PAGE 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, 1996
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 March 31, 1996 6,670,988 shares of Common Stock $1 par
value
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
<PAGE>
PAGE 2
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, 1996 and September 30, 1995, and the
results of operations for the three months and six months ended March 31, 1996
and 1995, 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, 1995 Annual Report to Shareholders.
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PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, Septemmber
1996 1995
(In thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 11,964 $ 11,984
Accounts receivable 16,240 13,425
Inventories of materials and supplies, at
lower of average cost or market 5,114 4,904
Prepaid expenses and other 2,801 3,953
Total Current Assets 36,119 34,266
SECURITIES HELD FOR INVESTMENT:
Held for maturity, at amortized cost 22,407 22,422
Available-for-sale, at fair value 4,108 3,516
26,515 25,938
PROPERTY AND EQUIPMENT:
Drilling vessels, equipment and drill pipe 175,950 174,989
Investment in joint venture 10,447 8,182
Other 4,689 4,569
191,086 187,740
Less-accumulated depreciation 101,067 96,313
Net Property and Equipment 90,019 91,427
DEFERRED COSTS AND OTHER ASSETS 1,037 1,222
$153,690 $152,853
See accompanying notes to financial statements.
</TABLE>
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PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, September 30,
1996 1995
<S> <C> <C>
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term notes payable $ 3,750 $ 3,750
Short-term notes payable --- 1,500
Accounts payable 3,045 6,260
Accrued liabilities 10,401 8,995
Total Current Liabilities 17,196 20,505
LONG-TERM NOTES PAYABLE, net of current maturities 33,319 35,569
DEFERRED CREDITS:
Income taxes 1,595 1,334
Other 3,786 553
5,381 1,887
SHAREHOLDERS' EQUITY:
Preferred stock, no par value;
1,000,000 shares authorized, none outstanding --- ---
Common stock, $1 par value;
10,000,000 share authorized with
6,671,000 and 6,629,000 shares
shares issued and outstanding in
1996 and 1995, respectively 6,671 6,629
Paid-in capital 55,247 54,771
Net unrealized holding gains on
available-for-sale securities 1,719 1,328
Retained earnings 34,157 32,164
Total Shareholders' Equity 97,794 94,892
$ 153,690 $ 152,853
</TABLE>
See accompanying notes to financial statements
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PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
<S> <C> <C> <C> <C>
1996 1995 1996 1995
(In thousands, except per share amounts)
REVENUES:
Contract drilling $ 18,878 $ 17,928 $ 36,821 $ 35,565
Contract management 208 386 403 1,055
19,086 18,314 37,224 36,620
COSTS AND EXPENSES:
Contract drilling 12,901 12,508 25,789 24,876
Contract management 149 115 295 277
Depreciation 2,433 2,496 5,068 6,038
General and
administrative 1,294 1,190 2,354 2,247
16,777 16,309 33,506 33,438
OPERATING INCOME 2,309 2,005 3,718 3,182
OTHER INCOME (EXPENSE)
Interest expense (619) (636) (1,309) (1,467)
Interest income 591 763 1,180 1,442
(28) 127 (129) (25)
INCOME BEFORE MINORITY INTEREST
AND INCOME TAXES 2,281 2,132 3,589 3,157
MINORITY INTEREST IN NET LOSS
OF PARTNERSHIPS --- --- --- 908
INCOME BEFORE INCOME TAXES 2,281 2,132 3,589 4,065
PROVISION FOR INCOME TAXES
Foreign 800 665 1,584 655
Federal 150 180 12 380
950 845 1,596 1,035
NET INCOME $ 1,331 $ 1,287 $ 1,993 $ 3,030
EARNINGS PER COMMON SHARE $ .20 $ .20 $ .30 $ .46
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 6,648 6,582 6,640 6,582
</TABLE>
See accompanying notes to financial statements.
