Tidewater Reports Results for the Three and Six-Months Ended June 30, 2019

HOUSTON--(BUSINESS WIRE)--Tidewater Inc. (NYSE:TDW) announced today revenue for the three and six months ended June 30, 2019, of $125.9 million and $248.0 million, and net losses for the same periods of $16.0 million (or $0.42 per common share) and $37.7 million (or $1.01 per common share), respectively. Excluding certain costs outlined below, net losses for the three and six months ended June 30, 2019 were $15.5 million (or $0.41 per common share) and $33.5 million (or $0.90 per common share), respectively.


John T. Rynd, Tidewater’s President and Chief Executive Officer, commented, “The second quarter results help solidify our growing sense of an improving market and demonstrates our ability to execute on the business objectives that we have set forth. We saw revenue increase from the prior quarter driven largely by a North Sea market that was seasonally stronger than anticipated for this time of year and a global improvement in demand for deepwater vessels.

We remain focused on being the most cost efficient operator in our industry and have shown further progress towards reducing our general and administrative costs, which remain on track for an $87 million fourth quarter exit run rate. Additionally, we are committed to maintaining a fleet of vessels that are in demand by our customers, which will lead to higher regulatory drydock costs and downtime over the near-to-intermediate term, but we will only invest in the maintenance to the extent we have an adequate return on capital.

We do not envision significant market advancement over the second half of 2019, but we do see ongoing signs of improvement, and our outlook for the offshore market remains on a positive long-term slope with reasons for optimism in each of our primary markets. Our existing market position coupled with our continued efforts to differentiate ourselves will drive ongoing financial improvements and best position us through this slowly improving market.”

Included in the $16.0 million ($0.42 per common share) net loss for the three months and six months ended June 30, 2019 were general and administrative expenses for severance and similar expenses related to integrating Tidewater and GulfMark operations of $0.5 million ($0.01 per common share) and $4.2 million ($0.11 per common share), respectively.

The fully diluted number of shares, as of June 30 2019, assuming exercise of all outstanding warrants is as follows:

Common shares outstanding

37,845,158

New Creditor Warrants (strike price $0.001 per common share)

2,034,235

GulfMark Creditor Warrants (strike price $0.01 per common share)

1,683,147

Total

41,562,540

Tidewater will hold a conference call to discuss results for the three months ended June 30, 2019 on Tuesday, August 13, 2019 at 10:00 a.m. Central Time. Investors and interested parties may listen to the teleconference via telephone by calling 1-888-771-4371 if calling from the U.S. or Canada (1-847-585-4405 if calling from outside the U.S.) and ask for the “Tidewater” call just prior to the scheduled start. A replay of the conference call will be available beginning at 12:00 p.m. Central Time on August 13, 2019, and will continue until 11:59 p.m. Central Time on September 13, 2019. To hear the replay, call 1-888-843-7419 (1-630-652-3042 if calling from outside the U.S.). The conference call ID number is 48850067.

A simultaneous webcast of the conference call will be available online at the Tidewater Inc. website, www.tdw.com. The online replay will be available until September 13, 2019.

The conference call will contain forward-looking statements in addition to statements of historical fact. The actual achievement of any forecasted results or the unfolding of future economic or business developments in a way anticipated or projected by the company involves numerous risks and uncertainties that may cause the company’s actual performance to be materially different from that stated or implied in the forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry and other factors discussed within the “Risk Factors” section of Tidewater’s most recent Forms 10-Q and 10-K.

Tidewater owns and operates the largest fleet of Offshore Support Vessels in the industry, with over 60 years of experience supporting offshore energy exploration and production activities worldwide.


Note: all per-share amounts are stated on a diluted basis.


Financial information is displayed on the next page.

TIDEWATER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

Revenues:

Vessel revenues

$

123,641

104,174

243,303

191,668

Other operating revenues

2,218

1,427

4,705

5,426

Total revenues

125,859

105,601

248,008

197,094

Costs and expenses:

Vessel operating costs

80,439

68,012

162,642

129,376

Costs of other operating revenues

586

642

1,350

3,116

General and administrative (A)

23,696

24,425

50,836

47,990

Depreciation and amortization

25,038

12,785

47,970

24,802

Loss (gain) on asset dispositions, net

494

(1,338

)

(776

)

(3,257

)

Long-lived asset impairments

1,215

7,401

Total operating costs and expenses

130,253

105,741

262,022

209,428

Operating loss

(4,394

)

(140

)

(14,014

)

(12,334

)

Other income (expense):

