News Column

Tidewater Reports First Quarter Results For Fiscal 2015

August 5, 2014

NEW ORLEANS--(BUSINESS WIRE)-- Tidewater Inc. (NYSE:TDW) announced today first quarter net earnings for the period ended June 30, 2014, of $43.7 million, or $0.88 per common share, on revenues of $385.7 million. For the same quarter last year, net earnings were $30.1 million, or $0.61 per common share, on revenues of $334.1 million. The immediately preceding quarter ended March 31, 2014, had net earnings of $43.4 million, or $0.88 per common share, on revenues of $367.8 million.

As previously announced, Tidewater will hold a conference call to discuss June quarterly earnings on Wednesday, August 6, 2014, 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 6, 2014, and will continue until 11:59 p.m. Central time on August 8, 2014. 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 37748027.

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 September 6, 2014.

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)

 
Three Months Ended
June 30,
    2014     2013  
Revenues:  
Vessel revenues $ 381,510 331,630
Other operating revenues     4,167     2,455  
      385,677     334,085  
Costs and expenses:
Vessel operating costs 217,244 196,161
Costs of other operating revenues 4,661 2,020
General and administrative 51,060 50,480
Vessel operating leases 6,540 4,031
Depreciation and amortization 43,111 40,108
Gain on asset dispositions, net     (2,943 )   (2,140 )
      319,673     290,660  
Operating income 66,004 43,425
Other income (expenses):
Foreign exchange loss (1,289 ) (89 )
Equity in net earnings of unconsolidated companies 5,283 4,420
Interest income and other, net 622 740
Interest and other debt costs, net     (13,129 )   (8,913 )
      (8,513 )   (3,842 )
Earnings before income taxes 57,491 39,583
Income tax expense     13,792     9,500  
Net earnings 43,699 30,083
Less: Net earnings attributable to noncontrolling interests     26     ---  
Net earnings attributable to Tidewater Inc.   $ 43,673     30,083  
 
 
Basic earnings attributable to Tidewater Inc. per common share   $ 0.88     0.61  
 
Diluted earnings attributable to Tidewater Inc. per common share   $ 0.88     0.61  
 
Weighted average common shares outstanding 49,580,038 49,226,911
Dilutive effect of stock options and restricted stock     282,986     331,090  
Adjusted weighted average common shares     49,863,024     49,558,001  
   

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and par value data)

       
June 30, March 31,
ASSETS     2014     2014  
Current assets:
Cash and cash equivalents $ 53,451 60,359
Trade and other receivables, net 291,341 252,421
Due from affiliate 430,167 429,450
Marine operating supplies 63,214 57,392
Other current assets     33,121     20,587  
Total current assets     871,294     820,209  
Investments in, at equity, and advances to unconsolidated companies 67,926 63,928
Properties and equipment:
Vessels and related equipment 4,519,296 4,521,102
Other properties and equipment     97,867     97,714  
4,617,163 4,618,816
Less accumulated depreciation and amortization     1,001,989     997,208  
Net properties and equipment     3,615,174     3,621,608  
Goodwill 283,699 283,699
Other assets     92,751     96,385  
Total assets   $ 4,930,844     4,885,829  
 
LIABILITIES AND EQUITY        
Current liabilities:
Accounts payable $ 74,814 74,515
Accrued expenses 131,355 157,302
Due to affiliate 118,456 86,154
Accrued property and liability losses 3,264 3,631
Current portion of long term debt 10,395 9,512
Other current liabilities     71,489     70,567  
Total current liabilities     409,773     401,681  
Long-term debt 1,500,960 1,505,358
Deferred income taxes 110,146 108,929
Accrued property and liability losses 2,147 5,286
Other liabilities and deferred credits 184,756 179,204
 
Commitments and Contingencies
 
Equity:

Common stock of $0.10 par value, 125,000,000 shares authorized, issued 49,720,702 shares at June 30, 2014 and 49,730,442 shares at March 31, 2014

4,972 4,973
Additional paid-in capital 148,216 142,381
Retained earnings 2,575,339 2,544,255
Accumulated other comprehensive loss     (11,877 )   (12,225 )
Total stockholders’ equity 2,716,650 2,679,384
Noncontrolling Interests     6,412     5,987  
Total equity 2,723,062 2,685,371
Total liabilities and equity   $ 4,930,844     4,885,829  
 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

