-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, DM07I6lrg1nBWJCb3kfst2WRjFo0i69jXf3Syp75J1g5xwHcOS8yY3n2bzK9CWK6 Cp5lxyhiHShOugUDb9f1Dg== 0000008411-95-000017.txt : 19950512 0000008411-95-000017.hdr.sgml : 19950512 ACCESSION NUMBER: 0000008411-95-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 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: 95536397 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, 1995 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 December 31, 1994: 6,582,613 shares of Common Stock $1 par value PAGE 2 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 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, 1995 and September 30, 1994, and the results of operations for the three months and six months ended March 31, 1995 and 1994, 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, 1994 Annual Report to Shareholders. PAGE 3 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) September March 31, 30, 1994 1995 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 22,025 $ 16,119 Accounts receivable 14,593 13,915 Current maturities of long-term notes receivable --- 400 Inventories of materials and supplies, at lower of 4,282 4,194 average cost or market 2,447 3,844 Prepaid expenses and other Total Current Assets 43,347 38,472 AVAILABLE FOR SALE SECURITIES 28,785 24,928 LONG-TERM NOTES RECEIVABLE, net of current maturities --- 5,985 PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 196,544 187,525 Other 6,450 4,479 202,994 192,004 Less-accumulated depreciation 114,903 109,159 Net Property and Equipment 88, 091 82,845 DEFERRED COSTS AND OTHER ASSETS 1,269 1,230 $161,492 $153,460
See accompanying notes to financial statements. PAGE 4 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) September March 31, 30, 1994 1995 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of notes payable $ 3,880 $ 3,000 Accounts payable 5,013 3,728 Payable to purchase partnerships' interest 13,275 --- Accrued liabilities 7,312 6,573 Total Current Liabilities 29,480 13,301 LONG-TERM NOTES PAYABLE, net of current maturities 37,198 50,294 DEFERRED CREDITS: Income taxes 2,716 1,650 Other 553 639 3,269 2,289 MINORITY INTEREST IN PARTNERSHIPS --- 1,617 SHAREHOLDERS' EQUITY: Preferred stock, no par value; 1,000,000 shares authorized, none outstanding --- --- Common stock, $1 par value; 10,000,000 shares authorized with 6,582,000 shares issued and outstanding 6,582 6,582 Paid-in capital 54,273 54,273 Net unrealized holding gains 2,556 --- Retained earnings 28,134 25,104 91,545 85,959 Total Shareholders' Equity $ 161,492 $ 153,460
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, 1995 1994 1995 1994 (In thousands, except per share amounts) REVENUES: Drilling revenues $ 18,078 $ 15,985 $ 35,934 $ 31,358 Management fee income 236 534 686 1,019 Dividends and interest 763 598 1,442 1,213 Gain on sale of Indian Joint --- --- --- 201 Venture 19,077 17,117 38,062 33,791 COSTS AND EXPENSES: Drilling 12,623 11,124 25,153 21,973 Depreciation 2,496 3,385 6,038 6,742 General and 1,190 1,094 2,247 2,079 administrative 636 675 1,467 1,355 Interest 16,945 16,278 34,905 32,149 INCOME BEFORE MINORITY INTEREST AND INCOME TAXES 2,132 839 3,157 1,642 MINORITY INTEREST IN NET LOSS OF PARTNERSHIPS --- 714 908 1,794 INCOME BEFORE INCOME TAXES 2,132 1,553 4,065 3,436 PROVISION FOR INCOME TAXES 845 248 1,035 531 NET INCOME $ 1,287 $ 1,305 $ 3,030 $ 2,905 INCOME PER COMMON SHARE $ .20 $ .20 $ .46 $ .44 AVERAGE COMMON SHARES OUTSTANDING 6,582 6,582 6,582 6,582
See accompanying notes to financial statements PAGE 6 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended March 31, 1995 1994 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $ 3,030 $ 2,905 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 6,038 6,742 Amortization of deferred costs 238 263 Deferred federal income tax 200 --- provision Minority interest in net loss of (908) (1,794) partnership Changes in assets and liabilities: Increase in accounts receivable (678) (1,001) Increase (decrease) in accounts payable and accrued liabilities 2,024 (114) Other 1,065 (541) Total adjustments 7,979 3,555 Net cash provided by operating 11,009 6,460 activities CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from sale of Indian Joint Venture --- 1,300 Payment received on notes receivable 202 202 Investment in joint venture (1,708) --- Capital expenditures (1,997) (3,007) Net cash used by investing (3,503) (1,505) activities CASH FLOW FROM FINANCING ACTIVITIES: Principal payment on long-term notes (1,500) (1,500) payable Net payment to limited partner (100) --- Net cash used by financing (1,600) (1,500) activities NET INCREASE IN CASH AND CASH EQUIVALENTS 5,906 3,455 CASH AND CASH EQUIVALENTS, at beginning of period 16,119 10,087 CASH AND CASH EQUIVALENTS, at end of $22,025 $13,542 period
