Tidewater's CEO Discusses F3Q12 Results - Earnings Call Transcript
Tidewater Inc. (
)
F3Q12 Earnings Call
February 2, 2012 - 11:00 a.m. ET
Executives
Joseph M. Bennett, Executive Vice President and Chief Investor Relations Officer
Dean E. Taylor – Chairman, President and Chief Executive Officer
Jeffrey M. Platt – Chief Operating Officer
Quinn P. Fanning – Executive Vice President and Chief Financial Officer
Bruce D. Lundstrom – Executive Vice President, General Counsel and Secretary
Analysts
Gregory Lewis – Credit Suisse
Veny Aleksandrov – Pritchard Capital Partners, LLC
James Crandell – Dahlman Rose & Company, LLC
James West – Barclays Capital, Inc.
Todd P. Scholl – Clarkson Capital Markets
John Donald – Howard Weil
Joseph Gibney – Capital One Southcoast, Inc.
Richard Sanchez – IHS Petrodata
Presentation
Operator
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Good morning. My name is Brandon and I'll be your conference operator today. At this time, I would like to welcome everyone to the fiscal 2012 third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)
Thank you. Mr. Joe Bennett, you may begin your conference, sir.
Joseph M. Bennett
Thank you, Brandon. Good morning, everyone and welcome to Tidewater's fiscal 2012 third quarter earnings results conference call for the period ended December 31st, 2011. I'm Joe Bennett, Tidewater's Executive Vice President and Chief Investor Relations Officer.
With me this morning on the call are our Chairman, President and CEO, Dean Taylor; Jeff Platt, our Chief Operating Officer; Quinn Fanning, Executive Vice President and CFO; and Bruce Lundstrom, our Executive Vice President, General Counsel and Secretary.
We'll follow our usual conference call format. After the formalities, I'll turn the call over to Dean for his initial comments, to be followed by Quinn's review of the financial details for the quarter. Dean will then provide some wrap-up comments before we open the call for questions.
During today's conference call, Dean, Quinn, I, and other Tidewater management may make certain comments that are forward-looking statements and not statements of historical fact. I know that you understand that there are risks, uncertainties and other factors that may cause the company's actual future performance to be materially different from that stated or implied by any comment that we may make during today's conference call.
Additional information concerning the factors that could cause actual results to differ materially from those stated or implied by the forward-looking statements may be found in the Risk Factors section of Tidewater's most recent Form 10-K.
With that, I'll now turn the call over to Dean.
Dean E. Taylor
Thank you, Joe, and good morning, everyone.
Earlier this morning, we reported fully diluted earnings per share for our third fiscal quarter of $0.67. That figure includes the reversal of accruals for previous tax liabilities which contributed about $8.4 million to net income or $0.16 per share. Adjusting for this benefit, our fully diluted earnings per share were $0.51 which exceeds the consensus estimate of $0.43.
This quarter's results compared to the $0.67 per share we reported in the year ago quarter and $0.34 per share of the September quarter, after adjusting for the $0.43 per share goodwill impairment charge we took due to the shift in our segment reporting of our financial results during the September quarter.
This quarter's results reflect solid operating performance, and we're consistent with our previously stated view about improving industry fundamentals. As Quinn will explain in a minute, the quarter benefited from several positive developments. Fleet utilization rates and average day rates improved which contributed to vessel operating revenues for the December quarter, hitting the top-end of our prior guidance.
After adjusting for a benefit associated with foreign exchange movements, operating expenses were in line with the bottom end of our previous guidance. Growing revenue and positive cost control help explain the quarter's earnings performance. Our focus in upcoming quarters will be to continue these trends.
Last quarter our results were adversely impacted by start-up delays in both Australia and Saudi Arabia. This quarter's results reflect the positive impact from their resolution, but only in part as the resolutions of these matters occurred midway through the December quarter.
Our vessels in Australia are now at work at healthy day rates, which contributed to the turnaround in operating results for our Asia-Pacific region. In Saudi Arabia by mid-November, we had five vessels on charter with our customer under the long-term contract that was discussed during our last earnings conference call.
We also stated during that call that our efforts with the customer to resolve the issues related to the original contract could possibly lead to additional work. As of today, we have eight vessels working for this customer, with one vessel expected to begin work by mid-February, reflecting, we believe, a positive view by our customer of our performance.
This is important as the Saudi Arabian market represents an attractive long-term growth opportunity for us. Tidewater's safety performance has continued at a very high level. Touchwood, we continue our record of no lost-time accidents during this current fiscal year. And, in fact, not since August of 2010 have we incurred a lost-time accident.
This is something of which we are proud and we fully recognize that our safety efforts demand constant vigilance by every employee. Our current fiscal year-to-date total recordable incident rate of 0.13 per 200,000 man hours matches the best year Tidewater has every achieved. But we will not be satisfied until that rate becomes and remains zero. I salute our 7,000 plus employees for their diligence in operating safely, and encourage them to keep up the good work.
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