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Tidewater Reports First Quarter Results For Fiscal 2014

Stocks in this article: TDW

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 6, 2013.

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 larger 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.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

(In thousands, except share and per share data)
Three Months Ended
June 30,
      2013     2012
Revenues:
Vessel revenues $ 331,630 290,094
Other operating revenues       2,455       4,354  
        334,085       294,448  
Costs and expenses:
Vessel operating costs 196,161 161,336

Costs of other operating revenues

2,020 3,523
Vessel operating leases 4,031 4,492
Depreciation and amortization 40,108 35,784
General and administrative 50,480 40,664
Gain on asset dispositions, net       (2,140 )     (838 )
        290,660       244,961  
Operating income 43,425 49,487
Other income (expenses):
Foreign exchange loss (89 ) (1,751 )
Equity in net earnings of unconsolidated companies 4,420 2,363
Interest income and other, net 740 719
Interest and other debt costs       (8,913 )     (7,587 )
        (3,842 )     (6,256 )
Earnings before income taxes 39,583 43,231
Income taxes       9,500       10,375  
Net earnings     $ 30,083       32,856  
 
Basic earnings per common share     $ 0.61       0.65  
 
Diluted earnings per common share     $ 0.61       0.65  
 
Weighted average common shares outstanding 49,226,911 50,193,065
Dilutive effect of stock options and restricted stock       331,090       174,686  
Adjusted weighted average common shares       49,558,001       50,367,751  
 
Cash dividends declared per common share     $ 0.25       0.25  
       

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
(In thousands, except share and par value data)            
June 30, March 31,
ASSETS     2013     2013
Current assets:
Cash and cash equivalents $ 64,813 40,569
Trade and other receivables, net 467,777 393,438
Marine operating supplies 62,007 62,348
Other current assets       24,576       11,735  
Total current assets       619,173       508,090  
Investments in, at equity, and advances to unconsolidated companies 49,445 46,047
Properties and equipment:
Vessels and related equipment 4,589,777 4,250,169
Other properties and equipment       66,747       83,779  
4,656,524 4,333,948
Less accumulated depreciation and amortization       1,114,256       1,144,129  
Net properties and equipment       3,542,268       3,189,819  
Goodwill 341,448 297,822
Other assets       144,708       126,277  
Total assets     $ 4,697,042       4,168,055  
 
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:
Accounts payable 75,976 63,602
Accrued expenses 170,784 159,086
Accrued property and liability losses 4,328 4,133
Other current liabilities       40,218       39,808  
Total current liabilities       291,306       266,629  
Long-term debt 1,475,062 1,000,000
Deferred income taxes 189,266 189,763
Accrued property and liability losses 11,886 10,833
Other liabilities and deferred credits 144,055 139,074
 
Commitments and Contingencies
 
Stockholders’ equity:

Common stock of $0.10 par value, 125,000,000 shares authorized, issued 49,507,077 shares at June 30, 2013 and 49,485,832 shares at March 31, 2013

4,951 4,949
Additional paid-in capital 125,872 119,975
Retained earnings 2,471,557 2,453,973
Accumulated other comprehensive loss       (16,913 )     (17,141 )
Total stockholders’ equity       2,585,467       2,561,756  
Total liabilities and stockholders' equity     $ 4,697,042       4,168,055  
       

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)
(In thousands)            
Three Months Ended
June 30,
      2013     2012
Net earnings $ 30,083 32,856
Other comprehensive income/(loss):

Unrealized gains/(losses) on available-for-sale securities net of tax of $60 and $(336)

111 (624 )

Amortization of loss on derivative contract net of tax of $63 and $63

      117     116  
Total comprehensive income     $ 30,311     32,348  
       

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(In thousands)            
Three Months Ended
June 30,
      2013     2012
Operating activities:
Net earnings $ 30,083 32,856