 
Three Months Ended
June 30,
      2014   2013
Net earnings $ 43,699   30,083
Other comprehensive income/(loss):

Unrealized gains on available for sale securities, net of tax of $55 and $60

101 111

Amortization of loss on derivative contract, net of tax of $63 and $63

116 117

Change in other benefit plan minimum liability, net of tax of $70 and $0

    131   ---
Total comprehensive income   $ 44,047   30,311
 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(In thousands)
  Three Months Ended
June 30,
      2014     2013  
Operating activities:  
Net earnings $ 43,699 30,083
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 43,111 40,108
Provision (benefit) for deferred income taxes 2,432 (12,151 )
Gain on asset dispositions, net (2,943 ) (2,140 )
Equity in earnings of unconsolidated companies, less dividends (3,998 ) (3,398 )
Compensation expense - stock-based 5,341 5,711
Excess tax benefit on stock options exercised --- (12 )
Changes in assets and liabilities, net:
Trade and other receivables (39,044 ) 18,891

Changes in due to/from affiliate, net

31,552

 

(48,515

)
Marine operating supplies (5,822 ) 1,100
Other current assets (12,534 ) (11,589 )
Accounts payable (5,360 ) (11,459 )
Accrued expenses (25,590 ) (8,421 )
Accrued property and liability losses (367 ) 158
Other current liabilities (616 ) 944

Other liabilities and deferred credits

817

876

Other, net     267     3,409  
Net cash provided by operating activities     30,945     3,595  
Cash flows from investing activities:
Proceeds from sales of assets 3,754 2,161
Proceeds from sale/leaseback of assets 13,400 ---
Additions to properties and equipment (39,874 ) (156,434 )
Payments for acquisition, net of cash acquired --- (127,737 )
Other     3     (665 )
Net cash used in investing activities     (22,717 )   (282,675 )
Cash flows from financing activities:
Debt issuance costs --- (2,699 )
Principal payment on long-term debt (3,959 ) (97,490 )
Debt borrowings --- 414,262
Proceeds from exercise of stock options 994 1,675
Cash dividends (12,520 ) (12,436 )
Excess tax benefit on stock options exercised --- 12
Other     349     ---  
Net cash (used in) provided by financing activities     (15,136 )   303,324  
Net change in cash and cash equivalents (6,908 ) 24,244
Cash and cash equivalents at beginning of period     60,359     40,569  
Cash and cash equivalents at end of period   $ 53,451     64,813  
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized $ 24,385 3,980
Income taxes $ 11,170 20,617
Supplemental disclosure of non-cash investing activities:
Additions to properties and equipment $ 5,236 130
Increase in receivables due to sale of shipyard   $ ---     9,500  
             

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, 2014 $ 4,973 142,381 2,544,255 (12,225 ) 5,987 2,685,371
Total comprehensive income --- --- 43,673 348 26 44,047
Exercise of stock options 3 997 --- --- --- 1,000
Cash dividends declared ($.25 per share) --- --- (12,589 ) --- --- (12,589 )
Amortization of restricted stock units --- 992 --- --- --- 992
Amortization/cancellation of restricted stock (4 ) 3,846 --- --- --- 3,842
Cash received from noncontrolling interests --- --- --- --- 449 449
Cash paid to noncontrolling interests     ---     ---     ---     ---     (50 )   (50 )
Balance at June 30, 2014   $ 4,972     148,216     2,575,339     (11,877 )   6,412     2,723,062  
                           
Balance at March 31, 2013 $ 4,949 119,975 2,453,973 (17,141 ) --- 2,561,756
Total comprehensive income --- --- 30,083 228 --- 30,311
Exercise of stock options 5 1,688 --- --- --- 1,693
Cash dividends declared ($.25 per share) --- --- (12,499 ) --- --- (12,499 )
Amortization of restricted stock units --- 3,034 --- --- --- 3,034
Amortization/cancellation of restricted stock     (3 )   1,175     ---     ---     ---     1,172  
Balance at June 30, 2013   $ 4,951     125,872     2,471,557     (16,913 )   ---     2,585,467  
 


The company’s vessel revenues and vessel operating costs and the related percentage of total vessel revenues for the quarters ended June 30, 2014 and 2013 and for the quarter ended March 31, 2014, were as follows:

         
Quarter
Quarter Ended Ended
June 30, March 31,
(In thousands)     2014   %     2013   %     2014   %  
Vessel revenues:  
Americas $ 119,983 31 % 90,244 27 % 108,710 30 %
Asia/Pacific 40,249 11 % 42,956 13 % 37,907 10 %
Middle East/North Africa 55,539 15 % 41,213 13 % 48,783 14 %
Sub-Saharan Africa/Europe     165,739   43 %   157,217   47 %   167,050   46 %
Total vessel revenues   $ 381,510   100 %   331,630   100 %   362,450   100 %
Vessel operating costs:
Crew costs $ 111,285 29 % 93,232 28 % 100,951 28 %
Repair and maintenance 47,732 13 % 48,093 14 % 49,322 14 %
Insurance and loss reserves 5,394 1 % 6,020 2 % 5,274 1 %
Fuel, lube and supplies 22,369 6 % 18,805 6 % 19,858 5 %
Other     30,464   8 %   30,011   9 %   31,329   9 %
Total vessel operating costs     217,244   57 %   196,161   59 %   206,734   57 %
Vessel operating margin (A)   $ 164,266   43 %   135,469   41 %   155,716   43 %
 


Note (A): The following table reconciles vessel operating margin as presented above to operating profit for the quarters ended June 30, 2014 and 2013 and for the quarter ended March 31, 2014:

   

 

Quarter

Quarter Ended

Ended

June 30,

March 31,

(In thousands)   2014     2013   2014
Vessel operating margin $ 164,266   135,469 155,716
General and administrative – vessel operations (37,669 ) (33,810 ) (35,275 )
Vessel operating leases (6,540 ) (4,031 ) (8,151 )
Depreciation and amortization – vessel operations     (41,425 )   (39,396 )   (41,843 )
Vessel operating profit   $ 78,632     58,232     70,447  
 


The company’s other operating profit for the quarters ended June 30, 2014 and 2013 and for the quarter ended March 31, 2014, consists of the following:

     
Quarter
Quarter Ended Ended
June 30, March 31,
(In thousands)   2014   2013   2014
Other operating revenues $ 4,167 2,455 5,383
Costs of other operating revenues (4,661 ) (2,020 ) (5,588 )
General and administrative – other operating activities (1,059 ) (825 ) (1,026 )
Depreciation – other operating activities     (870 )   (2 )   (292 )
Other operating profit   $ (2,423 )   (392 )   (1,523 )
 


The company’s operating income and other components of earnings before income taxes, and its related percentage of total revenues for the quarters ended June 30, 2014 and 2013 and for the quarter ended March 31, 2014, were as follows:

       

 

 

Quarter

Quarter Ended

Ended

June 30,

March 31,

(In thousands)     2014     %     2013     %     2014     %  
Vessel operating profit:  
Americas $ 30,208 8 % 20,301 6 % 21,381 6 %
Asia/Pacific (971 ) (1 %) 10,289 3 % 8,016 2 %
Middle East/North Africa 11,793 3 % 10,123 3 % 8,240 2 %
Sub-Saharan Africa/Europe     37,602     10 %   17,519     5 %   32,810     9 %
78,632 20 % 58,232 17 % 70,447 19 %
Other operating profit     (2,423 )   (1 %)   (392 )   (<1%)   (1,523 )   (<1%)
76,209 19 % 57,840 17 % 68,924 19 %

Corporate general and administrative expenses

(12,332 ) (3 %) (15,845 ) (5 %) (9,434 ) (3 %)
Corporate depreciation     (816 )   (<1%)   (710 )   (<1%)   (790 )   (<1%)
Corporate expenses (13,148 ) (3 %) (16,555 ) (5 %) (10,224 ) (3 %)
Gain on asset dispositions, net     2,943     1 %   2,140     1 %   2,363     1 %
Operating income   $ 66,004     17 %   43,425     13 %   61,063     17 %
Foreign exchange loss (1,289 ) (<1%) (89 ) (<1%) (2,728 ) (1 %)
Equity in net earnings of unconsolidated companies 5,283 1 % 4,420 1 % 4,929 1 %
Interest income and other, net 622 <1% 740 <1% 708 <1%
Interest and other debt costs, net     (13,129 )   (3 %)   (8,913 )   (3 %)   (12,733 )   (3 %)
Earnings before income taxes   $ 57,491     15 %   39,583     12 %   51,239     14 %
 


The company’s revenues, day-based vessel utilization percentages and average day rates by vessel class and in total for the quarters ended June 30, 2014 and 2013 and the quarter ended March 31, 2014, were as follows:

     
Quarter
Quarter Ended Ended
June 30, March 31,
      2014     2013   2014

REVENUE BY VESSEL CLASS (in thousands):

Americas fleet:

Deepwater $ 82,282 55,032 74,859
Towing-supply 29,517 27,670 26,073
Other 8,184 7,542 7,778
Total $ 119,983 90,244 108,710

Asia/Pacific fleet:

Deepwater $ 24,242 24,292 23,834
Towing-supply 15,037 17,722 13,114
Other 970 942 959
Total $ 40,249 42,956 37,907

Middle East/North Africa fleet:

Deepwater $ 19,467 15,852 16,114
Towing-supply 35,279 24,497 31,979
Other 793 864 690
Total $ 55,539 41,213 48,783

Sub-Saharan Africa/Europe fleet:

Deepwater $ 91,691 87,251 86,064
Towing-supply 55,436 54,860 59,803
Other 18,612 15,106 21,183
Total $ 165,739 157,217 167,050

Worldwide fleet:

Deepwater $ 217,682 182,427 200,871
Towing-supply 135,269 124,749 130,969
Other 28,559 24,454 30,610
Total   $ 381,510     331,630   362,450

UTILIZATION:

Americas fleet:

Deepwater 88.7 % 77.8 83.7
Towing-supply 62.7 43.3 59.5
Other 69.3 82.2 78.4
Total 74.8 % 60.1 73.2

Asia/Pacific fleet:

Deepwater 70.6 % 92.7 84.7
Towing-supply 90.7 64.5 82.7
Other 100.0 100.0 100.0
Total 83.5 % 72.2 84.1

Middle East/North Africa fleet:

Deepwater 72.1 % 91.3 71.3
Towing-supply 93.6 72.1 88.2
Other 91.9 44.7 98.1
Total 87.8 % 73.3 84.0

Sub-Saharan Africa/Europe fleet:

Deepwater 86.3 % 79.3 83.1
Towing-supply 75.3 67.6 77.9
Other 78.1 70.2 89.2
Total 79.5 % 71.8 83.3

Worldwide fleet:

Deepwater 83.8 % 81.2 81.9
Towing-supply 78.4 60.8 76.6
Other 76.9 71.5 87.3
Total     79.8 %   68.8   80.8
 
     

Quarter

Quarter Ended

Ended

June 30,

March 31,

    2014     2013     2014

AVERAGE VESSEL DAY RATES:

   

Americas fleet:

Deepwater $ 31,175 29,786 31,066
Towing-supply 16,559 15,161 16,220
Other 8,856 6,965 7,868
Total $ 22,443 18,977 21,718

Asia/Pacific fleet:

Deepwater $ 41,948 39,291 39,072
Towing-supply 13,017 13,022 12,383
Other 10,658 10,353 10,661
Total $ 22,066 20,749 21,550

Middle East/North Africa fleet:

Deepwater $ 25,081 21,202 20,524
Towing-supply 13,366 12,567 13,000
Other 4,742 4,750 3,912
Total $ 15,502 14,316 14,258

Sub-Saharan Africa/Europe fleet:

Deepwater $ 30,414 27,514 29,158
Towing-supply 16,867 15,386 16,542
Other 5,562 4,883 5,392
Total $ 17,179 15,993 15,917

Worldwide fleet:

Deepwater $ 31,061 28,572 29,730
Towing-supply 15,261 14,338 14,982
Other 6,306 5,496 5,905
Total   $ 18,701     16,976     17,525
 


The day-based utilization percentages, average day rates and the number of the company’s new vessels (defined as vessels acquired or constructed since calendar year 2000 as part of its new build and acquisition program) by vessel class and in total for the quarters ended June 30, 2014 and 2013 and the quarter ended March 31, 2014, were as follows:

       
Quarter
Quarter Ended Ended
June 30, March 31,
    2014       2013   2014

UTILIZATION:

Deepwater vessels:
PSVs 86.8 % 84.0 86.1
AHTS vessels 83.5 95.9 73.9
Towing-supply 84.9 81.7 84.4
Other 76.9 73.3 91.8
Total     83.7 %     81.2   86.0

AVERAGE VESSEL DAY RATES:

Deepwater vessels:
PSVs $ 30,802 28,689 29,735
AHTS vessels 34,116 29,561 31,158
Towing-supply 15,519 14,595 15,126
Other 6,706 5,843 6,126
Total   $ 19,627       17,955   18,287

AVERAGE VESSEL COUNT:

Deepwater vessels:
PSVs 76 69 76
AHTS vessels 12 11 12
Towing-supply 105 103 105
Other 52 53 52
Total     245       236   245
 


The company’s average number of vessels by class and geographic distribution for the quarters ended June 30, 2014 and 2013 and for the quarter ended March 31, 2014:

     
Quarter
Quarter Ended Ended
June 30, March 31,
    2014   2013   2014

Americas fleet:

Deepwater 33 27 32
Towing-supply 31 46 30
Other   15   14   14
Total 79 87 76
Less stacked vessels   8   25   10
Active vessels   71   62   66

Asia/Pacific fleet:

Deepwater 9 7 8
Towing-supply 14 24 14
Other   1   1   1
Total 24 32 23
Less stacked vessels   --   6   --
Active vessels   24   26   23

Middle East/North Africa fleet:

Deepwater 12 9 12
Towing-supply 31 30 31
Other   2   4   2
Total 45 43 45
Less stacked vessels   1   3   1
Active vessels   44   40   44

Sub-Saharan Africa/Europe fleet:

Deepwater 38 44 39
Towing-supply 48 58 52
Other   47   48   49
Total 133 150 140
Less stacked vessels   4   10   5
Active vessels   129   140   135
Active owned or chartered vessels 268 268 268
Stacked vessels   13   44   16
Total owned or chartered vessels 281 312 284
Vessels withdrawn from service -- 1 --
Joint-venture and other   11   10   11
Total   292   323   295


Note (B): Included in total owned or chartered vessels at June 30, 2014 and 2013 and at March 31, 2014, were 11, 41, and 15 vessels, respectively, that were stacked by the company. These vessels were considered to be in service and are included in the calculation of the company’s utilization statistics.

The table below summarizes the various commitments to acquire and construct new vessels, by vessel type, and ROVs as of June 30, 2014:

           
Number Amount Remaining
of Shipyard Delivery Total Invested Balance
(In thousands)   Vessels/ROVs   Location   Dates   Cost   6/30/14   6/30/14
Towing-supply:
7,145 BHP AHTS 6 International 1/2015 - 2/2016 $ 116,143 55,909 60,234
Deepwater:
246-foot PSV 2 International 8/2014
261-foot PSV 6 International 9/2015 – 6/2016
264-foot PSV 1 United States 10/2014
268-foot PSV 2 International 2/2015, 5/2015
275-foot PSV (A) 10 International 9/2014 – 7/2015
292-foot PSV 1 International 5/2016
300-foot PSV 2 United States 9/2015, 2/2016
310-foot PSV 2 United States 11/2015, 2/2016
Total Deepwater PSVs 26 843,784 230,331 613,453
Other:
Fast supply boat   1   International   ---     8,014   8,014   ---
Total vessel commitments   33           $ 967,941   294,254   673,687
Total ROV commitments   2   United States   11/2014   $ 14,980   3,694   11,286
Total commitments   35           $ 982,921   297,948   684,973
 

(A)  Two different international shipyards are constructing six and four 275-foot PSVs, respectively.



The table below summarizes by vessel class and vessel type the number of vessels and ROVs expected to be delivered by quarter along with the expected cash outlay (in thousands) of the various commitments as discussed above:

  Quarter Period Ended
 
 
Vessel class and type     09/14   12/14   03/15   06/15   09/15   Thereafter
Deepwater PSVs 5   4   3   2   3   9
Towing-supply vessels --- --- 1 1 1 3
Other     ---   ---   ---   ---   ---   1  
Total vessel commitments     5   4   4   3   4   13  
Total ROV commitments     ---   2   ---   ---   ---   ---  
Total commitments     5   6   4   3   4   13  
 
(In thousands)
Expected quarterly cash outlay   $ 130,207   135,523   124,933   120,099   53,749   120,462 (B )
 

(B) The $120,462 of ‘Thereafter’ vessel construction obligations are expected to be paid as follows: $70,034 during fiscal 2016 and $50,428 during fiscal 2017.






Tidewater Inc., New Orleans

Joe Bennett, 504-566-4506

Executive Vice President and Chief Investor Relations Officer

SOURCE: Tidewater Inc.


Source: Tidewater Inc.


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