Tidewater Reports Results For The Three Months Ended September 30, 2017

11/08/2017

NEW ORLEANS, Nov. 8, 2017 /PRNewswire/ -- Tidewater Inc. (NYSE:TDW) announced today a net loss for the period from August 1, 2017 through September 30, 2017 (Successor), of $15.7 million, or $0.81 per common share, on revenues of $74.3 million. For the period from July 1, 2017 through July 31, 2017 (Predecessor), the net loss was$1,122.5 million, or $23.82 per common share, on revenues of $36.3 million. For the quarter ended September 30, 2016 (Predecessor), the net loss was $178.5 million, or $3.79 per common share, on revenues of $143.7 million. For the immediately preceding quarter ended June 30, 2017 (Predecessor), the net loss was $524.4 million, or $11.13 per common share, on revenues of $115.1 million.

As more fully explained in the company's September 30, 2017 Form 10-Q, upon emergence from Chapter 11 bankruptcy on July 31, 2017, the company adopted fresh start accounting in accordance with applicable accounting and reporting regulations, which resulted in the company becoming a new entity for financial reporting purposes on July 31, 2017. References herein to "Successor" relate to the financial position and results of operations of the reorganized company subsequent to July 31, 2017, while references to "Predecessor" relate to financial position and results of operations of the company through July 31, 2017.

Larry Rigdon, company CEO and President, stated, "We are pleased to have successfully completed the financial restructuring of Tidewater during the September quarter. With a young, modern fleet, a global operating footprint and a financial profile characterized by low leverage and ample liquidity, the company is in a strong position, despite the challenging medium-term outlook for offshore energy services. Our near-term goals include further reducing costs in order to achieve a cash flow break even. Our ultimate goals include a return to sustainable profitability and positioning the company for an eventual recovery in offshore energy services.

Included in the net loss for the period from August 1, 2017 through September 30, 2017 (Successor) were the following:

$1.9 million ($1.9 million after-tax, or $0.10 per share) in reorganization items, including $1.3 million related to re-delivery of sale leaseback vessels to their respective owners and $0.6 million of reorganization-related professional fees.

Included in the net loss for the period from July 1, 2017 through July 31, 2017 (Predecessor) were the following:

$1.1 billion ($1.1 billion after-tax, or $23.00 per share) in reorganization items, including $1.8 billion of fresh start accounting adjustments, $22.9 million of reorganization-related professional fees and a gain on settlement of liabilities subject to compromise of $767.6 million.
$21.3 million ($21.3 million after-tax, or $0.45 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the period from July 1, 2017 through July 31, 2017.

Included in the net loss for the prior fiscal year's quarter ended September 30, 2016 (Predecessor) were the following:

$129.6 million ($129.6 million after-tax, or $2.75 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the September 2016 quarter.
$2.5 million ($2.2 million after-tax, or $0.05 per share) of foreign exchange losses resulting primarily from the strengthening of the Norwegian kroner relative to the U.S. dollar and the revaluation of kroner-denominated liabilities.
$0.6 million ($0.6 million after-tax, or $0.01 per share) of foreign exchange gains which is included in Equity in net earnings (losses) of unconsolidated companies and related to our Angola joint venture, Sonatide.

Included in the net loss for the preceding quarter ended June 30, 2017 (Predecessor) were the following:

$313.2 million ($313.2 million after-tax, or $6.65 per share) of reorganization items, including (i) the establishment of a reserve in regards to sale leaseback claims of $323.6 million and the write-off of leasehold improvements to vessels underlying sale leaseback transactions of $1.7 million, partially offset by the recognition of sale leaseback-related deferred gains of $105.9 million and accrued liabilities associated with the recognition of lease expense on a straight-line basis of $11.3 million, (ii) the recognition of $94.8 million of make-whole claims on the Senior Notes and $5.1 million of debt issue costs and (iii) professional fees associated with the restructuring incurred subsequent to the Petition Date of $5.2 million.
$163.4 million ($163.4 million after-tax, or $3.47 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the June 2017 quarter.
$11.9 million ($11.9 million after-tax, or $0.25 per share) of debt negotiation expenses that were incurred in the quarter, which includes $6.7 million classified as general and administrative expenses and $5.2 million classified as reorganization items.
$1.2 million ($1.2 million after-tax, or $0.02 per share) of foreign exchange losses resulting primarily from the strengthening of the Norwegian kroner relative to the U.S. dollar and the revaluation of kroner-denominated liabilities.

Income tax expense largely reflects tax liabilities in certain jurisdictions that levy taxes on bases other than pre-tax profitability (so called "deemed profit" regimes.)

