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Tidewater Reports Third Quarter Results For Fiscal 2016

02/02/2016

NEW ORLEANS, Feb. 2, 2016 /PRNewswire/ -- Tidewater Inc. (NYSE: TDW) announced today a third quarter net loss for the period ended December 31, 2015, of $19.5 million, or $0.42 per common share, on revenues of $218.2 million. For the same quarter last year, net loss was $160.7 million, or $3.31 per common share, on revenues of $387.6 million. The immediately preceding quarter ended September 30, 2015, had a net loss of $43.8 million, or $0.93 per common share, on revenues of $271.9 million.

Included in the net loss for the quarter ended December 31, 2015 were the following:

  • $15.1 million ($12.3 million after-tax, or $0.26 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the December 2015 quarter.
  • $4.1 million ($4.1 million after-tax, or $0.09 per share) of foreign exchange losses which is included in Equity in net earnings (losses) of unconsolidated companies and related to our Angola joint venture, Sonatide.

Income tax expense in each of the fiscal 2016 quarters largely reflect tax liabilities in certain jurisdictions that levy taxes on bases other than pre-tax profitability (so called "deemed profit" regimes.)

Included in the net loss for the prior fiscal year's quarter ended December 31, 2014 was the following:

  • A $283.7 million ($214.9 million after-tax, or $4.43 per share) non-cash goodwill impairment charge that resulted from the Company's annual goodwill impairment assessment performed during that quarter. The goodwill assessment took into account the significant reductions at that time in oil and natural gas prices and the corresponding expected reductions in levels of exploration and production spending by our customers globally and the expected future impact of such on our vessels' average day rates and utilization.

Included in the net loss for the preceding quarter ended September 30, 2015 were the following:

  • $31.7 million ($31.6 million after-tax, or $0.67 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the September 2015 quarter.
  • A $7.6 million ($6.3 million after-tax, or $0.13 per share) restructuring charge related to severance and other termination costs resulting from right-sizing efforts during the September 2015 quarter.
  • $5.2 million ($5.2 million after-tax, or $0.11 per share) of foreign exchange losses which is included in Equity in net earnings (losses) of unconsolidated companies and related to our Angola joint venture, Sonatide.

As previously announced, Tidewater will hold a conference call to discuss December quarterly earnings on Wednesday, February 3, 2016, 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 February 3, 2016, and will continue until 11:59 p.m. Central time on February 5, 2016. 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 41633331.

A simultaneous webcast of the conference call will be available online at the Tidewater Inc. website, (http://www.tdw.com). The online replay will be available until March 3, 2016.

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 involve 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 recent Forms 10-Q and 10-K.

Tidewater is the leading provider of Offshore Service Vessels (OSVs) to the global energy industry.

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 EARNINGS

(Unaudited)

(In thousands, except share and per share data)




Quarter Ended

December 31,



Nine Months Ended

December 31,




2015



2014



2015



2014


Revenues:

















Vessel revenues


$

212,908




378,126




775,352




1,150,588


Other operating revenues



5,283




9,428




19,536




20,167





218,191




387,554




794,888




1,170,755


Costs and expenses:

















Vessel operating costs



125,094




210,365




462,987




640,428


Costs of other operating revenues



3,778




8,395




15,624




19,616


General and administrative



35,598




46,642




116,837




144,464


Vessel operating leases



8,441




7,165




25,325




20,247


Depreciation and amortization



45,422




43,331




137,058




130,150


Gain on asset dispositions, net



(5,883)




(4,699)




(19,345)




(13,092)


Asset impairments



15,141




6,236




61,771




8,096


Goodwill impairment






283,699







283,699


Restructuring charge









7,586








227,591




601,134




807,843




1,233,608


Operating loss



(9,400)




(213,580)




(12,955)




(62,853)


Other income (expenses):

















Foreign exchange gain (loss)



(469)




4,334




(3,758)




8,453


Equity in net earnings (losses) of unconsolidated companies



(1,710)







(7,070)




9,104


Interest income and other, net



609




434




1,754




1,555


Interest and other debt costs, net



(13,312)




(12,239)




(39,741)




(37,927)





(14,882)




(7,471)




(48,815)




(18,815)


Loss before income taxes



(24,282)




(221,051)




(61,770)




(81,668)


Income tax expense (benefit)



(4,679)




(60,070)




16,996




(25,211)


Net loss


$

(19,603)




(160,981)




(78,766)




(56,457)


Less: Net losses attributable to noncontrolling interests


$

(94)




(287)




(370)




(343)


Net loss attributable to Tidewater Inc.


