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

News Details

Tidewater Reports Third Quarter Results For Fiscal 2016