-----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, VuL68sgyfglzH4fbuLbtlSAh9OFU5+o76EpBdl8ZttONaXHwJXcTRwnNZmvvLWdh LOclulRmesW64r6F2Nc+RA== 0000008411-00-000007.txt : 20000516 0000008411-00-000007.hdr.sgml : 20000516 ACCESSION NUMBER: 0000008411-00-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 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: 630478 BUSINESS ADDRESS: STREET 1: 15835 PARK TEN PL DR STREET 2: SUITE 200 CITY: HOUSTON STATE: TX ZIP: 77084 BUSINESS PHONE: 2817497845 MAIL ADDRESS: STREET 1: 15835 PARK TEN PL DR STREET 2: SUITE 200 CITY: HOUSTON STATE: TX ZIP: 77084 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, 2000 COMMISSION FILE NUMBER 1-13167 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: 281-749-7800 --------------- 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___ The number of shares outstanding of the issuer's class of common stock, as of April 30, 2000; 13,814,476 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, 2000 and September 30, 1999, and the results of its operations and cash flows for the three months and six months ended March 31, 2000 and 1999, 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, 1999 Annual Report to Shareholders. PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) March 31, September 30, 2000 1999 ---------- ------------- (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 16,566 $ 20,105 Accounts receivable 25,084 18,289 Inventories of materials and supplies, at lower of average cost or market 8,355 8,010 Deferred tax assets 720 720 Prepaid expenses 1,500 3,408 ---------- ------------ Total Current Assets 52,225 50,532 ---------- ------------ SECURITIES HELD FOR INVESTMENT: Held-to-maturity, at amortized cost 22,592 22,589 Available-for-sale, at fair value 311 347 ---------- ----------- 22,903 22,936 ---------- ----------- PROPERTY AND EQUIPMENT, at cost: Drilling vessels, equipment and drill pipe 377,784 358,372 Other 7,759 7,317 ---------- ----------- 385,543 365,689 Less-accumulated depreciation 160,188 146,775 ---------- ----------- Net Property and Equipment 225,355 218,914 ---------- ----------- DEFERRED COSTS AND OTHER ASSETS 1,283 1,222 ---------- ----------- $301,766 $293,604 ========== =========== The accompanying notes are an integral part of these consolidated financial statements. PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) March 31, September 30, 2000 1999 ---------- ------------ (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,724 $ 7,640 Accrued liabilities 9,088 11,373 ---------- ---------- Total Current Liabilities 12,812 19,013 ---------- ---------- LONG-TERM DEBT, net of current maturities: 49,000 54,000 ---------- ---------- DEFERRED CREDITS: Income taxes 8,706 8,168 Other 26,384 20,194 ---------- ---------- 35,090 28,362 ---------- ---------- SHAREHOLDERS' EQUITY: Preferred stock, no par value; 1,000,000 shares authorized, none outstanding --- --- Common stock, $1 par value; 20,000,000 shares authorized with 13,802,000 and 13,675,000 shares issued and outstanding at March 31, 2000 and September 30, 1999, respectively 13,802 13,675 Paid-in capital 53,955 52,458 Accumulated other comprehensive income (loss) (162) (139) Retained earnings 137,269 126,235 --------- --------- 204,864 192,229 --------- --------- $301,766 $293,604 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three Months Ended Six Months Ended March 31, March 31, 2000 1999 2000 1999 (Unaudited) (Unaudited) REVENUES: Contract drilling $ 31,878 $ 40,8773 $ 62,539 $ 75,129 Contract management 483 448 1,006 1,173 -------- --------- -------- -------- 32,361 41,325 63,545 76,302 -------- --------- -------- -------- COSTS AND EXPENSES: Contract drilling 12,392 18,109 26,358 34,020 Contract management 354 392 743 1,115 Depreciation 7,564 6,457 13,708 11,784 General and administrative 2,137 1,916 4,137 4,106 -------- --------- -------- -------- 22,447 26,874 44,946 51,025 -------- --------- -------- -------- OPERATING INCOME 9,914 14,451 18,599 25,277 -------- --------- -------- -------- OTHER INCOME (EXPENSE) Interest expense (974) (1,277) (1,928) (2,101) Interest income 581 548 1,118 1,134 -------- -------- -------- -------- (393) (729) (810) (967) -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 9,521 13,722 17,789 24,310 PROVISION FOR INCOME TAXES 3,540 4,998 6,755 8,810 -------- -------- -------- -------- NET INCOME 5,981 $ 8,724 $ 11,034 $ 15,500 ======== ========= ======== ======== EARNINGS PER SHARE Basic $ .44 $ .64 $ .81 $1.14 Diluted $ .43 $ .63 $ .80 $1.13 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 13,719 13,627 13,700 13,626 Diluted 13,902 13,740 13,828 13,739 The accompanying notes are an integral part of these consolidated financial statements.
PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended March 31, 2000 1999 (Unaudited) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $ 11,034 $15,500 -------- ------- Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 13,708 11,784 Amortization 373 275 Deferred federal income tax provision 550 1,000 Changes in assets and liabilities: Increase in accounts receivable (6,795) (11,020) Increase (decrease) in accounts payable and accrued liabilities (5,370) 4,444 Net mobilization fees 6,195 11,648 Other 1,122 (765) -------- ------- 9,783 17,366 -------- ------- Net cash provided by operating activities 20,817 32,866 -------- ------- CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (20,980) (34,247) -------- ------- Net cash used by investing activities (20,980) (34,247) -------- ------- CASH FLOW FROM FINANCING ACITIVITES: Proceeds from revolving credit facility 6,000 13,000 Principal payments on long-term debt (11,000) (7,750) Proceeds from exercises of stock options 1,624 50 -------- ------- Net cash provided by financing activities (3,376) 5,300 -------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,539) 3,919 CASH AND CASH EQUIVALENTS, at beginning of period 20,105 11,621 -------- ------- CASH AND CASH EQUIVALENTS, at end of period $16,566 $15,540 ======== ======= Supplemental disclosure of cash flow information: Cash paid during the period for domestic and foreign income taxes $ 5,553 $ 7,427 ======== ======= Cash paid during the period for interest, net of amounts capitalized $ 1,096 $ 2,216 ======== ======= The accompanying notes are an integral part of these consolidated financial statements.
PART I. ITEM 1 - FIANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. UNAUDITED INTERIM INFORMATION The unaudited interim financial statements as of March 31, 2000 and for each of the six month periods ended March 31, 2000 and 1999, included 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 note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although management believes that the note disclosures are adequate to make the information not misleading. For interim periods, the Company records income taxes using the expected effective tax rate for the fiscal year. In the opinion of the Company's management, the unaudited interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company for the periods presented. The interim financial results may not be indicative of results that could be expected for a full year. 2. EARNINGS PER COMMON SHARE The computation of basic and diluted earnings per share is as follows (in thousands, except per share amounts): Three Months Ended Six Months Ended ----------------------------- ------------------------------ Net Per Share Net Per Share Income Shares Amount Income Shares Amount ------- -------- --------- -------- ------ ---------- March 31, 2000: Basic earnings per share $ 5,981 13,719 $ .44 $11,034 13,700 $ .81 Effect of dilutive securities- Stock Options --- 183 (.01) --- 128 (.01) ------- ------ ----- ------- ------ ------ Diluted earnings per share $ 5,981 13,902 $ .43 $11,034 13,828 $ .80 ======= ====== ===== ======= ====== ====== March 31, 1999: Basic earnings per share $ 8,724 13,627 .64 $15,500 13,626 $ 1.14 Effect of dilutive securities- Stock Options --- 113 (.01) --- 113 (.01) ------- ------ ----- ------- ------ ------ Diluted earnings per share $ 8,724 13,740 $ .63 $15,500 13,739 $ 1.13 ======== ====== ===== ======= ====== ======
3. COMPREHENSIVE INCOME Comprehensive income includes the following (in thousands): THREE MONTHS ENDED MARCH 31, 2000 1999 -------- ------- Net Income $ 5,981 $ 8,724 Other comprehensive income: Unrealized holding gain (loss) on available-for-sale Securities, net of tax benefit of $5 in 2000 and tax expense of $29 in 1999 (8) 55 -------- ------- Comprehensive income $ 5,973 $ 8,779 ======== ======= SIX MONTHS ENDED MARCH 31, 2000 1999 -------- ------- Net Income $11,034 $15,500 Other comprehensive income: Unrealized holding gain (loss) on available-for-sale Securities, net of tax benefit of $13 and $19 in 2000 and 1999, respectively (23) (34) ------- ------- Comprehensive income $11,011 $15,466 ======= ======= 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. MARKET OUTLOOK Worldwide utilization of offshore drilling equipment is currently around 80% compared to around 70% at the beginning of fiscal year 2000. There are encouraging indications that the offshore drilling market environment could continue to improve toward the end of 2000 and into 2001. Except for the RIG-200 and RIG-19, the Company's drilling units have current contract commitment that should keep the various rigs employed for the remainder of fiscal 2000. The ATWOOD SOUTHERN CROSS (idle since September 1998) is currently being mobilized to the Mediterranean Sea to commence a short-term drilling