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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, 1993 Commission File Number
0-6352
ATWOOD OCEANICS, INC.
(Exact name of registrant as specified in its charter)
State of Texas 74-1611874
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15835 Park Ten Place Drive
P.O. Box 218350 Houston, Texas 77218
(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 13 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, 1993: 6,582,613 shares of Common Stock
$1 par value.
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
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 for a fair statement of the results for the quarters ended
December 31, 1993 and 1992. 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, 1993 Annual Report to Shareholders.
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM I - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, September 30,
1993 1993
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,576 $ 10,087
Accounts receivable 11,184 10,768
Current maturities of long-term
notes receivable 400 400
Inventories of materials and
supplies, at lower of average
cost or market 3,971 3,850
Prepaid expenses and other 2,095 1,498
Total Current Assets 31,226 26,603
MARKETABLE SECURITIES AND U.S.
TREASURY BONDS 24,949 24,957
LONG-TERM NOTES RECEIVABLE,
net of current maturities 6,288 6,389
PROPERTY AND EQUIPMENT:
Drilling vessels, equipment and
drill pipe 184,524 182,851
Other 3,952 3,924
188,476 186,775
Less - accumulated depreciation 99,668 96,625
88,808 90,150
DEFERRED COSTS AND OTHER ASSETS 1,028 1,754
$ 152,299 $ 149,853
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM I - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, September 30,
1993 1993
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of notes
payable by partnership $ 3,000 $ 3,000
Accounts payable 4,465 3,058
Accrued liabilities 6,303 5,842
Total Current Liabilities 13,768 11,900
LONG-TERM NOTES PAYABLE BY
PARTNERSHIP, net of current
maturities 54,845 55,409
DEFERRED INCOME TAXES 767 ---
MINORITY INTEREST IN PARTNERSHIPS 1,569 2,794
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
Retained earnings 20,495 18,895
Total Shareholders' Equity 81,350 79,750
$ 152,299 $ 149,853
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31,
1993 1992
(In thousands, except per)
share amounts)
REVENUES:
Drilling revenues $ 15,373 $ 10,305
Management fee income 485 439
Dividends and interest 615 630
Gain on sale of Indian joint venture 201 ---
16,674 11,374
COSTS AND EXPENSES:
Drilling costs 10,849 7,769
Depreciation 3,357 2,935
General and administrative 985 1,034
Interest 680 864
15,871 12,602
INCOME (LOSS) BEFORE MINORITY
INTEREST AND INCOME TAXES 803 (1,228)
MINORITY INTEREST IN NET LOSS
OF PARTNERSHIPS 1,080 916
INCOME (LOSS) BEFORE INCOME TAXES 1,883 (312)
PROVISION FOR INCOME TAXES 283 190
NET INCOME (LOSS) $ 1,600 $ (502)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,582 6,582
INCOME (LOSS) PER COMMON SHARE $ .24 $ (.08)
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOW
Three Months Ended
December 31,
1993 1992
(In thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,600 $ (502)
Adjustments to reconcile net loss to
net cash provided (used) by operating
activities:
Depreciation 3,357 2,935
Amortization of deferred costs 62 56
Minority interest in net loss of
partnership (1,080) (1,072)
Changes in assets and liabilities:
Decrease (increase) in
accounts receivable (416) 3,498
Increase (decrease) in accounts payable
and accrued liabilities 1,868 (216)
Other (564) 453
Total adjustments 3,227 5,654
Net cash provided by operating
activities 4,827 5,152
CASH FLOW FROM INVESTING ACTIVITIES;
Proceeds from sale of Indian
Joint Venture 1,300 ---
Capital expenditures (1,989) (2,011)
Payment received on notes
receivable 101 101
Net cash used by investing
activities (588) (1,910)
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payment on long term
notes payable (750) (750)
Short-term note payable --- 3,000
Net cash (used) provided by
financing activities (750) 2,250
NET INCREASE IN CASH AND CASH
EQUIVALENTS 3,489 5,492
CASH AND CASH EQUIVALENTS, at beginning
of period 10,087 8,859
CASH AND CASH EQUIVALENTS, at end
of period $ 13,576 $ 14,351
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues increased $5.3 million (47 percent) and $.7 million (4
percent) in the first quarter of fiscal year 1994 compared to the first and
fourth quarters of fiscal year 1993. The significant increase from the
first quarter of fiscal year 1993 is primarily due to a $5.1 million (50
percent) increase in drilling revenues coupled with a $201,000 gain on sale
of the Company's forty percent interest in an Indian Corporation. A
comparative analysis of drilling revenues is as follows:
QUARTERS ENDED
December 31, September 30, December 31,
1993 1993 1992
(In Thousands)
SEAHAWK $ 2,763 $ 2,779 $ ---
HUNTER 2,407 2,406 2,200
EAGLE 1,774 2,259 2,270
FALCON 3,546 2,917 2,950
VICKSBURG 1,027 1,049 1,050
RIG-19 1,683 1,729 1,150
RICHMOND 1,462 1,451 ---
OTHER 711 $ 26 $ 685
$15,373 $14,616 $10,305
Since its commencement of operations in February 1993, the SEAHAWK has
been a significant contributor to the Company's improved operating results.
