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Tidewater Reports Results for the Three and Six-Months Ended June 30, 2019

HOUSTON--(BUSINESS WIRE)--

Tidewater Inc. (TDW) announced today revenue for the three and six months ended June 30, 2019, of $125.9 million and $248.0 million, and net losses for the same periods of $16.0 million (or $0.42 per common share) and $37.7 million (or $1.01 per common share), respectively. Excluding certain costs outlined below, net losses for the three and six months ended June 30, 2019 were $15.5 million (or $0.41 per common share) and $33.5 million (or $0.90 per common share), respectively.

John T. Rynd, Tidewater’s President and Chief Executive Officer, commented, “The second quarter results help solidify our growing sense of an improving market and demonstrates our ability to execute on the business objectives that we have set forth. We saw revenue increase from the prior quarter driven largely by a North Sea market that was seasonally stronger than anticipated for this time of year and a global improvement in demand for deepwater vessels.

We remain focused on being the most cost efficient operator in our industry and have shown further progress towards reducing our general and administrative costs, which remain on track for an $87 million fourth quarter exit run rate. Additionally, we are committed to maintaining a fleet of vessels that are in demand by our customers, which will lead to higher regulatory drydock costs and downtime over the near-to-intermediate term, but we will only invest in the maintenance to the extent we have an adequate return on capital.

We do not envision significant market advancement over the second half of 2019, but we do see ongoing signs of improvement, and our outlook for the offshore market remains on a positive long-term slope with reasons for optimism in each of our primary markets. Our existing market position coupled with our continued efforts to differentiate ourselves will drive ongoing financial improvements and best position us through this slowly improving market.”

Included in the $16.0 million ($0.42 per common share) net loss for the three months and six months ended June 30, 2019 were general and administrative expenses for severance and similar expenses related to integrating Tidewater and GulfMark operations of $0.5 million ($0.01 per common share) and $4.2 million ($0.11 per common share), respectively.

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

Common shares outstanding

 

 

37,845,158

 

 

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

 

 

2,034,235

 

 

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

 

 

1,683,147

 

 

Total

 

 

41,562,540

 

 

 

Tidewater will hold a conference call to discuss results for the three months ended June 30, 2019 on Tuesday, August 13, 2019 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 August 13, 2019, and will continue until 11:59 p.m. Central Time on September 13, 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 48850067.

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 September 13, 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 on the next page.

 
 
 

TIDEWATER INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

 

 

Three Months Ended 

 

 

Six Months Ended 

 

 

 

 June 30, 2019

 

 

 June 30, 2018

 

 

June 30, 2019 

 

 

June 30, 2018 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel revenues

 

$

123,641

 

 

 

104,174

 

 

 

243,303

 

 

 

191,668

 

Other operating revenues

 

 

2,218

 

 

 

1,427

 

 

 

4,705

 

 

 

5,426

 

Total revenues

 

 

125,859

 

 

 

105,601

 

 

 

248,008

 

 

 

197,094

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel operating costs

 

 

80,439

 

 

 

68,012

 

 

 

162,642

 

 

 

129,376

 

Costs of other operating revenues

 

 

586

 

 

 

642

 

 

 

1,350

 

 

 

3,116

 

General and administrative (A)

 

 

23,696

 

 

 

24,425

 

 

 

50,836

 

 

 

47,990

 

Depreciation and amortization

 

 

25,038

 

 

 

12,785

 

 

 

47,970

 

 

 

24,802

 

Loss (gain) on asset dispositions, net

 

 

494

 

 

 

(1,338

)

 

 

(776

)

 

 

(3,257

)

Long-lived asset impairments

 

 

 

 

 

1,215

 

 

 

 

 

 

7,401

 

Total operating costs and expenses

 

 

130,253

 

 

 

105,741

 

 

 

262,022

 

 

 

209,428

 

Operating loss

 

 

(4,394

)

 

 

(140

)

 

 

(14,014

)

 

 

(12,334

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

 

11

 

 

 

(1,002

)

 

 

(497

)

 

 

(1,350

)

Equity in net earnings (losses) of unconsolidated companies

 

 

95

 

 

 

390

 

 

 

33

 

 

 

(15,049

)

Interest income and other, net

 

 

1,859

 

 

 

2,914

 

 

 

4,329

 

 

 

2,786

 

Interest and other debt costs, net

 

 

(7,582

)

 

 

