Tidewater Reports Results for the Three and Twelve Months Ended December 31, 2022

Full-Year 2023 Guidance

• Forecasted revenue for 2023 of approximately $900 million, an increase of 39.0% compared to full-year 2022 revenue of $647.7 million
• Forecasted 2023 vessel operating margin of approximately 50.0%, an increase of 11.9 percentage points compared to full-year 2022 vessel operating margin of 38.1%

Full-Year 2022 Highlights

• Revenue of $647.7 million, an increase of 74.6% compared to full-year 2021 revenue of $371.0 million
• Vessel operating margin of 38.1%, an increase of 10.5 percentage points compared to full-year 2021 vessel operating margin of 27.6%
• Operating income of $26.7 million, an increase of 128.1% compared to full-year 2021 operating loss of $95.0 million
• Adjusted EBITDA of $166.7 million, an increase of 380.3% compared to full-year 2021 adjusted EBITDA of $34.7 million

Fourth Quarter 2022 Highlights

• Adjusted EBITDA of $51.2 million
• Free cash flow of $53.3 million
• Year-end net debt balance of $9.6 million
• Second consecutive quarter of positive net income, generating $10.6 million in the fourth quarter of 2022

HOUSTON–(BUSINESS WIRE)–Tidewater Inc. (NYSE:TDW) announced today revenue for the three and twelve months ended December 31, 2022 of $186.7 million and $647.7 million, respectively, compared with $105.2 million and $371.0 million, respectively, for the three and twelve months ended December 31, 2021. Tidewater’s net income (losses) for the three and twelve months ended December 31, 2022, were $10.6 million ($0.20 per common share) and $(21.7) million ($0.49 per common share), respectively, compared with $(37.9) million ($0.92 per common share) and $(129.0) million ($3.14 per common share), respectively, for the three and twelve months ended December 31, 2021. Included in the net income for the three months ended December 31, 2022 were merger and severance expenses of $5.1 million. Included in the net losses for the twelve months ended December 31, 2022 were long-lived asset impairment and other of $0.7 million; gain on bargain purchase of $1.3 million; loss on warrants of $14.2 million and merger and severance expenses of $19.1 million. Excluding these items, we would have reported a net income for the three months ended December 31, 2022 of $15.8 million ($0.30 per common share) and net profit for the twelve months ended December 31, 2022 of $10.9 million ($0.22 per common share). Included in the net losses for the three and twelve months ending December 31, 2021 were impairment charges related to assets held for sale, affiliate credit loss expense, inventory obsolescence, loss on debt extinguishment and severance expenses totaling $26.2 million and $28.4 million, respectively. Excluding these costs, we would have reported a net loss for the three months ending December 31, 2021 of $11.7 million ($0.28 per common share) and a net loss for the twelve months ending December 31, 2021 of $100.6 million ($2.45 per common share).

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “As we mentioned in this year’s second quarter earnings press release, 2022 marked an inflection point in the recovery of the offshore vessel market. I am pleased by our annual financial performance and by our accomplishments during the year. Revenue improved by approximately 75.0% due to the acquisition of Swire Pacific Offshore in April and an increase in offshore activity that has been driven by the need to ensure reliable and secure sources of hydrocarbons for a global economy still emerging from the pandemic. This increase in demand combined with an underinvestment in vessels over the past eight years allowed the industry to push utilization and day rates globally. By all financial measures, 2022 represented a marked improvement in our results. Our primary goal is to build a business that maximizes long-term free cash flow generation within the principles and risk tolerances appropriate for this industry and age. We generated over $50.0 million of free cash flow during 2022 and as such, we ended the year in a strong cash position, resulting in a net debt balance of only $9.6 million. The acquisition in April further bolstered our fleet, providing a compelling platform to take advantage of the continued strength in the offshore vessel market.

“While we are pleased with the momentum that was built throughout 2022, we believe that the macroeconomic trends driving the business will persist and that Tidewater is well-positioned to drive continued financial performance and cash flow generation in 2023 and beyond. We are forecasting revenue for 2023 of approximately $900.0 million, up almost 40.0% from 2022, and for vessel operating margin for 2023 of approximately 50.0%, up about 12 percentage points from 2022.

