Tidewater Reports Results for the Three and Six Months Ended June 30, 2024

August 7, 2024

Second Quarter 2024 Highlights

Revenue of $339.2 million, an increase of $18.1 million, or 5.6%, from the first quarter of 2024
Average day rate increased to $21,130 per day, $1,567 higher than the first quarter of 2024
Composite leading edge term contract average day rate of $28,754
- > 900m² PSV – leading edge term contract average day rate improved 8% to $35,172
- 700 – 900m² PSV – leading edge term contract average day rate improved 9% to $28,026
- > 16K BHP AHTS – leading edge term contract average day rate improved 13% to $48,615
- 8 – 12K BHP AHTS – leading edge term contract average day rate improved 8% to $25,175
Net income of $50.4 million, an increase of $3.3 million from the first quarter of 2024
Adjusted EBITDA of $139.7 million, an increase of $0.8 million from the first quarter of 2024
Net cash provided by operating activities of $78.6 million, an increase of $23.9 million from the first quarter of 2024
Free cash flow of $87.6 million, an increase of $18.2 million from the first quarter of 2024

Share Repurchases and 2024 Guidance

Repurchased 176,555 shares from May 2, 2024 through the end of the second quarter through the repurchase of $16.9 million of shares at an average price of $95.66 per share
Board approves additional share repurchase authorization of $13.9 million, for a total current outstanding authorized capacity of $47.7 million, the maximum permissible amount under existing debt agreements
Updated 2024 revenue guidance to $1.39 to $1.41 billion and 2024 gross margin guidance of 51%

HOUSTON–(BUSINESS WIRE)–Tidewater Inc. (NYSE:TDW) announced today revenue for the three and six months ended June 30, 2024 of $339.2 million and $660.4 million, respectively, compared with $215.0 million and $408.1 million, respectively, for the three and six months ended June 30, 2023. Tidewater’s net income for the three and six months ended June 30, 2024, was $50.4 million ($0.94 per common share) and $97.4 million ($1.83 per common share), respectively, compared with net income of $22.6 million ($0.43 per common share) and $33.3 million ($0.64 per common share), respectively, for the three and six months ended June 30, 2023.

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “Second quarter revenue came in nicely above our expectations driven by continued strength in global day rates. Our consolidated global average day rate expanded materially during the quarter, with the average day rate increasing nearly $1,600 per day sequentially, the second largest sequential increase in day rate since the offshore vessel recovery began in early 2022. The improvement in day rates was broad-based with each vessel class and each segment posting day rate improvement sequentially. We saw particular strength in our large and mid-sized AHTS vessels, with significant day rate increases on both a term contract and spot basis, which is indicative of the strength of drilling activity during the seasonably favorable second quarter and of the preparation for additional drilling projects as we progress towards the end of the year.

“Chartering activity for our PSVs and AHTS vessels continued to improve, with notable term contract day rate progression in our Europe and Mediterranean and Asia Pacific segments as preparation for activity towards the end of the year and 2025 continues to firm up amid tight vessel supply. The composite leading edge term contract average day rate this quarter declined approximately 6% sequentially as we had several of our smallest vessels come off of long-term contracts early in the Middle East. We were able to immediately re-contract these vessels and the new day rates were on average 29% higher than the previous contracts, but nonetheless the low day rate nature of this market and vessel size brought down the composite quarterly average.

“Revenue in the second quarter came in at $339.2 million with a gross margin of 47.7%. On a global basis, revenue, gross margin and day rate were all up from the previous quarter; both absolute gross margin dollars and day rate marked a new record for Tidewater and we generated the highest gross margin percentage in fifteen years. Utilization declined modestly as drydock days increased sequentially due to more vessels undergoing drydocks during the quarter. We anticipate that drydock days in the third quarter should decline modestly from the second quarter and drop meaningfully in the fourth quarter as we finish off our peak drydock year in the typical five year drydock cycle.

“We generated $87.6 million of free cash flow during the second quarter, a nice increase from the first quarter and a demonstration of the free cash flow generation capability of the fleet. We were active in repurchasing shares during the second quarter and we currently retain the unused capacity under the previously announced share repurchase authorization. In addition, we are pleased to announce the Board has authorized an additional $13.9 million of share repurchase capacity, for a total outstanding share repurchase capacity of $47.7 million. The outstanding authorization represents the maximum permissible amount of share repurchases under our existing debt agreements. Since the inception of the share repurchase program in the fourth quarter of 2023, we have repurchased approximately $67.9 million of outstanding shares. We believe that the pace of our return of capital program to-date is sustainable on a long-term basis given the outlook for the business and the structural supply and demand factors supporting the offshore supply vessel industry.

“We anticipate strength in the various elements of demand for our vessels to continue to build throughout the year, though we do anticipate several drilling campaigns to begin later during the third quarter and early into the fourth quarter than originally anticipated, and in addition we expect an increase in drydock days from what was previously anticipated for the third quarter. As such, we update our full-year revenue guidance to $1.39 to $1.41 billion and gross margin guidance of 51%. We remain optimistic about the outlook for 2025, as the observable supply and demand factors driving the offshore vessel industry remain highly constructive, which should allow us to maintain the pace of day rate increases that we have achieved over the past year, combined with a substantial increase in available vessel days as the heaviest drydock schedule in 2024 rolls into the lightest drydock schedule in 2025, naturally lifting vessel utilization.”