The HUNTER had 100 percent utilization during the quarters ended December
31 and September 30, 1993 compared to 77 percent utilization during the
quarter ended December 31, 1992, which accounts for the improvement in
revenues from this rig. During December 1993, the EAGLE was mobilized from
Malaysia to the "Zone of Cooperation" (an area between Indonesia and
Australia) to commence drilling under a multiple well contract for Marathon
Petroleum Timor Gap West, Ltd. The downtime incurred in relocating the
EAGLE accounts for the decrease in revenues. The increase in revenues for
the FALCON is due to the rig being 100 percent utilized during the first
quarter of fiscal 1994 as compared to incurring some downtime during both
the fourth and first quarters of fiscal 1993. RIG-19 has encountered no
downtime since it was relocated to a new platform during the quarter ended
December 31, 1992, which accounts for the increase in revenues from this
rig. The RICHMOND has worked continuously since its return to work in
March 1993. The increase in "other" relates primarily to the commencement
in November 1993 of a short-term labor contract in Australia. The
Company's current contract status for its drilling operations is as
follows:
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NAME OF RIG LOCATION CONTRACT STATUS
SEAHAWK Malaysia Commenced drilling in February, 1993 under a
contract with primary term of 600 days plus
multiple options.
HUNTER Malaysia Drilling under a contract providing for six
firm wells plus six options wells. Without
option wells, contract could terminate in
July, 1994.
EAGLE Indonesia- Drilling under a contract providing for five
Australia firm wells plus seven option wells.
"Zone of Estimated completion is December 1994.
Cooperation"
FALCON Malaysia Commencing to drill under a contract for
three firm wells plus one optional well.
Estimated completion is July 1994.
VICKSBURG Australia Drilling under a contract estimated to extend
to January 1995.
RIG-19 Australia Drilling under a term contract estimated to
extend into 1997.
RICHMOND U.S. Gulf Drilling under a contract estimated to
terminate in April 1994.
For the three months ended December 31, 1993 compared to the three
months ended December 31, 1992, drilling costs increased $3.1 million or 40
percent. This increase is primarily due to the operations of the SEAHAWK,
and increases in utilization of the RICHMOND and FALCON, offset somewhat by
refunds of certain payroll related foreign taxes. An analysis of drilling
costs by rigs is as follows:
QUARTERS ENDED
December 31, September 30, December 31,
1993 1993 1992
(In Thousands)
SEAHAWK $ 1,538 $ 1,614 $ ---
HUNTER 1,691 1,593 1,837
EAGLE 1,539 1,492 1,471
FALCON 2,819 2,717 1,875
VICKSBURG 201 554 717
RIG-19 1,151 1,114 714
RICHMOND 882 1,003 120
OTHER 1,028 796 1,035
$10,849 $10,883 $ 7,769
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As previously stated, the SEAHAWK commenced its operations in February
1993. Even though, the EAGLE revenues declined in the first quarter of
fiscal 1994 due to the rig being relocated from Malaysia to Australia -
Indonesian "Zone of Cooperation", its operating costs continued at
virtually the same level due to the costs associated with this relocation.
