TIDEWATER INC - FORM 8-K - EX-99.1

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8-K - 8-K - TIDEWATER INC	d25722d8k.htm

Exhibit 99.1

LOGO

Press Release

TIDEWATER INC. • Pan-American Life Center • 601 Poydras Street, Suite 1500 • New Orleans, LA 70130 • Telephone (504) 568-1010 • Fax (504) 566-4582

Tidewater Reports First Quarter Results For Fiscal 2016

NEW ORLEANS, LA. August 10, 2015 — Tidewater Inc. (NYSE:TDW) announced today a first quarter net loss for the period ended June 30, 2015, of $15.1 million, or $0.32 per common share, on revenues of $304.8 million. For the same quarter last year, net earnings were $43.7 million, or $0.88 per common share, on revenues of $385.7 million. The immediately preceding quarter ended March 31, 2015, had a net loss of $9.1 million, or $0.19 per common share, on revenues of $324.8 million. Included in the net loss for the quarter ended June 30, 2015 were the following:

●

$15.0 million ($14.0 million after-tax, or $0.30 per share) in non-cash asset impairment charges that is included in “Gain/loss on asset dispositions, net,” and resulted from impairment reviews undertaken during the quarter, including write-offs of unreimbursed and/or potentially unrecoverable costs related to cancelled vessel construction contracts and a vessel construction project that is the subject of an on-going arbitration proceeding.

●

$10.2 million ($9.5 million after-tax, or $0.20 per share) of total foreign exchange losses, $6.1 million of which is included in Equity in net earnings/(losses) of unconsolidated companies and related to our Angola joint venture, Sonatide.

Income tax expense of $10.3 million for the quarter ended June 30, 2015 (and the resulting effective income tax rate) largely reflects tax liabilities in certain jurisdictions that levy taxes on bases other than pre-tax profitability (so called “deemed profit” regimes).

Included in the net loss of the preceding quarter ended March 31, 2015 were charges resulting from cost reduction initiatives related to a more challenging business environment since the precipitous decline in crude oil prices that began in the second half of fiscal 2015, as well as period end asset impairment reviews and assessment of realization of deferred tax assets:

●

A $4.1 million ($3.3 million after-tax, or $0.07 per share) restructuring charge related to severance and other termination costs resulting from right-sizing efforts during the March 2015 quarter.

●

$6.4 million ($5.1 million after-tax, or $0.11 per share) of total charges related to stacked vessel and other asset impairment reviews undertaken during the March 2015 quarter, which is included in “Gain/(loss) on asset dispositions, net”.

●

A $23.8 million ($23.8 million after-tax, or $0.51 per share) non-cash adjustment related to the valuation of deferred tax assets.

As previously announced, Tidewater will hold a conference call to discuss June quarterly earnings on Tuesday, August 11, 2015, 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 11, 2015, and will continue until 11:59 p.m. Central time on August 13, 2015. 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 40293268.

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 11, 2015.

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.

CONTACT: Tidewater Inc., New Orleans

Joe Bennett, Executive Vice President and Chief Investor Relations Officer

504-566-4506

SOURCE: Tidewater Inc.

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,

		2015		2014

Revenues:
Vessel revenues	$		298,313		381,510
Other operating revenues			6,461		4,167

			304,774		385,677

Costs and expenses:
Vessel operating costs			179,281		217,244
Costs of other operating revenues			5,744		4,661
General and administrative			43,953		51,060
Vessel operating leases			8,443		6,540
Depreciation and amortization			45,657		43,111
(Gain)/loss on asset dispositions, net			7,607		(2,943)

			290,685		319,673

Operating income			14,089		66,004
Other income (expenses):
Foreign exchange loss			(4,133)		(1,289)
Equity in net earnings/(losses) of unconsolidated companies			(2,441)		5,283
Interest income and other, net			790		622
Interest and other debt costs, net			(13,182)		(13,129)

			(18,966)		(8,513)

Earnings (loss) before income taxes			(4,877)		57,491
Income tax expense			10,287		13,792

