Atwood Oceanics Announces Fiscal 2017 Second Quarter Earnings
May 08 2017 - 4:52PM
FOR IMMEDIATE RELEASE -
EARNINGS
HOUSTON,
May 8, 2017 -- Atwood Oceanics, Inc. (NYSE: ATW)
("Company"), announced today that it had recognized a 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 compared to net
income of $9.7 million or $0.15 per diluted share on revenues of
$157.6 million for the quarter ended December 31, 2016 and
compared to net income of $122.4 million or $1.89 per diluted
share, on revenues of $296.4 million for the quarter ended
March 31, 2016. For the six months ended March 31, 2017,
the Company recognized a net loss of $19.2 million or $(0.27) per
diluted share, on revenues of $325.3 million compared to net income
of $161.5 million or $2.49 per diluted share, on revenues of $604.2
million for the six months ended March 31, 2016.
During the three months ended
March 31, 2017, we concluded that the Atwood
Eagle and its materials and supplies were impaired, and we
wrote them down to their approximate salvage value. We recorded a
non-cash impairment charge of approximately $59.0 million ($57.6
million, net of tax, or $0.74 per diluted share), which is included
in Asset Impairment on the Unaudited Condensed Consolidated
Statement of Operations for the three months ended March 31, 2017.
This impairment charge includes a write-down of property and
equipment and deferred costs of $49.6 million, a write-down of our
inventory of materials and supplies that was specific to the
Atwood Eagle of $8.4 million, and accrued
estimated transaction costs of $1.0 million. On May 5, 2017, we
executed a sale and recycling agreement with respect to the
Atwood Eagle, pursuant to which the vessel,
together with associated equipment and machinery will be sold to a
third party to be demolished and recycled.
In January 2017, the client for
the Atwood Achiever exercised its option
provided as part of the "blend and extend" agreement we entered
into in October 2015 to revert the contract to the original
operating day rate and original end date. Exercise of this option
resulted in a one-time payment to us of $48.1 million that includes
the difference in day rates, taxes, and administrative fees
covering the time periods for which the reduced day rate was
applicable for previously provided drilling services, and is
reported as a component of Contract drilling revenue in our
Unaudited Condensed Consolidated Statements of Operations for the
three and six months ended March 31, 2017
During the three months ended
March 31, 2017, we issued, in a public offering, 15,525,000
shares of common stock. The net proceeds from the offering, before
deducting estimated offering expenses, were approximately $181
million. The net proceeds are currently held as cash and are
expected to be used for general corporate purposes, which may
include the repayment of borrowings under the Credit Facility, the
funding of future purchases or redemption of our Senior Notes,
working capital and capital expenditures, and otherwise to enhance
our liquidity.
During the three months ended
March 31, 2016, we repurchased, through open market transactions,
$13.5 million aggregate principal of our Senior Notes at an
aggregate cost of $5.1 million, including a minimal amount of
accrued interest, representing an average discount of 62.2%. As a
result of the repurchases, we recognized a gain on debt retirement,
net of the related debt issuance costs, of $8.4 million (or $0.13
per diluted share) in Gains on extinguishment of debt on the
Unaudited Condensed Consolidated Statement of Operations for the
three and six months ended March 31, 2016.
