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>
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>
PAGE 3
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
(Unaudited) September
March 31, 30, 1994
1995
(In thousands)
<S> <C> <C>
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
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PAGE 4
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
(Unaudited) September
March 31, 30, 1994
1995
<S> <C> <C>
(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
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PAGE 5
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
March 31, March 31,
<S> <C> <S> <C> <C>
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
</TABLE>
See accompanying notes to financial statements
<PAGE>
PAGE 6
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
Six Months Ended March 31,
1995 1994
<S> <C> <C>
(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
</TABLE>
See accompanying notes to financial statements
<PAGE>
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>
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:
<TABLE>
QUARTERS ENDED
<S> <C> <C> <C>
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
</TABLE>
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>
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:
<TABLE>
<S> <C> <C> <C>
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>
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:
</TABLE>
<TABLE>
QUARTERS ENDED
<S> <C> <C> <C>
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
</TABLE>
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:
<TABLE>
QUARTERS ENDED
March 31, December 31, March 31,
1995 1994 1994
(In thousands)
<S> <C> <C> <C>
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>
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>
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
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 22,025
<SECURITIES> 28,785
<RECEIVABLES> 14,593
<ALLOWANCES> 0
<INVENTORY> 4,282
<CURRENT-ASSETS> 43,347
<PP&E> 202,994
<DEPRECIATION> 114,903
<TOTAL-ASSETS> 161,492
<CURRENT-LIABILITIES> 29,480
<BONDS> 37,198
<COMMON> 6,582
0
0
<OTHER-SE> 56,829
<TOTAL-LIABILITY-AND-EQUITY> 161,492
<SALES> 36,620
<TOTAL-REVENUES> 38,062
<CGS> 27,400
<TOTAL-COSTS> 27,400
<OTHER-EXPENSES> 6,038
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,467
<INCOME-PRETAX> 4,065
<INCOME-TAX> 1,035
<INCOME-CONTINUING> 3,030
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,030
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