Net earnings (loss)			(15,164)		43,699
Less: Net earnings (losses) attributable to noncontrolling interests			(112)		26

Net earnings (loss) attributable to Tidewater Inc.	$		(15,052)		43,673


Basic earnings (loss) attributable to Tidewater Inc. per common share	$		(0.32)		0.88


Diluted earnings (loss) attributable to Tidewater Inc. per common share	$		(0.32)		0.88


Weighted average common shares outstanding			46,981,747		49,580,038
Dilutive effect of stock options and restricted stock			---		282,986

Adjusted weighted average common shares			46,981,747		49,863,024

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and par value data)



ASSETS	June 30, 2015		March 31, 2015

Current assets:
Cash and cash equivalents	$	102,984		78,568
Trade and other receivables, net		262,762		303,096
Due from affiliate		385,452		420,365
Marine operating supplies		43,255		49,005
Other current assets		40,359		17,781

Total current assets		834,812		868,815

Investments in, at equity, and advances to unconsolidated companies		62,701		65,844
Properties and equipment:
Vessels and related equipment		4,714,193		4,717,132
Other properties and equipment		119,684		119,879

		4,833,877		4,837,011
Less accumulated depreciation and amortization		1,114,671		1,090,704

Net properties and equipment		3,719,206		3,746,307

Other assets		96,765		75,196

Total assets	$	4,713,484		4,756,162


LIABILITIES AND EQUITY

Current liabilities:
Accounts payable	$	58,659		54,011
Accrued expenses		118,162		146,255
Due to affiliate		192,046		185,657
Accrued property and liability losses		3,460		3,669
Current portion of long-term debt		45,420		10,181
Other current liabilities		74,483		82,461

Total current liabilities		492,230		482,234

Long-term debt		1,498,109		1,524,295
Deferred income taxes		25,618		23,276
Accrued property and liability losses		9,727		10,534
Other liabilities and deferred credits		230,632		235,108

Commitments and Contingencies
Equity:
Common stock of $0.10 par value, 125,000,000 shares authorized, issued 46,965,458 shares at June 30, 2015 and 47,029,359 shares at March 31, 2015		4,696		4,703
Additional paid-in capital		162,707		159,940
Retained earnings		2,303,831		2,330,223
Accumulated other comprehensive loss		(20,181)		(20,378)

Total stockholders’ equity		2,451,053		2,474,488
Noncontrolling Interests		6,115		6,227

Total equity		2,457,168		2,480,715
Total liabilities and equity	$	4,713,484		4,756,162

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)



		Three Months Ended June 30,

		2015	2014

Net earnings (loss)	$	(15,164)		43,699
Other comprehensive income/(loss):
Unrealized gains (losses) on available for sale securities, net of tax of $0 and $55		(52)		101
Amortization of loss on derivative contract, net of tax of $0 and $63		179		116
Change in other benefit plan minimum liability, net of tax of $0 and $70		70		131

Total comprehensive income (loss)	$	(14,967)		44,047

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



		Three Months Ended
		June 30,

		2015		2014

Operating activities:
Net earnings (loss)	$		(15,164)		43,699
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization			45,657		43,111
Provision for deferred income taxes			64		2,432
(Gain) loss on asset dispositions, net			7,607		(2,943)
Equity in earnings (losses) of unconsolidated companies, less dividends			3,143		(3,998)
Compensation expense - stock-based			3,219		5,341
Changes in assets and liabilities, net:
Trade and other receivables			40,280		(39,044)
Changes in due to/from affiliate, net			41,302		31,552
Marine operating supplies			5,250		(5,822)
Other current assets			(10,578)		(12,534)
Accounts payable			4,227		(5,360)
Accrued expenses			(28,772)		(25,590)
Accrued property and liability losses			(209)		(367)
Other current liabilities			(6,811)		(616)
Other liabilities and deferred credits			708		817
Other, net			2,774		267

Net cash provided by operating activities			92,697		30,945

Cash flows from investing activities:
Proceeds from sales of assets			5,866		3,754
Proceeds from sale/leaseback of assets			---		13,400
Additions to properties and equipment			(92,598)		(39,874)
Refunds from cancelled vessel construction contracts			24,190		---
Other			(690)		3

