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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 March 31, 1994 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 March 31, 1994: 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 March
31, 1994 and 1993. 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)
March 31, September 30,
1994 1993
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 13,542 $ 10,087
Accounts receivable 11,769 10,768
Current maturities of long-term
notes receivable 400 400
Inventories of materials and
supplies, at lower of average
cost or market 3,990 3,850
Prepaid expenses and other 1,987 1,498
Total Current Assets 31,688 26,603
MARKETABLE SECURITIES AND U.S.
TREASURY BONDS 24,942 24,957
LONG-TERM NOTES RECEIVABLE,
net of current maturities 6,187 6,389
PROPERTY AND EQUIPMENT:
Drilling vessels, equipment and
drill pipe 184,971 182,851
Other 3,994 3,924
188,965 186,775
Less - accumulated depreciation 102,557 96,625
86,408 90,150
DEFERRED COSTS AND OTHER ASSETS 937 1,754
$ 150,162 $ 149,853
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM I - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, September 30,
1994 1993
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of notes
payable by partnership $ 3,000 $ 3,000
Accounts payable 3,006 3,058
Accrued liabilities 5,780 5,842
Total Current Liabilities 11,786 11,900
LONG-TERM NOTES PAYABLE BY
PARTNERSHIP, net of current
maturities 54,280 55,409
DEFERRED INCOME TAXES 767 ---
MINORITY INTEREST IN PARTNERSHIPS 674 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 21,800 18,895
Total Shareholders' Equity 82,655 79,750
$ 150,162 $ 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
March 31,
1994 1993
(In thousands, except per)
share amounts)
REVENUES:
Drilling revenues $ 15,985 $ 11,605
Management fee income 534 382
Dividends and interest 598 809
Gain on Sale of Indian
Joint Venture --- ---
17,117 12,796
COSTS AND EXPENSES:
Drilling costs 11,124 9,638
Depreciation 3,385 3,280
General and administrative 1,094 1,002
Interest 675 791
16,278 14,711
INCOME (LOSS) BEFORE MINORITY INTEREST AND
INCOME TAXES 839 (1,915)
MINORITY INTEREST IN LOSS
OF PARTNERSHIPS 714 1,384
INCOME (LOSS) BEFORE
INCOME TAXES 1,553 (531)
PROVISION FOR INCOME TAXES 248 616
NET INCOME (LOSS) $ 1,305 $ (1,147)
INCOME (LOSS) PER COMMON SHARE $ .20 $ (.17)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,582 6,582
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. PART 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended
March 31,
1994 1993
(In thousands, except per)
share amounts)
REVENUES:
Drilling revenues $ 31,358 $ 21,910
Management fee income 1,019 821
Dividends and interest 1,213 1,439
Gain on Sale of Indian Joint
Venture 201 ---
33,791 24,170
COSTS AND EXPENSES:
Drilling costs 21,973 17,407
Depreciation 6,742 6,215
General and administrative 2,079 2,036
Interest 1,355 1,655
32,149 27,313
INCOME (LOSS) BEFORE MINORITY INTEREST AND
INCOME TAXES 1,642 (3,143)
MINORITY INTEREST IN LOSS
OF PARTNERSHIPS 1,794 2,300
INCOME (LOSS) BEFORE INCOME TAXES 3,436 (843)
PROVISION FOR INCOME TAXES 531 806
NET INCOME (LOSS) $ 2,905 $ (1,649)
INCOME (LOSS) PER COMMON SHARE $ .44 $ (.25)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,582 6,582
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOW
Six Months Ended
March 31,
1994 1993
(In thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 2,905 $ (1,649)
Adjustments to reconcile net loss to
net cash provided (used) by operating
activities:
Depreciation 6,742 6,215
Amortization of deferred costs 263 11
Minority interest in loss of
partnerships (1,794) (2,300)
Changes in assets and liabilities:
Decrease (increase) in
accounts receivable (1,001) 6,138
Decrease in accounts payable
and accrued liabilities (114) (1,484)
Other (541) 422
TOTAL ADJUSTMENTS 3,555 9,002
Net Cash Provided by Operating
Activities 6,460 7,353
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Indian
Joint Venture 1,300 ---
Capital expenditures (3,007) (4,039)
Payment received on notes
receivable 202 716
Net Cash Used by Investing
Activities (1,505) (3,323)
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payment on long-term
notes payable (1,500) (1,500)
Repayment of short-term note payable --- (2,500)
Net advances by limited partner --- 262
Net Cash Used by Financing Activities (1,500) (3,738)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 3,455 292
CASH AND CASH EQUIVALENTS, at beginning
of period 10,087 8,859
CASH AND CASH EQUIVALENTS, at end
of period $ 13,542 $ 9,151
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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 $4.3 million (34 percent) in the second