<PAGE>
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PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1996 1995
(In thousands)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $ 1,993 $ 3,030
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 5,068 6,038
Amortization of deferred costs 306 238
Minority interest in net loss of partnerships --- (908)
Changes in assets and liabilities:
Increase in accounts receivable (2,815) (678)
Increase (decrease) in accounts payable and
accrued liabilities (1,809) 2,024
Other 1,069 1,265
Total adjustments 1,819 7,979
Net cash provided by operating activities 3,812 11,009
CASH FLOW FROM INVESTING ACTIVITIES:
Payment received on note receivable --- 202
Investment in joint venture (2,264) (1,708)
Capital expenditures (1,336) (1,997)
Net cash used by investing activities (3,600) (3,503)
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payments on long-term notes payable (2,250) (1,500)
Proceeds from exercises of stock options 518 ---
Payment on short-term note payable (1,500) ---
Prepayment of mobilization revenues 3,000 ---
Net payments to limited partner --- (100)
Net Cash used by financing activities (232) (1,600)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (20) 5,906
CASH AND CASH EQUIVALENTS, at beginning of period 11,984 16,119
CASH AND CASH EQUIVALENTS, at end of period $11,964 $22,025
</TABLE>
See accompanying notes to financial statements
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PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In January 1996, the Company commenced receiving a contribution to its
financial results from a dayrate payment on RIG-200 during the delay period
prior to its start-up of operations in Australia in late 1996 or early 1997.
In December 1995, the Company received a $3 million prepayment of mobilization
revenue relating to RIG-200 which was reflected in the Consolidated Balance
Sheet as "other deferred credits".
2. For the six months ended March 31, 1996, in accordance with FASB 115,
shareholders' equity was increased $391,000 (net of $201,000 increase in
deferred income taxes) to reflect the net unrealized increases during the six
months ended March 31, 1996 in holding gains on securities classified as
available-for-sale.
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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 ATWOOD SOUTHERN CROSS, which has not been placed in
service, the Company has continued to maintain 100 percent utilization of its
equipment. Since October 1993 through March 31, 1996, the Company has
incurred only forty-one idle equipment days, a 99.5 percent equipment
utilization rate.
Contract drilling revenues increased $1.3 million in the first six
months of fiscal year 1996 compared to the first six months of fiscal year
1995; however, this increase was offset somewhat by an approximate $650,000
decrease in contract management revenues. The reduction in contract
management revenues is due to the commencement in the first quarter of fiscal
year 1995 of drilling operations of the GOODWYN 'A' platform rig whereby the
Company is currently compensated through dayrate revenues instead of a fixed
management fee as was the case prior to commencement of drilling operations.
The increase in total contract revenues for the three months and six months
ended March 31, 1996 is primarily due to the commencement in January 1996 of
dayrate payments on RIG 200. A comparative analysis of drilling revenues is
as follows:
<TABLE>
<CAPTION>
QUARTERS ENDED
<S> <C> <C> <C>
March 31, December 31, March 31,
1996 1995 1995
RIG-200 $ 729 $ --- $ ---
SEAHAWK 2,736 2,690 2,601
HUNTER 2,658 2,552 2,542
EAGLE 3,733 3,857 3,878
FALCON 2,515 2,553 2,787
VICKSBURG 1,235 1,249 1,198
RIG-19 2,057 1,939 1,908
RICHMOND 1,494 1,271 1,430
GOODWYN "A" 1,721 1,832 1,584
$18,878 $17,943 $17,928
</TABLE>
Since its commencement of operation in February 1993, the SEAHAWK has
been a significant contributor to the Company's profitability. The ATWOOD
HUNTER has experienced 100 percent utilization since April 1993. The ATWOOD
FALCON has experienced 100 percent utilization while working in China and the
"Joint Development Area" between Thailand and Malaysia. The increase in
revenue for the RICHMOND in the second quarter of fiscal year 1996 compared to
the first quarter of fiscal year 1996 is due to higher dayrate levels. In
October 1994, the Australian operator-owned GOODWYN 'A' platform rig commenced
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drilling operations. Since July 1989, the Company, on a 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.
Current status of the Company's drilling contracts is as follows:
NAME OF RIG LOCATION CONTRACT STATUS
RIG-200 United States Currently waiting for notice to
transport rig to Australia. Estimate
drilling to commence late 1996 or early
1997. Firm two year term with
anticipated drilling program of five
years.
