Energy, Automobile, EV, Renewable News | Tidewater Reports Results for the Three and Nine Months Ended September 30, 2024

Tidewater Reports Results for the Three and Nine Months Ended September 30, 2024

November 8, 2024

Third Quarter 2024 Highlights

Revenue of $340.4 million, an increase of $1.1 million from the prior quarter
Average day rate increased to $22,275 per day, $1,145 higher than the prior quarter
Net income of $46.4 million and Adjusted EBITDA of $142.6 million
Net cash provided by operating activities of $49.1 million and free cash flow of $67.0 million

Share Repurchases and 2024 Guidance

Repurchased 189,738 shares since the end of the second quarter of 2024 through the end of October for $15.0 million at an average price of $79.06 per share
Board approves additional share repurchase authorization of $10.1 million, for a total current outstanding authorized capacity of $42.8 million, the maximum permissible amount under existing debt agreements
Updated 2024 revenue guidance to $1.33 to $1.35 billion and 2024 gross margin guidance of 48%

HOUSTON–(BUSINESS WIRE)–Tidewater Inc. (NYSE:TDW) announced today revenue for the three and nine months ended September 30, 2024 of $340.4 million and $1,000.8 million, respectively, compared with $299.3 million and $707.3 million, respectively, for the three and nine months ended September 30, 2023. Tidewater’s net income for the three and nine months ended September 30, 2024, was $46.4 million ($0.87 per common share) and $143.8 million ($2.70 per common share), respectively, compared with net income of $26.2 million ($0.49 per common share) and $59.5 million ($1.13 per common share), respectively, for the three and nine months ended September 30, 2023.

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “Third quarter revenue of $340.4 million and gross margin of 47.2% came in as expected, with our consolidated average day rate up over 5% to $22,275. In particular, the average day rate and average leading-edge day rates in our large PSV and anchor handler fleets continued to show sequential quarterly improvement. Utilization declined in all of our geographic segments and is principally related to project start-up delays, but also due to higher-than-expected idle time between contracts and days in drydock.

“Cash flow from operations for the first nine months of 2024 was $182.5 million, the best performance Tidewater has seen in 8 years. During the same period the company spent $75.2 million on reducing the number of shares outstanding and $89.0 million on the required amortization of outstanding debt. Our expectation for the next two quarters is that quarterly free cash flow generation will increase. Our ability under our existing debt agreements to repurchase shares will increase substantially in the same time frame and our desire to repurchase shares at current trading levels is very strong. The Board has authorized the maximum permissible amount of share repurchases under our existing debt agreements, and our current unused repurchase capacity is now $42.8 million. The company anticipates share repurchase capacity to increase by close to $100 million in the first quarter of 2025.

“Although we are confident in the visibility of free cash flow growth over the next two quarters, the visibility into the continued pace of growth in offshore activity throughout 2025 is more limited. We will be closely monitoring market dynamics in the coming months and look forward to providing updated thoughts around full-year 2025 in our next earnings press release. Global industry discussion on new vessel orders and reactivations, which popped up briefly over the summer, has dropped off significantly from that time due to the same limited visibility.

“Over the past several years, we have employed a contracting strategy appropriate for an improving market, emphasizing shorter-duration contracts, trading off longer-term contract coverage and higher utilization for the opportunity to push day rates and contract terms. This has proven to be a successful strategy, with our realized day rate now more than double our realized day rate at the beginning of 2022 when the offshore vessel recovery began. We believe this remains the correct contracting strategy as day rates have still not returned to a point at which newbuilding vessel activity makes economic sense, which is reflected in the continued record low newbuild OSV orderbook. The lack of newbuild activity combined with vessel attrition expected to occur over the coming years points to persistent longer-term vessel supply constraints.

