-----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, PMRRJp90eu5VycZxIdCjMK4d3WIr/7iFE19hblL9ti25H+aiYWczgBsFxaDZSfkz D/I+6b6+WXQP/knILC7xXA== 0000008411-99-000012.txt : 19990513 0000008411-99-000012.hdr.sgml : 19990513 ACCESSION NUMBER: 0000008411-99-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990512 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: 99617763 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, 1999 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___ The number of shares outstanding of the issuer's class of common stock, as of April 30, 1999; 13,640,976 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, 1999 and September 30, 1998, and the results of its operations and cash flows for the three months and six months ended March 31, 1999 and 1998, 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, 1998 Annual Report to Shareholders. PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, September 30, 1999 1998 ------------------ ------------------ (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 15,540 $ 11,621 Accounts receivable 38,750 27,730 Inventories of materials and supplies, at lower of average cost or market 8,700 8,076 Deferred tax assets 880 880 Prepaid expenses 2,420 3,280 ---------- ---------- Total Current Assets 66,290 51,587 ---------- ---------- SECURITIES HELD FOR INVESTMENT: Held-to-maturity, at amortized cost 22,587 22,585 Available-for-sale, at fair value 270 323 ---------- ---------- 22,857 22,908 ---------- ---------- PROPERTY AND EQUIPMENT, at cost: Drilling vessels, equipment and drill pipe 348,672 327,520 Other 6,800 6,128 ---------- ---------- 355,472 333,648 Less-accumulated depreciation 135,718 128,016 ---------- ---------- Net Property and Equipment 219,754 205,632 ---------- ---------- DEFERRED COSTS AND OTHER ASSETS 1,401 1,610 ---------- ---------- $310,302 $281,737 ========== ========== PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, September 30, 1999 1998 ---------- -------------------- (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ ---- $ 750 Accounts payable 8,834 14,250 Accrued liabilities 13,610 11,723 ------------ ---------- Total Current Liabilities 22,444 26,723 ------------ ---------- LONG-TERM DEBT, net of current liabilities 78,000 72,000 ------------ ---------- DEFERRED CREDITS: Income taxes 5,901 4,820 Other 24,675 14,428 ------------ ---------- 30,576 19,248 ------------ ---------- 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 13,631,000 and 13,625,000 shares issued and outstanding in 1999 and 1998, respectively 13,631 13,625 Paid-in capital 51,825 51,781 Net unrealized holding loss on available-for -sale securities (189) (155) Retained earnings 114,015 98,515 ----------- ---------- 179,282 163,766 ----------- ---------- $ 310,302 $ 281,737 =========== ========= 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, -------------------- ----------------------- 1999 1998 1999 1998 ---- ---- ---- ---- (In thousands except (In thousands except per per share amounts) share amounts) REVENUES: Contract drilling $ 40,877 $ 40,989 $ 75,129 $ 76,757 Contract management 488 439 1,173 895 --------- -------- -------- -------- 41,325 41,428 76,302 77,652 --------- -------- -------- -------- COSTS AND EXPENSES: Contract drilling 18,109 15,869 34,020 31,938 Contract management 392 385 1,115 739 Depreciation 6,457 4,810 11,784 8,882 administrative 1,916 1,847 4,106 3,831 --------- -------- --------- -------- 26,874 22,911 51,025 45,390 --------- -------- --------- -------- OPERATING INCOME 14,451 18,517 25,277 32,262 --------- -------- --------- -------- OTHER INCOME (EXPENSE) Interest expense (1,277) (1,102) (2,101) (2,141) Interest income 548 551 1,134 1,134 --------- -------- -------- -------- (729) (551) (967) (1,007) --------- -------- -------- -------- INCOME BEFORE INCOME TAXES 13,722 17,966 24,310 31,255 PROVISION FOR INCOME TAXES 4,998 6,284 8,810 10,896 --------- -------- -------- ------- NET INCOME $ 8,724 $11,682 $15,500 $20,359 ========= ======== ======== ======= EARNINGS PER SHARE Basic $ .63 $ .84 $1.13 $1.47 Diluted $ .64 $ .86 $1.14 $1.50 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 13,627 13,571 13,626 13,560 Diluted 13,740 13,838 13,739 13,824 . PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended March 31, ----------------------- 1999 1998 -------- --------- (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $15,500 $20,359 ------- ------- Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 11,784 8,882 Amortization of deferred items 275 (1,197) Deferred tax provision 1,000 2,600 Changes in assets and liabilities: Increase in accounts receivable (11,020) (12,588) Increase (decrease) in accounts payable and accrued liabilities 4,444 (4,176) Net mobilization fees 11,648 1,200 Other (765) 371 ------- ------- Total adjustments 17,366 (4,908) ------- ------- Net cash provided by operating