program, with ongoing discussions for additional work. The Company's backlog should provide a high level of revenues and cash flows for the remainder of fiscal 2000. RESULTS OF OPERATIONS Contract revenues for the three months and six months ended March 31, 2000 decreased 22% and 17%, respectively, compared to the same periods ended March 31, 1999. A comparative analysis of contract revenues is as follows: CONTRACT REVENUES (In Millions) ---------------------------------------------------- Three Months Ended Six Months Ended March 31, March 31, ------------------------- ----------------------- 2000 1999 Variance 2000 1999 Variance ----- ----- -------- ----- ----- -------- SEAHAWK $ 5.6 $ 2.8 $ 2.8 $ 7.8 $ 5.7 $ 2.1 ATWOOD HUNTER 9.0 7.4 1.6 17.8 16.1 1.7 ATWOOD FALCON 9.9 9.8 0.1 20.4 15.1 5.3 RICHMOND 1.6 1.3 0.3 3.0 3.7 (0.7) ATWOOD SOUTHERN CROSS 0.0 0.0 0.0 0.0 0.0 0.0 VICKSBURG 2.9 3.4 (0.5) 6.2 3.8 2.4 RIG 200/RIG-19 0.0 3.9 (3.9) 0.0 7.9 (7.9) ATWOOD EAGLE 2.9 10.7 (7.8) 7.3 19.8 (12.5) GOODWYN 'A'/ NORTH RANKIN 'A' 0.5 2.0 (1.5) 1.0 4.2 (3.2) ----- ----- ----- ----- ----- ------ $32.4 $41.3 $(8.9) $63.5 $76.3 $(12.8) ===== ===== ===== ===== ===== ====== The SEAHAWK commenced drilling operations, following its upgrade, in January 2000 at a significant enhancement in dayrate over the reduced dayrate it received during its upgrade period, accounting for its increase in revenues in 2000. In 1999, the ATWOOD HUNTER incurred some days of downtime in order to correct certain equipment defects, which accounts for revenues being lower in 1999 compared to 2000. The increase in revenues for the ATWOOD FALCON during the six months ended March 31, 2000 compared to the same period in fiscal 1999 was due to the rig's upgrade not being completed until November 1998. Improvement during the quarter in revenues earned by the RICHMOND was due to an increase in dayrates; however, the level of dayrates for the first half of fiscal 2000 were not as high as the first half of fiscal 1999, accounting for the RICHMOND year-to-date decline in revenues. The ATWOOD SOUTHERN CROSS is currently being mobilized to the Mediterranean Sea to commence a short drilling program after being idle since September 1998. The VICKSBURG worked the entire first half of fiscal 2000 compared to having some idle days at the beginning of fiscal 1999 while completing its upgrade, accounting for its increase in revenues for the first half of fiscal 2000; however, revenues declined during the quarter ended March 31, 2000 compared to the same period in 1999 due to a reduction in contract dayrate. When the ATWOOD EAGLE commenced working in the Mediterranean Sea in 1998, its dayrate was $115,000, compared to a dayrate during 2000 of approximately $50,000. Besides a dayrate reduction, the decline in revenues is also attributable to the rig being idle in January while undergoing a water depth upgrade. RIG-200 and RIG-19 are available for contract since becoming idle in June and September 1999, respectively. As a result of a decline in drilling activities on the GOODWYN 'A' and NORTH RANKIN 'A' platforms, the Company's management activities related to these platforms have also declined resulting in less revenues being received and less costs being incurred. Contract drilling and management costs for the three months and six months ended March 31, 2000 decreased 31% and 23%, respectively, compared to the same periods in 1999. An analysis of contract drilling and management costs by rig is as follows. CONTRACT DRILLING AND MANAGEMENT COSTS (In Millions) --------------------------------------------------------- Three Months Ended Six Months Ended March 31, March 31, ---------------------------- ------------------------ 2000 1999 Variance 2000 1999 Variance ------ ----- -------- ----- ----- -------- SEAHAWK $ 1.9 $ 1.7 $ 0.2 $ 4.1 $ 3.4 $ 0.7 RICHMOND 1.5 1.4 0.1 2.8 3.1 (0.3) ATWOOD HUNTER 2.4 2.4 0.0 5.2 5.0 0.2 ATWOOD FALCON 2.0 2.0 0.0 4.1 3.1 1.0 VICKSBURG 1.3 1.4 (0.1) 2.8 1.7 1.1 ATWOOD SOUTHERN CROSS 1.1 1.2 (0.1) 2.1 2.6 (0.5) RIG-200/RIG-19 0.0 2.2 (2.2) 0.1 4.3 (4.2) ATWOOD EAGLE 1.5 4.0 (2.5) 4.2 7.5 (3.3) GOODWYN 'A'/ NORTH RANKIN 'A' 0.4 1.7 (1.3) 0.8 3.4 (2.6) OTHER 0.6 0.5 0.1 0.9 1.0 (0.1) ----- ----- ---- ----- ----- ----- $12.7 $18.5 $(5.8) $27.1 $35.1 $(8.0) The increase in drilling costs for the SEAHAWK for the six months ended March 31, 2000 is primarily due to additional costs incurred in December 1999 to mobilize and prepare the rig for commencement of drilling operations following its required upgrade for its four-year contract extension. The increase in drilling costs for the ATWOOD FALCON and VICKSBURG for the six months ended March 31, 2000 is due to both rigs working the entire first half of fiscal 2000 while working only a portion of the first quarter of fiscal 1999 due to completing