“The outlook on the timing of the growth in offshore vessel activity has become uncertain recently due to concerns around slower acceleration in oil demand driven by lower-than-expected growth in China and geopolitical events as well as the growth in non-OPEC oil supply. We continue to believe that these concerns will clarify themselves in the coming months and that the longer-term outlook for Tidewater remains quite attractive. The world’s demand for energy of all types will continue to grow and the displacement rate from the growth of renewable energy sources appears to be lower than previously predicted. As such, hydrocarbon energy sources will remain a critical element of satisfying the world’s demand for energy and offshore hydrocarbons will increasingly fill this need. Our customers’ commitment to long cycle exploration and development programs is indicative of the long-term conviction in the role of offshore hydrocarbons in the global energy mix and underpins our outlook for consistently strong offshore vessel demand. Our customers have executed sizable drilling campaigns over the last few years and seem to be taking time to evaluate the outcomes of these projects before they proceed with incremental future activity. The improvements in demand for offshore vessels coming from subsea activities is very evident but it is not clear to what extent that will offset the expected pause in the growth of offshore drilling activity.

“Given our conviction around the positive and improving structural supply and demand fundamentals and Tidewater’s strong position in the offshore vessel industry, we believe that market inefficiencies will provide for opportunities to continue our past success in enhancing shareholder value as the long-term supply and demand fundamentals continue to develop in our favor.”

In addition to the number of outstanding shares, as of September 30, 2024, the Company also has the following in-the-money warrants.

Common shares outstanding			52,322,461
New Creditor Warrants (strike price $0.001 per common share)			76,175
GulfMark Creditor Warrants (strike price $0.01 per common share)			77,313
Total			52,475,949

Tidewater will hold a conference call to discuss results for the three months ending September 30, 2024 on November 8, 2024, at 8:00 a.m. Central Time. Investors and interested parties may listen to the earnings conference call via telephone by calling +1.800.715.9871 if calling from the U.S. or Canada (+1.647.932.3411 if calling from outside the U.S. or Canada) and provide Conference ID: 6513877 prior to the scheduled start time. A live webcast of the call will also be available in the Investor Relations section of Tidewater’s website at investor.tdw.com.

A replay of the conference call will be available beginning at 11:00 a.m. Central Time on November 8, 2024. To access the replay, visit the Investor Relations section of Tidewater’s website at investor.tdw.com.

About Tidewater

Tidewater owns and operates the largest fleet of offshore support vessels in the industry, with 65 years of experience supporting offshore energy exploration, production and offshore wind activities worldwide. To learn more, visit www.tdw.com.

Cautionary Statement

This news release contains “forward-looking statements” within the meaning of the U.S. federal securities laws – that is, any statements that are not historical facts. Such statements often contain words such as “expect,” “believe,” “think,” “anticipate,” “predict,” “plan,” “assume,” “estimate,” “forecast,” “target,” “projections,” “intend,” “should,” “will,” “shall” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain and based on our management’s current expectations and beliefs concerning future developments and their potential impact on Tidewater Inc. and its subsidiaries (the “Company”).

These forward-looking statements involve risks and uncertainties that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: fluctuations in worldwide energy demand and oil and gas prices; fleet additions by competitors and industry overcapacity; limited capital resources available to replenish our asset base as needed, including through acquisitions or vessel construction, and to fund our capital expenditure needs; uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable terms, if at all; changes in decisions and capital spending by customers based on industry expectations for offshore exploration, field development and production; consolidation of our customer base; loss of a major customer; changing customer demands for vessel specifications, which may make some of our older vessels technologically obsolete for certain customer projects or in certain markets; rapid technological changes; delays and other problems associated with vessel maintenance; the continued availability of qualified personnel and our ability to attract and retain them; the operating risks normally incident to our lines of business, including the potential impact of liquidated counterparties; our ability to comply with covenants in our indentures and other debt instruments; acts of terrorism and piracy; the impact of regional or global public health crises or pandemics; the impact of potential information technology, cybersecurity or data security breaches; integration of acquired businesses and entry into new lines of business; disagreements with our joint venture partners; natural disasters or significant weather conditions; unsettled political conditions, war, civil unrest and governmental actions, such as expropriation or enforcement of customs or other laws that are not well developed or consistently enforced; risks associated with our international operations, including local content, local currency or similar requirements especially in higher political risk countries where we operate; interest rate and foreign currency fluctuations; labor changes proposed by international conventions; increased regulatory burdens and oversight; changes in laws governing the taxation of foreign source income; retention of skilled workers; enforcement of laws related to the environment, labor and foreign corrupt practices; increased global concern, regulation and scrutiny regarding climate change; increased stockholder activism; the potential liability for remedial actions or assessments under existing or future environmental regulations or litigation; the effects of asserted and unasserted claims and the extent of available insurance coverage; the resolution of pending legal proceedings; and other risks and uncertainties detailed in our most recent Form 10-K, Form 10-Qs and Form 8-Ks filed with or furnished to the SEC.

