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Tidewater Reports Results for the Three and Nine-Months Ended September 30, 2019

HOUSTON--(BUSINESS WIRE)--

Tidewater Inc. (TDW) announced today revenue for the three and nine months ended September 30, 2019, of $119.8 million and $367.8 million, and net losses for the same periods of $44.2 million (or $1.15 per common share) and $81.9 million (or $2.17 per common share), respectively. Excluding certain costs outlined below, net losses for the three and nine months ended September 30, 2019 were $37.9 million (or $0.99 per common share) and $71.4 million (or $1.89 per common share), respectively. Highlights for the three months ended September 30, 2019: 

  • Significant streamlining of shore base operations underway
  • Adjusted EBITDA for the trailing twelve months of $80.5 million
  • Initiated bond consent and $125 million tender to improve debt capital structure, reduce negative interest carry and improve operational efficiency
  • Third quarter general and administrative expense includes $6.3 million of severance and similar expenses related to significant reduction in force
  • Fourth quarter general and administrative expense will also include charges for severance and similar expenses related to further reductions in force
  • Rollout of SAP enterprise resource planning system occurred as scheduled on October 1; the third quarter includes approximately $0.7 million of general and administrative expense related to third party cost associated with the implementation
  • Generated revenue of $119.8 million, a $20.6 million increase from the same period in the prior year as a result of the 2018 acquisition of GulfMark Offshore, Inc.
  • High-grading active fleet through the stacking of eight vessels, disposing of three smaller, low specification vessels and reactivating of five larger, high specification vessels
  • Active utilization increased to 80.4% from 79.3% in the second quarter

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “We continue to be disciplined with respect to our fleet composition by maintaining the fleet size in certain regions and reactivating capacity in other regions when returns on investment are acceptable. Likewise, we won’t hesitate to remove smaller, lower specification vessels that do not have acceptable returns on investment from our active fleet. While underlying market conditions remain challenging, they are improving, and Tidewater’s strong balance sheet and focus on increasing organizational efficiency and scalability supports our growth initiatives and the expansion of our leadership position in the market.”

Included in the net loss for the three months and nine months ended September 30, 2019 were general and administrative expenses for severance and similar expenses related to integrating Tidewater and GulfMark operations of $6.3 million ($0.16 per common share) and $10.5 million ($0.28 per common share), respectively.

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

Common shares outstanding

 

 

39,110,938

 

 

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

 

 

1,329,884

 

 

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

 

 

1,300,359

 

 

Total

 

 

41,741,181

 

 

Tidewater will hold a conference call to discuss results for the three months ended September 30, 2019 on Tuesday, November 12, 2019 at 8:00 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 12, 2019, and will continue until 11:59 p.m. Central Time on December 12, 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 49155275.

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 December 12, 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 beginning on the next page.

 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2019

 

 

September 30,
2018

 

 

September 30,
2019

 

 

September 30,
2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel revenues

 

$

117,173

 

 

 

97,011

 

 

 

360,476

 

 

 

288,679

 

Other operating revenues

 

 

2,592

 

 

 

2,181

 

 

 

7,296

 

 

 

7,607

 

Total revenues

 

 

119,765

 

 

 

99,192

 

 

 

367,772

 

 

 

296,286

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel operating costs

 

 

80,619

 

 

 

65,237

 

 

 

243,261

 

 

 

194,613

 

Costs of other operating revenues

 

 

534

 

 

 

1,681

 

 

 

1,884

 

 

 

4,797

 

General and administrative (A)

 

 

30,474

 

 

 

25,546

 

 

 

81,310

 

 

 

73,536

 

Depreciation and amortization

 

 

25,735

 

 

 

13,390

 

 

 

73,705

 

 

 

38,192

 

Loss (gain) on asset dispositions, net

 

 

(270

)

 

 

1,571

 

 

 

(1,047

)

 

 

(1,686

)

Long-lived asset impairments

 

 

5,224

 

 

 

16,853

 

 

 

5,224

 

 

 

24,254

 

Total operating costs and expenses

 

 

142,316

 

 

 

124,278

 

 

 

404,337

 

 

 

333,706

 

Operating loss

 

 

(22,551

)

 

 

(25,086

)

 

 

(36,565

)

 

 

(37,420

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

 

173

 

 

 

1

 

 

 

(324

)

 

 

(1,349

)

Equity in net earnings (losses) of unconsolidated companies

 

