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Tidewater Reports Fourth Quarter and Year End Results For Fiscal 2017

NEW ORLEANS, June 12, 2017 /PRNewswire/ -- Tidewater Inc. (NYSE:TDW) announced today a fourth quarter net loss for the period ended March 31, 2017, of $94.9 million, or $2.01 per common share, on revenues of $160.7 million. For fiscal year ended March 31, 2017, the company's net loss was $660.1 million, or $14.02 per common share, on revenues of $601.6 million. For the prior fiscal year's fourth quarter ended March 31, 2016, the company's net loss was $81.8 million, or $1.74 per common share, on revenues of $184.2 million. For fiscal year ended March 31, 2016, the company's net loss was $160.2 million, or $3.41 per common share, on revenues of $979.1 million. During fiscal years ended March 31, 2017 and 2016, the company generated net cash from operating activities of $29.8 million and $253.4 million, respectively, and generated net cash in investing activities of $14.9 million and used net cash in investing activities of $135.0 million, respectively.

Included in the net loss for the quarter ended March 31, 2017 were the following:

  • $64.9 million ($64.9 million after-tax, or $1.38 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the March 2017 quarter.
  • $16.8 million ($16.8 million after-tax, or $0.36 per share) of general and administrative expenses related to debt renegotiations.
  • $39.1 million ($31.3 million after-tax and consideration of noncontrolling interests, or $0.67 per share) of revenue related to the early termination of a long-term vessel charter contract.

Included in the net loss for the fiscal year ended March 31, 2017 were the following:

  • $484.7 million ($484.7 million after-tax, or $10.30 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken throughout fiscal 2017.
  • $29.0 million ($29.0 million after-tax, or $0.62 per share) of general and administrative expenses related to debt renegotiations.
  • $39.1 million ($31.3 million after-tax and consideration of noncontrolling interests, or $0.67 per share) of revenue related to the early termination of a long-term vessel charter contract.

Included in the net loss for the prior fiscal year's quarter ended March 31, 2016 were the following:

  • $55.5 million ($40.7 million after-tax, or $0.87 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken during the March 2016 quarter.
  • $8.7 million ($8.7 million after-tax, or $0.18 per share) of foreign exchange losses which is included in Equity in net earnings (losses) of unconsolidated companies and related to our Angola joint venture, Sonatide.

Included in the net loss for the prior fiscal year ended March 31, 2016 were the following:

  • $117.3 million ($98.6 million after-tax, or $2.10 per share) in non-cash asset impairment charges that resulted from impairment reviews undertaken throughout fiscal 2016.
  • $24.1 million ($24.1 million after-tax, or $0.51 per share) of foreign exchange losses which is included in Equity in net earnings (losses) of unconsolidated companies and related to our Angola joint venture, Sonatide.
  • A $7.6 million ($6.3 million after-tax, or $0.13 per share) restructuring charge related to severance and other termination costs resulting from right-sizing efforts during the September 2015 quarter.

Income tax expense largely reflects tax liabilities in certain jurisdictions that levy taxes on bases other than pre-tax profitability (so called "deemed profit" regimes.)

Reorganization and Chapter 11 Proceedings

As previously disclosed, on May 17, 2017, Tidewater and certain of its subsidiaries the ("Debtors") filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Cases," and such court, the "Bankruptcy Court"), seeking approval of a prepackaged plan of restructuring (the "Prepackaged Plan"). 

On May 19, 2017, the Bankruptcy Court set a combined hearing to consider approval of the Debtors' disclosure statement and confirmation of the Prepackaged Plan for June 28, 2017. If the Prepackaged Plan is approved by the Bankruptcy Court within the time frame we currently expect, the Prepackaged Plan will likely become effective in July 2017, at which point or shortly thereafter the Debtors would emerge from bankruptcy, however, there can be no assurance that the effectiveness of the Prepackaged Plan will occur on such date, or at all.  Additional details about the restructuring are available on the company's website, www.tdw.com, and at http://dm.epiq11.com/tidewater, or via the company's restructuring information line 844-843-0204 (toll free) or 504-597-5543 (international calls).  Additional details about the restructuring will also be available in the company's Form 10-K, which is expected to be filed with the SEC shortly after the issuance of this press release.