If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this presentation regarding our environmental, social and other sustainability plans, goals or activities are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards still developing, internal controls and processes that we continue to evolve, and assumptions subject to change in the future. Statements in this release are made as of the date hereof, and the Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Financial information is displayed beginning on the next page.

The financial statements and supplementary information presented in this press release were not audited. This press release presents extracts from the Consolidated Balance Sheets at September 30, 2024 and December 31, 2023; the Consolidated Statements of Operations and Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and 2023; and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023. Extracts are drawn from the September 30, 2024 unaudited quarterly and year to date financial statements and the December 31, 2023 audited annual financial statements of Tidewater Inc. All per-share amounts are stated on a diluted basis.


TIDEWATER INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (In Thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Revenues:
Vessel revenues	$	338,485		$	296,975		$	994,174		$	698,478
Other operating revenues		1,871			2,287			6,576			8,849
Total revenues		340,356			299,262			1,000,750			707,327
Costs and expenses:
Vessel operating costs		178,654			164,239			522,723			397,962
Costs of other operating revenues		901			1,481			2,867			3,005
General and administrative		28,471			21,001			80,129			70,559
Depreciation and amortization		62,435			57,730			178,150			121,164
Gain on asset dispositions, net		(51	)		(863	)		(13,090	)		(4,483	)
Total costs and expenses		270,410			243,588			770,779			588,207
Operating income		69,946			55,674			229,971			119,120
Other income (expense):
Foreign exchange gain (loss)		5,522			(2,149	)		(939	)		(3,620	)
Equity in net earnings of unconsolidated companies		—			4			—			29
Interest income and other, net		1,028			568			3,686			3,488
Interest and other debt costs, net		(17,622	)		(19,288	)		(56,225	)		(28,209	)
Total other expense		(11,072	)		(20,865	)		(53,478	)		(28,312	)
Income before income taxes		58,874			34,809			176,493			90,808
Income tax expense		12,883			9,260			33,840			32,515
Net income		45,991			25,549			142,653			58,293
Less: Net loss attributable to noncontrolling interests		(380	)		(650	)		(1,098	)		(1,228	)
Net income attributable to Tidewater Inc.	$	46,371		$	26,199		$	143,751		$	59,521
Basic income per common share	$	0.88		$	0.50		$	2.74		$	1.16
Diluted income per common share	$	0.87		$	0.49		$	2.70		$	1.13
Weighted average common shares outstanding		52,490			52,230			52,498			51,235
Dilutive effect of warrants, restricted stock units and stock options		593			1,380			656			1,322
Adjusted weighted average common shares		53,083			53,610			53,154			52,557


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

	September 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	280,840		$	274,437
Restricted cash		7,259			1,241
Trade and other receivables, net of allowance for credit losses of $3,086 and $15,914 at September 30, 2024 and December 31, 2023, respectively		293,085			268,352
Marine operating supplies		26,670			31,933
Prepaid expenses and other current assets		18,117			15,172
Total current assets		625,971			591,135
Net properties and equipment		1,220,056			1,315,122
Deferred drydocking and survey costs		160,944			106,698
Indemnification assets		12,216			17,370
Other assets		27,944			32,449
Total assets	$	2,047,131		$	2,062,774