Net cash used in investing activities			(63,232)		(22,717)

Cash flows from financing activities:
Debt issuance costs			(936)		---
Principal payments on long-term debt			(23,662)		(3,959)
Debt borrowings			31,338		---
Proceeds from exercise of stock options			---		994
Cash dividends			(11,789)		(12,520)
Other			---		349

Net cash used in financing activities			(5,049)		(15,136)

Net change in cash and cash equivalents			24,416		(6,908)
Cash and cash equivalents at beginning of period			78,568		60,359

Cash and cash equivalents at end of period	$		102,984		53,451

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$		22,430		24,385
Income taxes	$		17,441		11,170
Supplemental disclosure of non-cash investing activities:
Additions to properties and equipment	$		421		5,236


TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited) (In thousands)

	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non controlling interest		Total

Balance at March 31, 2015	$	4,703		159,940		2,330,223		(20,378)		6,227		2,480,715
Total comprehensive loss		---		---		(15,052)		197		(112)		(14,967)
Exercise of stock options		---		186		---		---		---		186
Cash dividends declared ($.25 per share)		---		---		(11,340)		---		---		(11,340)
Amortization of restricted stock units		---		2,456		---		---		---		2,456
Amortization/cancellation of restricted stock		(7)		125		---		---		---		118

Balance at June 30, 2015	$	4,696		162,707		2,303,831		(20,181)		6,115		2,457,168



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

The company’s vessel revenues and vessel operating costs and the related percentage of total vessel revenues for the quarters ended June 30, 2015 and 2014 and for the quarter ended March 31, 2015, were as follows:


		Quarter Ended June 30,								Quarter Ended March 31,

(In thousands)		2015		%		2014		%		2015		%

Vessel revenues:
Americas	$		114,172		38%		119,983		31%		117,149		37%
Asia/Pacific			27,937		9%		40,249		11%		29,536		9%
Middle East/North Africa			47,266		16%		55,539		15%		45,486		14%
Sub-Saharan Africa/ Europe			108,938		37%		165,739		43%		125,599		40%

Total vessel revenues	$		298,313		100%		381,510		100%		317,770		100%

Vessel operating costs:
Crew costs	$		92,288		31%		111,285		29%		98,045		31%
Repair and maintenance			37,254		12%		47,732		13%		40,307		13%
Insurance and loss reserves			5,375		2%		5,394		1%		7,213		2%
Fuel, lube and supplies			18,110		6%		22,369		6%		18,372		6%
Other			26,254		9%		30,464		8%		30,003		9%

Total vessel operating costs			179,281		60%		217,244		57%		193,940		61%

Vessel operating margin (A)	$		119,032		40%		164,266		43%		123,830		39%


Note (A): The following table reconciles vessel operating margin as presented above to operating profit for the quarters ended June 30, 2015 and 2014 and for the quarter ended March 31, 2015:

		Quarter Ended June 30,								Quarter Ended March 31,

(In thousands)		2015				2014				2015

Vessel operating margin	$		119,032				164,266				123,830
General and administrative – vessel operations			(32,800)				(37,669)				(34,190)
Vessel operating leases			(8,443)				(6,540)				(8,075)
Depreciation and amortization – vessel operations			(42,749)				(41,425)				(42,179)

Vessel operating profit	$		35,040				78,632				39,386


The company’s other operating loss for the quarters ended June 30, 2015 and 2014 and for the quarter ended March 31, 2015, consists of the following:

		Quarter Ended June 30,								Quarter Ended March 31,

(In thousands)		2015				2014				2015

Other operating revenues	$		6,461				4,167				6,992
Costs of other operating revenues			(5,744)				(4,661)				(6,889)
General and administrative – other operating activities			(1,139)				(1,059)				(1,226)
Depreciation – other operating activities			(1,414)				(870)				(1,351)

Other operating loss	$		(1,836)				(2,423)				(2,474)