$

(19,509)




(160,694)




(78,396)




(56,114)


Basic loss per common share


$

(0.42)




(3.31)




(1.67)




(1.14)


Diluted loss per common share


$

(0.42)




(3.31)




(1.67)




(1.14)


Weighted average common shares outstanding



46,943,705




48,481,722




46,956,041




49,213,712


Dilutive effect of stock options and restricted stock













Adjusted weighted average common shares



46,943,705




48,481,722




46,956,041




49,213,712


 

 

 

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and par value data)


ASSETS


December 31,

2015



March 31,

2015


Current assets:









Cash and cash equivalents


$

47,980




78,568


Trade and other receivables, net



261,209




303,096


Due from affiliate



336,474




420,365


Marine operating supplies



38,719




49,005


Other current assets



60,819




17,781


Total current assets



745,201




868,815


Investments in, at equity, and advances to unconsolidated companies



45,663




65,844


Properties and equipment:









Vessels and related equipment



4,681,306




4,717,132


Other properties and equipment



120,969




119,879





4,802,275




4,837,011


Less accumulated depreciation and amortization



1,194,974




1,090,704


Net properties and equipment



3,607,301




3,746,307


Other assets



82,350




75,196


Total assets


$

4,480,515




4,756,162











LIABILITIES AND EQUITY









Current liabilities:









Accounts payable


$

61,019




54,011


Accrued expenses



96,604




146,255


Due to affiliate



169,943




185,657


Accrued property and liability losses



3,443




3,669


Current portion of long-term debt



9,810




10,181


Other current liabilities



66,253




82,461


Total current liabilities



407,072




482,234


Long-term debt



1,441,924




1,524,295


Deferred income taxes



35,600




23,276


Accrued property and liability losses



9,748




10,534


Other liabilities and deferred credits



210,239




235,108











Commitments and Contingencies


















Equity:









Common stock of $0.10 par value, 125,000,000 shares authorized, issued
   46,969,590 shares at December 31, 2015 and 47,029,359 shares at
   March 31, 2015



4,697




4,703


Additional paid-in capital



168,753




159,940


Retained earnings



2,216,862




2,330,223


Accumulated other comprehensive loss



(20,237)




(20,378)


Total stockholders' equity



2,370,075




2,474,488


Noncontrolling Interests



5,857




6,227


Total equity



2,375,932




2,480,715


Total liabilities and equity


$

4,480,515




4,756,162


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)




Quarter Ended

December 31,



Nine Months Ended

December 31,




2015



2014



2015



2014


Net loss


$

(19,603)




(160,981)




(78,766)




(56,457)


Other comprehensive income (loss):

















Unrealized gains (losses) on available for sale securities,
   net of tax of $0, $(29), $0 and $43



212




(54)




(467)




79


Amortization of loss on derivative contract, net of tax of
   $0, $62, $0 and $188



180




116




538




349


Change in other benefit plan minimum liability, net of tax
   of $0, $0, $0 and $70









70




131


Total comprehensive loss


$

(19,211)




(160,919)




(78,625)




(55,898)


 

 

 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)




Nine Months Ended

December 31,




2015



2014


Operating activities:









Net loss


$

(78,766)




(56,457)


Adjustments to reconcile net loss to net cash provided by operating activities:









Depreciation and amortization



137,058




130,150


Provision (benefit) for deferred income taxes



192




(77,278)


Gain on asset dispositions, net



(19,345)




(13,092)


Asset impairments



61,771




8,096


Goodwill impairment






283,699


Equity in earnings (losses) of unconsolidated companies, less dividends



22,087




(1,550)


Compensation expense—stock-based



9,960




16,395


Changes in assets and liabilities, net:









Trade and other receivables



38,726




(48,876)


Changes in due to/from affiliate, net



68,177




78,881


Marine operating supplies



9,786




1,243


Other current assets



1,711




3,090


Accounts payable



6,862




(29,052)


Accrued expenses



(51,068)




(6,856)


Accrued property and liability losses



(226)




(366)


Other current liabilities



(17,239)




(437)


Other liabilities and deferred credits



2,406




(3,025)


Other, net



(699)




(9,006)


Net cash provided by operating activities



191,393




275,559


Cash flows from investing activities:









Proceeds from sales of assets



8,428




5,160


Proceeds from sale/leaseback of assets






110,694


Additions to properties and equipment



(152,225)




(231,685)


Refunds from cancelled vessel construction contracts



36,190





Other



(210)




127


Net cash used in investing activities



(107,817)




(115,704)


Cash flows from financing activities:









Principal payment on long-term debt



(109,163)




(27,206)


Debt borrowings



31,338




20,000


Proceeds from exercise of stock options






1,025


Cash dividends



(35,378)




(36,997)


Repurchases of common stock






(99,999)


Other



(961)




351


Net cash used in financing activities



(114,164)




(142,826)


Net change in cash and cash equivalents



(30,588)