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	64,058		$	44,931
Accrued expenses		117,878			125,590
Current portion of long-term debt		53,105			103,077
Other current liabilities		38,532			55,133
Total current liabilities		273,573			328,731
Long-term debt		597,352			631,361
Other liabilities		62,366			64,985

Commitments and contingencies

Equity:
Common stock of $0.001 par value, 125,000,000 shares authorized, 52,322,461 and 52,259,303 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		52			52
Additional paid-in-capital		1,653,027			1,671,759
Accumulated deficit		(541,191	)		(637,838	)
Accumulated other comprehensive loss		4,592			5,266
Total stockholders’ equity		1,116,480			1,039,239
Noncontrolling interests		(2,640	)		(1,542	)
Total equity		1,113,840			1,037,697
Total liabilities and equity	$	2,047,131		$	2,062,774


TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands)

	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Net income	$	45,991		$	25,549		$	142,653		$	58,293
Other comprehensive income (loss):
Unrealized gain (loss) on note receivable		130			(153	)		283			(469	)
Change in liability of pension plans		(600	)		—			(957	)		(3,694	)
Total comprehensive income	$	45,521		$	25,396		$	141,979		$	54,130


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

	Nine Months			Nine Months
	Ended			Ended
	September 30, 2024			September 30, 2023
Cash flows from operating activities:
Net income	$	142,653		$	58,293
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		117,430			85,989
Amortization of deferred drydocking and survey costs		60,720			35,175
Amortization of debt premiums and discounts		5,129			2,644
Amortization of below market contracts		(3,929	)		(1,906	)
Provision for deferred income taxes		56			69
Gain on asset dispositions, net		(13,090	)		(4,483	)
Gain on pension settlement		—			(1,807	)
Stock-based compensation expense		9,795			7,247
Changes in assets and liabilities, net of effects of business acquisition:
Trade and other receivables		(24,733	)		(92,684	)
Accounts payable		19,127			18,237
Accrued expenses		(4,623	)		14,231
Deferred drydocking and survey costs		(115,584	)		(73,309	)
Other, net		(10,405	)		9,778
Net cash provided by operating activities		182,546			57,474
Cash flows from investing activities:
Proceeds from asset dispositions		14,868			9,604
Proceeds from sale of notes		2,208			—
Acquisitions, net of cash acquired		—			(594,191	)
Additions to properties and equipment		(23,046	)		(23,202	)
Net cash used in investing activities		(5,970	)		(607,789	)
Cash flows from financing activities:
Exercise of warrants		—			111,483
Proceeds from issuance of shares		2			—
Issuance of long-term debt		—			575,000
Principal payments on long-term debt		(89,007	)		—
Purchase of common stock		(46,639	)		—
Acquisition of non-controlling interest in a majority owned subsidiary		—			(1,427	)
Debt issuance costs		(193	)		(14,758	)
Share based awards reacquired to pay taxes		(28,528	)		(5,899	)
Net cash used in financing activities		(164,365	)		664,399
Net change in cash, cash equivalents and restricted cash		12,211			114,084
Cash, cash equivalents and restricted cash at beginning of period		277,965			167,977
Cash, cash equivalents and restricted cash at end of period	$	290,176		$	282,061


Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest, net of amounts capitalized	$	54,081	$	8,452
Income taxes	$	45,641	$	36,585
Supplemental disclosure of noncash investing activities:
Purchase of vessels	$	—	$	12,198
Supplemental disclosure of noncash financing activities:
Debt incurred for the purchase of vessels	$	—	$	12,198

Note: Cash, cash equivalents and restricted cash at September 30, 2024 includes $2.1 million in long-term restricted cash, which is included in other assets in our consolidated balance sheet.