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. On March 27, 1995, the Company executed agreements (with an effective date of December 31, 1994) to acquire the 50 percent limited partner's interest in the three semisubmersible drilling rigs, the HUNTER, EAGLE and FALCON. Pursuant to the acquisition, the Company has become the sole owner of the three semisubmersible rigs for an aggregate purchase price consisting of $13.3 million in cash payable at closing plus the issuance of a $3 million note payable in annual installments of $750,000. Final closing and funding of this purchase occurred on April 27, 1995. 2. In conjunction with the acquisition of the limited partner's interest the Company contributed to equity in Atwood Deep Seas, Ltd ("Deep Seas") $7.9 million principal amount of Deep Seas' long-term debt acquired by the Company in 1990 with a current discounted basis of $6.3 million. Currently, Deep Seas' long-term debt consist of $38.7 million in non-recourse loans from the bank group and will continue to require quarterly principal payments of $750,000, with a balloon payment of $29.7 million payable in March 1998. 3. When the Company acquired its initial interest in the HUNTER, EAGLE and FALCON in 1990, an estimated useful lives for these rigs of ten years were adopted for depreciation purposes. However, since these facilities remain "state-of-the-art" drilling rigs and since the Company acquired the 50 percent limited partner's interest on the basis that these rigs will remain long-term productive assets, effective January 1, 1995, management has increased its estimated lives on these rigs by an additional five years. The effect of the change in depreciable lives was an approximate $1 million reduction in depreciation for the quarter ended March 31, 1995. 4. Effective on January 1, 1995, all notes payable to the limited partner by Deep Seas (approximately $14 million) were cancelled with approximately $6 million (net of $8 million previously reclassified as "minority interest in partnerships") reclassified as equity in Deep Seas. 5. In accordance with Financial Accounting Standards Board Statement No. 115 "Accounting for Certain Investments in Debt and Equity Securities", shareholders' equity was increased by $2,556,000 (net of $1,316,000 in deferred income taxes) to reflect the net unrealized holding gains on securities classified as available-for-sale previously carried at lower of cost or market. In accordance with the Statement, prior period financial statements have not been restated to reflect the change in accounting principle. The change had no effect on net income. 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 SOUTHERN CROSS, which has not been placed in service, thus far in fiscal 1995, the Company continues to maintain 100 percent utilization of its equipment. Since October 1993, the Company has incurred only eleven idle equipment days, a 99.7 percent equipment utilization rate. The key to the Company's return to profitability in 1994 and its level of profitability thus far in fiscal 1995 has been high equipment utilization. However, due to certain planned maintenance and surveys on the EAGLE, the Company will incur some idle days on this rig during the fourth quarter of fiscal 1995. Also, the EAGLE and RICHMOND have current contracts which could expire before the end of fiscal 1995. The Company is currently pursuing new contract opportunities for each rig. Total revenues increased $1.9 million (11 percent) in the second quarter of fiscal year 1995 compared to the second quarter of fiscal year 1994. The revenue increase in the second quarter of fiscal 1995 is primarily due to a $2.1 million (13 percent) increase in drilling revenues. A comparative analysis of drilling revenues is as follows: QUARTERS ENDED March 31, December 31, March 31, 1995 1994 1994 SEAHAWK $ 2,632 $ 2,674 $ 2,684 HUNTER 2,542 2,578 2,533 EAGLE 3,878 3,871 3,218 FALCON 2,787 2,771 2,311 VICKSBURG 1,198 1,164 1,044 RIG-19 1,908 1,901 1,744 RICHMOND 1,430 1,500 1,487 GOODWYN "A" 1,586 1,159 --- OTHER 117 238 964 $18,078 $17,856 $15,985