17,029


Cash and cash equivalents at beginning of period



78,568




60,359


Cash and cash equivalents at end of period


$

47,980




77,388


Supplemental disclosure of cash flow information:









Cash paid during the period for:









Interest, net of amounts capitalized


$

47,608




48,046


Income taxes


$

38,208




57,987


Supplemental disclosure of non-cash investing activities:









Additions to properties and equipment


$

146




3,386


 

 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)




Common

stock



Additional

paid-in

capital



Retained

earnings



Accumulated

other

comprehensive

loss



Non

controlling

interest



Total


Balance at March 31, 2015


$

4,703




159,940




2,330,223




(20,378)




6,227




2,480,715


Total comprehensive loss









(78,396)




141




(370)




(78,625)


Stock option expense






609













609


Cash dividends declared ($.75 per share)









(34,965)










(34,965)


Amortization of restricted stock units



1




7,843













7,844


Amortization/cancellation of restricted stock



(7)




361













354


Balance at December 31, 2015


$

4,697




168,753




2,216,862




(20,237)




5,857




2,375,932



























Balance at March 31, 2014


$

4,973




142,381




2,544,255




(12,225)




5,987




2,685,371


Total comprehensive loss









(56,114)




559




(343)




(55,898)


Exercise of stock options



3




1,022













1,025


Cash dividends declared ($.75 per share)









(37,229)










(37,229)


Retirement of common stock



(284)







(99,715)










(99,999)


Amortization of restricted stock units



1




12,495













12,496


Amortization/cancellation of restricted stock



(4)




2,603













2,599


Cash received from noncontrolling interests















450




450


Cash paid to noncontrolling interests















(50)




(50)


Balance at December 31, 2014


$

4,689




158,501




2,351,197




(11,666)




6,044




2,508,765


 

The company's vessel revenues and vessel operating costs and the related percentage of total vessel revenues for the quarters and the nine-month periods ended December 31, 2015 and 2014 and for the quarter ended September 30, 2015, were as follows:

 









Quarter


Quarter Ended

Nine Months Ended

Ended


December 31,

December 31,

September 30,


(In thousands)


2015



%



2014



%



2015



%



2014



%



2015



%


Vessel revenues:









































Americas


$

75,963




36%




134,554




36%




279,345




36%




388,550




34%




89,210




34%


Asia/Pacific



19,144




9%




35,046




9%




79,254




10%




121,284




10%




32,173




12%


Middle East/North Africa



40,184




19%




55,925




15%




132,786




17%




160,301




14%




45,336




17%


Sub-Saharan Africa/ Europe



77,617




36%




152,601




40%




283,967




37%




480,453




42%




97,412




37%


Total vessel revenues


$

212,908




100%




378,126




100%




775,352




100%




1,150,588




100%




264,131




100%


Vessel operating costs:









































Crew costs


$

71,270




33%




104,167




28%




247,670




32%




330,086




29%




84,112




32%


Repair and maintenance



14,811




7%




46,418




12%




80,593




10%




133,481




12%




28,528




11%


Insurance and loss reserves



1,689




1%




3,093




1%




9,815




1%




10,470




1%




2,751




1%


Fuel, lube and supplies



16,369




8%




24,710




7%




51,626




7%




69,900




6%




17,147




6%


Other



20,955




10%




31,977




8%




73,283




10%




96,491




8%




26,074




10%


Total vessel operating costs



125,094




59%




210,365




56%




462,987




60%




640,428




56%




158,612




60%


Vessel operating margin (A)


$

87,814




41%




167,761




44%




312,365




40%




510,160




44%




105,519




40%











































Note (A): The following table reconciles vessel operating margin as presented above to operating profit for the quarters and the nine-month periods ended December 31, 2015 and 2014 and for the quarter ended September 30, 2015:



Quarter Ended

December 31,



Nine Months Ended

December 31,



Quarter

Ended

September 30,


(In thousands)


2015



2014



2015



2014



2015


Vessel operating margin


$

87,814




167,761




312,365




510,160




105,519


General and administrative expenses - vessel operations



(27,686)




(36,024)




(88,994)




(110,305)




(28,508)


Vessel operating leases



(8,441)




(7,165)




(25,325)




(20,247)




(8,441)


Depreciation and amortization - vessel operations



(42,424)




(41,639)




(128,001)




(125,038)




(42,828)


Vessel operating profit


$

9,263




82,933




70,045




254,570




25,742


 

The company's other operating loss for the quarters and the nine-month periods ended December 31, 2015 and 2014 and for the quarter ended September 30, 2015, consists of the following:



Quarter Ended

December 31,



Nine Months Ended

December 31,



Quarter

Ended

September 30,


(In thousands)


2015



2014



2015



2014



2015


Other operating revenues


$

5,283




9,428




19,536




20,167




7,792


Costs of other marine revenues



(3,778)




(8,395)