Foreign exchange gain (loss)

11

(1,002

)

(497

)

(1,350

)

Equity in net earnings (losses) of unconsolidated companies

95

390

33

(15,049

)

Interest income and other, net

1,859

2,914

4,329

2,786

Interest and other debt costs, net

(7,582

)

(7,547

)

(15,318

)

(15,146

)

Total other expense

(5,617

)

(5,245

)

(11,453

)

(28,759

)

Loss before income taxes

(10,011

)

(5,385

)

(25,467

)

(41,093

)

Income tax expense

5,542

5,797

11,372

9,118

Net loss

$

(15,553

)

(11,182

)

(36,839

)

(50,211

)

Less: Net income attributable to noncontrolling interests

406

(242

)

851

(99

)

Net loss attributable to Tidewater Inc.

$

(15,959

)

(10,940

)

(37,690

)

(50,112

)

Basic loss per common share

(0.42

)

(0.44

)

(1.01

)

(2.09

)

Diluted loss per common share

(0.42

)

(0.44

)

(1.01

)

(2.09

)

Weighted average common shares outstanding

37,571

25,654

37,369

23,989

Dilutive effect of stock options and restricted stock

Adjusted weighted average common shares

37,571

25,654

37,369

23,989

Total shares outstanding including warrants

June 30, 2019

June 30, 2018

Common shares outstanding

37,845

26,085

New Creditor Warrants (strike price $0.001 per common share)

2,034

3,925

GulfMark Creditor Warrants (strike price $0.01 per common share)

1,683

Total

41,563

30,010

Note (A): General and administrative expenses for the three and six months ended June 30, 2019 included stock-based compensation of $3.6 million and $9.2 million, respectively, and expenses for the three and six months ended June 30, 2018 included stock-based compensation of $3.2 million and $6.1 million, respectively. In addition, general and administrative costs for the three and six months ended June 30, 2019 includes $0.5 million and $4.2 million of severance and similar costs related to integrating Tidewater and GulfMark operations.

TIDEWATER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and par value data)

June 30,

December 31,

ASSETS

2019

2018

Current assets:

Cash and cash equivalents

$

369,549

371,791

Restricted cash

13,614

25,953

Trade and other receivables, net

121,155

111,266

Due from affiliates

121,959

132,951

Marine operating supplies

29,141

29,505

Other current assets

14,460

11,836

Total current assets

669,878

683,302

Investments in, at equity, and advances to unconsolidated companies

658

1,039

Properties and equipment, net

1,041,054

1,089,857

Deferred drydocking and survey costs

41,029

22,215

Other assets

39,651

31,326

Total assets

$

1,792,270

1,827,739

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

24,170

31,939

Accrued costs and expenses

56,675

61,784

Due to affiliates

39,060

34,972

Current portion of long-term debt

10,002

8,568

Other current liabilities

24,442

21,092

Total current liabilities

154,349

158,355

Long-term debt

424,911

430,436

Other liabilities

97,471

94,025

Contingencies

Equity:

Common stock of $0.001 par value, 125,000,000 shares authorized,

37,845,158 and 36,978,280 shares issued and outstanding

at June 30, 2019 and December 31, 2018, respectively

38

37

Additional paid-in capital

1,359,842

1,352,388

Accumulated deficit

(248,473

)

(210,783

)

Accumulated other comprehensive income

2,194

2,194

Total stockholders’ equity

1,113,601

1,143,836

Noncontrolling interests

1,938

1,087

Total equity

1,115,539

1,144,923

Total liabilities and equity

$

1,792,270

1,827,739

TIDEWATER INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)

Three Months Ended

Six Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

Net loss

$

(15,553

)

(11,182

)

$

(36,839

)

(50,211

)

Other comprehensive income:

Unrealized losses on available for sale securities, net of tax of $0, $0, $0 and $0

43

(256

)

Total comprehensive loss

$

(15,553

)

(11,139

)

$

(36,839

)

(50,467

)

TIDEWATER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Six Months Ended

June 30, 2019

June 30, 2018

Operating activities:

Net loss

$

(36,839

)

(50,211

)

Adjustments to reconcile net loss to net cash provided by (used in) operating

activities:

Depreciation and amortization

38,582

22,572

Amortization of deferred drydocking and survey costs

9,388

2,230

Amortization of debt premium and discounts

(1,019

)

(900

)

Provision for deferred income taxes

6

Gain on asset dispositions, net

(776

)

(3,257

)