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			income			interest			Total
Balance at June 30, 2024	$	52	$	1,649,523	$	(573,390	)	$	5,062		$	(2,260	)	$	1,078,987
Total comprehensive income (loss)		—		—		46,371			(470	)		(380	)		45,521
Repurchase and retirement of common stock		—		—		(14,172	)		—			—			(14,172	)
Amortization of share-based awards		—		3,504		—			—			—			3,504
Balance at September 30, 2024	$	52	$	1,653,027	$	(541,191	)	$	4,592		$	(2,640	)	$	1,113,840

Balance at June 30, 2023	$	51	$	1,554,793	$	(666,327	)	$	4,566		$	(556	)	$	892,527
Total comprehensive income (loss)		—		—		26,199			(153	)		(650	)		25,396
Exercise of warrants into common stock		2		111,481		—			—			—			111,483
Amortization of share-based awards		—		2,118		—			—			—			2,118
Balance at September 30, 2023	$	53	$	1,668,392	$	(640,128	)	$	4,413		$	(1,206	)	$	1,031,524

	Nine Months Ended
										Accumulated
				Additional						other			Non
	Common			paid-in			Accumulated			comprehensive			controlling
	stock			capital			deficit			income (loss)			interest			Total
Balance at December 31, 2023	$	52		$	1,671,759		$	(637,838	)	$	5,266		$	(1,542	)	$	1,037,697
Total comprehensive income (loss)		—			—			143,751			(674	)		(1,098	)		141,979
Issuance of common stock		1			1			—			—			—			2
Repurchase and retirement of common stock		(1	)		—			(47,104	)		—			—			(47,105	)
Amortization of share-based awards		—			(18,733	)		—			—			—			(18,733	)
Balance at September 30, 2024	$	52		$	1,653,027		$	(541,191	)	$	4,592		$	(2,640	)	$	1,113,840


Balance at December 31, 2022	$	51		$	1,556,990		$	(699,649	)	$	8,576		$	22		$	865,990
Total comprehensive income (loss)		—			—			59,521			(4,163	)		(1,228	)		54,130
Exercise of warrants into common stock		2			111,481			—			—			—			111,483
Acquisition of non-controlling interest in a majority owned subsidiary		—			(1,427	)		—			—			—			(1,427	)
Amortization of share-based awards		—			1,348			—			—			—			1,348
Balance at September 30, 2023	$	53		$	1,668,392		$	(640,128	)	$	4,413		$	(1,206	)	$	1,031,524


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

(In Thousands)	Three Months Ended								Nine Months Ended
	September 30, 2024				September 30, 2023				September 30, 2024				September 30, 2023
Vessel revenues:
Americas	$	64,606	19	%	$	70,717	24	%	$	201,689	20	%	$	168,780	24	%
Asia Pacific		56,283	17	%		38,994	13	%		159,285	16	%		83,603	12	%
Middle East		36,947	11	%		34,685	12	%		111,415	11	%		97,303	14	%
Europe/Mediterranean		85,325	25	%		78,929	26	%		248,972	25	%		149,474	21	%
West Africa		95,324	28	%		73,650	25	%		272,813	28	%		199,318	29	%
Total vessel revenues	$	338,485	100	%	$	296,975	100	%	$	994,174	100	%	$	698,478	100	%
Vessel operating costs:
Crew costs	$	107,708	32	%	$	97,286	32	%	$	316,291	32	%	$	231,936	33	%
Repair and maintenance		25,554	8	%		23,595	8	%		71,645	7	%		57,081	8	%
Insurance		2,965	1	%		2,359	1	%		8,170	1	%		6,532	1	%
Fuel, lube and supplies		17,213	5	%		17,770	6	%		50,093	5	%		45,283	7	%
Other		25,214	7	%		23,229	8	%		76,524	8	%		57,130	8	%
Total vessel operating costs		178,654	53	%		164,239	55	%		522,723	53	%		397,962	57	%
Vessel operating margin (A)	$	159,831	47	%	$	132,736	45	%	$	471,451	47	%	$	300,516	43	%

Note (A): Vessel operating margin equals vessel revenues less vessel operating costs.