quarter of fiscal year 1994 compared to the second quarter of fiscal year
1993. This increase is primarily due to an increase in drilling revenues.
A comparative analysis of drilling revenues by rig is as follows:
QUARTERS ENDED
March 31, December 31, March 31,
1994 1993 1993
(In Thousands)
HUNTER $ 2,533 $ 2,407 $ ---
EAGLE 3,218 1,774 2,318
FALCON 2,311 3,546 4,157
VICKSBURG 1,044 1,027 1,239
RIG-19 1,744 1,683 1,759
SEAHAWK 2,684 2,763 811
RICHMOND 1,487 1,462 647
OTHER 964 711 674
$15,985 $15,373 $11,605
Thus far in fiscal year 1994, the HUNTER has incurred no idle days.
The rig was idle the entire second quarter of fiscal year 1993. 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. The downtime incurred in December in
relocating the rig coupled with a higher dayrate contract accounts for the
significant increase in revenues for the EAGLE in the second quarter as
compared to the first quarter of fiscal year 1994. Due to higher labor
costs, dayrate revenue levels are higher in Australia than in Malaysia.
This difference in dayrate levels is reflected in the comparison of FALCON
revenues. The FALCON was relocated from Australia to Malaysia during the
second quarter of fiscal year 1994 which accounts for its reduction in
revenues. Since its relocation from the Gulf of Mexico to Australia in
1987, the VICKSBURG has worked continuously for the same customer. RIG-19
has also had continuous employment since its acquisition in 1989. Since
its commencement of operations in February 1993, the SEAHAWK has been a
significant contributor to the Company's improved operating results. The
RICHMOND has worked continuously since its return to employment 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 drilling rigs wholly or partially owned is as
follows:
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NAME OF RIG LOCATION CONTRACT STATUS
HUNTER Malaysia Rig has four remaining firm wells to drill
under current contract which also provides
for six option wells. If no option wells are
drilled, contract could terminate in July
1994.
EAGLE Indonesia- Drilling under a contract providing for five
Australia firm wells plus seven option wells.
"Zone of If no options wells are drilled, contract
Cooperation" could terminate in July 1994.
FALCON Malaysia Drilling under a contract for three firm
wells plus one option well. If option well
not drilled, contract could terminate in 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.
SEAHAWK Malaysia Commenced drilling in February, 1993 under a
contract with primary term of 600 days plus
multiple options.
RICHMOND U.S. Gulf Drilling under a contract estimated to
terminate in June 1994.
SOUTHERN CROSS Australia Remains idle while the Company pursues future
contract opportunities.
For the three months ended March 31, 1994 compared to the three months
ended March 31, 1993, drilling costs increased $1.5 million or 15 percent.
An analysis of drilling costs by rig is as follows:
QUARTERS ENDED
March 31, December 31, March 31,
1994 1993 1993
(In Thousands)
HUNTER $ 1,823 $ 1,691 $ 1,133
EAGLE 2,430 1,539 1,560
FALCON 1,422 2,819 2,606
VICKSBURG 610 201 856
RIG-19 1,242 1,151 1,212
SEAHAWK 1,451 1,538 959
RICHMOND 885 882 455
OTHER 1,261 1,028 857
$11,124 $10,849 $ 9,638
The increase in the HUNTER's drilling costs for the first two quarters
of fiscal 1994 compared to the second quarter of fiscal 1993 is directly
related to its 100 percent utilization in 1994. The increase in EAGLE's
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related to its 100 percent utilization, thus far, in fiscal 1994. The
increase in EAGLE's drilling costs is due to its relocation from Malaysia
to Australia - Indonesia "Zone of Cooperation". Operating costs are less
in Malaysia due to lower labor expenses. The reduction in FALCON drilling
costs is due to its relocation from Australia to Malaysia. Even though
operating costs are lower in Malaysia compared to Australia, current
dayrate levels are also less; thereby, resulting in approximately the same
operating margins. 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 which
accounts for its low costs in the quarter ended December 31, 1993. As
previously stated, the SEAHAWK commenced its operation in February 1993.