 

(468

)

 

 

56

 

 

 

(435

)

 

 

(14,993

)

Interest income and other, net

 

 

1,579

 

 

 

2,709

 

 

 

5,908

 

 

 

5,495

 

Interest and other debt costs, net

 

 

(7,468

)

 

 

(7,585

)

 

 

(22,786

)

 

 

(22,731

)

Total other expense

 

 

(6,184

)

 

 

(4,819

)

 

 

(17,637

)

 

 

(33,578

)

Loss before income taxes

 

 

(28,735

)

 

 

(29,905

)

 

 

(54,202

)

 

 

(70,998

)

Income tax expense

 

 

15,071

 

 

 

1,278

 

 

 

26,443

 

 

 

10,396

 

Net loss

 

$

(43,806

)

 

 

(31,183

)

 

 

(80,645

)

 

 

(81,394

)

Less: Net income attributable to noncontrolling interests

 

 

394

 

 

 

(287

)

 

 

1,245

 

 

 

(386

)

Net loss attributable to Tidewater Inc.

 

$

(44,200

)

 

 

(30,896

)

 

 

(81,890

)

 

 

(81,008

)

Basic loss per common share

 

 

(1.15

)

 

 

(1.16

)

 

 

(2.17

)

 

 

(3.23

)

Diluted loss per common share

 

 

(1.15

)

 

 

(1.16

)

 

 

(2.17

)

 

 

(3.23

)

Weighted average common shares outstanding

 

 

38,537

 

 

 

26,615

 

 

 

37,767

 

 

 

25,073

 

Dilutive effect of stock options and restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average common shares

 

 

38,537

 

 

 

26,615

 

 

 

37,767

 

 

 

25,073

 

Total shares outstanding including warrants

 

 

 

 

 

September 30, 2019

 

 

September 30, 2018

 

Common shares outstanding

 

 

 

 

 

 

39,111

 

 

 

26,816

 

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

 

 

 

 

 

 

1,330

 

 

 

3,512

 

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

 

 

 

 

 

 

1,300

 

 

 

 

Total

 

 

 

 

 

 

41,741

 

 

 

30,328

 

Note (A):  General and administrative expenses for the three and nine months ended September 30, 2019 included stock-based compensation of $7.4 million and $16.6 million, respectively, and general and administrative expenses for the three and nine months ended September 30, 2018 included stock-based compensation of $3.8 million and $10.0 million, respectively. In addition, general and administrative costs for the three and nine months ended September 30, 2019 includes $6.3 million and $10.5 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)

 

 

September 30,

 

 

December 31,

 

ASSETS

 

2019

 

 

2018

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

359,332

 

 

 

371,791

 

Restricted cash

 

 

3,300

 

 

 

25,953

 

Trade and other receivables, net

 

 

123,133

 

 

 

111,266

 

Due from affiliates

 

 

124,757

 

 

 

132,951

 

Marine operating supplies

 

 

21,303

 

 

 

29,505

 

Other current assets

 

 

13,116

 

 

 

11,836

 

Total current assets

 

 

644,941

 

 

 

683,302

 

Investments in, at equity, and advances to unconsolidated companies

 

 

 

 

 

1,039

 

Properties and equipment, net

 

 

1,022,786

 

 

 

1,089,857

 

Deferred drydocking and survey costs

 

 

49,025

 

 

 

22,215

 

Other assets

 

 

37,269

 

 

 

31,326

 

Total assets

 

$

1,754,021

 

 

 

1,827,739

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

23,672

 

 

 

31,939

 

Accrued costs and expenses

 

 

54,792

 

 

 

61,784

 

Due to affiliates

 

 

41,676

 

 

 

34,972

 

Current portion of long-term debt

 

 

9,689

 

 

 

8,568

 

Other current liabilities

 

 

30,024

 

 

 

21,092

 

Total current liabilities

 

 

159,853

 

 

 

158,355

 

Long-term debt

 

 

419,905

 

 

 

430,436

 

Other liabilities

 

 

96,499

 

 

 

94,025

 

 

 

 

 

 

 

 

 

 

Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

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

39,110,938 and 36,978,280 shares issued and outstanding

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

 

 

39

 

 

 

37

 

Additional paid-in capital

 

 

1,365,872

 

 

 

1,352,388

 

Accumulated deficit

 

 

(292,673

)

 

 

(210,783

)

Accumulated other comprehensive income

 