Long-lived asset impairments

7,401

Changes in investments in, at equity, and advances

to unconsolidated companies

381

27,881

Compensation expense - stock-based

9,215

6,139

Changes in assets and liabilities, net:

Trade and other receivables

(10,921

)

(15,097

)

Changes in due to/from affiliates, net

15,080

19,869

Accounts payable

(7,769

)

1,709

Accrued costs and expenses

(4,977

)

(6,652

)

Cash paid for deferred drydocking and survey costs

(28,688

)

(13,394

)

Other, net

(2,386

)

18,693

Net cash provided by (used in) operating activities

(20,723

)

16,983

Cash flows from investing activities:

Proceeds from sales of assets

20,566

12,968

Additions to properties and equipment

(8,873

)

(5,775

)

Net cash provided by investing activities

11,693

7,193

Cash flows from financing activities:

Principal payment on long-term debt

(3,792

)

(2,637

)

Payments to General Unsecured Creditors

(8,377

)

Taxes on share-based awards

(1,760

)

Other

1

(1,998

)

Net cash used in financing activities

(5,551

)

(13,012

)

Net change in cash, cash equivalents and restricted cash

(14,581

)

11,164

Cash, cash equivalents and restricted cash at beginning of period

397,744

453,335

Cash, cash equivalents and restricted cash at end of period

$

383,163

464,499

Supplemental disclosure of cash flow information:

Cash paid during the year for:

Interest, net of amounts capitalized

$

16,293

16,134

Income taxes

$

7,754

10,083

TIDEWATER INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)

Three Months Ended

Accumulated

Additional

other

Non

Common

paid-in

Accumulated

comprehensive

controlling

stock

capital

deficit

loss

interest

Total

Balance at March 31, 2019

$

37

1,356,436

(232,514

)

2,194

1,532

1,127,685

Total comprehensive loss

(15,959

)

406

(15,553

)

Issuance of common stock from exercise of warrants

1

1

Amortization/cancellation of restricted stock units

3,406

3,406

Balance at June 30, 2019

$

38

1,359,842

(248,473

)

2,194

1,938

1,115,539

Balance at March 31, 2018

$

24

1,061,983

(78,438

)

(446

)

2,358

985,481

Total comprehensive loss

(10,940

)

43

(242

)

(11,139

)

Issuance of common stock

2

(2

)

Amortization of restricted stock units

3,184

3,184

Acquisition of non-controlling interests

(1,126

)

(874

)

(2,000

)

Balance at June 30, 2018

$

26

1,064,039

(89,378

)

(403

)

1,242

975,526

Six Months Ended

Accumulated

Additional

other

Non

Common

paid-in

Accumulated

comprehensive

controlling

stock

capital

deficit

loss

interest

Total

Balance at December 31, 2018

$

37

1,352,388

(210,783

)

2,194

1,087

1,144,923

Total comprehensive loss

(37,690

)

851

(36,839

)

Issuance of common stock from exercise of warrants

1

1

2

Amortization/cancellation of restricted stock units

7,453

7,453

Balance at June 30, 2019

$

38

1,359,842

(248,473

)

2,194

1,938

1,115,539

Balance at December 31, 2017

$

22

1,059,120

(39,266

)

(147

)

2,215

1,021,944

Total comprehensive loss

(50,112

)

(256

)

(99

)

(50,467

)

Issuance of common stock

4

(2

)

2

Amortization of restricted stock units

6,047

6,047

Acquisition of non-controlling interests

(1,126

)

(874

)

(2,000

)

Balance at June 30, 2018

$

26

1,064,039

(89,378

)

(403

)

1,242

975,526

The company’s vessel revenues and vessel operating costs and the related percentage of total vessel revenues, were as follows:

Three Months Ended

Six Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

(In thousands)

%

%

%

%

Vessel revenues:

Americas

$

35,199

28

%

32,601

31

%

$

70,477

29

%

58,682

31

%

Middle East/Asia Pacific

20,449

17

%

22,406

21

%

40,905

17

%

40,794

21

%

Europe/Mediterranean Sea

35,027

28

%

13,357

13

%

63,585

26

%

22,980

12

%

West Africa

32,966

27

%

35,810

35

%

68,336

28

%

69,212

36

%

Total vessel revenues

$

123,641

100

%

104,174

100

%

$

243,303

100

%

191,668

100

%

Vessel operating costs:

Crew costs

$

47,191

38

%

36,368

35

%

$

95,335

39

%

70,592

37

%

Repair and maintenance

10,911

9

%

7,978

8

%

20,612

9

%

15,682

8

%

Insurance and loss reserves

750

1

%

2,191

2

%

2,928

1

%

1,120

2

%

Fuel, lube and supplies

8,451

7

%

8,181

8

%

17,797

7

%

17,193

9

%

Other

13,136

10

%

13,294

13

%

25,970

11

%

24,789

13

%

Total vessel operating costs

80,439

65

%

68,012

65

%

162,642

67

%

129,376

69

%

Vessel operating margin (B)

43,202

35

%

36,162

35

%

80,661

33

%

62,292

31

%

Note (B): Vessel operating margin can be recalculated by adjusting vessel operating profit (loss) before general and administrative expenses & depreciation and amortization expenses.