SEAHAWK Malaysia Term contract (estimated completion
February 1997).
ATWOOD Malaysia Rig has six remaining option wells on
HUNTER its current contract, which, if drilled,
could result in the dayrate revenue
remaining approximately at current
level. If all option wells are drilled,
contract could extend to the end of
1996.
ATWOOD Equatorial Guinea Preparing to commence drilling under a
EAGLE one year firm plus two six-month options
contract.
ATWOOD Thailand/Malaysia Drilling the fourth of four firm wells
FALCON "Joint with three option wells (estimated
Development Area" completion October 1996 if all option
wells drilled).
VICKSBURG Australia Under contract until January 1997 (with
a one year option).
RIG-19 Australia Should complete work on current platform
in August 1996. Discussions ongoing
whereby rig could be moved to a new
platform with drilling work of 9 to 18
months.
RICHMOND United States Firm commitment through June 1996 in the
Gulf of Mexico (anticipate continuous
work with current client through
remainder of fiscal year 1996.)
GOODWYN 'A' Australia Term contract (estimated completion
December 1996).
For the six months ended March 31, 1996 compared to the six months ended
March 31, 1995, contract drilling costs increased $913,000 or 4 percent. An
analysis of contract drilling costs by rig is as follows:
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<TABLE>
<CAPTION>
QUARTERS ENDED
<S> <C> <C> <C>
March 31, December 31, March 31,
1996 1995 1995
(In thousands)
SEAHAWK $ 1,654 $ 1,593 $ 1,377
ATWOOD HUNTER 1,821 1,758 1,769
ATWOOD EAGLE 2,519 2,939 3,138
ATWOOD FALCON 1,663 1,638 1,543
VICKSBURG 705 786 770
RIG-19 1,613 1,435 1,552
RICHMOND 1,235 1,111 1,008
GOODWYN "A" 1,379 1,384 1,219
OTHER 312 244 132
$12,901 $12,888 $12,508
</TABLE>
The increase in drilling costs for the SEAHAWK and ATWOOD HUNTER is
primarily due to general increases in equipment maintenance costs. The
reduction in drilling costs for the ATWOOD EAGLE is attributable to the rig
completing its drilling program in Australia in early March 1996 and being
mobilized to Equatorial Guinea.
For the six months ended March 31, 1996 compared to the same period in
fiscal year 1995, depreciation decreased $970,000. This decrease is
attributable to an increase in the depreciable lives of the ATWOOD HUNTER,
ATWOOD EAGLE and ATWOOD FALCON of five additional years upon the Company's
acquisition of the limited partner's interest in these rigs effective December
31, 1994. An analysis of depreciation expense by rig is as follows:
<TABLE>
<CAPTION>
QUARTERS ENDED
March 31, December 31, March 31,
1996 1995 1995
(In thousands)
<S> <C> <C> <C>
ATWOOD HUNTER $ 410 $ 404 $ 396
ATWOOD EAGLE 482 481 478
ATWOOD FALCON 659 656 651
SEAHAWK 552 585 576
RIG-19 159 340 287
OTHER 171 169 108
$ 2,433 $ 2,635 $ 2,496
</TABLE>
As a result of the Company's buyout of its limited partner's interest
effective as of December 31, 1994, the limited partner had no interest in the
operating results of the ATWOOD HUNTER, ATWOOD EAGLE and ATWOOD FALCON for the
six months ended March 31, 1996; therefore, no minority interest is reflected
in the 1996 financial statements. The increase in provision for income taxes
for the six months ended March 31, 1996 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. Thus,
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operating results for the 1995 compared to 1996 were enhanced by the positive
impact of minority interest and a lower tax provision. Due to lower tax
attribute carryforwards, the Company anticipates that tax expense in 1996 will
be higher than 1995.
LIQUIDITY AND CAPITAL RESOURCES
Except for general capital maintenance (estimated to range between $3
million and $6 million for fiscal year 1996) the Company currently has no
other capital commitments. However, the Company has five drilling vessels
that have upgrade potential. The ATWOOD FALCON, ATWOOD HUNTER and ATWOOD
EAGLE are currently equipped to drill in water depths of 2,500, 1,500 and
2,500 feet, respectively, and can be upgraded to drill in deeper water depths.