(15,624)




(19,616)




(6,102)


General and administrative expenses - other operating activities



(762)




(1,207)




(2,747)




(3,473)




(846)


Depreciation and amortization - other operating activities



(1,369)




(858)




(4,285)




(2,626)




(1,502)


Other operating loss


$

(626)




(1,032)




(3,120)




(5,548)




(658)


 

The company's operating loss and other components of loss before income taxes, and its related percentage of total revenues for the quarters and nine-month periods ended December 31, 2015 and 2014 and for the quarter ended September 30, 2015, were as follows:

 



Quarter Ended

December 31,


Nine Months Ended

December 31,


Quarter

Ended

September 30,

(In thousands)


2015


%


2014


%


2015


%


2014


%


2015


%

Vessel operating profit (loss):






















Americas (B)


$

9,289


4%


33,784


8%


41,940


5%


100,770


8%


8,812


3%

Asia/Pacific (B)



(3,796)


(2%)


2,621


1%


4,122


1%


9,064


1%


6,168


2%

Middle East/North Africa



5,849


3%


12,408


3%


21,524


3%


31,568


3%


7,515


3%

Sub-Saharan Africa/Europe



(2,079)


(1%)


34,120


9%


2,459


<1%


113,168


10%


3,247


1%




9,263


4%


82,933


21%


70,045


9%


254,570


22%


25,742


9%

Other operating loss



(626)


(<1%)


(1,032)


(<1%)


(3,120)


(<1%)


(5,548)


(<1%)


(658)


(<1%)




8,637


4%


81,901


21%


66,925


9%


249,022


22%


25,084


9%























Corporate general and administrative expenses



(7,150)


(3%)


(9,411)


(3%)


(25,096)


(3%)


(30,686)


(3%)


(7,932)


(3%)

Corporate depreciation



(1,629)


(1%)


(834)


(<1%)


(4,772)


(1%)


(2,486)


(<1%)


(1,649)


(<1%)

Corporate expenses



(8,779)


(4%)


(10,245)


(3%)


(29,868)


(4%)


(33,172)


(3%)


(9,581)


(3%)























Gain on asset dispositions, net



5,883


2%


4,699


1%


19,345


2%


13,092


1%


6,111


2%

Asset impairments



(15,141)


(6%)


(6,236)


(1%)


(61,771)


(7%)


(8,096)


(1%)


(31,672)


(11%)

Goodwill impairment





(283,699)


(73%)




(283,699)


(24%)



Restructuring charge







(7,586)


(1%)




(7,586)


(3%)

Operating loss


$

(9,400)


(4%)


(213,580)


(55%)


(12,955)


(1%)


(62,853)


(5%)


(17,644)


(6%)

Foreign exchange gain (loss)



(469)


(<1%)


4,334


1%


(3,758)


(1%)


8,453


1%


844


<1%

Equity in net earnings (losses) of unconsolidated companies



(1,710)


(1%)




(7,070)


(1%)


9,104


1%


(2,919)


(1%)

Interest income and other, net



609


<1%


434


<1%


1,754


<1%


1,555


<1%


355


<1%

Interest and other debt costs, net



(13,312)


(6%)


(12,239)


(3%)


(39,741)


(5%)


(37,927)


(3%)


(13,247)


(5%)

Loss before income taxes


$

(24,282)


(11%)


(221,051)


(57%)


(61,770)


(8%)


(81,668)


(7%)


(32,611)


(12%)

 

Note (B): Nine months ended December 31, 2015 figures exclude restructuring charges of $3.6 million and $4.0 million related to our Americas and Asia/Pacific segments, respectively, which were incurred during the quarter ended September 30, 2015.

The company's revenues, day-based vessel utilization percentages and average day rates by vessel class and in total for the quarters and the nine-month periods ended December 31, 2015 and 2014 and for the quarter ended September 30, 2015, were as follows:

 



Quarter Ended

December 31,



Nine Months Ended

December 31,



Quarter

Ended

September 30,




2015



2014



2015



2014



2015


REVENUE BY VESSEL CLASS (In thousands):





















Americas fleet:





















Deepwater


$

49,792




94,298




191,720




267,983




61,776


Towing-supply



22,254




33,607




75,890




97,511




24,121


Other



3,917




6,649




11,735




23,056




3,313


Total


$

75,963




134,554




279,345




388,550




89,210


Asia/Pacific fleet:





















Deepwater


$

13,267




20,575




56,535




72,492




23,435


Towing-supply



5,877




13,487




22,719




45,862




8,738


Other






984







2,930





Total


$

19,144




35,046




79,254




121,284




32,173


Middle East/North Africa fleet:





















Deepwater


$

17,690




25,615




58,845




64,336




20,769


Towing-supply



21,795




29,441




71,898




93,435




23,914


Other



699