The company’s operating loss and other components of loss before income taxes and its related percentage of total revenues, were as follows:

Three Months Ended

Six Months Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

(In thousands)

%

%

%

%

Vessel operating profit (loss):

Americas

$

2,900

2

%

5,681

5

%

$

1,870

<1

%

10,592

5

%

Middle East/Asia Pacific

(2,127

)

(1

%)

625

1

%

(3,289

)

(1

%)

(1,628

)

(1

%)

Europe/Mediterranean Sea

2,824

2

%

(1,142

)

(1

%)

(493

)

(<1

%)

(4,696

)

(2

%)

West Africa

3,099

3

%

1,705

2

%

11,214

5

%

(48

)

(<1

%)

Other operating profit

1,625

1

%

778

1

%

3,330

1

%

2,284

1

%

8,321

7

%

7,647

7

%

12,632

5

%

6,504

2

%

Corporate expenses (C)

(12,221

)

(10

%)

(7,910

)

(7

%)

(27,422

)

(11

%)

(14,694

)

(7

%)

Gain (loss) on asset dispositions, net

(494

)

(<1

%)

1,338

1

%

776

<1

%

3,257

2

%

Long-lived asset impairments

(1,215

)

(1

%)

(7,401

)

(4

%)

Operating loss

(4,394

)

(3

%)

(140

)

(<1

%)

(14,014

)

(6

%)

(12,334

)

(6

%)

Note (C): The company incurred integration costs related to the combination with GulfMark during the three and six months ended June 30, 2019 of $0.5 million and $4.2 million, respectively. General and administrative expenses for the three and six months ended June 30, 2019 included stock-based compensation of $3.6 million and $9.2 million, respectively, and expenses for the three and six months ended June 30, 2018 included stock-based compensation of $3.2 million and $6.1 million, respectively.

TIDEWATER INC.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) – QUARTERLY DATA
(Unaudited)
(In thousands, except share and per share data)

Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

2019

2019

2018

2018

2018

Revenues:

Vessel revenues

$

123,641

119,662

108,527

97,011

104,174

Other operating revenues

2,218

2,487

1,707

2,181

1,427

Total revenues

125,859

122,149

110,234

99,192

105,601

Costs and expenses:

Vessel operating costs

80,439

82,203

74,967

65,237

68,012

Costs of other operating revenues

586

764

733

1,681

642

General and administrative (D)

23,696

27,140

36,487

25,546

24,425

Depreciation and amortization

25,038

22,932

20,101

13,390

12,785

Loss (gain) on asset dispositions, net

494

(1,270

)

(8,938

)

1,571

(1,338

)

Impairment of due from affiliate

20,083

Asset impairments

36,878

16,853

1,215

Total operating costs and expenses

130,253

131,769

180,311

124,278

105,741

Operating loss

(4,394

)

(9,620

)

(70,077

)

(25,086

)

(140

)

Other income (expense):

Foreign exchange gain (loss)

11

(508

)

1,455

1

(1,002

)

Equity in net earnings (losses) of unconsolidated companies

95

(62

)

(3,871

)

56

390

Interest income and other

1,859

2,470

5,799

2,709

2,914

Loss on debt extinguishment

(8,119

)

Interest and other debt costs

(7,582

)

(7,736

)

(7,708

)

(7,585

)

(7,547

)

Total other expense

(5,617

)

(5,836

)

(12,444

)

(4,819

)

(5,245

)

Loss before income taxes

(10,011

)

(15,456

)

(82,521

)

(28,905

)

(5,385

)

Income tax expense

5,542

5,830

7,856

1,278

5,797

Net loss

$

(15,553

)

(21,286

)

(90,377

)

(31,183

)

(11,182

)

Less: Net income (loss) attributable to noncontrolling interests

406

445

132

(287

)

(242

)

Net loss attributable to Tidewater Inc.