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, 2015 and 2014 and for the quarter ended March 31, 2015, were as follows:


		Quarter Ended June 30,								Quarter Ended March 31,

(In thousands)		2015		%		2014		%		2015		%

Vessel operating profit/(loss):
Americas	$		23,839		8%		30,208		8%		22,218		7%
Asia/Pacific			1,750		1%		(971)		(1%)		2,477		1%
Middle East/North Africa			8,160		3%		11,793		3%		5,690		1%
Sub-Saharan Africa/ Europe			1,291		<1%		37,602		10%		9,001		3%

			35,040		12%		78,632		20%		39,386		12%
Other operating loss			(1,836)		(1%)		(2,423)		(1%)		(2,474)		(1%)

			33,204		11%		76,209		19%		36,912		11%

Corporate general and administrative expenses			(10,014)		(3%)		(12,332)		(3%)		(9,939)		(3%)
Corporate depreciation			(1,494)		(1%)		(816)		(<1%)		(1,524)		(<1%)

Corporate expenses			(11,508)		(4%)		(13,148)		(3%)		(11,463)		(3%)

Gain/(loss) on asset dispositions, net			(7,607)		(2%)		2,943		1%		4,275		1%
Restructuring charge			---		---		---		---		(4,052)		(1%)

Operating income	$		14,089		5%		66,004		17%		25,672		8%

Foreign exchange (loss)/gain			(4,133)		(2%)		(1,289)		(<1%)		225		<1%
Equity in net earnings/(losses) of unconsolidated companies			(2,441)		(1%)		5,283		1%		1,075		<1%
Interest income and other, net			790		<1%		622		<1%		372		<1%
Interest and other debt costs, net			(13,182)		(4%)		(13,129)		(3%)		(12,102)		(4)%

Earnings (loss) before income taxes	$		(4,877)		(2%)		57,491		15%		15,242		5%

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, 2015 and 2014 and for the quarter ended March 31, 2015, were as follows:


		Quarter Ended June 30,			Quarter Ended March 31,

		2015		2014	2015

REVENUE BY VESSEL CLASS (In thousands):
Americas fleet:
Deepwater	$	80,152		82,282		85,249
Towing-supply		29,515		29,517		27,518
Other		4,505		8,184		4,382
Total	$	114,172		119,983		117,149
Asia/Pacific fleet:
Deepwater	$	19,833		24,242		22,046
Towing-supply		8,104		15,037		7,419
Other		---		970		71
Total	$	27,937		40,249		29,536
Middle East/North Africa fleet:
Deepwater	$	20,386		19,467		20,943
Towing-supply		26,189		35,279		23,797
Other		691		793		746
Total	$	47,266		55,539		45,486
Sub-Saharan Africa/Europe fleet:
Deepwater	$	53,966		91,691		64,302
Towing-supply		41,198		55,436		45,739
Other		13,774		18,612		15,558
Total	$	108,938		165,739		125,599
Worldwide fleet:
Deepwater	$	174,337		217,682		192,540
Towing-supply		105,006		135,269		104,473
Other		18,970		28,559		20,757
Total	$	298,313		381,510		317,770

UTILIZATION:
Americas fleet:
Deepwater		81.3	%	88.7		88.3
Towing-supply		64.7		62.7		65.7
Other		45.3		69.3		50.2
Total		69.6	%	74.8		73.2
Asia/Pacific fleet:
Deepwater		45.0	%	70.6		66.6
Towing-supply		73.4		90.7		63.2
Other		---		100.0		7.5
Total		58.2	%	83.5		62.5
Middle East/North Africa fleet:
Deepwater		70.1	%	72.1		81.8
Towing-supply		76.5		93.6		68.7
Other		100.0		91.9		100.0
Total		75.6	%	87.8		73.7
Sub-Saharan Africa/Europe fleet:
Deepwater		68.4	%	86.3		76.5
Towing-supply		66.4		75.3		71.5
Other		69.7		78.1		67.2
Total		68.2	%	79.5		71.3
Worldwide fleet:
Deepwater		70.7	%	83.8		80.7
Towing-supply		69.5		78.4		68.3
Other		64.3		76.9		63.4
Total		68.8	%	79.8		71.4