Tidewater will hold a conference call to discuss results for the three months ended September 30, 2017 on Thursday, November 9, 2017, at 9:00 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 November 9, 2017, and will continue until 11:59 p.m. Central time on November 11, 2017. 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 45919170.

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 December 9, 2017.

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 (LOSS)
(Unaudited)
(In thousands, except share and per share data)


	Successor		Predecessor
	Period from		Period from
	August 1, 2017		July 1, 2017		Three Months
	through		through		Ended
	September 30, 2017		July 31, 2017		September 30, 2016
Revenues:
Vessel revenues	$	70,571		34,340		139,361
Other operating revenues		3,729		1,923		4,361
		74,300		36,263		143,722
Costs and expenses:
Vessel operating costs		52,301		32,665		87,094
Costs of other operating revenues		2,273		763		3,423
General and administrative		16,246		8,773		32,954
Vessel operating leases		1,124		623		8,441
Depreciation and amortization		8,142		11,160		43,845
Gain on asset dispositions, net		(4)		(372)		(6,253)
Asset impairments		—		21,325		129,562
		80,082		74,937		299,066
Operating loss		(5,782)		(38,674)		(155,344)
Other income (expenses):
Foreign exchange loss		(58)		(2,024)		(2,539)
Equity in net earnings of unconsolidated companies		1,305		269		1,313
Interest income and other		873		704		992
Reorganization items		(1,880)		(1,083,729)		—
Interest and other debt costs		(5,240)		(574)		(18,477)
		(5,000)		(1,085,354)		(18,711)
Loss before income taxes		(10,782)		(1,124,028)		(174,055)
Income tax (benefit) expense		4,745		(1,529)		3,568
Net loss	$	(15,527)		(1,122,499)		(177,623)
Less: Net income (loss) attributable to noncontrolling interests		166		(24)		867
Net loss attributable to Tidewater Inc.	$	(15,693)		(1,122,475)		(178,490)
Basic loss per common share	$	(0.81)		(23.82)		(3.79)
Diluted loss per common share	$	(0.81)		(23.82)		(3.79)
Weighted average common shares outstanding		19,389,031		47,121,407		47,067,864
Dilutive effect of stock options and restricted stock		—		—		—
Adjusted weighted average common shares		19,389,031		47,121,407		47,067,864

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


	Successor		Predecessor
	Period from		Period from
	August 1, 2017		April 1, 2017		Six Months
	through		through		Ended
	September 30, 2017		July 31, 2017		September 30, 2016
Revenues:
Vessel revenues	$	70,571		146,597		301,791
Other operating revenues		3,729		4,772		9,856
		74,300		151,369		311,647
Costs and expenses:
Vessel operating costs		52,301		116,438		195,968
Costs of other operating revenues		2,273		2,348		7,326
General and administrative		16,246		41,832		70,001
Vessel operating leases		1,124		6,165		16,882
Depreciation and amortization		8,142		47,447		88,397
Gain on asset dispositions, net		(4)		(3,561)		(11,896)
Asset impairments		—		184,748		166,448
		80,082		395,417		533,126
Operating loss		(5,782)		(244,048)		(221,479)
Other income (expenses):
Foreign exchange loss		(58)		(3,181)		(5,272)
Equity in net earnings of unconsolidated companies		1,305		4,786		1,312
Interest income and other		873		2,384		2,168
Reorganization items		(1,880)		(1,396,905)		—
Interest and other debt costs		(5,240)		(11,179)		(35,431)
		(5,000)		(1,404,095)		(37,223)
Loss before income taxes		(10,782)		(1,648,143)		(258,702)
Income tax (benefit) expense		4,745		(1,234)		7,564
Net loss	$	(15,527)		(1,646,909)		(266,266)
Less: Net income attributable to noncontrolling interests		166		—		1,321
Net loss attributable to Tidewater Inc.	$	(15,693)		(1,646,909)		(267,587)
Basic loss per common share	$	(0.81)		(34.95)		(5.69)
Diluted loss per common share	$	(0.81)		(34.95)		(5.69)
Weighted average common shares outstanding		19,389,031		47,121,330		47,067,790
Dilutive effect of stock options and restricted stock		—		—		—
Adjusted weighted average common shares		19,389,031		47,121,330		47,067,790

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

	Successor		Predecessor
	September 30,		March 31,
ASSETS	2017		2017
Current assets:
Cash and cash equivalents	$	459,978		706,404
Trade and other receivables, less allowance for doubtful accounts of $200 and $16,165 as of September 30, 2017 and March 31, 2017, respectively		120,271		123,262
Due from affiliate		245,056		262,652
Marine operating supplies		31,083		30,560
Other current assets		14,813		18,409
Total current assets		871,201		1,141,287
Investments in, at equity, and advances to unconsolidated companies		25,729		45,115
Net properties and equipment		868,689		2,864,762
Deferred drydocking and survey costs		388		—
Other assets		46,845		139,535
Total assets	$	1,812,852		4,190,699