During the first quarter of fiscal 1993, the FALCON was moved between
drilling sites within Australia, which accounts for the lower drilling
costs during this period. During the first quarter of fiscal 1994, the
Company received refunds of approximately $500,000 related to personnel
taxes paid in prior periods for certain rig personnel. Virtually all of
these refunds were recorded as a reduction in the drilling costs of the
VICKSBURG. Drilling costs of RIG-19 was low in the quarter ended December
31, 1992 due to the rig being relocated to a new drilling site within
Australia. The increase in drilling costs for the RICHMOND is due to its
100 percentage utilization since March 1993.
The increase in depreciation expense is directly related to the
commencement of the SEAHAWK operations. The decline in interest expense is
due primarily to a reduction in interest rates coupled with some reduction
in outstanding principal. As required, the Company adopted the Financial
Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes", in the first quarter of fiscal year 1994. The adoption had no
impact on the Company's statement of operations and minimally increased
assets and liabilities by approximately $800,000 on the Company's balance
sheet.
The key to the Company continuing its profitable operations in
subsequent quarters is maintaining high utilization of the HUNTER, FALCON
and RICHMOND. These rigs have relatively short-term contracts and could
incur some idle time toward the end of fiscal 1994. For the remainder of
fiscal year 1994, the Company will continue its focus of achieving high
utilization of its fleet.
LIQUIDITY AND CAPITAL RESOURCES
In October, 1993, the Company sold its forty percent interest in an
Indian joint venture company for $1.3 million which resulted in the Company
recognizing a gain of $201,000. The Company used the proceeds from this
sale to help fund the $1.5 million purchase of the SOUTHERN CROSS, a
semisubmersible built in 1976. This vessel remains idle in Australia as
the Company pursues future contract opportunities. At this time, the
Company has no significant capital commitments; however, the Company is
currently pursuing and bidding additional expansion opportunities. During
the quarter, the Company's working capital increased approximately $3
million. The Company continues to experience no difficulties in collecting
its accounts receivable. Subject to investing in new opportunities, the
Company's cash reserves should increase as a result of anticipated
improvement in cash flows.
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 2
TO OUR SHAREHOLDERS AND EMPLOYEES:
The Company earned a profit of $1,600,000 in its first fiscal quarter
of 1994. First quarter results were enhanced by refunds of foreign
personnel taxes totalling $500,000 related to prior periods and by a gain
of $200,000 on the sale of the Company's forty-percent equity in an Indian
corporation. Even without these contributions, first quarter results still
reflect a significant improvement over the results for the first quarter of
1993. Earnings, before depreciation, interest and taxes, increased from
$1,454,000 for the first quarter of 1993 to $3,301,000 for the first
quarter of 1994. Compared to the first quarter of 1993, operating cash
flow increased from $1,417,000 to $3,239,000. Drilling revenues increased
by 49 percent and equipment utilization (excluding the SOUTHERN CROSS,
since it has not been placed in service) increased from 83 percent to 99
percent.
Continuing high utilization of our three partnership semisubmersibles
and the RICHMOND are key factors in the Company maintaining profitability.
The EAGLE, FALCON and HUNTER now have firm contract commitments which
should keep those units employed through our third fiscal quarter. The
RICHMOND also has firm commitments which should keep it employed through
our second fiscal quarter. In view of currently lower oil prices, we are
closely monitoring market developments for the second half of 1994 with a
continuing focus on achieving high utilization of our fleet.
The Company has been active during its first quarter in pursuing and
bidding additional expansion opportunities. Profitable opportunities for
the SOUTHERN CROSS are being sought along with other opportunities
requiring new investment.
We continue to earnestly strive for enhancement of our safety and
environmental efforts. Maintaining and developing effective operating
relationships with our clients is also an important goal in building our
business.
/s/ John R. Irwin
JOHN R. IRWIN
PRESIDENT
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
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: 2/9/94 s/JAMES M. HOLLAND
James M. Holland
Senior Vice President
and Chief Accounting Officer