		Quarter Ended June 30,		Quarter Ended March 31,

		2015	2014	2015

AVERAGE VESSEL DAY RATES:
Americas fleet:
Deepwater	$	28,568	31,175		28,972
Towing-supply		17,289	16,559		15,482
Other		8,796	8,856		6,777
Total	$	22,721	22,443		21,830
Asia/Pacific fleet:
Deepwater	$	39,268	41,948		33,443
Towing-supply		8,391	13,017		9,362
Other		---	10,658		10,609
Total	$	18,994	22,066		20,252
Middle East/North Africa fleet:
Deepwater	$	22,830	25,081		22,558
Towing-supply		12,143	13,366		12,526
Other		3,799	4,742		4,145
Total	$	14,626	15,502		15,121
Sub-Saharan Africa/Europe fleet:
Deepwater	$	24,278	30,414		27,239
Towing-supply		16,052	16,867		16,600
Other		5,201	5,562		5,605
Total	$	14,647	17,179		15,916
Worldwide fleet:
Deepwater	$	27,128	31,061		27,942
Towing-supply		14,197	15,261		14,460
Other		5,676	6,306		5,752
Total	$	17,379	18,701		17,928

The company’s average number of vessels by class and geographic distribution for the quarters ended June 30, 2015 and 2014 and for the quarter ended March 31, 2015:


	Quarter Ended June 30,				Quarter Ended March 31,

	2015		2014		2015

Americas fleet:
Deepwater		38		33		37
Towing-supply		29		31		30
Other		12		15		14

Total		79		79		81
Less stacked vessels		13		8		10

Active vessels		66		71		71

Asia/Pacific fleet:
Deepwater		12		9		11
Towing-supply		14		14		14
Other		1		1		1

Total		27		24		26
Less stacked vessels		4		--		--

Active vessels		23		24		26

Middle East/North Africa fleet:
Deepwater		14		12		13
Towing-supply		31		31		31
Other		2		2		2

Total		47		45		46
Less stacked vessels		2		1		1

Active vessels		45		44		45

Sub-Saharan Africa/Europe fleet:
Deepwater		36		38		34
Towing-supply		42		48		43
Other		42		47		46

Total		120		133		123
Less stacked vessels		9		4		8

Active vessels		111		129		115

Active owned or chartered vessels		245		268		257
Stacked vessels		28		13		19


Total owned or chartered vessels		273		281		276
Joint-venture and other		10		11		10

Total		283		292		286

Note (B): Included in total owned or chartered vessels at June 30, 2015 and 2014 and at March 31, 2015, were 38, 11 and 21 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, as of June 30, 2015:

(In thousands)

Number

of
Vessels

Shipyard

Location

Delivery

Dates

Total

Cost

Amount
Invested
6/30/15

Remaining
Balance

6/30/15

Towing-supply:

7,145 BHP AHTS

International

9/2015-3/2016

51,016

39,533

11,483

Deepwater

261-foot PSV

International

1/2016 - 4/2017

275-foot PSV

International

7/2015 - 10/2015

292-foot PSV

International

5/2016

300-foot PSV

United States

1/2016, 3/2016

310-foot PSV

United States

10/2015, 1/2016

Total Deepwater PSVs

439,109

227,291

211,818

Total vessel commitments

490,125

266,824

223,301

The table below summarizes by vessel class and vessel type the number of vessels 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		09/15	12/15		03/16		06/16		09/16		Thereafter

Deepwater PSVs		1		2		4		3		1		2
Towing-supply vessels		1		1		1		--		--		--

Totals		2		3		5		3		1		2


(In thousands)
Expected quarterly cash outlay	$	56,573		62,572		35,364		49,292		5,105		14,395 (C)

Note (C): The $14,395 of ‘Thereafter’ vessel construction obligations are expected to be paid as follows: $9,704 during fiscal 2017 and $4,691 during fiscal 2018.

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