“Our West Africa business continued to perform well during the fourth quarter, with revenue up about 6.8% sequentially, driven by an increase in average day rates. Likewise, our Americas region experienced a strong fourth quarter, with revenue also up 6.8% sequentially, all of which was driven by an 8.1% increase in day rates, with notable day rate enhancement in the U.S. Gulf of Mexico and Mexico. Further, revenue in the Mediterranean expanded by about 9.3% sequentially, resulting from a 4.5% increase in day rates and additional capacity brought to the area from the U.S. Gulf of Mexico. The North Sea experienced typical seasonality which resulted in total revenue in the fourth quarter declining by 2.6% sequentially. Further, our Asia Pacific segment was adversely impacted by a combination of vessels in transit along with drydocking activity and idle time as vessels came off contract; we expect this frictional unemployment to subside in the first quarter. Activity levels in rest of the world were slightly up during the fourth quarter. Overall day rates remained flat from the prior quarter, and if we exclude the declines in our North Sea and Asia Pacific business, our average day rate increased 4.8% sequentially.

“As we look forward into 2023, we are confident that not only is the recovery here, but that the demand for offshore vessels will continue to strengthen throughout this year. The renewed global focus on securing reliable sources of hydrocarbons has prioritized offshore oil and gas development and we believe that offshore oil and gas capital spending plans will accelerate throughout 2023 and beyond.

“Just as encouraging as the acceleration in demand for offshore vessels services is the continued reduction in the available supply of offshore vessels. The number of large OSVs that are currently laid up is quite limited and the likelihood any of these vessels returning to the market is remote. We see a similar situation developing in the mid-sized OSV fleet, where additional available supply is also very limited. We see essentially no new vessels on order, indicating that the supply of vessels will continue to decline modestly as vessels naturally attrition out of the global fleet. Accordingly, it is our view that the industry is positioned to benefit from an increase in demand over the medium-to-long term and a slowly shrinking supply of vessels. We believe this imbalance in supply and demand will continue to provide the opportunity for day rate and utilization increases, and we remain committed to maximizing the earnings and cash flow generation from our fleet.

“Finally, we are excited to announce that we will be publishing our 2022 Sustainability Report later this week. Tidewater remains committed to excellence in safe vessel operations as well as leading the industry through the energy transition. Look for the report later this week on our website.”

In addition to the number of outstanding shares, as of December 31, 2022, the company also has the following in-the-money warrants.

Common shares outstanding			50,554,179
New Creditor Warrants (strike price $0.001 per common share)			80,954
GulfMark Creditor Warrants (strike price $0.01 per common share)			165,479
Total			50,800,612

Tidewater will hold a conference call to discuss results for the three and twelve months ending December 31, 2022 on February 28, 2023, at 8:00 a.m. Central Time. Investors and interested parties may listen to the earnings conference call via telephone by calling +1.888.770.7135 if calling from the U.S. or Canada (+1.929.203.0820 if calling from outside the U.S.) and provide Conference ID: 2444624 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 February 28, 2023 and will continue until 11:59 p.m. Central Time on March 28, 2023. 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 Forms 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 have been audited. This press release presents extracts from the Consolidated Balance Sheets at December 31, 2022 and December 31, 2021; the Consolidated Statements of Operations and Consolidated Statements of Equity for the three and twelve months ended December 31, 2022 and 2021; and the Consolidated Statements of Cash Flows for the twelve months ended December 31, 2022 and 2021. Extracts are drawn from the December 31, 2022 and 2021 audited annual financial statements of Tidewater Inc. All per-share amounts are stated on a diluted basis.

In conjunction with the acquisition of Swire Pacific Offshore (SPO), we realigned our reportable segments to better reflect the post-acquisition operating environment. The previous Middle East/Asia Pacific segment has been split into the Middle East segment and the Asia Pacific segment. Our previous operations in Southeast Asia and Australia, along with the legacy SPO operations in the Asia Pacific region, now form the new Asia Pacific segment. Our segment disclosures reflect the current segment alignment for all periods presented.