their upgrades during which no operating costs were incurred. The decline in costs for the ATWOOD SOUTHERN CROSS is due to a reduction in personnel costs due to its idle status through the first half of fiscal 2000. Operating costs on the ATWOOD SOUTHERN CROSS during the second half of fiscal 2000 will increase with its return to work. The reduction in operating costs for the ATWOOD EAGLE was due to no operating costs being incurred in January 2000 when the rig was in a shipyard for its water depth upgrade and due to a general overall decline in maintenance and some personnel costs. RIG-200 and RIG-19 are currently stacked on land in Australia with very little costs being incurred. The Company does not recognize depreciation expense during a period a rig is out of service for a significant upgrade. The ATWOOD FALCON, VICKSBURG and SEAHAWK had some reduction in depreciation expense in 1999 due to upgrades, accounting for the increase in depreciation in 2000. A summary of the contract status of the Company's wholly or partially owned drilling units as of May 10, 2000 is as follows: NAME OF RIG LOCATION CONTRACT STATUS - -------------------- ------------------------ ----------------------------------------------------------------- ATWOOD FALCON Philippines Rig is under long-term contract which terminates in November 2001. ATWOOD HUNTER United States Rig is under long-term contract which terminates in September 2000. Gulf of Mexico ATWOOD EAGLE Mediterranean Sea Rig is currently preparing to be moved to Egypt to commence a drilling program which should keep the rig employed for the remainder of fiscal 2000. VICKSBURG India Rig is under term contract which terminates in December 2000. SEAHAWK Malaysia Rig is currently drilling under a four-year contract extension period, with a further option. ATWOOD SOUTHERN CROSS Mediterranean Sea Rig is being mobilized to the Mediterranean Sea to commence a short-term drilling program, with ongoing discussions for additional work. RICHMOND United States Upon completion of the current drilling program, the rig will be Gulf of Mexico moved to a shipyard for a minor upgrade. Discussions are ongoing for additional work following the rig's upgrade. RIG-19 Australia Rig is available for contract since it became idle in September 1999. RIG-200 Australia Rig is available for contract since it became idle in June 1999.
LIQUIDITY AND CAPITAL RESOURCES During the first half of fiscal 2000, operating cash flow (before changes in working capital and other assets and liabilities) was $25.7 million compared to $28.6 million for the first half of fiscal 1999. During the first half of fiscal 2000, the Company utilized internally generated funds to invest approximately $10.0 million in completing the upgrade of the SEAHAWK, to invest approximately $7.9 million in the upgrade of the ATWOOD EAGLE, to fund approximately $3.1 million of other capital expenditures, in addition to reducing long-term debt by $5 million. Subsequently to March 31, 2000, the Company has made an additional $3 million reduction in long-term debt, with a current outstanding balance of $46 million. In June 2000, a minor $5 million enhancement and refurbishment of the RICHMOND will be performed. The Company is also planning an additional $50 to $55 million future water depth upgrade to the ATWOOD EAGLE to enable the rig to work in water depths of 4,500 to 5,000 feet from its current water depth capacity of 3,600 feet. The Company continues to explore the market for possible growth opportunities. Further reduction or increase in long-term debt will depend on identifying investment opportunities. The Company will adjust planned capital expenditures, debt repayment and financing requirements in light of current market conditions. PART II. OTHER INFORMATION ATWOOD OCEANICS, INC. AND SUBSIDIARIES ITEM 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Shareholders was held on February 10, 2000, at which the shareholders voted on the election of six directors. Of the 12,465,237 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: NAME CAST FOR VOTES WITHHELD - ------------------------ ----------- -------------- Robert W. Burgess 12,399,188 66,049 George S. Dotson 12,308,888 156,349 Walter H. Helmerich III 12,309,188 156,049 Hans Helmerich 12,309,488 155,749 John R. Irwin 12,309,688 155,549 William J. Morrissey 12,397,388 67,849 ITEM 6. Reports on Form 8-K (a) Exhibits None (b) Report 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 12, 2000 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. 1000 USD Year Sep-30-2000 Oct-01-1999 Mar-31-2000 1 16,566 22,903 25,084 0 8,355 52,225 385,543 160,188 301,766 12,812 49,000 0 0 13,802 53,793 301,766 63,545 63,545 31,238 44,946 0 0 1,928 17,789 6,755 11,034 0 0 0 11,034 .81 .80
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