-----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, Js/S1RYnWfrpx+3KJlPfpZW53j5MugQN0DUqa3qRxEz2W1nYnqSNcJ7uVcVKXKtT RR2zxHoRL6/lNm1m60K+mg== 0000008411-98-000007.txt : 19980514 0000008411-98-000007.hdr.sgml : 19980514 ACCESSION NUMBER: 0000008411-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 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: 98617535 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 MARCH 31, 1998 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 April 30, 1998: 13,619,576 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 March 31, 1998 and September 30, 1997, and the results of its operations and cash flows for the three months and six months ended March 31, 1998 and 1997, 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) March 31, September 30, 1998 1997 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 13,146 $ 19,264 Accounts receivable 28,941 16,353 Inventories of materials and supplies, at lower of average cost or market 7,351 7,004 Deferred tax assets 1,820 1,820 Prepaid expenses 2,078 2,610 ----- ----- Total Current Assets 53,336 47,051 ------ ------ SECURITIES HELD FOR INVESTMENT: Held-to-maturity, at amortized cost 22,583 22,581 Available-for-sale, at fair value 438 389 --- --- 23,021 22,970 ------ ------ PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 282,986 249,496 Other 5,748 5,363 ---- ----- 288,734 254,859 Less-accumulated depreciation 119,477 110,936 ------- ------- Net Property and Equipment 169,257 143,923 ------- ------- DEFERRED COSTS AND OTHER ASSETS 1,652 1,386 ----- ----- $247,266 $215,330 ======== ======== PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, September 30, 1998 1997 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 750 $ 750 Accounts payable 3,104 5,323 Accrued liabilities 11,472 13,429 ------ ------ Total Current Liabilities 15,326 19,502 ------ ------ LONG-TERM DEBT, net of current maturities 72,000 58,750 ------ ------ DEFERRED CREDITS: Income taxes 4,427 1,810 Other 11,952 12,579 ------ ------ 16,379 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 13,607,000 and 13,546,000 shares issued and outstanding 13,607 13,546 Paid-in capital 50,524 50,104 Net unrealized holding loss on available-for-sale securities (80) (112) Retained earnings 79,510 59,151 --- --- Total Shareholders' Equity 143,561 122,689 ------- ------- $ 247,266 $ 215,330 ========= ========= PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended March 31, March 31, --------- --------- 1998 1997 1998 1997 ------ ------ ---- ---- (In thousands except per (In thousands except share amounts) per share amounts) REVENUES: Contract drilling $ 40,989 $ 20,247 $ 76,757 $ 41,914 Contract management 439 558 895 984 ----- ----- ----- ----- 41,428 20,805 77,652 42,898 ------ ------ ------ ------ COSTS AND EXPENSES: Contract drilling 15,869 11,767 31,938 24,173 Contract management 385 211 739 465 Depreciation 4,810 2,410 8,882 4,712 General and administrative 1,847 1,693 3,831 3,204 ----- ----- ----- ----- 22,911 16,081 45,390 32,554 ----- ------ ------ ------ OPERATING INCOME 18,517 4,724 32,262 10,344 ------ ----- ------ ------ OTHER INCOME (EXPENSE) Interest expense (1,102) (199) (2,141) (731) Interest income 551 592 1,134 1,238 --- --- ------- ----- (551) 393 (1,007) 507 ---- --- ------ --- INCOME BEFORE INCOME TAXES 17,966 5,117 31,255 10,851 PROVISION FOR INCOME TAXES 6,284 2,003 10,896 3,818 ----- ----- ------ ----- NET INCOME $11,682 $3,114 $20,359 $7,033 ======= ====== ======= ====== EARNINGS PER SHARE Basic $ .86 $ .23 $1.50 $ .52 Diluted $ .84 $ .23 $1.47 $ .51 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 13,571 13,466 13,560 13,440 Diluted 13,838 13,732 13,824 13,697 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended March 31, 1998 1997 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $20,359 $7,033 ------- ------ Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 8,882 4,712 Amortization of deferred items (1,197) 231 Deferred tax provision 2,600 --- Changes in assets and liabilities: Decrease (increase) in accounts receivable (12,588) 1,283 Increase (decrease) in accounts payable and accrued liabilities (4,176) 2,089 Deferred mobilization revenues 1,200 6,938 Other 371 (1,566) ----- ------- Total adjustments (4,908) 13,687 -------- ------ Net cash provided by operating activities 15,451 20,720 -------- ------ CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (35,300) (14,597) Investment in RIG-200 --- (526) ------ ----- Net cash used by investing activities (35,300) (15,123) -------- -------- CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from credit facilities 14,000 5,000 Proceeds from exercises of stock options 481 615 Principal payments on long-term debt (750) (15,702) ---- ------- Net cash provided (used) by financing activities 13,731 (10,087) ------ -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (6,118) (4,490) CASH AND CASH EQUIVALENTS, at beginning of period 19,264 17,565 -------- ------ CASH AND CASH EQUIVALENTS, at end of period $13,146 $13,075 ========= ======= Supplemental disclosure of cash flow information: Cash paid during the period for domestic and foreign income tax $ 9,495 $ 2,369 ======== ========= Cash paid during the period for interest, net of amount capitalized $ 1,084 $ 852 ======== ========= 