|
For the Three Months Ended |
|
(Unaudited) |
(In thousands, except per share
amounts) |
March 31,
2017 |
|
December 31,
2016 |
|
March 31,
2016 |
Revenues |
$ |
167,706 |
|
|
$ |
157,556 |
|
|
$ |
296,351 |
|
Income (Loss) before Income
Taxes |
(27,316 |
) |
|
12,064 |
|
|
136,426 |
|
Provision for Income Taxes |
(1,546 |
) |
|
(2,393 |
) |
|
(13,989 |
) |
Net Income (Loss) |
$ |
(28,862 |
) |
|
$ |
9,671 |
|
|
$ |
122,437 |
|
|
|
|
|
|
|
Earnings per Common Share - |
|
|
|
|
|
Basic |
$ |
(0.37 |
) |
|
$ |
0.15 |
|
|
$ |
1.89 |
|
Diluted |
$ |
(0.37 |
) |
|
$ |
0.15 |
|
|
$ |
1.89 |
|
|
|
|
Six Months Ended |
|
|
|
(Unaudited) |
(In thousands, except per share
amounts) |
|
|
March 31,
2017 |
|
March 31,
2016 |
Revenues |
|
|
$ |
325,262 |
|
|
$ |
604,170 |
|
Income (Loss) before Income
Taxes |
|
|
(15,251 |
) |
|
186,721 |
|
Provision for Income Taxes |
|
|
(3,940 |
) |
|
(25,203 |
) |
Net Income (Loss) |
|
|
$ |
(19,191 |
) |
|
$ |
161,518 |
|
|
|
|
|
|
|
Earnings per Common Share - |
|
|
|
|
|
Basic |
|
|
$ |
(0.27 |
) |
|
$ |
2.49 |
|
Diluted |
|
|
$ |
(0.27 |
) |
|
$ |
2.49 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
(In thousands, except per share
amounts) |
2017 |
|
2016 |
|
2017 |
|
2016 |
REVENUES: |
|
|
|
|
|
|
|
Contract drilling |
$ |
162,240 |
|
|
$ |
282,546 |
|
|
$ |
312,103 |
|
|
$ |
577,161 |
|
Revenues related to reimbursable
expenses |
5,466 |
|
|
13,805 |
|
|
13,159 |
|
|
27,009 |
|
Total revenues |
167,706 |
|
|
296,351 |
|
|
325,262 |
|
|
604,170 |
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Contract drilling |
64,277 |
|
|
89,918 |
|
|
129,947 |
|
|
220,570 |
|
Reimbursable expenses |
4,674 |
|
|
9,123 |
|
|
11,276 |
|
|
17,409 |
|
Depreciation |
41,443 |
|
|
41,053 |
|
|
83,251 |
|
|
83,880 |
|
General and administrative |
12,445 |
|
|
11,488 |
|
|
27,636 |
|
|
26,665 |
|
Asset impairment |
58,962 |
|
|
708 |
|
|
58,962 |
|
|
65,432 |
|
(Gain) loss on sale of
assets |
(51 |
) |
|
77 |
|
|
(118 |
) |
|
77 |
|
Other, net |
- |
|
|
(1,137 |
) |
|
- |
|
|
(1,060 |
) |
|
181,750 |
|
|
151,230 |
|
|
310,954 |
|
|
412,973 |
|
|
|
|
|
|
|
|
|
OPERATING (LOSS)
INCOME |
(14,044 |
) |
|
145,121 |
|
|
14,308 |
|
|
191,197 |
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME: |
|
|
|
|
|
|
|
Interest expense, net of
capitalized interest |
(13,537 |
) |
|
(17,098 |
) |
|
(29,828 |
) |
|
(30,859 |
) |
Interest income |
265 |
|
|
6 |
|
|
269 |
|
|
10 |
|
Gains on extinguishment of
debt |
- |
|
|
8,397 |
|
|
- |
|
|
8,397 |
|
Other income |
- |
|
|
- |
|
|
- |
|
|
17,976 |
|
|
(13,272 |
) |
|
(8,695 |
) |
|
(29,559 |
) |
|
(4,476 |
) |
|
|
|
|
|
|
|
|
(LOSS) INCOME
BEFORE INCOME TAXES |
(27,316 |
) |
|
136,426 |
|
|
(15,251 |
) |
|
186,721 |
|
PROVISION FOR
INCOME TAXES |
1,546 |
|
|
13,989 |
|
|
3,940 |
|
|
25,203 |
|
NET (LOSS)
INCOME |
$ |
(28,862 |
) |
|
$ |
122,437 |
|
|
$ |
(19,191 |
) |
|
$ |
161,518 |
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS
PER COMMON SHARE (NOTE 3): |
|
|
|
|
|
|
|
Basic |
$ |
(0.37 |
) |
|
$ |
1.89 |
|
|
$ |
(0.27 |
) |
|
$ |
2.49 |
|
Diluted |
$ |
(0.37 |
) |
|
$ |
1.89 |
|
|
$ |
(0.27 |
) |
|
$ |
2.49 |
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING (NOTE 3): |
