Atwood Oceanics Announces Fiscal 2017 Third Quarter Earnings
August 03 2017 - 8:48AM
FOR IMMEDIATE RELEASE -
EARNINGS
HOUSTON,
August 3, 2017 -- Atwood Oceanics, Inc. (NYSE: ATW)
("Company"), announced today that it had recognized a net loss of
4.3 million or $(0.05) per diluted share, on revenues of $117.2
million for the quarter ended June 30, 2017 compared to net
loss of 28.9 million or $(0.37) per diluted share on revenues of
$167.7 million for the quarter ended March 31, 2017 and
compared to net income of $99.5 million or $1.53 per diluted share,
on revenues of $227.8 million for the quarter ended June 30,
2016. For the nine months ended June 30, 2017, the Company
recognized a net loss of 23.5 million or $(0.32) per diluted share,
on revenues of $442.5 million compared to net income of $261.0
million or $4.02 per diluted share, on revenues of $832.0 million
for the nine months ended June 30, 2016.
Rob Saltiel, President and Chief
Executive Officer, commented on the Company's third quarter
financial results. "Our third quarter revenues were impacted
negatively by lower fleet revenue efficiency due to isolated
downtime incidents. In contrast, the rig fleet operated at a
revenue efficiency of approximately 99% for the month of July.
Third quarter contract drilling costs were significantly lower than
those of the second quarter due to excellent cost control and
efficient progression of the Atwood Condor
project as this rig prepares for work in Australia commencing
January 2018."
During the nine months ended June
30, 2016, we repurchased, through open market transactions, $159.3
million aggregate principal amount of our Senior Notes for $102.5
million, including accrued interest. As a result of the
repurchases, we recognized a total gain on debt retirement, net of
the related debt issuance costs and premium, of $58.9 million
($44.1 million, net of tax, or $0.68 per diluted share) in Gains on
extinguishment of debt on our Condensed Consolidated Statements of
Operations for the nine ended June 30, 2016.
These repurchases, in the nine
month periods ended June 30, 2016, allowed us to reduce our
outstanding indebtedness and related interest expense at a
significant discount to the face value of our Senior Notes. The
gain associated with the repurchases was subject to tax and
increased our effective tax rate. However, due to the availability
of operating loss carry-forwards the actual cash tax impact was
minimal. The repurchases were made using available cash
balances.
Pending Merger with Ensco plc
("Ensco")
On May 29, 2017, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Ensco and Echo Merger Sub LLC,
a wholly owned subsidiary of Ensco ("Merger Sub"), pursuant to
which Ensco will acquire the Company in an all-stock transaction.
Subject to the terms and conditions of the Merger Agreement, at the
effective time of the Merger, each share of common stock, par value
$1.00 per share (other than shares of Company common stock held by
Ensco, Merger Sub or the Company), will be converted into the right
to receive 1.60 validly issued, fully paid and nonassessable Class
A ordinary shares of Ensco, nominal value $0.10.
The Merger Agreement contains
customary representations, warranties and covenants by the Company,
Merger Sub and Ensco. The Merger Agreement also contains customary
pre-closing covenants, including the obligation of the Company and
Ensco to conduct their respective businesses in the ordinary course
of business and to refrain from taking specified actions without
the consent of the other party.
The consummation of the Merger is
subject to satisfaction of customary closing conditions, including
among other things, the approval of the allotment and issuance of
Ensco shares by Ensco's shareholders, approval of the Merger by
both the Company's and Ensco's shareholders, the expiration or
termination of any waiting period applicable to the Merger under
the Hart-Scott-Rodino Antitrust Improvements Acts of 1976 (the "HSR
Act") and similar regulatory clearances in certain other
jurisdictions. On June 29, 2017, the transaction received early
termination of the waiting period under the HSR Act. The Merger is
expected to close in the third quarter of calendar 2017.