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

Depreciation and amortization 40,108 35,784
Provision (benefit) for deferred income taxes (12,151 ) (2,654 )
Gain on asset dispositions, net (2,140 ) (838 )
Equity in earnings of unconsolidated companies, less dividends (3,398 ) (1,614 )
Compensation expense - stock-based 5,711 4,359
Excess tax benefit on stock options exercised (12 ) (49 )
Changes in assets and liabilities, net:
Trade and other receivables (62,616 ) (9,698 )
Marine operating supplies 1,100 (1,962 )
Other current assets (11,589 ) (10,127 )
Accounts payable 1,997 18,267
Accrued expenses 11,115 2,636
Accrued property and liability losses 158 (110 )
Other current liabilities 944 219
Other liabilities and deferred credits 876 1,165
Other, net       3,409       846  
Net cash provided by operating activities       3,595       69,080  
Cash flows from investing activities:
Proceeds from sales of assets 2,161 5,856
Additions to properties and equipment (156,434 ) (77,432 )
Payments for acquisition, net of cash acquired (127,737 ) ---
Other       (665 )     (860 )
Net cash used in investing activities       (282,675 )     (72,436 )
Cash flows from financing activities:
Debt issuance costs (2,699 ) ---
Principal payment on long-term debt (97,490 ) ---
Debt borrowings 414,262 ---
Proceeds from exercise of stock options 1,675 765
Cash dividends (12,436 ) (12,566 )
Excess tax benefit on stock options exercised 12 49
Stock repurchases       ---       (65,028 )
Net cash provided by (used in) financing activities       303,324       (76,780 )
Net change in cash and cash equivalents 24,244 (80,136 )
Cash and cash equivalents at beginning of period       40,569       320,710  
Cash and cash equivalents at end of period     $ 64,813       240,574  
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 3,980 2,696
Income taxes $ 20,617 12,646
Supplemental disclosure of non-cash investing activities:
Additions to properties and equipment $ 130 7,331
Increase in receivables due to sale of shipyard     $ 9,500       ---  
 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)
(In thousands)
                Accumulated    
Additional other
Common paid-in Retained comprehensive
      stock     capital     earnings     loss     Total

Balance at March 31, 2013

$ 4,949 119,975 2,453,973 (17,141 ) 2,561,756
Total comprehensive income --- --- 30,083 228 30,311
Stock option activity 5 1,688 --- --- 1,693
Cash dividends declared --- --- (12,499 ) --- (12,499 )
Retirement of common stock --- --- --- --- ---
Amortization of restricted stock units --- 3,034 --- --- 3,034
Amortization/cancellation of restricted stock       (3 )     1,175     ---       ---       1,172  

Balance at June 30, 2013

    $ 4,951       125,872     2,471,557       (16,913 )     2,585,467  
 
 

Balance at March 31, 2012

$ 5,125 102,726 2,437,836 (19,330 ) 2,526,357
Total comprehensive income --- --- 32,856 (508 ) 32,348
Stock option activity 3 1,354 --- --- 1,357
Cash dividends declared --- --- (12,625 ) --- (12,625 )
Retirement of common stock (140 ) --- (64,888 ) --- (65,028 )
Amortization of restricted stock units --- 1,829 --- --- 1,829
Amortization/cancellation of restricted stock       (6 )     1,845     ---       ---       1,839  

Balance at June 30, 2012

    $ 4,982       107,754     2,393,179       (19,838 )     2,486,077  
 

The company’s vessel revenues and vessel operating costs and the related percentage of total vessel revenues for the quarters ended June 30, 2013 and 2012 and for the quarter ended March 31, 2013, were as follows:

                    Quarter

Quarter Ended

Ended
June 30, March 31,
(In thousands)     2013     %     2012     %     2013     %
Vessel revenues:    
Americas $ 90,244 27 % 77,650 27 % 82,561 25 %
Asia/Pacific 42,956 13 % 51,742 18 % 44,477 14 %
Middle East/North Africa 41,213 13 % 32,450 11 % 42,884 13 %
Sub-Saharan Africa/Europe       157,217     47 %     128,252     44 %     155,117     48 %
      $ 331,630     100 %     290,094     100 %     325,039     100 %
Vessel operating costs:
Crew costs $ 93,232 28 % 87,304 30 % 90,581 28 %
Repair and maintenance 48,093 14 % 27,224 9 % 36,466 11 %
Insurance and loss reserves 6,020 2 % 5,351 2 % 4,223 1 %
Fuel, lube and supplies 18,805 6 % 17,743 6 % 22,458 7 %
Other       30,011     9 %     23,714     8 %     27,941     9 %
Total vessel operating costs       196,161     59 %     161,336     55 %     181,669     56 %
Vessel operating margin (A)     $ 135,469     41 %     128,758     45 %     143,370     44 %
 

Note (A): The following table reconciles vessel operating margin as presented above to operating income for the quarters ended June 30, 2013 and 2012 and for the quarter ended March 31, 2013:

            Quarter
Quarter Ended Ended
June 30, March 31,
(In thousands)       2013       2012       2013  
Vessel operating margin $ 135,469 128,758 143,370
Other marine revenues 2,455 4,354 3,294
Costs of other operating revenues (2,020 ) (3,523 ) (2,932 )
Vessel operating leases (4,031 ) (4,492 ) (3,971 )
Depreciation and amortization (40,108 ) (35,784 ) (38,287 )
General and administrative (50,480 ) (40,664 ) (46,739 )
Gain on asset dispositions, net       2,140       838       3,839  
Operating income     $ 43,425       49,487       58,574  
 

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, 2013 and 2012 and for the quarter ended March 31, 2013, were as follows:

                    Quarter

Quarter Ended

Ended

June 30,

March 31,
(In thousands)     2013     %     2012     %     2013     %
Vessel operating profit:    
Americas $ 20,301 6 % 10,192 3 % 6,178 2 %
Asia/Pacific 10,289 3 % 14,908 5 % 12,275 4 %
Middle East/North Africa 10,123 3 % 6,282 2 % 12,787 4 %
Sub-Saharan Africa/Europe       17,519       5 %     27,096       9 %     36,863       11 %
58,232 17 % 58,478 20 % 68,103 21 %
Corporate expenses (16,555 ) (5 %) (10,467 ) (4 %) (12,432 ) (4 %)
Gain on asset dispositions, net 2,140 1 % 838 <1% 3,839 1 %
Other operating income (expenses)       (392 )     (<1%)     638       <1%     (936 )     (<1%)
Operating income     $ 43,425       13 %     49,487       17 %     58,574       18 %
Foreign exchange (loss) gain (89 ) (<1%) (1,751 ) (1 %) 4,181 1 %
Equity in net earnings of unconsolidated companies 4,420 1 % 2,363 1 % 3,830 1 %
Interest income and other, net 740 <1% 719 <1% 693 <1%

Interest and other debt costs

     

(8,913

)     (3 %)     (7,587 )     (3 %)     (7,827 )     (2 %)
Earnings before income taxes     $

39,583

      12 %     43,231       15 %     59,451       18 %
 

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, 2013 and 2012 and the quarter ended March 31, 2013, were as follows:

            Quarter
Quarter Ended Ended
June 30, March 31,
      2013     2012     2013

REVENUE BY VESSEL CLASS (in thousands):

   

Americas fleet:

Deepwater vessels $ 55,032 36,280 49,916
Towing-supply/supply 27,670 34,352 25,938
Other 7,542 7,018 6,707
Total $ 90,244 77,650 82,561

Asia/Pacific fleet:

Deepwater vessels $ 24,292 25,337 24,327
Towing-supply/supply 17,722 25,500 19,211
Other 942 905 939
Total $ 42,956 51,742 44,477

Middle East/North Africa fleet:

Deepwater vessels $ 15,852 11,284 16,979
Towing-supply/supply 24,497 20,000 25,173
Other 864 1,166 732
Total $ 41,213 32,450 42,884

Sub-Saharan Africa/Europe fleet:

Deepwater vessels $ 87,251 62,615 78,724
Towing-supply/supply 54,860 49,012 58,981
Other 15,106 16,625 17,412
Total $ 157,217 128,252 155,117

Worldwide fleet:

Deepwater vessels $ 182,427 135,516 169,946
Towing-supply/supply 124,749 128,864 129,303
Other 24,454 25,714 25,790
Total     $ 331,630       290,094         325,039

UTILIZATION:

Americas fleet:

Deepwater vessels 77.8 % 73.7 80.4
Towing-supply/supply 43.3 53.4 41.9
Other 82.2 80.5 81.0
Total 60.1 % 63.3 59.1

Asia/Pacific fleet:

Deepwater vessels 92.7 % 92.6 83.6
Towing-supply/supply 64.5 54.9 54.5
Other 100.0 58.7 100.0
Total 72.2 % 62.5 62.4

Middle East/North Africa fleet:

Deepwater vessels 91.3 % 93.6 98.6
Towing-supply/supply 72.1 77.2 74.7
Other 44.7 42.2 29.3
Total 73.3 % 75.0 73.4

Sub-Saharan Africa/Europe fleet:

Deepwater vessels 79.3 % 84.1 76.3
Towing-supply/supply 67.6 60.3 73.3
Other 70.2 76.6 78.7
Total 71.8 % 71.3 75.9

Worldwide fleet:

Deepwater vessels 81.2 % 83.1 80.6
Towing-supply/supply 60.8 60.0 61.2
Other 71.5 74.2 75.2
Total       68.8 %     68.4         69.4
 
            Quarter
Quarter Ended Ended
June 30, March 31,
      2013     2012     2013

AVERAGE VESSEL DAY RATES:

Americas fleet:

Deepwater vessels $ 29,786 25,829 29,480
Towing-supply/supply 15,161 14,135 14,330
Other 6,965 5,987 6,132
Total $ 18,977 15,508 17,960

Asia/Pacific fleet:

Deepwater vessels $ 39,291 32,225 37,370
Towing-supply/supply 13,022 14,229 13,976
Other 10,353 9,945 10,432
Total $ 20,749 19,384 21,024

Middle East/North Africa fleet:

Deepwater vessels $ 21,202 18,920 21,259
Towing-supply/supply 12,567 9,812 12,689
Other 4,750 5,056 4,628
Total $ 14,316 11,325 14,583

Sub-Saharan Africa/Europe fleet:

Deepwater vessels $ 27,514 22,643 26,468
Towing-supply/supply 15,386 13,572 14,996
Other 4,883 4,884 5,300
Total $ 15,993 13,113 15,218

Worldwide fleet:

Deepwater vessels $ 28,572 24,406 27,782
Towing-supply/supply 14,338 13,054 14,207
Other 5,496 5,250 5,573
Total     $ 16,976     14,275     16,378
 

The utilization, average day rates and the number of the company’s new vessels (defined as vessels acquired or constructed since calendar year 2000 as part of its new build and acquisition program) for the quarters ended June 30, 2013 and 2012 and the quarter ended March 31, 2013, were as follows:

            Quarter
Quarter Ended Ended
June 30, March 31,
      2013     2012     2013

UTILIZATION:

Deepwater vessels:
Platform supply vessels 84.0 % 85.9 82.9
Anchor handling towing supply 95.9 93.7 99.0
Towing-supply/supply 81.7 89.3 84.8
Other 73.3 78.7 79.5
Total       81.2 %     86.2     83.8

AVERAGE VESSEL DAY RATES:

Deepwater vessels:
Platform supply vessels $ 28,689 24,062 27,889
Anchor handling towing supply 29,561 28,908 29,779
Towing-supply/supply 14,595 13,663 14,490
Other 5,843 5,657 6,004
Total     $ 17,955       15,466     17,458

AVERAGE VESSEL COUNT:

Deepwater vessels:
Platform supply vessels 69 55 67
Anchor handling towing supply 11 11 11
Towing-supply/supply 103 101 103
Other 53 50 49
Total       236       217     230
 

The company’s average number of vessels by class and geographic distribution for the quarters ended June 30, 2013 and 2012 and for the quarter ended March 31, 2013:

            Quarter
Quarter Ended Ended
June 30, March 31,
      2013     2012     2013

Americas fleet:

Deepwater vessels 27 21 23
Towing-supply/supply 46 50 48
Other     14     16     15
Total 87 87 86
Less stacked vessels     25     23     25
Active vessels     62     64     61

Asia/Pacific fleet:

Deepwater vessels 7 9 9
Towing-supply/supply 24 36 28
Other     1     2     1
Total 32 47 38
Less stacked vessels     6     15     10
Active vessels     26     32     28

Middle East/North Africa fleet:

Deepwater vessels 9 7 9
Towing-supply/supply 30 29 30
Other     4     6     6
Total 43 42 45
Less stacked vessels     3     7     6
Active vessels     40     35     39

Sub-Saharan Africa/Europe fleet:

Deepwater vessels 44 36 43
Towing-supply/supply 58 66 60
Other     48     49     46
Total 150 151 149
Less stacked vessels     10     21     12
Active vessels     140     130     137
 

ACTIVE OWNED OR CHARTERED VESSELS

268

261

265

Stacked vessels     44     66     53
 

TOTAL OWNED OR CHARTERED VESSELS

312

327

318

Vessels withdrawn from service 1 2 2
Joint-venture and other     10     10     10
Total     323     339     330

Note (B): Included in total owned or chartered vessels at June 30, 2013 and 2012 and at March 31, 2013, were 41, 66, and 51 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.

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