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, except per share data)
		Three Months Ended								Twelve Months Ended
		December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021
Revenues:
Vessel revenues		$	185,106			$	100,428			$	641,404			$	361,569
Other operating revenues			1,640				4,747				6,280				9,464
Total revenues			186,746				105,175				647,684				371,033
Costs and expenses:
Vessel operating costs			115,496				71,187				397,301				261,814
Costs of other operating revenues			694				228				2,130				2,231
General and administrative			28,633				17,641				101,921				68,516
Depreciation and amortization			29,881				28,288				119,160				114,544
Long-lived asset impairment and other			—				13,476				714				15,643
Affiliate credit loss impairment			—				1,400				—				400
(Gain) loss on asset dispositions, net			(1,076	)			(53	)			(250	)			2,901
Total costs and expenses			173,628				132,167				620,976				466,049
Operating income (loss)			13,118				(26,992	)			26,708				(95,016	)
Other income (expense):
Foreign exchange gain (loss)			2,105				582				(2,827	)			(369	)
Equity in net earnings (losses) of unconsolidated companies			14				(1,625	)			(221	)			(3,322	)
Interest income and other, net			981				1,426				5,397				1,605
Loss on warrants			—				—				(14,175	)			—
Loss on early extinguishment of debt			—				(11,100	)			—				(11,100	)
Interest and other debt costs, net			(4,339	)			(3,417	)			(17,189	)			(15,583	)
Total other expense			(1,239	)			(14,134	)			(29,015	)			(28,769	)
Income (loss) before income taxes			11,879				(41,126	)			(2,307	)			(123,785	)
Income tax expense (benefit)			1,697				(3,047	)			19,886				5,875
Net income (loss)			10,182				(38,079	)			(22,193	)			(129,660	)
Less: Net loss attributable to noncontrolling interests			(438	)			(145	)			(444	)			(691	)
Net income (loss) attributable to Tidewater Inc.		$	10,620			$	(37,934	)		$	(21,749	)		$	(128,969	)
Basic income (loss) per common share		$	0.22			$	(0.92	)		$	(0.49	)		$	(3.14	)
Diluted income (loss) per common share		$	0.20			$	(0.92	)		$	(0.49	)		$	(3.14	)
Weighted average common shares outstanding			48,766				41,280				44,132				41,009
Dilutive effect of warrants, restricted stock units and stock options			3,069				—				—				—
Adjusted weighted average common shares			51,835				41,280				44,132				41,009

TIDEWATER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands, except share and par value data)
		December 31, 2022				December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	164,192			$	149,037
Restricted cash			1,241				1,240
Trade and other receivable, less allowance for credit losses of $2,362 and $1,948 at December 31, 2022 and December 31, 2021, respectively			156,465				86,503
Due from affiliates, less allowance for credit losses of $11,698 and $72,456 at December 31, 2022 and December 31, 2021, respectively			—				70,134
Marine operating supplies			30,830				12,606
Assets held for sale			4,195				14,421
Prepaid expenses and other current assets			20,985				8,731
Total current assets			377,908				342,672
Net properties and equipment			796,655				688,040
Deferred drydocking and survey costs			61,080				40,734
Indemnification assets			28,369				—
Other assets			33,644				24,334
Total assets		$	1,297,656			$	1,095,780
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	38,946			$	20,788
Accrued costs and expenses			105,518				51,734
Due to affiliates			—				61,555
Other current liabilities			50,323				23,865
Total current liabilities			194,787				157,942
Long-term debt			169,036				167,885
Other liabilities and deferred credits			67,843				68,184
Commitments and contingencies
Equity:
Common stock			51				41
Additional paid-in-capital			1,556,990				1,376,494
Accumulated deficit			(699,649	)			(677,900	)
Accumulated other comprehensive loss			8,576				2,668
Total stockholders’ equity			865,968				701,303
Noncontrolling interests			22				466
Total equity			865,990				701,769
Total liabilities and equity		$	1,297,656			$	1,095,780