Conference Call
Given the proposed Merger with Ensco, the Company
will not hold a conference call to discuss its quarterly
results.
|
For the Three
Months Ended |
|
(Unaudited) |
(In
thousands, except per share amounts) |
June 30,
2017 |
|
March 31,
2017 |
|
June 30,
2016 |
Revenues |
$ |
117,234 |
|
|
$ |
167,706 |
|
|
$ |
227,797 |
|
Income
(Loss) before Income Taxes |
(1,768 |
) |
|
(27,316 |
) |
|
120,116 |
|
Provision for Income Taxes |
(2,581 |
) |
|
(1,546 |
) |
|
(20,611 |
) |
Net
Income (Loss) |
$ |
(4,349 |
) |
|
$ |
(28,862 |
) |
|
$ |
99,505 |
|
|
|
|
|
|
|
Earnings per Common Share - |
|
|
|
|
|
Basic |
$ |
(0.05 |
) |
|
$ |
(0.37 |
) |
|
$ |
1.54 |
|
Diluted |
$ |
(0.05 |
) |
|
$ |
(0.37 |
) |
|
$ |
1.53 |
|
|
|
|
Nine Months
Ended |
|
|
|
(Unaudited) |
(In
thousands, except per share amounts) |
|
|
June 30,
2017 |
|
June 30,
2016 |
Revenues |
|
|
$ |
442,496 |
|
|
$ |
831,967 |
|
Income
(Loss) before Income Taxes |
|
|
(17,021 |
) |
|
306,837 |
|
Provision for Income Taxes |
|
|
(6,520 |
) |
|
(45,814 |
) |
Net
Income (Loss) |
|
|
$ |
(23,541 |
) |
|
$ |
261,023 |
|
|
|
|
|
|
|
Earnings per Common Share - |
|
|
|
|
|
Basic |
|
|
$ |
(0.32 |
) |
|
$ |
4.03 |
|
Diluted |
|
|
$ |
(0.32 |
) |
|
$ |
4.02 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
Three Months
Ended June 30, |
|
Nine Months
Ended June 30, |
(In
thousands, except per share amounts) |
2017 |
|
2016 |
|
2017 |
|
2016 |
REVENUES: |
|
|
|
|
|
|
|
Contract drilling |
$ |
111,803 |
|
|
$ |
217,818 |
|
|
$ |
423,906 |
|
|
$ |
794,979 |
|
Revenues related to reimbursable expenses |
5,431 |
|
|
9,979 |
|
|
18,590 |
|
|
36,988 |
|
Total
revenues |
117,234 |
|
|
227,797 |
|
|
442,496 |
|
|
831,967 |
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
Contract drilling |
48,182 |
|
|
80,524 |
|
|
178,129 |
|
|
301,094 |
|
Reimbursable expenses |
3,245 |
|
|
5,489 |
|
|
14,521 |
|
|
22,898 |
|
Depreciation |
38,500 |
|
|
41,084 |
|
|
121,751 |
|
|
124,964 |
|
General and administrative |
15,557 |
|
|
12,028 |
|
|
43,193 |
|
|
38,693 |
|
Asset
impairment |
211 |
|
|
(659 |
) |
|
59,173 |
|
|
64,773 |
|
Loss
on sale of assets |
379 |
|
|
- |
|
|
261 |
|
|
77 |
|
Other,
net |
- |
|
|
16 |
|
|
- |
|
|
(1,044 |
) |
|
106,074 |
|
|
138,482 |
|
|
417,028 |
|
|
551,455 |
|
|
|
|
|
|
|
|
|
OPERATING INCOME |
11,160 |
|
|
89,315 |
|
|
25,468 |
|
|
280,512 |
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE) INCOME: |
|
|
|
|
|
|
|
Interest expense, net of capitalized interest |
(13,636 |
) |
|
(19,674 |
) |
|
(43,464 |
) |
|
(50,533 |
) |
Interest income |
708 |
|
|
9 |
|
|
975 |
|
|
19 |
|
Gains
on extinguishment of debt |
- |
|
|
50,466 |
|
|
- |
|
|
58,863 |
|
Other
income |
- |
|
|
- |
|
|
- |
|
|
17,976 |
|
|
(12,928 |
) |
|
30,801 |
|
|
(42,489 |
) |
|
26,325 |
|
|
|
|
|
|
|
|
|
(LOSS) INCOME BEFORE INCOME TAXES |
(1,768 |
) |
|
120,116 |
|
|
(17,021 |
) |
|
306,837 |
|
PROVISION FOR INCOME TAXES |
2,581 |
|
|
20,611 |
|
|
6,520 |
|
|
45,814 |
|
NET (LOSS) INCOME |
$ |
(4,349 |
) |
|
$ |
99,505 |
|
|
$ |
(23,541 |
) |
|
$ |
261,023 |
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS PER COMMON SHARE (NOTE
3): |
|
|
|
|
|
|
|
Basic |
$ |
(0.05 |
) |
|
$ |
1.54 |
|
|
$ |
(0.32 |
) |
|
$ |
4.03 |
|
Diluted |
$ |
(0.05 |