Since its commencement of operation in February 1993, the SEAHAWK has been a significant contributor to the Company's return to profitability. The HUNTER has experienced 100 percent utilization since April 1993. During December 1993 and January 1994, the EAGLE was mobilized from Malaysia to the "Zone of Cooperation" (an area jointly governed by Indonesia and Australia), which accounts for its revenue being lower in the March 1994 quarter. Since being relocated, the EAGLE has experienced 100 percent utilization. The FALCON worked in Malaysia during the second quarter of fiscal year 1994 compared to Korea and China during the quarters ended December 31, 1994 and March 31, 1995 where dayrate revenues are at higher levels. In September 1994, RIG-19 was relocated to a new platform and received an increase in dayrate revenue which accounts for its increase in drilling revenues. The RICHMOND has worked continuously since March 1993. In October 1994, the Australian operator-owned GOODWYN 'A' platform rig commenced drilling operations. Since July 1989, the Company, on a PAGE 9 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. The reduction in "other" relates primarily to less labor service being provided to the Australian operator-owned NORTH RANKIN "A" platform rig. The Company's current contract status for its drilling operations is as follows: NAME OF RIG LOCATION CONTRACT STATUS SEAHAWK Malaysia Term contract (estimated completion 1997). HUNTER Malaysia Drilling the first of possible eight option wells (with current discussion for ongoing work). EAGLE Australia/Indonesia Drilling the first of possibly three option "Zone of Cooper- wells (with current discussion for new ation contract opportunity). FALCON Thailand/Malaysia Drilling the first of four firm wells (with "Joint Development three option wells). Area" VICKSBURG Australia Under contract until February 1996 (with two one year options). RIG-19 Australia Term contract (estimated completion 1997). RICHMOND United States Drilling one firm well with one option well. Have received conditional letter of intent for work after completion of current contract. GOODWYN 'A' Australia Term contract (estimated completion 1997). For the three months ended March 31, 1995 compared to the three months ended March 31, 1994, drilling costs increased $1.5 million or 13 percent. An analysis of drilling costs by rig is as follows: QUARTERS ENDED March 31, December 31, March 31, 1995 1994 1994 SEAHAWK $ 1,377 $ 1,544 $ 1,451 HUNTER 1,769 1,930 1,823 EAGLE 3,138 3,008 2,430 FALCON 1,543 1,747 1,422 VICKSBURG 770 721 610 RIG-19 1,552 1,183 1,242 RICHMOND 1,008 941 885 GOODWYN "A" 1,219 896 --- OTHER 247 560 1,261 $12,623 $12,530 $11,124 The EAGLE's relocation from Malaysia to the "Zone of Cooperation" during December 1993 and January 1994 accounts for drilling costs being lower in the second quarter of fiscal year 1994 compared to the second quarter of fiscal year 1995. The increases in drilling costs for RIG-19 during the second quarter of fiscal year 1995 is due to increases in repairs and maintenance costs. As previously stated, drilling operations commenced on the GOODWYN 'A' platform rig in October 1994 whereby the Company has labor responsibility and is being compensated on a dayrate revenue basis. The reduction in "other" relates primarily to reduction in personnel costs assigned to the NORTH RANKIN "A" platform rig due to a decline in drilling activities of this customer- owned facility. PAGE 10 For the quarter ended March 31, 1995 compared to the same quarter of fiscal year 1994, depreciation decreased $889,000. This decrease is attributable to an increase in the depreciable lives of the HUNTER, EAGLE and FALCON of five additional years. The Company acquired the 50 percent limited partner's interest in these rigs on the basis that these rigs remain "state- of-the art" with at least ten years of estimated useful lives. An analysis of depreciation expense by rig is as follows:
QUARTERS ENDED March 31, December 31, March 31, 1995 1994 1994 (In thousands) HUNTER, EAGLE and $1,557 $2,588 2,534 FALCON 576 569 557 SEAHAWK 287 323 294 RIG-19 76 62 --- OTHER $2,496 $3,542 $3,385
In conjunction with the Company's acquisition of the limited partner's interest in the HUNTER, EAGLE and FALCON, all notes payable to the limited partner by Deep Seas were contributed to equity and terminated effective December 31, 1994. This accounts for the decrease in interest expense for the quarter ended May 31, 1995 compared to the quarter ended March 31, 1994. The increase in interest expense for the first half of fiscal year 1995 compared to the first half of fiscal year 1994 is due to increases in interest rates on the note payable to bank group. An analysis of interest expense is as follows: QUARTERS ENDED March 31, December 31, March 31, 1995 1994 1994 (In thousands) Note payable to bank $636 $ 565 $ 490 group Notes payable to --- 266 185 limited partner $ 636 $ 831 $ 675 Even though the final closing and funding of the Company's acquisition of the 50 percent limited partner's interest did not occur until April 27, 1995, the acquisition was effective as of December 31, 1994. Thus, the limited partner had no interest in the operating results of the HUNTER, EAGLE and FALCON for the three months ended March 31, 1995; therefore, no minority interest is reflected in the March 1995 quarter. The increase in