Given the pendency of the Bankruptcy Cases, the company will not be hosting an earnings conference call to discuss fiscal 2017 financial results.  However, we expect to resume holding quarterly earnings conference calls following our emergence from bankruptcy.

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.

CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(In thousands, except share and per share data)




Quarter Ended



Year Ended




March 31,



March 31,




2017



2016



2017



2016


Revenues:

















Vessel revenues


$

156,905




180,048




583,816




955,400


Other operating revenues



3,844




4,126




17,795




23,662





160,749




184,174




601,611




979,062


Costs and expenses:

















Vessel operating costs



80,845




98,146




359,171




561,133


Costs of other operating revenues



2,689




3,187




12,729




18,811


General and administrative



41,727




36,974




145,879




153,811


Vessel operating leases



8,443




8,337




33,766




33,662


Depreciation and amortization



37,592




45,251




167,291




182,309


(Gain) loss on asset dispositions, net



(6,064)




(6,692)




(24,099)




(26,037)


Asset impairments



64,857




55,540




484,727




117,311


Restructuring charge












7,586





230,089




240,743




1,179,464




1,048,586


Operating loss



(69,340)




(56,569)




(577,853)




(69,524)


Other income (expenses):

















Foreign exchange gain (loss)



664




(1,645)




(1,638)




(5,403)


Equity in net earnings (losses) of unconsolidated companies



2,841




(6,511)




5,710




(13,581)


Interest income and other, net



1,588




949




5,193




2,703


Interest and other debt costs, net



(21,008)




(14,011)




(75,026)




(53,752)





(15,915)




(21,218)




(65,761)




(70,033)


Loss before income taxes



(85,255)




(77,787)




(643,614)




(139,557)


Income tax (benefit) expense



1,717




3,823




6,397




20,819


Net Loss


$

(86,972)




(81,610)




(650,011)




(160,376)


Less: Net income (loss) attributable to noncontrolling interests



7,883




177




10,107




(193)


Net loss attributable to Tidewater Inc.


$

(94,855)




(81,787)




(660,118)




(160,183)


Basic loss per common share


$

(2.01)




(1.74)




(14.02)




(3.41)


Diluted loss per common share


$

(2.01)




(1.74)




(14.02)




(3.41)


Weighted average common shares outstanding



47,080,783




46,983,430




47,071,066




46,981,102


Dilutive effect of stock options and restricted stock













Adjusted weighted average common shares



47,080,783




46,983,430




47,071,066




46,981,102


 

TIDEWATER INC.

CONSOLIDATED BALANCE SHEETS


March 31, 2017 and 2016









(In thousands, except share and par value data)









ASSETS


2017



2016


Current assets:









Cash and cash equivalents


$

706,404




678,438


Trade and other receivables, less allowance for doubtful accounts of $16,165 in 2017 and $11,450 in 2016



123,262




228,113


Due from affiliate



262,652




338,595


Marine operating supplies



30,560




33,413


Other current assets



18,409




44,755


Total current assets



1,141,287




1,323,314


Investments in, at equity, and advances to unconsolidated companies



45,115




37,502


Net properties and equipment



2,864,762




3,551,291


Other assets



139,535




71,686


Total assets


$

4,190,699




4,983,793











LIABILITIES AND EQUITY









Current liabilities:









Accounts payable


$

31,599




49,130


Accrued expenses



78,121




91,611


Due to affiliate



132,857




187,971


Accrued property and liability losses



3,583




3,321


Current portion of long-term debt



2,034,124




2,045,516


Other current liabilities



48,429




74,825


Total current liabilities



2,328,713




2,452,374


Deferred income taxes



46,013




34,841


Accrued property and liability losses



10,209




9,478


Other liabilities and deferred credits



154,705




181,546











Commitments and Contingencies


















Equity:









Common stock of $0.10 par value, 125,000,000 shares authorized, issued 47,121,304 shares at March 31, 2017 and 47,067,715 shares at March 31, 2016



4,712




4,707


Additional paid-in capital



165,221




166,604


Retained earnings



1,475,329




2,135,075


Accumulated other comprehensive loss



(10,344)




(6,866)


Total stockholders' equity



1,634,918




2,299,520


Noncontrolling interests



16,141




6,034


Total equity



1,651,059




2,305,554


Total liabilities and equity


$

4,190,699




4,983,793


 

TIDEWATER INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)




Quarter Ended



Year Ended




March 31,



March 31,




2017



2016



2017



2016


Net loss


$

(86,972)




(81,610)




(650,011)




(160,376)


Other comprehensive income (loss):

















Unrealized gains (losses) on available for sale securities, net of tax of $61, ($239), $61 and ($239)



(94)




24




113




(443)


Change in loss on derivative contract, net of tax of $823, $77, $823 and $77



1,317




(395)




1,530




143


Change in supplemental executive retirement plan liability, net of tax of ($927), $1,264, ($927) and $1,264



(1,721)




2,347




(1,721)




2,347


Change in pension plan minimum liability, net of tax of $215, $1,093, $215 and $1,093



399




2,029




399




2,029


Change in other benefit plan minimum liability, net of tax of ($2,046), $5,081, ($2,046) and $5,081



(3,799)




9,366




(3,799)




9,436


Total comprehensive loss


$

(90,870)




(68,239)




(653,489)




(146,864)


 

TIDEWATER INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


Years Ended March 31, 2017, 2016 and 2015













(In thousands)


2017



2016



2015


Operating activities:













Net loss


$

(650,011)




(160,376)




(65,349)


Adjustments to reconcile net loss to net cash provided by operating activities:













Depreciation and amortization



167,291




182,309




175,204


Provision (benefit) for deferred income taxes



(2,200)




(6,796)




(72,389)


(Gain) loss on asset dispositions, net



(24,099)




(26,037)




(23,796)


Asset impairments



484,727




117,311




14,525


Goodwill impairment









283,699


Equity in earnings (losses) of unconsolidated companies, net of dividends



(7,613)




28,704




(1,916)


Compensation expense – stock based



3,278




13,219




21,374


Excess tax (benefit) liability on stock options exercised



4,927




1,605




1,784


Changes in assets and liabilities, net:













Trade and other receivables



104,829




71,540




(43,537)


Changes in due to/from affiliate, net



20,829




84,084




108,588


Marine operating supplies



2,285




13,672




6,148


Other current assets



(12,523)




5,976




2,794


Accounts payable



(17,531)




(4,881)




(22,989)


Accrued expenses



(18,687)




(53,143)




(11,435)


Accrued property and liability losses



262




(348)




38


Other current liabilities



(26,658)




(15,578)




118


Other liabilities and deferred credits



(2,657)




231




4,875


Other, net



3,372




1,868




(19,023)


Net cash provided by operating activities



29,821




253,360




358,713


Cash flows from investing activities:













Proceeds from sales of assets



14,797




10,690




8,310


Proceeds from sale/leaseback of assets









123,950


Additions to properties and equipment



(25,499)




(194,485)




(364,194)


Refunds from cancelled vessel construction contracts



25,565




46,119





Other






2,680




516


Net cash provided by (used in) investing activities



14,863




(134,996)




(231,418)


Cash flows from financing activities:













Principal payments on long-term debt



(10,069)




(136,843)




(97,823)


Debt borrowings






656,338




138,488


Cash dividends






(35,388)




(48,834)


Repurchases of common stock









(99,999)


Other



(6,649)




(2,601)




(918)


Net cash (used in) provided by financing activities



(16,718)




481,506




(109,086)


Net change in cash and cash equivalents



27,966




599,870




18,209


Cash and cash equivalents at beginning of year



678,438




78,568




60,359


Cash and cash equivalents at end of year


$

706,404




678,438




78,568


Supplemental disclosure of cash flow information:













Cash paid during the year for:













Interest, net of amounts capitalized


$

70,687




50,729




49,390


Income taxes


$

26,916




51,585




74,310


Supplemental disclosure of noncash investing activities:













Additions to properties and equipment


$

5,047







2,068


 

TIDEWATER INC.