|
|
|
|
|
|
|
Basic |
78,270 |
|
|
64,781 |
|
|
71,504 |
|
|
64,739 |
|
Diluted |
78,270 |
|
|
64,825 |
|
|
71,504 |
|
|
64,870 |
|
Dividend declared per share |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.075 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING
COSTS
|
REVENUES |
|
Three Months Ended |
|
Six Months Ended |
(In millions) |
March 31,
2017 |
|
December 31,
2016 |
|
March 31,
2016 |
|
March 31,
2017 |
|
March 31,
2016 |
Ultra-Deepwater |
$ |
162 |
|
|
$ |
148 |
|
|
$ |
189 |
|
|
$ |
310 |
|
|
$ |
371 |
|
Deepwater |
- |
|
|
- |
|
|
59 |
|
|
- |
|
|
131 |
|
Jackups |
- |
|
|
2 |
|
|
34 |
|
|
2 |
|
|
75 |
|
Reimbursable |
6 |
|
|
8 |
|
|
14 |
|
|
13 |
|
|
27 |
|
|
$ |
168 |
|
|
$ |
158 |
|
|
$ |
296 |
|
|
$ |
325 |
|
|
$ |
604 |
|
|
DRILLING COSTS |
|
Three Months Ended |
|
Six Months Ended |
(In millions) |
March 31,
2017 |
|
December 31,
2016 |
|
March 31,
2016 |
|
March 31,
2017 |
|
March 31,
2016 |
Ultra-Deepwater |
$ |
53 |
|
|
$ |
50 |
|
|
$ |
54 |
|
|
$ |
103 |
|
|
$ |
115 |
|
Deepwater |
- |
|
|
- |
|
|
19 |
|
|
- |
|
|
62 |
|
Jackups |
11 |
|
|
14 |
|
|
19 |
|
|
25 |
|
|
45 |
|
Reimbursable |
5 |
|
|
7 |
|
|
9 |
|
|
11 |
|
|
17 |
|
Other |
- |
|
|
1 |
|
|
(2 |
) |
|
2 |
|
|
(1 |
) |
|
$ |
69 |
|
|
$ |
72 |
|
|
$ |
99 |
|
|
$ |
141 |
|
|
$ |
238 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par
value) |
March 31,
2017 |
|
September 30,
2016 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash |
$ |
435,208 |
|
|
$ |
145,427 |
|
Accounts receivable, net |
81,630 |
|
|
113,091 |
|
Income tax receivable |
2,889 |
|
|
6,095 |
|
Inventories of materials and
supplies, net |
101,721 |
|
|
109,925 |
|
Prepaid expenses, deferred costs
and other current assets |
12,498 |
|
|
18,504 |
|
Total current assets |
633,946 |
|
|
393,042 |
|
|
|
|
|
Property and equipment, net |
4,143,390 |
|
|
4,127,696 |
|
|
|
|
|
Other receivables |
11,831 |
|
|
11,831 |
|
Deferred income taxes |
165 |
|
|
165 |
|
Deferred costs and other
assets |
7,313 |
|
|
7,058 |
|
Total
assets |
$ |
4,796,645 |
|
|
$ |
4,539,792 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
Accounts payable |
$ |
23,693 |
|
|
$ |
25,299 |
|
Accrued liabilities |
9,747 |
|
|
7,868 |
|
Interest payable |
8,395 |
|
|
7,096 |
|
Income tax payable |
8,582 |
|
|
8,294 |
|
Deferred credits and other
liabilities |
1,636 |
|
|
799 |
|
Total current
liabilities |
52,053 |
|
|
49,356 |
|
|
|
|
|
Long-term debt |
1,298,067 |
|
|
1,227,919 |
|
Deferred income taxes |
1,599 |
|
|
1,202 |
|
Deferred credits |
7,910 |
|
|
- |
|
Other |
35,994 |
|
|
30,929 |
|
Total long-term
liabilities |
1,343,570 |
|
|
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 80,516 issued (Note 10) and
outstanding as of March 31, 2017 and 180,000 shares authorized and
64,799 shares issued and outstanding as of September 30, 2016 |
80,516 |
|
|
64,799 |
|
Paid-in capital |
410,855 |
|
|
237,542 |
|
Retained earnings |
2,909,684 |
|
|
2,929,839 |
|
Accumulated other
comprehensive loss |
(33 |
) |
|
(1,794 |
) |
Total shareholders' equity |
3,401,022 |
|
|
3,230,386 |
|
Total
liabilities and shareholders' equity |
$ |
4,796,645 |
|
|
$ |
4,539,792 |