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	39,439		31,599
Accrued expenses		61,115		78,121
Due to affiliate		112,642		132,857
Accrued property and liability losses		2,774		3,583
Current portion of long-term debt		5,174		2,034,124
Other current liabilities		38,041		48,429
Total current liabilities		259,185		2,328,713
Long-term debt		445,677		—
Deferred income taxes		—		46,013
Accrued property and liability losses		2,607		10,209
Other liabilities and deferred credits		62,569		154,705

Commitments and Contingencies

Equity:
Predecessor Common stock of $0.10 par value, 125,000,000 shares authorized, 47,121,304 shares issued and outstanding at March 31, 2017		—		4,712
Predecessor Additional paid-in capital		—		165,221
Successor Common stock of $0.001 par value, 125,000,000 shares authorized 20,738,076 shares issued and outstanding at September 30, 2017		21		—
Successor Additional paid-in capital		1,056,563		—
Retained earnings		(15,693)		1,475,329
Accumulated other comprehensive loss		82		(10,344)
Total stockholders' equity		1,040,973		1,634,918
Noncontrolling interests		1,841		16,141
Total equity		1,042,814		1,651,059
Total liabilities and equity	$	1,812,852		4,190,699

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


	Successor		Predecessor
	Period from		Period from
	August 1, 2017		July 1, 2017		Three Months
	through		through		Ended
	September 30, 2017		July 31, 2017		September 30, 2016
Net loss	$	(15,527)		(1,122,499)		(177,623)
Other comprehensive income:
Unrealized gains on available for sale securities, net of tax of $0, $0 and $0		82		77		119
Change in loss on derivative contract, net of tax of $0, $0 and $0		—		—		72
Changes in supplemental executive retirement plan liability, net of tax of $0, $0 and $0		—		(536)		—
Changes in minimum pension liability, net of tax of $0, $0 and $0		—		(594)		—
Change in other benefit plan minimum liability, net of tax of $0, $0 and $0		—		(1,468)		—
Total comprehensive loss	$	(15,445)		(1,125,020)		(177,432)

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


	Successor		Predecessor
	Period from		Period from
	August 1, 2017		April 1, 2017		Six Months
	through		through		Ended
	September 30, 2017		July 31, 2017		September 30, 2016
Net loss	$	(15,527)		(1,646,909)		(266,266)
Other comprehensive income:
Unrealized gains on available for sale securities, net of tax of $0, $0 and $0		82		163		280
Change in loss on derivative contract, net of tax of $0, $0 and $0		—		—		143
Changes in supplemental executive retirement plan liability, net of tax of $0, $0 and $0		—		(536)		—
Changes in minimum pension liability, net of tax of $0, $0 and $0		—		(594)		—
Change in other benefit plan minimum liability, net of tax of $0, $0 and $0		—		(1,468)		—
Total comprehensive loss	$	(15,445)		(1,649,344)		(265,843)

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


	Successor		Predecessor
	Period from		Period from
	August 1, 2017		April 1, 2017		Six Months
	through		through		Ended
	September 30, 2017		July 31, 2017		September 30, 2016
Operating activities:
Net loss	$	(15,527)		(1,646,909)		(266,266)
Adjustments to reconcile net loss to net cash provided by operating activities:
Reorganization items		—		1,368,882		—
Depreciation and amortization		8,138		47,447		88,397
Amortization of deferred drydocking and survey costs		4		—		—
Amortization of debt premiums and discounts		(281)		—		—
Provision for deferred income taxes		—		(5,543)		—
Gain on asset dispositions, net		(4)		(3,561)		(11,896)
Asset impairments		—		184,748		166,448
Equity in earnings of unconsolidated companies, less dividends		(1,044)		(4,252)		(1,659)
Compensation expense - stock-based		1,173		1,707		2,628
Changes in assets and liabilities, net:
Trade and other receivables		(3,775)		6,286		18,263
Changes in due to/from affiliate, net		(3,920)		1,301		25,792
Marine operating supplies		1,005		88		2,289
Other current assets		5,714		(1,840)		(1,827)
Accounts payable		(317)		8,157		9,671
Accrued expenses		(10,555)		17,245		(16,386)
Accrued property and liability losses		13		(822)		281
Other current liabilities		3,753		(2,337)		(9,716)
Other liabilities and deferred credits		(847)		2,884		(5,173)
Other, net		(1,339)		4,932		(1,448)
Net cash used in operating activities		(17,809)		(21,587)		(602)
Cash flows from investing activities:
Proceeds from sales of assets		4,875		2,172		1,839
Additions to properties and equipment		(589)		(2,265)		(9,509)
Payments related to novated vessel construction contract		—		5,272		—
Refunds from cancelled vessel construction contracts		—		—		11,515
Net cash provided by investing activities		4,286		5,179		3,845
Cash flows from financing activities:
Principal payment on long-term debt		—		(5,124)		(5,036)
Cash payments to creditors pursuant to the plan of reorganization		(87,366)		(122,806)		—
Cash received for issuance of common stock		1		—		—
Other		—		(1,200)		(1,722)
Net cash used in financing activities		(87,365)		(129,130)		(6,758)
Net change in cash and cash equivalents		(100,888)		(145,538)		(3,515)
Cash and cash equivalents at beginning of period		560,866		706,404		678,438
Cash and cash equivalents at end of period	$	459,978		560,866		674,923
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	59		1,577		34,209
Income taxes	$	1,392		4,740		16,790
Supplemental disclosure of non-cash investing activities:
Additions to properties and equipment	$	—		—		10,477