CONSOLIDATED STATEMENTS OF EQUITY


Years Ended March 31, 2017, 2016 and 2015
(In thousands)


Common

stock



Additional

paid-in

capital



Retained

earnings



Accumulated

other

comprehensive

loss



Non

controlling

interest



Total


Balance at March 31, 2014


$

4,973




142,381




2,544,255




(12,225)




5,987




2,685,371


Total comprehensive loss









(65,190)




(8,153)




(159)




(73,502)


Stock option activity



3




(691)













(688)


Cash dividends declared ($1.00 per share)









(49,127)










(49,127)


Retirement of common stock



(284)







(99,715)










(99,999)


Amortization of restricted stock units



17




15,270













15,287


Amortization/cancellation of restricted stock awards



(6)




2,980













2,974


Cash received from noncontrolling interests, net















399




399


Balance at March 31, 2015


$

4,703




159,940




2,330,223




(20,378)




6,227




2,480,715


Total comprehensive loss









(160,183)




13,512




(193)




(146,864)


Stock option activity






(278)













(278)


Cash dividends declared ($.75 per share)









(34,965)










(34,965)


Amortization of restricted stock units



11




6,463













6,474


Amortization/cancellation of restricted stock awards



(7)




479













472


Balance at March 31, 2016


$

4,707




166,604




2,135,075




(6,866)




6,034




2,305,554


Total comprehensive loss









(660,118)




(3,478)




10,107




(653,489)


Stock option activity






1,146













1,146


Amortization/cancellation of restricted stock units



5




(2,529)




372










(2,152)


Balance at March 31, 2017


$

4,712




165,221




1,475,329




(10,344)




16,141




1,651,059


The company's vessel revenues and vessel operating costs and the related percentage of total vessel revenues for the quarters and the years ended March 31, 2017 and 2016 and for the quarter ended December 31, 2016, were as follows:








Quarter



Quarter Ended


Year Ended



Ended



March 31,


March 31,



December 31,

(In thousands)


2017

%

2016

%


2017

%


2016

%


2016

%

Vessel revenues:
























Americas


$

80,533


51%


63,650


35%


239,843


41%



342,995


36%



45,577


36%

Asia/Pacific



5,951


4%


9,791


6%


25,568


4%



89,045


9%



5,586


4%

Middle East (A)



20,727


13%


24,163


13%


89,050


15%



111,356


12%



20,647


17%

Africa/Europe (A)



49,694


32%


82,444


46%


229,355


40%



412,004


43%



53,310


43%

Total vessel revenues


$

156,905


100%


180,048


100%


583,816


100%



955,400


100%



125,120


100%

Vessel operating costs:
























Crew costs


$

41,829


27%


55,549


31%


190,471


33%



303,219


32%



43,384


35%

Repair and maintenance



17,074


11%


14,280


8%


60,257


10%



94,873


10%



13,214


10%

Insurance and loss reserves



(1,767)


(1%)


(1,230)


(1%)


10,008


2%



8,585


1%



2,142


2%

Fuel, lube and supplies



9,279


6%


10,366


6%


38,009


7%



61,992


6%



7,782


6%

Other



14,430


9%


19,181


11%


60,426


10%



92,464


10%



15,836


13%

Total vessel operating costs



80,845


52%


98,146


55%


359,171


62%



561,133


59%



82,358


66%

Vessel operating margin (B)


$

76,060


48%


81,902


45%


224,645


38%



394,267


41%



42,762


34%

Note (A):  At the beginning of fiscal 2017 the company's operations in the Mediterranean Sea (based in Egypt) were transitioned from the company's previously disclosed Middle East/North Africa operations and included with the company's previously disclosed Sub-Saharan Africa/Europe operations as a result of management realignments. As such, the company now discloses these new segments as Middle East and Africa/Europe, respectively. The company's Americas and Asia/Pacific segments are not affected by this change. The new segment alignment is consistent with the company's chief operating decision maker's review of operating results for the purpose of allocating resources and assessing performance. Fiscal 2016 amounts have been recast to conform to the new segment alignment.