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

Common shares outstanding			52,487,862
New Creditor Warrants (strike price $0.001 per common share)			76,175
GulfMark Creditor Warrants (strike price $0.01 per common share)			81,179
Total			52,645,216

Tidewater will hold a conference call to discuss results for the three months ending June 30, 2024 on August 7, 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: 1488572 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 August 7, 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 June 30, 2024 and December 31, 2023; the Consolidated Statements of Operations and Consolidated Statements of Equity for the three and six months ended June 30, 2024 and 2023; and the Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023. Extracts are drawn from the June 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						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Revenues:
Vessel revenues	$	337,003		$	210,323		$	655,689		$	401,503
Other operating revenues		2,227			4,638			4,705			6,562
Total revenues		339,230			214,961			660,394			408,065
Costs and expenses:
Vessel operating costs		176,513			118,264			344,069			233,723
Costs of other operating revenues		816			373			1,966			1,524
General and administrative		26,329			26,013			51,658			49,558
Depreciation and amortization		59,445			32,768			115,715			63,434
Gain on asset dispositions, net		(2,000	)		(1,404	)		(13,039	)		(3,620	)
Total costs and expenses		261,103			176,014			500,369			344,619
Operating income		78,127			38,947			160,025			63,446
Other income (expense):
Foreign exchange loss		(2,376	)		(3,819	)		(6,461	)		(1,471	)
Equity in net earnings of unconsolidated companies		5			25			—			25
Interest income and other, net		1,175			2,790			2,658			2,920
Interest and other debt costs, net		(19,127	)		(4,731	)		(38,603	)		(8,921	)
Total other expense		(20,323	)		(5,735	)		(42,406	)		(7,447	)
Income before income taxes		57,804			33,212			117,619			55,999
Income tax expense		7,887			11,284			20,957			23,255
Net income		49,917			21,928			96,662			32,744
Less: Net loss attributable to noncontrolling interests		(437	)		(656	)		(718	)		(578	)
Net income attributable to Tidewater Inc.	$	50,354		$	22,584		$	97,380		$	33,322
Basic income per common share	$	0.96		$	0.44		$	1.85		$	0.66
Diluted income per common share	$	0.94		$	0.43		$	1.83		$	0.64
Weighted average common shares outstanding		52,684			50,857			52,502			50,731
Dilutive effect of warrants, restricted stock units and stock options		663			1,148			640			1,260
Adjusted weighted average common shares		53,347			52,005			53,142			51,991


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

	June 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	315,897		$	274,437
Restricted cash		3,527			1,241
Trade and other receivables, net of allowance for credit losses of $3,350 and $15,914 at June 30, 2024 and December 31, 2023, respectively		280,498			268,352
Marine operating supplies		26,908			31,933
Prepaid expenses and other current assets		20,115			15,172
Total current assets		646,945			591,135
Net properties and equipment		1,253,583			1,315,122
Deferred drydocking and survey costs		148,657			106,698
Indemnification assets		10,920			17,370
Other assets		29,643			32,449
Total assets	$	2,089,748		$	2,062,774

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	60,740		$	44,931
Accrued expenses		133,149			125,590
Current portion of long-term debt		102,993			103,077
Other current liabilities		43,342			55,133
Total current liabilities		340,224			328,731
Long-term debt		607,998			631,361
Other liabilities		62,539			64,985

Commitments and contingencies

Equity:
Common stock of $0.001 par value, 125,000,000 shares authorized, 52,487,862 and 52,259,303 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		52			52
Additional paid-in-capital		1,649,523			1,671,759
Accumulated deficit		(573,390	)		(637,838	)
Accumulated other comprehensive loss		5,062			5,266
Total stockholders’ equity		1,081,247			1,039,239
Noncontrolling interests		(2,260	)		(1,542	)
Total equity		1,078,987			1,037,697
Total liabilities and equity	$	2,089,748		$	2,062,774


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

	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Net income	$	49,917		$	21,928		$	96,662		$	32,744
Other comprehensive income (loss):
Unrealized gain (loss) on note receivable		73			(184	)		153			(316	)
Change in liability of pension plans		(220	)		(3,504	)		(357	)		(3,694	)
Total comprehensive income	$	49,770		$	18,240		$	96,458		$	28,734