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In Thousands)
		Three Months Ended								Twelve Months Ended
		December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021
Net income (loss)		$	10,182			$	(38,079	)		$	(22,193	)		$	(129,660	)
Other comprehensive income (loss):
Unrealized (gain) loss on note receivable			779				—				(496	)			—
Change in supplemental executive retirement plan pension liability, net of tax			4,561				(763	)			4,561				(763	)
Change in liability of pension plans			1,762				3,957				1,843				4,235
Total comprehensive income (loss)		$	17,284			$	(34,885	)		$	(16,285	)		$	(126,188	)

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
		Twelve Months				Twelve Months
		Ended				Ended
		December 31, 2022				December 31, 2021
Operating activities:
Net loss		$	(22,193	)		$	(129,660	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			83,522				73,223
Amortization of deferred drydocking and survey costs			35,638				41,321
Amortization of debt premiums and discounts			1,679				3,171
Provision for deferred income taxes			36				(1,287	)
(Gain) loss on asset dispositions, net			(250	)			2,901
Gain on bargain purchase			(1,300	)			—
Affiliate credit loss impairment			—				400
Long-lived asset impairment and other			714				15,643
Loss on warrants			14,175				—
Loss on debt extinguishment			—				11,100
Stock-based compensation expense			7,372				5,638
Changes in assets and liabilities, net of effects of business acquisition:
Trade and other receivables			(4,129	)			26,120
Changes in due to/from affiliate, net			(20	)			(123	)
Accounts payable			16,481				3,807
Accrued expenses			(1,340	)			(688	)
Deferred drydocking and survey costs			(56,000	)			(27,282	)
Other, net			(34,159	)			(9,278	)
Net cash provided by (used in) operating activities			40,226				15,006
Cash flows from investing activities:
Proceeds from sales of assets			13,568				34,010
Acquisitions, net of cash acquired			(20,740	)			—
Additions to properties and equipment			(16,637	)			(8,951	)
Net cash provided by (used in) investing activities			(23,809	)			25,059
Cash flows from financing activities:
Proceeds from stock offering			187,832				—
Repurchase of SPO Acquisition Warrants			(187,832	)			—
Issuance of long-term debt			—				172,375
Principal payments on long-term debt			—				(198,918	)
Debt extinguishment premium			—				(7,781	)
Debt issuance and modification costs			(393	)			(5,737	)
Tax on share-based awards			(2,323	)			(953	)
Net cash used in financing activities			(2,716	)			(41,014	)
Net change in cash, cash equivalents and restricted cash			13,701				(949	)
Cash, cash equivalents and restricted cash at beginning of period			154,276				155,225
Cash, cash equivalents and restricted cash at end of period		$	167,977			$	154,276

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
		Twelve Months				Twelve Months
		Ended				Ended
		December 31, 2022				December 31, 2021
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest, net of amounts capitalized		$	15,554			$	13,747
Income taxes		$	22,275			$	19,013
Supplemental disclosure of noncash investing activities:
Acquisition of SPO		$	162,648			$	—
Supplemental disclosure of noncash financing activities:
Warrants issued for SPO acquisition		$	162,648			$	—
Repurchase of SPO Acquisition Warrants		$	1,365			$	—
Note: Cash, cash equivalents and restricted cash at December 31, 2022 includes $2.5 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 (loss)				interest				Total
Balance at September 30, 2022		$	46			$	1,555,388			$	(710,269	)		$	1,474			$	460			$	847,099
Total comprehensive income (loss)			—				—				10,620				7,102				(438	)			17,284
Issuance of common stock			5				120,629				—				—				—				120,634
Repurchase of SPO Acquisition Warrants			—				(121,007	)			—				—				—				(121,007	)
Amortization of share-based awards			—				1,980				—				—				—				1,980
Balance at December 31, 2022		$	51			$	1,556,990			$	(699,649	)		$	8,576			$	22			$	865,990
Balance at September 30, 2021		$	41			$	1,375,215			$	(639,966	)		$	(1,289	)		$	611			$	734,612
Total comprehensive loss			—				—				(37,934	)			3,957				(145	)			(34,122	)
Amortization of share-based awards			—				1,279				—				—				—				1,279
Balance at December 31, 2021		$	41			$	1,376,494			$	(677,900	)		$	2,668			$	466			$	701,769

Contacts

Tidewater Inc.

West Gotcher

Vice President,

Finance and Investor Relations

+1.713.470.5285

Read full story here