Note (B):  The following table reconciles vessel operating margin as presented above to operating profit (loss) for the quarters and the years ended March 31, 2017 and 2016 and for the quarter ended December 31, 2016:









Quarter




Quarter Ended



Year Ended



Ended




March 31,



March 31,



December 31,


(In thousands)


2017



2016



2017



2016



2016


Vessel operating margin


$

76,060




81,902




224,645




394,267




42,762


General and administrative expenses - vessel operations



(19,445)




(27,045)




(88,306)




(116,039)




(20,608)


Vessel operating leases



(8,443)




(8,337)




(33,766)




(33,662)




(8,441)


Depreciation and amortization - vessel operations



(36,173)




(42,427)




(160,405)




(170,428)




(39,882)


Vessel operating profit (loss)


$

11,999




4,093




(57,832)




74,138




(26,169)


The company's other operating profit (loss) for the quarters and the years ended March 31, 2017 and 2016 and for the quarter ended December 31, 2016, consists of the following:









Quarter




Quarter Ended



Year Ended



Ended




March 31,



March 31,



December 31,


(In thousands)


2017



2016



2017



2016



2016


Other operating revenues


$

3,844




4,126




17,795




23,662




4,095


Costs of other marine revenues



(2,689)




(3,187)




(12,729)




(18,811)




(2,714)


General and administrative expenses - other operating activities



(525)




(947)




(2,184)




(3,694)




(410)


Depreciation and amortization - other operating activities



(855)




(1,436)




(4,430)




(5,721)




(855)


Other operating profit (loss)


$

(225)




(1,444)




(1,548)




(4,564)




116


The company's operating loss and other components of loss before income taxes and the related percentage of total revenues for the quarters and the years ended March 31, 2017 and 2016 and for the quarter ended December 31, 2016, were as follows:



Quarter Ended

Year Ended

Quarter Ended



March 31,

March 31,

December 31,

(In thousands)


2017

%

2016

%

2017

%

2016

%

2016

%

Vessel operating profit (loss):






















Americas (C) (D)


$

30,618


19%


11,026


6%


18,873


3%


52,966


5%


(6,242)


(5%)

Asia/Pacific (C)



(3,358)


(2%)


(5,809)


(3%)


(20,614)


(3%)


(1,687)


(<1%)


(5,586)


(4%)

Middle East



(2,806)


(2%)


2,427


1%


(4,696)


(1%)


7,325


1%


(2,782)


(2%)

Africa/Europe



(12,455)


(8%)


(3,551)


(2%)


(51,395)


(9%)


15,534


2%


(11,559)


(9%)




11,999


7%


4,093


2%


(57,832)


(10%)


74,138


8%


(26,169)


(20%)

Other operating profit (loss)



(225)


(<1%)


(1,444)


(1%)


(1,548)


(<1%)


(4,564)


(<1%)


116


<1%




11,774


7%


2,649


1%


(59,380)


(10%)


69,574


8%


(26,053)


(20%)























Corporate general and
  administrative expenses (E)



(21,757)


(14%)


(8,982)


(5%)


(55,389)


(10%)


(34,078)


(3%)


(13,133)


(10%)

Corporate depreciation



(564)


(<1%)


(1,388)


(1%)


(2,456)


(<1%)


(6,160)


(1%)


(565)


(1%)

Corporate expenses



(22,321)


(14%)


(10,370)


(6%)


(57,845)


(10%)


(40,238)


(4%)


(13,698)


(11%)























Gain (loss) on asset dispositions, net



6,064


3%


6,692


4%


24,099


4%


26,037


3%


6,139


5%

Asset impairments



(64,857)


(40%)


(55,540)


