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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%