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

	Six Months			Six Months
	Ended			Ended
	June 30, 2024			June 30, 2023
Operating activities:
Net income	$	96,662		$	32,744
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		78,191			42,144
Amortization of deferred drydocking and survey costs		37,524			21,290
Amortization of debt premiums and discounts		3,593			842
Amortization of below market contracts		(2,856	)		—
Provision for deferred income taxes		32			34
Gain on asset dispositions, net		(13,039	)		(3,620	)
Gain on pension settlement		—			(1,807	)
Stock-based compensation expense		6,226			4,751
Changes in assets and liabilities, net of effects of business acquisition:
Trade and other receivables		(12,146	)		(37,919	)
Accounts payable		15,809			30,876
Accrued expenses		10,648			(13,544	)
Deferred drydocking and survey costs		(80,101	)		(52,691	)
Other, net		(7,133	)		(565	)
Net cash provided by operating activities		133,410			22,535
Cash flows from investing activities:
Proceeds from asset dispositions		14,817			8,659
Proceeds from sale of notes		702			—
Additions to properties and equipment		(17,334	)		(17,500	)
Net cash used in investing activities		(1,815	)		(8,841	)
Cash flows from financing activities:
Proceeds from issuance of shares		2			—
Principal payments on long-term debt		(26,507	)		—
Purchase of common stock		(32,898	)		—
Acquisition of non-controlling interest in a majority owned subsidiary		—			(1,427	)
Debt issuance costs		(193	)		—
Share based awards reacquired to pay taxes		(28,463	)		(5,521	)
Net cash used in financing activities		(88,059	)		(6,948	)
Net change in cash, cash equivalents and restricted cash		43,536			6,746
Cash, cash equivalents and restricted cash at beginning of period		277,965			167,977
Cash, cash equivalents and restricted cash at end of period	$	321,501		$	174,723


Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest, net of amounts capitalized	$	30,546	$	7,846
Income taxes	$	33,084	$	27,201
Supplemental disclosure of noncash investing activities:
Purchase of vessels	$	—	$	12,171
Supplemental disclosure of noncash financing activities:
Debt incurred for the purchase of vessels	$	—	$	12,171

Note: Cash, cash equivalents and restricted cash at June 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 March 31, 2024	$	53		$	1,646,061	$	(594,347	)	$	5,209		$	(1,823	)	$	1,055,153
Total comprehensive income (loss)		—			—		50,354			(147	)		(437	)		49,770
Issuance of common stock		—			2		—			—			—			2
Repurchase and retirement of common stock		(1	)		—		(29,397	)		—			—			(29,398	)
Amortization of share-based awards		—			3,460		—			—			—			3,460
Balance at June 30, 2024	$	52		$	1,649,523	$	(573,390	)	$	5,062		$	(2,260	)	$	1,078,987

Balance at March 31, 2023	$	51		$	1,553,919	$	(688,911	)	$	8,254		$	100		$	873,413
Total comprehensive income (loss)		—			—		22,584			(3,688	)		(656	)		18,240
Amortization of share-based awards		—			874		—			—			—			874
Balance at June 30, 2023	$	51		$	1,554,793	$	(666,327	)	$	4,566		$	(556	)	$	892,527

	Six 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)		—			—			97,380			(204	)		(718	)		96,458
Issuance of common stock		1			1			—			—			—			2
Repurchase and retirement of common stock		(1	)		—			(32,932	)		—			—			(32,933	)
Amortization of share-based awards		—			(22,237	)		—			—			—			(22,237	)
Balance at June 30, 2024	$	52		$	1,649,523		$	(573,390	)	$	5,062		$	(2,260	)	$	1,078,987


Balance at December 31, 2022	$	51		$	1,556,990		$	(699,649	)	$	8,576		$	22		$	865,990
Total comprehensive income (loss)		—			—			33,322			(4,010	)		(578	)		28,734
Acquisition of non-controlling interest in a majority owned subsidiary		—			(1,427	)		—			—			—			(1,427	)
Amortization of share-based awards		—			(770	)		—			—			—			(770	)
Balance at June 30, 2023	$	51		$	1,554,793		$	(666,327	)	$	4,566		$	(556	)	$	892,527

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								Six Months Ended
	June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Vessel revenues:
Americas	$	73,142	22	%	$	50,376	24	%	$	137,083	21	%	$	98,063	24	%
Asia Pacific		55,221	16	%		22,585	11	%		103,002	16	%		44,609	11	%
Middle East		36,536	11	%		31,856	15	%		74,468	11	%		62,618	16	%
Europe/Mediterranean		83,266	25	%		39,295	19	%		163,647	25	%		70,545	18	%
West Africa		88,838	26	%		66,211	31	%		177,489	27	%		125,668	31	%
Total vessel revenues	$	337,003	100	%	$	210,323	100	%	$	655,689	100	%	$	401,503	100	%
Vessel operating costs:
Crew costs	$	106,231	31	%	$	68,007	32	%	$	208,583	32	%	$	134,650	34	%
Repair and maintenance		24,743	7	%		16,834	8	%		46,091	7	%		33,486	8	%
Insurance		2,625	1	%		2,168	1	%		5,205	1	%		4,173	1	%
Fuel, lube and supplies		15,562	5	%		13,958	7	%		32,880	5	%		27,513	7	%
Other		27,352	8	%		17,297	8	%		51,310	7	%		33,901	8	%
Total vessel operating costs		176,513	52	%		118,264	56	%		344,069	52	%		233,723	58	%
Vessel operating margin (A)	$	160,490	48	%	$	92,059	44	%	$	311,620	48	%	$	167,780	42	%