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 March 31, 1998 increased 99% and 275%, respectively, compared to the three months ended March 31, 1997. For the first half of fiscal 1998 compared to the first half of fiscal 1997, contract revenues and net income increased 81% and 189%, respectively. These improvements 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, ATWOOD FALCON, RIG 200 and RICHMOND coupled with RIG-19 having reduced revenues in the first quarter of fiscal 1998 due to a move to a new offshore installation. A comparative analysis of contract revenues for the second quarter is as follows: CONTRACT REVENUES - ------------------------- ---- ---------------------------- Second Quarter Second Quarter Fiscal 1998 Fiscal 1997 Variance ---------------------- ------------------ ----------- (In millions) ATWOOD HUNTER $ 8.6 $ 0.0 $ 8.6 SOUTHERN CROSS 5.7 0.0 5.7 ATWOOD EAGLE 8.6 4.6 4.0 ATWOOD FALCON 8.1 4.1 4.0 RIG-200 2.0 1.6 0.4 RICHMOND 2.4 2.2 0.2 SEAHAWK 2.8 2.8 0.0 VICKSBURG 0.0 1.2 (1.2) RIG-19 1.2 1.9 (0.7) GOODWYN `A' 1.6 1.8 (0.2) NORTH RANKIN `A' 0.4 0.6 (0.2) $41.4 $20.8 $20.6 ==== ===== ===== In April 1998, the ATWOOD EAGLE was relocated from West Africa to the Mediterranean Sea and has commenced a minimum 200-day drilling program at higher dayrates. The ATWOOD FALCON is drilling the last well of its phase-one program in the Philippines. Upon completion of this well, the rig will be mobilized to a shipyard in Singapore to undergo a water-depth upgrade which will take five to six months to complete. The VICKSBURG is currently in a Singapore shipyard undergoing upgrade and cantilever conversion. Contract drilling and management cost increased 36% and 33%, respectively, for the three months and six months periods ended March 31, 1998 compared to the same periods in fiscal 1997. This increase was primarily due to commencement of drilling operations for the ATWOOD SOUTHERN CROSS and ATWOOD HUNTER following upgrades. A comparative analysis of contract drilling and management costs for the second quarter is as follows: CONTRACT DRILLING AND MANAGEMENT COSTS --------------------------------------------------- Second Second Quarter Quarter Variance Fiscal 1998 Fiscal 1997 -------------- --------------- ------------- (In millions) SOUTHERN CROSS $ 3.4 $ 0.0 $ 3.4 ATWOOD HUNTER 2.1 0.0 2.1 ATWOOD EAGLE 2.7 2.4 0.3 ATWOOD FALCON 1.8 1.7 0.1 RICHMOND 1.3 1.3 0.0 RIG-200 0.6 0.6 0.0 SEAHAWK 1.4 1.7 (0.3) RIG-19 0.8 1.5 (0.7) VICKSBURG 0.0 0.9 (0.9) GOODWYN `A'/NORTH RANKIN `A' 1.7 1.5 0.2 OTHER 0.5 0.4 0.1 --- --- --- $16.3 $12.0 $4.3 ===== ===== ==== The increase in operating costs for the ATWOOD EAGLE was due to higher repair and maintenance costs for the quarter. The reduction in operating costs for RIG-19 was due to the rig being relocated to a new platform during the quarter with no revenues or costs being recognized during the relocation period. During the VICKSBURG upgrade period, no operating costs are being incurred. The increase in depreciation expense was due to the commencement of upgrade cost depreciation of the ATWOOD HUNTER and ATWOOD SOUTHERN CROSS. General and administrative expenses increased 9% 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 April 30, 1998 is as follows: NAME OF RIG LOCATION CONTRACT STATUS ATWOOD FALCON Philippines Currently drilling the last well under the phase-one portion of a two-phase drilling program. 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 Term contract (estimated completion Gulf of Mexico September 2000). ATWOOD EAGLE Mediterranean Sea At the end of April 1998, the rig commenced 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 November 1998). ATWOOD SOUTHERN CROSS Australia In November 1997, the rig commenced drilling under a 300-day plus option contract. LIQUIDITY AND CAPITAL RESOURCES For the six months ended March 31, 1998 compared to the same period in fiscal 1997, operating cash flows (before changes in working capital and other assets and liabilities) increased 156%. During the first six-months of fiscal 1998, the Company utilized its internally generated funds plus an additional $14 million borrowed under the $125 million revolving credit facility to invest $12.4 million in completing the upgrade and refurbishment of the ATWOOD SOUTHERN CROSS, to invest $13.2 million in commencing the upgrade and refurbishment of the VICKSBURG, to invest $6.6 million in equipment to be used for the upgrade of the ATWOOD FALCON, and to invest $3.1 million in other capital expenditures. 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 upgraded mode, and management remains confident that a profitable contract will be obtained for the rig after its upgrade. Higher dayrate revenues have resulted in accounts receivable increasing from $16.4 million at September 30, 1997 to $28.9 million at March 31, 1998. The Company continues to experience no difficulties in collecting its account receivables, with no requirement for an allowance for doubtful accounts. 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: May 13, 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 MAR-31-1998 1 13,146 23,021 28,941 0 7,351 53,336 288,734 119,477 247,266 15,326 0 0 0 13,607 50,444 247,266 77,652 77,652 36,508 45,390 0 0 2,141 31,255 10,896 20,359 0 0 0 20,359 1.50 1.47
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