|
ATWOOD OCEANICS,
INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
Six Months Ended March 31, |
(In thousands) |
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
Net (loss) income |
$ |
(19,191 |
) |
|
$ |
161,518 |
|
Adjustments to reconcile net
(loss) income to net cash provided by operating activities: |
|
|
|
Depreciation |
83,251 |
|
|
83,880 |
|
Amortization |
3,367 |
|
|
1,607 |
|
Provision for doubtful
accounts |
2,369 |
|
|
1,141 |
|
Deferred income tax benefit |
(525 |
) |
|
(650 |
) |
Share-based compensation
expense |
7,566 |
|
|
5,009 |
|
Asset impairment |
58,962 |
|
|
65,432 |
|
(Gain) loss on sale of
assets |
(118 |
) |
|
77 |
|
(Gain) on extinguishment of
debt |
- |
|
|
(8,397 |
) |
Other, net |
- |
|
|
(1,137 |
) |
Changes in assets and
liabilities: |
|
|
|
Accounts receivable |
38,217 |
|
|
62,963 |
|
Income tax receivable |
3,206 |
|
|
507 |
|
Inventories of materials and
supplies |
(168 |
) |
|
16,187 |
|
Prepaid expenses, deferred costs
and other current assets |
6,072 |
|
|
14,709 |
|
Deferred costs and other
assets |
(4,201 |
) |
|
(1,381 |
) |
Accounts payable |
3,425 |
|
|
(25,306 |
) |
Accrued liabilities |
4,023 |
|
|
(3,760 |
) |
Income tax payable |
288 |
|
|
6,534 |
|
Deferred credits and other
liabilities |
6,720 |
|
|
1,220 |
|
Net cash provided by operating
activities |
193,263 |
|
|
380,153 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(154,448 |
) |
|
(176,175 |
) |
Proceeds from sale of assets |
- |
|
|
6,681 |
|
Net cash used in investing
activities |
(154,448 |
) |
|
(169,494 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds from issuance of
long-term debt |
125,000 |
|
|
45,000 |
|
Principal payments on long-term
debt |
(55,000 |
) |
|
(120,156 |
) |
Dividends paid |
- |
|
|
(21,746 |
) |
Payments related to exercise of
stock options |
- |
|
|
(928 |
) |
Proceeds from issuance of common
stock
|
180,966 |
|
|
- |
|
Net cash provided by (used in)
financing activities
|
250,966 |
|
|
(97,830 |
) |
Net increase in cash and cash
equivalents |
289,781 |
|
|
112,829 |
|
Cash and cash equivalents, at
beginning of period |
145,427 |
|
|
113,983 |
|
Cash and cash
equivalents, at end of period |
$ |
435,208 |
|
|
$ |
226,812 |
|
|
|
|
|
Non-cash
activities: |
|
|
|
(Decrease) increase in accounts
payable related to capital expenditures |
$ |
(5,031 |
) |
|
$ |
950 |
|
Increase in deferred credits not
yet collected |
$ |
9,125 |
|
|
$ |
- |
|
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.
Conference
Call
The Company has scheduled a
conference call and webcast related to its second quarter 2017
results on Tuesday, May 9, 2017, at 9:00 A.M. CDT (10:00
A.M. EDT). Interested parties are invited to listen to the call by
dialing 1-800-894-5910, or internationally 1-785-424-1052,
Conference ID - Atwood, Password 46829. Interested parties may also
listen over the Internet through a link posted in the Investor
Relations section of the Company's Web site.
A replay of the conference call
will be available on the Company's Web site following the end
of the live call.
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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