(7,547

)

 

 

(15,318

)

 

 

(15,146

)

Total other expense

 

 

(5,617

)

 

 

(5,245

)

 

 

(11,453

)

 

 

(28,759

)

Loss before income taxes

 

 

(10,011

)

 

 

(5,385

)

 

 

(25,467

)

 

 

(41,093

)

Income tax expense

 

 

5,542

 

 

 

5,797

 

 

 

11,372

 

 

 

9,118

 

Net loss

 

$

(15,553

)

 

 

(11,182

)

 

 

(36,839

)

 

 

(50,211

)

Less: Net income attributable to noncontrolling interests

 

 

406

 

 

 

(242

)

 

 

851

 

 

 

(99

)

Net loss attributable to Tidewater Inc.

 

$

(15,959

)

 

 

(10,940

)

 

 

(37,690

)

 

 

(50,112

)

Basic loss per common share

 

 

(0.42

)

 

 

(0.44

)

 

 

(1.01

)

 

 

(2.09

)

Diluted loss per common share

 

 

(0.42

)

 

 

(0.44

)

 

 

(1.01

)

 

 

(2.09

)

Weighted average common shares outstanding

 

 

37,571

 

 

 

25,654

 

 

 

37,369

 

 

 

23,989

 

Dilutive effect of stock options and restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average common shares

 

 

37,571

 

 

 

25,654

 

 

 

37,369

 

 

 

23,989

 

Total shares outstanding including warrants

 

 

 

 

 

June 30, 2019

 

 

June 30, 2018

 

Common shares outstanding

 

 

 

 

 

 

37,845

 

 

 

26,085

 

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

 

 

 

 

 

 

2,034

 

 

 

3,925

 

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

 

 

 

 

 

 

1,683

 

 

 

 

Total

 

 

 

 

 

 

41,563

 

 

 

30,010

 

 

Note (A): General and administrative expenses for the three and six months ended June 30, 2019 included stock-based compensation of $3.6 million and $9.2 million, respectively, and expenses for the three and six months ended June 30, 2018 included stock-based compensation of $3.2 million and $6.1 million, respectively. In addition, general and administrative costs for the three and six months ended June 30, 2019 includes $0.5 million and $4.2 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)

 

 

June 30,

 

 

December 31,

 

ASSETS

 

2019

 

 

2018

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

369,549

 

 

 

371,791

 

Restricted cash

 

 

13,614

 

 

 

25,953

 

Trade and other receivables, net

 

 

121,155

 

 

 

111,266

 

Due from affiliates

 

 

121,959

 

 

 

132,951

 

Marine operating supplies

 

 

29,141

 

 

 

29,505

 

Other current assets

 

 

14,460

 

 

 

11,836

 

Total current assets

 

 

669,878

 

 

 

683,302

 

Investments in, at equity, and advances to unconsolidated companies

 

 

658

 

 

 

1,039

 

Properties and equipment, net

 

 

1,041,054

 

 

 

1,089,857

 

Deferred drydocking and survey costs

 

 

41,029

 

 

 

22,215

 

Other assets

 

 

39,651

 

 

 

31,326

 

Total assets

 

$

1,792,270

 

 

 

1,827,739

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

24,170

 

 

 

31,939

 

Accrued costs and expenses

 

 

56,675

 

 

 

61,784

 

Due to affiliates

 

 

39,060

 

 

 

34,972

 

Current portion of long-term debt

 

 

10,002

 

 

 

8,568

 

Other current liabilities

 

 

24,442

 

 

 

21,092

 

Total current liabilities

 

 

154,349

 

 

 

158,355

 

Long-term debt

 

 

424,911

 

 

 

430,436

 

Other liabilities

 

 

97,471

 

 

 

94,025

 

 

 

 

 

 

 

 

 

 

Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

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

37,845,158 and 36,978,280 shares issued and outstanding

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

 

 

38

 

 

 

37

 

Additional paid-in capital

 

 

1,359,842

 

 

 

1,352,388

 

Accumulated deficit

 

 

(248,473

)

 

 

(210,783

)

Accumulated other comprehensive income

 

 

2,194

 

 

 

2,194

 

Total stockholders’ equity

 

 

1,113,601

 

 

 

1,143,836

 

Noncontrolling interests

 

 

1,938

 

 

 

1,087

 

Total equity

 

 

1,115,539

 

 

 

1,144,923

 