(30%)


(484,727)


(81%)


(117,311)


(12%)


(253,422)


(196%)

Restructuring charge









(7,586)


(1%)



Operating loss


$

(69,340)


(43%)


(56,569)


(31%)


(577,853)


(97%)


(69,524)


(7%)


(287,034)


(222%)

Foreign exchange gain (loss)



664


<1%


(1,645)


(1%)


(1,638)


(<1%)


(5,403)


(1%)


2,970


2%

Equity in net earnings (losses) of unconsolidated companies



2,841


2%


(6,511)


(4%)


5,710


1%


(13,581)


(1%)


1,557


1%

Interest income and other, net



1,588


1%


949


1%


5,193


1%


2,703


<1%


1,437


1%

Interest and other debt costs, net



(21,008)


(13%)


(14,011)


(7%)


(75,026)


(12%)


(53,752)


(5%)


(18,587)


(14%)

Loss before income taxes


$

(85,255)


(53%)


(77,787)


(42%)


(643,614)


(107%)


(139,557)


(14%)


(299,657)


(232%)

Note (C):  Americas segment fiscal 2016 figure excludes restructuring charges of $3.6 million. Asia/Pacific segment fiscal 2016 amount excludes restructuring charges of $4.0 million.

Note D):  Americas segment vessel operating profit for fiscal 2017 includes $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract.

Note (E):  Corporate general and administrative expenses in fiscal 2017 include $29 million of costs associated with debt renegotiations.

The company's revenues, days-based vessel utilization percentages and average day rates by vessel class and in total for the quarters and the years ended March 31, 2017 and 2016 and for the quarter ended December 31, 2016, were as follows: 



















Quarter




Quarter Ended



Year Ended



Ended




March 31,



March 31,



December 31,




2017



2016



2017



2016



2016


REVENUE BY VESSEL CLASS (In thousands):





















Americas fleet:





















Deepwater (F)


$

62,831




43,802




171,334




235,522




30,846


Towing-supply



14,738




16,878




56,561




92,768




11,905


Other



2,964




2,970




11,948




14,705




2,826


Total


$

80,533




63,650




239,843




342,995




45,577


Asia/Pacific fleet:





















Deepwater


$

1,138




4,318




7,252




60,853




1,652


Towing-supply



4,813




5,473




18,316




28,192




3,934


Other
















Total


$

5,951




9,791




25,568




89,045




5,586


Middle East fleet:





















Deepwater


$

8,295




5,796




28,274




23,596




6,953


Towing-supply



12,432




18,367




60,776




87,760




13,694


Other
















Total


$

20,727




24,163




89,050




111,356




20,647


Africa/Europe fleet:





















Deepwater


$

23,032




40,260




102,374




205,587




21,748


Towing-supply



22,794




32,823




102,732




153,818




26,087


Other



3,868




9,361




24,249




52,599




5,475


Total


$

49,694




82,444




229,355




412,004




53,310


Worldwide fleet:





















Deepwater


$

95,296




94,176




309,234




525,558




61,199


Towing-supply



54,777




73,541




238,385




362,538




55,620


Other



6,832




12,331




36,197




67,304




8,301


Total


$

156,905




180,048




583,816




955,400




125,120


Note (F):  Included in Americas fleet deepwater revenue for the fourth quarter is $39.1 million of revenue related to the early cancellation of a long-term vessel charter contract.







Quarter




Quarter Ended


Year Ended


Ended




March 31,


March 31,


December 31,




2017



2016


2017



2016


2016


UTILIZATION:



















Americas fleet:



















Deepwater



29.7%




45.6



35.5




61.1



32.1


Towing-supply


41.8




43.6



39.4




53.4



36.4


Other



45.7




59.5



41.2




52.6



37.0


Total



35.2%




46.5



37.4




57.1



34.0


Asia/Pacific fleet:



















Deepwater



9.1%




17.4



8.7




40.5



7.7


Towing-supply


34.4




56.3



43.2




67.6



42.5


Other














Total



24.7%




38.0



28.0