 

2,194

 

 

 

2,194

 

Total stockholders’ equity

 

 

1,075,432

 

 

 

1,143,836

 

Noncontrolling interests

 

 

2,332

 

 

 

1,087

 

Total equity

 

 

1,077,764

 

 

 

1,144,923

 

Total liabilities and equity

 

$

1,754,021

 

 

 

1,827,739

 

 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,
2019

 

 

September 30,
2018

 

 

September 30,
2019

 

 

September 30,
2018

 

Net loss

 

$

(43,806

)

 

 

(31,183

)

 

$

(80,645

)

 

 

(81,394

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on available for sale

securities, net of tax of $0, $0, $0 and $0

 

 

 

 

 

 

 

 

 

 

 

(256

)

Total comprehensive loss

 

$

(43,806

)

 

 

(31,183

)

 

$

(80,645

)

 

 

(81,650

)

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

 

Six Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(80,645

)

 

 

(81,394

)

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

activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

57,629

 

 

 

33,949

 

Amortization of deferred drydocking and survey costs

 

 

16,076

 

 

 

4,243

 

Amortization of debt premium and discounts

 

 

(1,562

)

 

 

(1,371

)

Provision for deferred income taxes

 

 

759

 

 

 

 

Gain on asset dispositions, net

 

 

(1,047

)

 

 

(1,686

)

Long-lived asset impairments

 

 

5,224

 

 

 

24,254

 

Changes in investments in, at equity, and advances

to unconsolidated companies

 

 

435

 

 

 

28,087

 

Compensation expense - stock-based

 

 

16,599

 

 

 

9,967

 

Changes in assets and liabilities, net:

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

(11,796

)

 

 

(10,744

)

Changes in due to/from affiliates, net

 

 

14,898

 

 

 

28,290

 

Accounts payable

 

 

(8,267

)

 

 

1,719

 

Accrued costs and expenses

 

 

(10,574

)

 

 

(10,857

)

Cash paid for deferred drydocking and survey costs

 

 

(43,701

)

 

 

(17,088

)

Other, net

 

 

9,268

 

 

 

14,861

 

Net cash provided by (used in) operating activities

 

 

(36,704

)

 

 

22,230

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sales of assets

 

 

25,092

 

 

 

16,499

 

Additions to properties and equipment

 

 

(13,931

)

 

 

(9,116

)

Net cash provided by investing activities

 

 

11,161

 

 

 

7,383

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal payment on long-term debt

 

 

(6,458

)

 

 

(4,020

)

Payments to General Unsecured Creditors

 

 

 

 

 

(8,377

)

Taxes on share-based awards

 

 

(3,112

)

 

 

 

Other

 

 

1

 

 

 

(1,997

)

Net cash used in financing activities

 

 

(9,569

)

 

 

(14,394

)

Net change in cash, cash equivalents and restricted cash

 

 

(35,112

)

 

 

15,219

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

397,744

 

 

 

453,335

 

Cash, cash equivalents and restricted cash at end of period

 

$

362,632

 

 

 

468,554

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized

 

$

24,482

 

 

 

24,218

 

Income taxes

 

$

10,386

 

 

 

13,679

 

 

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 June 30, 2019

 

$

38

 

 

 

 

 

1,359,842

 

 

 

 

 

(248,473

)

 

 

 

 

2,194

 

 

 

 

 

1,938

 

 

 

 

 

1,115,539

 

Total comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(44,200

)

 

 

 

 

 

 

 

 

 

394

 

 

 

 

 

(43,806

)

Issuance of common stock from exercise of warrants

 

 

1

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization/cancellation of restricted stock units

 

 

 

 

 

 

 

6,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,031

 

Balance at September 30, 2019

 

$

39

 

 

 

 

 

1,365,872

 

 

 

 

 

(292,673

)

 

 

 

 

2,194

 

 

 

 

 

2,332

 

 

 

 

 

1,077,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2018

 

$

26

 

 

 

 

 

1,064,039

 

 

 

 

 

(89,378

)

 

 

 

 

(403

)

 

 

 

 

1,242

 

 

 

 

 

975,526

 

Total comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

(30,896

)

 

 

 

 

 

 

 

 

 

(287

)

 

 

 

 

(31,183

)

Issuance of common stock

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Amortization of restricted stock units

 

 

 

 

 

 

 

(436

)

 

 

 

 

 

...