Total liabilities and equity

 

$

1,792,270

 

 

 

1,827,739

 

 
 
 
 

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

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

June 30, 2018

 

 

June 30, 2019

 

 

June 30, 2018

 

Net loss

 

$

(15,553

)

 

 

(11,182

)

 

$

(36,839

)

 

 

(50,211

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized losses on available for sale securities, net of tax of $0, $0, $0 and $0

 

 

 

 

 

43

 

 

 

 

 

 

(256

)

Total comprehensive loss

 

$

(15,553

)

 

 

(11,139

)

 

$

(36,839

)

 

 

(50,467

)

 
 
 
 

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

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

June 30, 2018

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(36,839

)

 

 

(50,211

)

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

activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

38,582

 

 

 

22,572

 

Amortization of deferred drydocking and survey costs

 

 

9,388

 

 

 

2,230

 

Amortization of debt premium and discounts

 

 

(1,019

)

 

 

(900

)

Provision for deferred income taxes

 

 

6

 

 

 

 

Gain on asset dispositions, net

 

 

(776

)

 

 

(3,257

)

Long-lived asset impairments

 

 

 

 

 

7,401

 

Changes in investments in, at equity, and advances

to unconsolidated companies

 

 

381

 

 

 

27,881

 

Compensation expense - stock-based

 

 

9,215

 

 

 

6,139

 

Changes in assets and liabilities, net:

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

(10,921

)

 

 

(15,097

)

Changes in due to/from affiliates, net

 

 

15,080

 

 

 

19,869

 

Accounts payable

 

 

(7,769

)

 

 

1,709

 

Accrued costs and expenses

 

 

(4,977

)

 

 

(6,652

)

Cash paid for deferred drydocking and survey costs

 

 

(28,688

)

 

 

(13,394

)

Other, net

 

 

(2,386

)

 

 

18,693

 

Net cash provided by (used in) operating activities

 

 

(20,723

)

 

 

16,983

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sales of assets

 

 

20,566

 

 

 

12,968

 

Additions to properties and equipment

 

 

(8,873

)

 

 

(5,775

)

Net cash provided by investing activities

 

 

11,693

 

 

 

7,193

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal payment on long-term debt

 

 

(3,792

)

 

 

(2,637

)

Payments to General Unsecured Creditors

 

 

 

 

 

(8,377

)

Taxes on share-based awards

 

 

(1,760

)

 

 

 

Other

 

 

1

 

 

 

(1,998

)

Net cash used in financing activities

 

 

(5,551

)

 

 

(13,012

)

Net change in cash, cash equivalents and restricted cash

 

 

(14,581

)

 

 

11,164

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

397,744

 

 

 

453,335

 

Cash, cash equivalents and restricted cash at end of period

 

$

383,163

 

 

 

464,499

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized

 

$

16,293

 

 

 

16,134

 

Income taxes

 

$

7,754

 

 

 

10,083

 

 
 
 
 

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 March 31, 2019

 

$

37

 

 

 

1,356,436

 

 

 

(232,514

)

 

 

2,194

 

 

 

1,532

 

 

 

1,127,685

 

Total comprehensive loss

 

 

 

 

 

 

 

 

(15,959

)

 

 

 

 

 

406

 

 

 

(15,553

)

Issuance of common stock from exercise of warrants

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Amortization/cancellation of restricted stock units

 

 

 

 

 

3,406

 

 

 

 

 

 

 

 

 

 

 

 

3,406

 

Balance at June 30, 2019

 

$

38

 

 

 

1,359,842

 

 

 

(248,473

)

 

 

2,194

 

 

 

1,938

 

 

 

1,115,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2018

 

$

24

 

 

 

1,061,983

 

 

 

(78,438

)

 

 

(446

)

 

 

2,358

 

 

 

985,481

 

Total comprehensive loss

 

 

 

 

 

 

 

 

(10,940

)

 

 

43

 

 

 

(242

)

 

 

(11,139

)

Issuance of common stock

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of restricted stock units

 

 

 

 

 

3,184

 

 

 

 

 

 

 

 

 

 

 

 

3,184

 

Acquisition of non-controlling interests

 

 

 

 

 

(1,126

)

 

 

 

 

 

 

 

 

(874

)

 

 

(2,000

)

Balance at June 30, 2018

 

$

26

 

 

 

1,064,039

 

 

 

(89,378

)

 

 

...