activities 32,866 15,451 ------- ------- CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (34,247) (35,300) ------- ------- Net cash used by investing activities (34,247) (35,300) ------- ------- CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from credit facilities 13,000 14,000 Proceeds from exercises of stock options 50 481 Principal payments on long-term debt (7,750) (750) ------- ------- Net cash provided by financing activities 5,300 13,731 ------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,919 (6,118) CASH AND CASH EQUIVALENTS, at beginning of period 11,621 19,264 ------- ------- CASH AND CASH EQUIVALENTS, at end of period $15,540 $13,146 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for domestic and foreign income tax $ 7,427 $9,495 ======= ====== Cash paid during the period for interest, net of amount capitalized $ 2,216 $1,084 ======= ====== 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 - -------------- The worldwide fleet utilization for mobile offshore drilling units is currently at 75 percent. Despite recent improvements in oil prices, international petroleum exploration and development companies continue to limit their capital expenditures on drilling programs. The reduction in demand for offshore drilling units has likewise resulted in a decline in dayrates. Currently, the ATWOOD SOUTHERN CROSS, RICHMOND and RIG-200 are without drilling contracts. The Company is actively marketing these rigs; however, current market conditions may result in these rigs incurring a significant amount of idle time during the remainder of 1999. The ATWOOD EAGLE continues to operate in the Mediterranean Sea with a commitment to the end of June 1999. The Company is currently in discussion for additional work for the ATWOOD EAGLE at a dayrate significantly below the $115,000 dayrate received when the rig initially moved to the Mediterranean Sea in 1998. Despite the anticipated lower rig utilization and some dayrate reductions, term contracts in place for the ATWOOD HUNTER, ATWOOD FALCON, VICKSBURG and SEAHAWK should provide the Company with a high level of revenues during the second half of fiscal 1999 and into fiscal 2000. RESULTS OF OPERATIONS - --------------------- Contract revenues for the three months and six months ended March 31, 1999 decreased .3% and 1.7%, respectively, compared to the same periods ended March 31, 1998. A comparative analysis of contract revenues is as follows: CONTRACT REVENUES ------------------------------------------------------ Second Quarter Second Quarter Fiscal 1999 Fiscal 1998 Variance --------------- ---------------- ----------------- (In millions) VICKSBURG $ 3.4 $ 0.0 $3.4 ATWOOD EAGLE 10.7 8.6 2.1 ATWOOD FALCON 9.8 8.1 1.7 RIG-19 1.9 1.2 0.7 RIG-200 2.0 2.0 0.0 SEAHAWK 2.8 2.8 0.0 RICHMOND 1.3 2.4 (1.1) ATWOOD HUNTER 7.4 8.6 (1.2) ATWOOD SOUTHERN CROSS 0.0 5.7 (5.7) GOODWYN `A' 1.6 1.6 0.0 NORTH RANKIN `A' 0.4 0.4 0.0 ----- ----- ----- $41.3 $41.4 $(0.1) ===== ===== ====== During the second quarter of fiscal 1998, the VICKSBURG was in a shipyard undergoing upgrade and refurbishment; therefore, earning no revenues compared to working in India for all of the second quarter of fiscal 1999. The ATWOOD EAGLE was relocated from West Africa to the Mediterranean Sea at the end of March 1998 and commenced working under a term rig sharing agreement which provided for enhancements in operating dayrates. The increase in revenues for the ATWOOD FALCON resulted from higher contract dayrates following completion of its upgrade in November 1998. RIG-19 revenues increased due to the rig having reduced revenues in the second quarter of fiscal 1998 from its move to a new offshore installation with no revenues being recognized during the relocation period. The decline in revenues for the RICHMOND was due to lower dayrates dictated by the market environment. ATWOOD HUNTER revenues declined as a result of incurring a few days of downtime during the quarter due to repairs required to correct certain equipment defects. Due to current curtailed worldwide drilling activities, the Company has been unable to obtain a contract for the ATWOOD SOUTHERN CROSS since it completed its last contract in September 1998. Contract drilling and management costs for the three months and six months ended March 31, 1999 increased 14% and 8%, respectively, compared to the same periods ended March 31, 1998. A comparative analysis of contract drilling and management costs by rig is as follows: CONTRACT DRILLING AND MANAGEMENT COSTS ------------------------------------------------------------------------- Second Quarter Second Quarter Fiscal 1999 Fiscal 1998 Variance -------------- -------------- ------------- (In millions) VICKSBURG $ 1.4 $ 0.0 $ 1.4 ATWOOD EAGLE 4.0 2.7 1.3 RIG-19 1.5 0.8 0.7 ATWOOD HUNTER 2.4 2.1 0.3 SEAHAWK 1.7 1.4 0.3 ATWOOD FALCON 2.0 1.8 0.2 RICHMOND 1.4 1.3 0.1 RIG-200 0.7 0.6 0.1 ATWOOD SOUTHERN