ATW
$6.20
Atwood Oceanics
($.33)
(5.05%)
Earnings Details
3rd Quarter June 2017
Thursday, August 03, 2017 8:48:29 AM
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Summary

Atwood Oceanics (ATW) Recent Earnings

Atwood Oceanics (ATW) reported a 3rd Quarter June 2017 loss of $0.05 per share on revenue of $117.2 million. The consensus estimate was a loss of $0.06 per share. Revenue fell 48.5% compared to the same quarter a year ago.

Atwood Oceanics Inc is an offshore drilling contractor, engaged in drilling and completion of exploratory and developmental oil and gas wells.

Results
Reported Earnings
($0.05)
Earnings Whisper
-
Consensus Estimate
($0.06)
Reported Revenue
$117.2 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Atwood Oceanics Announces Fiscal 2017 Third Quarter Earnings

FOR IMMEDIATE RELEASE - EARNINGS

HOUSTON, August 3, 2017 -- Atwood Oceanics, Inc. (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,
March 31,
June 30,
2017
2017
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,
June 30,
2017
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,
March 31,
June 30,
June 30,
June 30,
2017
2017
2016
2017
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,
March 31,
June 30,
June 30,
June 30,
2017
2017
2016
2017
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,
September 30,
2017
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