The increase in drilling costs for the RICHMOND is due to its 100 percent
utilization since March 1993. The increase in "Other" is due to the
commencement of the Australian labor contract in November 1993.
The decline in interest expense during 1994 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 primary reason for the Company's profitable results in 1994 has
been its ability to maintain high equipment utilization. For the first six
months of fiscal year 1994, the Company, excluding the SOUTHERN CROSS, has
only incurred eleven idle equipment days (99 percent utilization) compared
to 259 idle equipment days (80 percent utilization) for the same period in
fiscal year 1993. The key to the Company continuing its profitable
operations in subsequent quarters is maintaining high utilization of its
equipment. The HUNTER, EAGLE, FALCON and RICHMOND are working under
contracts that could end during the current fiscal year. Should any of
these contracts terminate, there is no guarantee of immediate on-going
work; thus the Company could incur significant idle equipment days toward
the end of fiscal year 1994. For the remainder of fiscal year 1994, the
Company will continue its emphasis on maintaining high equipment
utilization.
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 first half of fiscal 1994 the Company's working capital increased
approximately $5 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 continuing improvement in cash flows.
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ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 2
TO OUR SHAREHOLDERS AND EMPLOYEES:
May 12, 1994
To Our Shareholders and Employees:
The Company had 100 percent utilization of its drilling equipment
during the second quarter of fiscal 1994 excluding the SOUTHERN CROSS,
which has not been placed in service. The primary reason for the Company's
profitable results to date in 1994 has been its ability to maintain high
equipment utilization. For the first six months of fiscal year 1994, the
Company, excluding the SOUTHERN CROSS, has only incurred eleven idle
equipment days (99 percent utilization) compared to 259 idle equipment days
(80 percent utilization) for the same period in fiscal year 1993.
Earnings, including investment income, before depreciation, interest and
taxes, but after adjustment for minority interest, were $7.7 million for
the six months ended March 31, 1994, compared to $3.0 million for the same
period in 1993. Drilling revenues for the second quarter of fiscal year
1994 increased $4.38 million or 38 percent compared to the same period in
1993.
Firm contract commitments already in place should permit the Company
to maintain high fleet utilization during its third quarter of fiscal year
1994. However, uncertainties relating to oil prices, possible deferrals in
exploration programs and international rig relocations for the second half
of calendar 1994 continue to persist. Ongoing opportunities for our three
semisubmersibles and the RICHMOND commencing in the third and fourth
quarters of calendar 1994 are being aggressively pursued with a view to
maintaining high utilization.
Our overall safety and operational performances during the quarter
have been given strong emphasis and have progressed favorably. In keeping
with our positive longer-term view, we have also recently submitted bids
for term opportunities that, if successful, would require investment in new
equipment or major upgrade improvements in existing equipment.
/s/ John R. Irwin
JOHN R. IRWIN
PRESIDENT
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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 10,
1994, at which the shareholders voted on the election of six directors. Of
the 5,348,602 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:
Votes Votes
Name Cast For Withheld
Robert W. Burgess 5,341,042 7,560
George S. Dotson 5,341,042 7,560
Walter H. Helmerich III 5,341,042 7,560
Hans Helmerich 5,341,042 7,560
John R. Irwin 5,341,042 7,560
William J. Morrissey 5,341,042 7,560
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: 5/12/94 s/JAMES M. HOLLAND
James M. Holland
Senior Vice President
and Chief Accounting Officer