provision for income taxes for the three months and six months ended March 31, 1995 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. PAGE 11 LIQUIDITY AND CAPITAL RESOURCES Effective as of December 31, 1994, the Company has become the sole owner of the HUNTER, EAGLE and FALCON for an aggregate purchase price consisting of $13.3 million in cash plus the issuance of a $3 million note payable. The note is payable in four annual $750,000 installments and bears interest at six percent. In conjunction with this acquisition, the Company contributed to equity in Deep Seas $7.9 million principal amount of Deep Seas' long-term debt acquired by the Company in 1990 with a current discounted basis of $6.3 million. Effective on January 1, 1995, all notes payable to limited partner by Deep Seas (approximately $14 million) were cancelled with approximately $6 million (net of $8 million previously reclassified as "minority interest in partnership") reclassified as equity in Deep Seas. Fabrication work continues on RIG-200 (the state-of-the-art modular platform rig jointly owned by the Company and Helmerich & Payne, Inc.). At March 31, 1995, the Company had invested approximately $2 million in the RIG- 200 project, with total investment by the Company to be approximately $13 million. The construction of this rig is scheduled to be completed toward the end of calendar 1995; however, the Australian company that has contracted for the use of the rig has indicated that actual drilling operations may not commence until April 1997. Upon completion and delivery of RIG-200 in Australia, the Company should commence receiving financial enhancement from this investment; however, the maximum enhancement may not occur until sometime in fiscal year 1997. The SOUTHERN CROSS remains idle in Australia as the Company pursues future contract opportunities. Before this unit can be placed into service, an additional capital investment, estimated to range from $6 million to $30 million depending upon rig configuration. In addition to pursuing a contract opportunity for the SOUTHERN CROSS, the Company is also pursuing other expansion opportunities. In order to complete the funding of the acquisition of the 50 percent limited partner's interest and continue funding RIG-200 without having to sell any of its available for sale securities, the Company borrowed $3 million in April 1995 under a short-term loan facility. The Company currently plans to fund the RIG-200 investment from internally generated funds; however, should the Company receive a contract for the SOUTHERN CROSS or receive a commitment on another expansion opportunity, funding of additional investment opportunities could require some additional borrowings under the short-term $10 million facility. The Company continues to experience no difficulties in collecting its accounts receivable , with no requirement for an allowance for doubtful accounts. In accordance with Financial Accounting Standard Board Statements No. 115, available for sale securities and shareholders' equity have been increased by $2.6 million to reflect the net unrealized holding gains. This change in accounting principals has no effect on net income. Except for the planned idle repair period for the EAGLE, the Company, based upon current contracts and expectations, should maintain its high level of equipment utilization throughout the remainder of fiscal year 1995. However, due to the planned idle period for the EAGLE and increased foreign tax expenses, management anticipates some reduction in the level of profitability in the second half of fiscal year 1995 compared to the first half of fiscal 1995. The Company will continue its emphasis on maintaining a high level of equipment utilization. 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 9, 1995, at which the shareholders voted on the election of six directors. Of the 5,895,508 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 5,855,193 40,315 George S. Dotson 5,855,193 40,315 Walter H. Helmerich III 5,855,193 40,315 Hans Helmerich 5,855,193 40,315 John R. Irwin 5,855,193 40,315 William J. Morrissey 5,855,193 40,315 Item 6. Reports on Form 8-K On April 5, 1995, the Company filed a Form 8-K related to the March 27, 1995 announcement that it executed agreements to acquire the 50 percent limited partner's interest in the HUNTER, EAGLE and FALCON. 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: 5/11/95 s/JAMES M.HOLLAND James M. Holland Senior Vice President and Chief Accounting Officer
EX-27 2
5 6-MOS SEP-30-1995 MAR-31-1995 22,025 28,785 14,593 0 4,282 43,347 202,994 114,903 161,492 29,480 37,198 6,582 0 0 56,829 161,492 36,620 38,062 27,400 27,400 6,038 0 1,467 4,065 1,035 3,030 0 0 0 3,030 .46 .46
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