) |
|
$ |
1.53 |
|
|
$ |
(0.32 |
) |
|
$ |
4.02 |
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE
3): |
|
|
|
|
|
|
|
Basic |
80,542 |
|
|
64,795 |
|
|
74,515 |
|
|
64,750 |
|
Diluted |
80,542 |
|
|
64,847 |
|
|
74,515 |
|
|
64,852 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING
COSTS
|
REVENUES |
|
Three Months Ended |
|
Nine Months Ended |
(In
millions) |
June 30,
2017 |
|
March 31,
2017 |
|
June 30,
2016 |
|
June 30,
2017 |
|
June 30,
2016 |
Ultra-Deepwater |
$ |
109 |
|
|
$ |
162 |
|
|
$ |
182 |
|
|
$ |
419 |
|
|
$ |
553 |
|
Deepwater |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
131 |
|
Jackups |
3 |
|
|
- |
|
|
36 |
|
|
5 |
|
|
111 |
|
Reimbursable |
5 |
|
|
6 |
|
|
10 |
|
|
18 |
|
|
37 |
|
|
$ |
117 |
|
|
$ |
168 |
|
|
$ |
228 |
|
|
$ |
442 |
|
|
$ |
832 |
|
|
DRILLING
COSTS |
|
Three Months Ended |
|
Nine Months Ended |
(In
millions) |
June 30,
2017 |
|
March 31,
2017 |
|
June 30,
2016 |
|
June 30,
2017 |
|
June 30,
2016 |
Ultra-Deepwater |
$ |
43 |
|
|
$ |
53 |
|
|
$ |
54 |
|
|
$ |
146 |
|
|
$ |
168 |
|
Deepwater |
- |
|
|
- |
|
|
10 |
|
|
1 |
|
|
71 |
|
Jackups |
7 |
|
|
11 |
|
|
16 |
|
|
32 |
|
|
62 |
|
Reimbursable |
3 |
|
|
5 |
|
|
5 |
|
|
15 |
|
|
23 |
|
Other |
(2 |
) |
|
- |
|
|
1 |
|
|
(1 |
) |
|
- |
|
|
$ |
51 |
|
|
$ |
69 |
|
|
$ |
86 |
|
|
$ |
193 |
|
|
$ |
324 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In
thousands, except par value) |
June 30,
2017 |
|
September 30,
2016 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash |
$ |
474,313 |
|
|
$ |
145,427 |
|
Accounts receivable, net |
78,140 |
|
|
113,091 |
|
Income
tax receivable |
2,769 |
|
|
6,095 |
|
Inventories of materials and supplies, net |
102,444 |
|
|
109,925 |
|
Prepaid expenses, deferred costs and other current assets |
13,617 |
|
|
18,504 |
|
Total
current assets |
671,283 |
|
|
393,042 |
|
|
|
|
|
Property and equipment, net |
4,137,741 |
|
|
4,127,696 |
|
|
|
|
|
Other
receivables |
11,831 |
|
|
11,831 |
|
Deferred income taxes |
165 |
|
|
165 |
|
Deferred costs and other assets |
7,174 |
|
|
7,058 |
|
Total assets |
$ |
4,828,194 |
|
|
$ |
4,539,792 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Accounts payable |
$ |
35,822 |
|
|
$ |
25,299 |
|
Accrued liabilities |
11,034 |
|
|
7,868 |
|
Interest payable |
13,571 |
|
|
7,096 |
|
Income
tax payable |
7,239 |
|
|
8,294 |
|
Deferred credits and other liabilities |
8,663 |
|
|
799 |
|
Total current liabilities |
76,329 |
|
|
49,356 |
|
|
|
|
|
Long-term debt |
1,298,136 |
|
|
1,227,919 |
|
Deferred income taxes |
1,815 |
|
|
1,202 |
|
Deferred credits |
12,429 |
|
|
- |
|
Other |
39,663 |
|
|
30,929 |
|
Total long-term liabilities |
1,352,043 |
|
|
1,260,050 |
|
|
|
|
|
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
Preferred stock, no par value, 1,000 shares authorized, none
outstanding |
- |
|
|
- |
|
Common
stock, $1.00 par value, 180,000 shares authorized with 80,544
issued (Note 10) and outstanding as of June 30, 2017 and 180,000
shares authorized and 64,799 shares issued and outstanding as of
September 30, 2016 |
80,544 |
|
|
64,799 |
|
Paid-in capital |
413,831 |
|
|
237,542 |
|
Retained earnings |
2,905,334 |
|
|
2,929,839 |
|
Accumulated other comprehensive loss |
113 |
|
|
(1,794 |
) |
Total