The Company is currently exploring opportunities which, if successful, could
require an upgrade investment of between $10 and $20 million per rig to drill
in 3,000 feet of water and a significantly higher investment to reach a deeper
water depth drilling capacity. The ATWOOD SOUTHERN CROSS (a second-generation
semisubmersible) remains idle in Australia as the Company continues to market
the rig. Before this unit can be placed in service, an additional capital
investment of approximately $20 million will be required to enable the rig to
drill in water depths up to 2,000 feet. The VICKSBURG, a jackup, is also a
candidate for upgrade investment. This rig is currently committed under a
drilling contract until 1997.
The construction of RIG-200 was completed on time and within cost
estimates. The rig is currently stacked in the United States awaiting
notification for delivery of the rig to Australia. Due to certain delays
unrelated to the Company's activities, the rig is now not scheduled to
commence drilling operations until late 1996 or early 1997. On January 1,
1996, the Company commenced receiving a "holding period" dayrate on RIG-200.
In December 1995, the Company received a $3 million prepayment of mobilization
revenues related to RIG-200, which will not be recognized into income until
the rig is delivered to Australia.
The Company continues to experience no difficulties in collecting its
accounts receivable, with no requirement for an allowance for doubtful
accounts. Currently the Company has no outstanding borrowings under a $10
million short-term line of credit it has with a bank. In accordance with
Financial Accounting Standard Board Statement No. 115, available for sale
securities are reflected in the Consolidated Balance Sheet at fair value, with
the aggregate unrealized gain, net of related deferred tax liability included
in shareholders' equity.
Fiscal year 1996 second quarter results were enhanced by the
commencement in January 1996 of dayrate payments on RIG-200. With the
relocation of the ATWOOD EAGLE to Equatorial Guinea to commence a drilling
program at a significantly increased dayrate level, coupled with revenues from
RIG-200, management anticipates that the level of profitability for the last
two quarters of fiscal year 1996 will reflect continuing improvement. The
Company should be able to continue to maintain a high level of equipment
utilization. Management will continue to pursue contract opportunities for
the ATWOOD SOUTHERN CROSS, as well as higher dayrate contracts for the ATWOOD
HUNTER and ATWOOD FALCON which should enhance the operating results of these
two rigs in fiscal year 1997.
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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 8,
1996, at which the shareholders voted on the election of six directors (each
to serve a one year term) and to act upon a shareholder's proposal. Of the
6,330,958 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
are as follows:
<TABLE>
<CAPTION>
NAME CAST FOR VOTES
WITHHELD
<S> <C> <C>
Robert W. Burgess 6,281,824 52,074
George S. Dotson 6,283,824 48,074
Walter H. Helmerich III 6,284,754 46,214
Hans Helmerich 6,268,544 78,614
John R. Irwin 6,284,764 46,194
William J. Morrissey 6,281,824 52,074
</TABLE>
The vote on the shareholder's proposal was as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES ABSTAINED FROM
VOTING
<S> <C> <C>
335,722 5,469,628 16,710
</TABLE>
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PAGE 13
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: 5/6/96
James M. Holland
Senior Vice President
and Chief Accounting
Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000008411
<NAME> ATWOOD OCEANICS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 11,964
<SECURITIES> 26,515
<RECEIVABLES> 16,240
<ALLOWANCES> 0
<INVENTORY> 5,114
<CURRENT-ASSETS> 36,119
<PP&E> 191,086
<DEPRECIATION> 101,067
<TOTAL-ASSETS> 153,690
<CURRENT-LIABILITIES> 17,196
<BONDS> 33,319
0
0
<COMMON> 6,671
<OTHER-SE> 56,966
<TOTAL-LIABILITY-AND-EQUITY> 153,690
<SALES> 37,224
<TOTAL-REVENUES> 38,404
<CGS> 26,084
<TOTAL-COSTS> 28,438
<OTHER-EXPENSES> 5,068
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,309
<INCOME-PRETAX> 3,589
<INCOME-TAX> 1,596
<INCOME-CONTINUING> 1,993
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,993
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