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

							Accumulated
			Additional				other		Non
	Common		paid-in		Retained		comprehensive		controlling
	stock		capital		earnings		loss		interest		Total
Balance at March 31, 2017 (Predecessor)	$	4,712		165,221		1,475,329		(10,344)		16,141		1,651,059
Total comprehensive loss		—		—		(1,646,909)		(2,435)		—		(1,649,344)
Stock option expense		—		390		—		—		—		390
Cancellation/forfeiture or restricted stock units		—		1,254		—		—		—		1,254
Amortization of restricted stock units		—		2		—		—		—		2
Cash paid to noncontrolling interests		—		—		—		—		(1,200)		(1,200)
Balance at July 31, 2017 (Predecessor)	$	4,712		166,867		(171,580)		(12,779)		14,941		2,161
Cancellation of Predecessor equity		(4,712)		(166,867)		171,580		12,779		(13,266)		(486)
Balance at July 31, 2017 (Predecessor)	$	—		—		—		—		1,675		1,675

Issuance of Successor common stock and warrants	$	18		1,055,391		—		—		—		1,055,409

Balance at August 1, 2017 (Successor)	$	18		1,055,391		—		—		1,675		1,057,084
Total comprehensive loss		—		—		(15,693)		82		166		(15,445)
Issuance of common stock		3		(1)		—		—		—		2
Amortization of restricted stock units		—		1,173		—		—		—		1,173
Balance at September 30, 2017 (Successor)	$	21		1,056,563		(15,693)		82		1,841		1,042,814

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

	Successor				Predecessor
	Period from				Period from
	August 1, 2017				July 1, 2017				Three Months
	through				through				Ended
	September 30, 2017				July 31, 2017				September 30, 2016
(In thousands)			%				%				%
Vessel revenues:
Americas	$	17,449		25%		8,961		26%		53,125		38%
Middle East/Asia Pacific		16,669		24%		8,547		25%		29,584		21%
Africa/Europe		36,453		51%		16,832		49%		56,652		41%
Total vessel revenues	$	70,571		100%		34,340		100%		139,361		100%
Vessel operating costs:
Crew costs	$	27,705		39%		14,443		42%		49,370		35%
Repair and maintenance		6,373		9%		9,196		27%		13,440		10%
Insurance and loss reserves		1,679		2%		825		2%		2,637		2%
Fuel, lube and supplies		6,990		10%		2,851		8%		10,176		7%
Other		9,554		14%		5,350		16%		11,471		8%
Total vessel operating costs		52,301		74%		32,665		95%		87,094		62%
Vessel operating margin (A)	$	18,270		26%		1,675		5%		52,267		38%

	Successor				Predecessor
	Period from				Period from
	August 1, 2017				April 1, 2017				Six Months
	through				through				Ended
	September 30, 2017				July 31, 2017				September 30, 2016
(In thousands)			%				%				%
Vessel revenues:
Americas	$	17,449		25%		40,848		28%		113,733		38%
Middle East/Asia Pacific		16,669		24%		36,313		25%		61,707		20%
Africa/Europe		36,453		51%		69,436		47%		126,351		42%
Total vessel revenues	$	70,571		100%		146,597		100%		301,791		100%
Vessel operating costs:
Crew costs	$	27,705		39%		56,653		39%		105,258		35%
Repair and maintenance		6,373		9%		23,040		16%		29,969		10%
Insurance and loss reserves		1,679		2%		3,949		3%		9,633		3%
Fuel, lube and supplies		6,990		10%		12,279		8%		20,948		7%
Other		9,554		14%		20,517		14%

News Details

Tidewater Reports Results For The Three Months Ended September 30, 2017