shareholders' equity |
3,399,822 |
|
|
3,230,386 |
|
Total liabilities and shareholders'
equity |
$ |
4,828,194 |
|
|
$ |
4,539,792 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
Nine Months
Ended June 30, |
(In
thousands) |
2017 |
|
2016 |
Cash flows from operating activities: |
|
|
|
Net
(loss) income |
$ |
(23,541 |
) |
|
$ |
261,023 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
Depreciation |
121,751 |
|
|
124,964 |
|
Amortization |
4,357 |
|
|
2,407 |
|
Provision for doubtful accounts |
2,472 |
|
|
4,619 |
|
Deferred income tax benefit |
86 |
|
|
(378 |
) |
Share-based compensation expense |
10,657 |
|
|
8,224 |
|
Asset
impairment |
59,173 |
|
|
64,753 |
|
Loss
(gain) on sale of assets |
261 |
|
|
(71 |
) |
Gain
on extinguishment of debt |
- |
|
|
(58,863 |
) |
Other,
net |
- |
|
|
(1,137 |
) |
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
32,479 |
|
|
121,964 |
|
Income
tax receivable |
3,326 |
|
|
511 |
|
Inventories of materials and supplies |
(891 |
) |
|
12,988 |
|
Prepaid expenses, deferred costs and other current assets |
6,324 |
|
|
19,377 |
|
Deferred costs and other assets |
(6,440 |
) |
|
(1,019 |
) |
Accounts payable |
911 |
|
|
(33,674 |
) |
Accrued liabilities |
10,400 |
|
|
(3,274 |
) |
Income
tax payable |
(1,055 |
) |
|
(376 |
) |
Deferred credits and other liabilities |
28,558 |
|
|
(6,623 |
) |
Net
cash provided by operating activities |
248,828 |
|
|
515,415 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
(173,246 |
) |
|
(198,248 |
) |
Proceeds from sale of assets |
2,338 |
|
|
20,813 |
|
Net
cash used in investing activities |
(170,908 |
) |
|
(177,435 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from issuance of long-term debt |
125,000 |
|
|
45,000 |
|
Principal payments on long-term debt |
(55,000 |
) |
|
(290,110 |
) |
Dividends paid |
- |
|
|
(21,746 |
) |
Payments related to exercise of stock options |
- |
|
|
(930 |
) |
Proceeds from issuance of common stock
|
180,966 |
|
|
- |
|
Windfall tax benefits from share-based payment arrangements |
- |
|
|
14,797 |
|
Net
cash provided by (used in) financing activities
|
250,966 |
|
|
(252,989 |
) |
Net
increase in cash and cash equivalents |
328,886 |
|
|
84,991 |
|
Cash
and cash equivalents, at beginning of period |
145,427 |
|
|
113,983 |
|
Cash and cash equivalents, at end of
period |
$ |
474,313 |
|
|
$ |
198,974 |
|
|
|
|
|
Non-cash activities: |
|
|
|
Increase in accounts payable related to capital expenditures |
$ |
9,612 |
|
|
$ |
7,902 |
|
Atwood Oceanics, Inc. is a leading
offshore drilling company engaged in the drilling and completion of
exploration and development wells for the global oil and gas
industry. The Company currently owns 10 mobile offshore drilling
units and is constructing two ultra-deepwater drillships. The
Company was founded in 1968 and is headquartered in Houston, Texas.
Atwood Oceanics, Inc. common stock is traded on the New York Stock
Exchange under the symbol "ATW." For more information about the
Company, please visit www.atwd.com.
Contact: Mark W. Smith
Senior Vice President and Chief Financial Officer
(281) 749-7840
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Atwood Oceanics, Inc. via Globenewswire
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