CROSS 1.2 3.4 (2.2) GOODWYN `A'/NORTH RANKIN `A' 1.7 1.7 0.0 OTHER 0.5 0.5 0.0 ----- ----- ----- $18.5 $16.3 $ 2.2 ===== ===== ====== The increase in costs for the VICKSBURG was due to the rig being upgraded in 1998 with no operating costs being recognized. Operating costs for the ATWOOD EAGLE in the Mediterranean Sea are higher than its previous areas of operation in West Africa, accounting for its increase in costs. RIG-19 costs increase was due to the rig being relocated to a new platform in 1998 with no operating costs being recognized during the relocation period. The increase in operating costs for the ATWOOD HUNTER, SEAHAWK and ATWOOD FALCON were primarily due to higher repair and maintenance costs incurred in the quarter. The decrease in costs for the ATWOOD SOUTHERN CROSS is due to it being idle with reduced personnel and other operating costs. The increase in depreciation expense is primarily due to increase is depreciation on the ATWOOD FALCON and VICKSBURG following completion of their upgrades. The Company does not recognize depreciation expense during the period a rig is out of service for a significant upgrade. A summary of the contract status of the Company's wholly or partially owned drilling units as of May 12, 1999 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 Gulf of Mexico which terminates in September 2000. ATWOOD EAGLE Mediterranean Rig is contracted into June 1999, with Sea current discussions for additional work. VICKSBURG India Rig is under term contract which terminates in December 1999, with options for further work. SEAHAWK Malaysia The rig is undergoing upgrades which may not be completed until the end of calendar 1999. Following the upgrades, the rig will commence drilling under a four-year contract extension period, with a further option to extend. RIG-19 Australia Rig is expected to complete its current contract in June 1999. RIG-200 Australia Rig is being moved to a stacking location following the completion of its contract in April 1999. RICHMOND United States Rig is available for contract since it Gulf of Mexico became idle in March 1999. ATWOOD SOUTHERN CROSS Australia Rig is available contract since it became idle at the end of September 1998. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- During the first half of fiscal 1999, operating cash flow (before changes in working capital and other assets and liabilities) was $28.6 million compared to $30.6 million for the first half of fiscal 1998. During the first half of fiscal 1999, the Company utilized internally generated funds plus an additional net $6 million borrowed during the first half of fiscal 1999 under its revolving credit facility to invest approximately $28.1 million in completing the upgrades of the ATWOOD FALCON and the VICKSBURG, and to fund approximately $6.1 in other capital expenditures. Currently, the only significant capital commitment for the remainder of fiscal 1999 is an approximate $23 million upgrade of the SEAHAWK. The SEAHAWK contract extension provides for approximately $20 million of the upgrade costs to be reimbursed by the operator and for the Company to be paid a reduced dayrate during the upgrade period. Fifty percent of the upgrade costs reimbursement (approximately $10 million reflected in accounts receivable and other deferred credits at March 31, 1999) was paid by the operator in April 1999, with the balance due at the end of the upgrade process. At March 31, 1999, the Company had $78 million outstanding under the revolving credit facility compared to $85 million and $72 million outstanding at December 31, 1998 and September 30, 1998, respectively. Depending upon additional capital investments, anticipated future cash flows are expected to provide the Company with the option of continuing to repay 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. 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 11, 1999, at which the shareholders voted on the election of six directors. Of the 11,938,595 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 11,754,688 183,907 George S. Dotson 11,749,688 188,907 Walter H. Helmerich III 11,752,020 186,575 Hans Helmerich 11,750,320 188,275 John R. Irwin 11,758,920 179,675 William J. Morrissey 11,752,820 185,775 ITEM 6. Reports on Form 8-K On January 8, 1999, the Company filed a Form 8-K related to the January 4, 1999 announcement that it executed a four-year contract extension, with a further option to extend, for the use of the SEAHAWK (a semisubmersible tender-assist rig). 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, 1999 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 Year Sep-30-1999 Oct-01-1998 Mar-31-1999 1 15,540 22,857 38,750 0 8,700 66,290 355,472 135,718 310,302 22,444 78,000 0 0 13,631 51,636 179,282 76,302 76,302 39,241 51,025 0 0 2,101 24,310 8,810 15,500 0 0 0 15,500 1.14 1.13
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