$

(15,959

)

(21,731

)

(90,509

)

(30,896

)

(10,940

)

Basic loss per common share

$

(0.42

)

(0.58

)

(2.83

)

(1.16

)

(0.44

)

Diluted loss per common share

$

(0.42

)

(0.58

)

(2.83

)

(1.16

)

(0.44

)

Weighted average common shares outstanding (E)

37,570,629

37,178,580

31,974,802

26,614,507

24,654,220

Dilutive effect of stock options and restricted stock

Adjusted weighted average common shares

37,570,629

37,178,580

31,974,802

26,614,507

24,654,220

Vessel operating margin

$

43,202

37,459

33,560

31,774

36,162

Note (D): Restructuring and merger-related items:

Professional services costs included in general and administrative expenses related to the business combination with GulfMark

$

88

4,465

3,036

1,547

Integration related costs related to the business combination with GulfMark

460

3,651

Total

$

460

3,739

4,465

3,036

1,547

Note (E):

Shares issuable upon the exercise of New Creditor Warrants

held by U.S. citizens included in weighted average shares

outstanding

2,547

300,646

Total shares outstanding including warrants

Common shares outstanding

37,845,158

37,381,954

36,978,280

26,815,991

26,085,274

New Creditor Warrants

(strike price $0.001 per common share)

2,034,235

2,070,463

2,220,857

3,512,416

3,924,441

GulfMark Creditor Warrants

(strike price $0.01 per common share)

1,683,147

2,046,795

2,189,709

Total

41,562,540

41,499,212

41,388,846

30,328,407

30,009,715

TIDEWATER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)

June 30,

March 31,

December 31,

September 30,

June 30,

ASSETS

2019

2019

2018

2018

2018

Current assets:

Cash and cash equivalents

$

369,549

391,060

371,791

461,088

459,286

Restricted cash

13,614

6,975

25,953

7,466

5,213

Trade and other receivables, net (F)

121,155

112,853

111,266

88,013

96,630

Due from affiliates

121,959

119,049

132,951

174,349

197,059

Marine operating supplies

29,141

29,337

29,505

27,591

28,930

Other current assets

14,460

14,844

11,836

9,880

10,213

Total current assets

669,878

674,118

683,302

768,387

797,331

Investments in, at equity, and advances to unconsolidated companies

658

774

1,039

1,129

1,335

Net properties and equipment

1,041,054

1,065,297

1,089,857

790,055

817,140

Deferred drydocking and survey costs

41,029

30,602

22,215

16,053

14,372

Other assets

39,651

38,507

31,326

28,700

26,779

Total assets

$

1,792,270

1,809,298

1,827,739

1,604,324

1,656,957

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable (F)

$

24,170

29,739

31,939

30,571

30,561

Accrued costs and expenses

56,675

56,025

61,784

46,060

49,312

Due to affiliates

39,060

40,245

34,972

48,064

62,353

Current portion of long-term debt

10,002

9,957

8,568

7,671

6,290

Other current liabilities

24,442

20,115

21,092

21,341

20,605

Total current liabilities

154,349

156,081

158,355

153,707

169,121

Long-term debt

424,911

427,436

430,436

435,301

438,559

Other liabilities and deferred credits

97,471

98,096

94,025

71,408

73,751

Contingencies

Equity:

Common stock

38

37

37

27

26

Additional paid-in capital

1,359,842

1,356,436

1,352,388

1,063,603

1,064,039

Accumulated deficit

(248,473

)

(232,514

)

(210,783

)

(120,274

)

(89,378

)

Accumulated other comprehensive income (loss)

2,194

2,194

2,194

(403

)

(403

)

Total stockholders’ equity

1,113,601

1,126,153

1,143,836

942,953

974,284

Noncontrolling interests

1,938

1,532

1,087

955

1,242

Total equity

1,115,539

1,127,685

1,144,923

943,908

975,526

Total liabilities and equity

$

1,792,270

1,809,298

1,827,739

1,604,324

1,656,957

Supplemental Information

Due from related parties, net of due to related parties:

Sonatide (Angola)

$

66,690

62,591

79,829

102,512

106,084

DTDW (Nigeria)

16,209

16,213

18,150

23,773

28,622

Total

$

82,899

78,804

97,979

126,285

134,706


Contacts

Tidewater Inc.
Quintin V. Kneen
Chief Financial Officer
713-470-5308

Matt Mancheski
Vice President, Investor Relations & Corporate Development
+1 713-470-5294
[email protected]

SOURCE: Tidewater Inc.


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