capital expenditure. The Company anticipates spending between $35 and $40 million on the upgrade and refurbishment of the VICKSBURG and $50 million on the upgrade of the ATWOOD FALCON. The VICKSBURG is currently being marketed in its upgrade mode, and management is confident that a profitable contract will be obtained for the rig after its upgrade. Subsequent to December 31, 1997, the Company borrowed another $7 million under the revolving credit facility for a current outstanding debt of $72 million. The ATWOOD HUNTER, ATWOOD EAGLE and the RICHMOND plus $20 million of the United States treasury bonds are pledged as collateral under the revolving credit agreement. The anticipated operating cash flows plus proceeds available under the revolving credit facility should provide sufficient cash resources to fund all currently planned rig upgrades. Depending upon additional capital investments, anticipated future operating cash flows are expected to provide the Company with the option of repaying funds borrowed under the revolving credit facility prior to the required maturity. The Company will continue to review and adjust its planned capital expenditures and financing of such expenditures in light of current market conditions. ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) Reports on Form 8-K 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: February 11, 1998 s/JAMES M. HOLLAND ------------------------- James M. Holland Senior Vice President and Chief Accounting Officer EX-27 2 FDS --
5 (Replace this text with the legend) 0000008411 ATWOOD OCEANICS, INC. 1,000 USD 3-MOS SEP-30-1998 OCT-01-1997 DEC-31-1997 1 8,919 23,022 22,704 0 6,750 42,329 279,313 114,800 231,116 19,209 65,000 0 0 13,552 117,880 231,116 36,224 36,224 18,407 22,479 0 0 1,039 13,289 4,612 8,677 0 0 0 8,677 .64 .63
-----END PRIVACY-ENHANCED MESSAGE-----