Tidewater Inc. ( TDW)

F2Q12 (Qtr End 09/30/2011) Earnings Call

November 2, 2011 10:00 am ET


Joe Bennett - EVP and Chief Investor Relations Officer

Dean Taylor - Chairman, President and CEO

Jeff Platt - COO

Quinn Fanning - EVP and CFO

Bruce Lundstrom - EVP, General Counsel and Secretary


Dave Wilson - Howard Weil

Veny Aleksandrov - Pritchard Capital

Jud Bailey - Jefferies & Co.



At this time, I would like to welcome everyone to the fiscal 2012 second quarter earnings conference call. (Operator Instructions) Mr. Bennett, you may begin your conference.

Joe Bennett

Good morning, everyone, and welcome to Tidewater's fiscal 2012 second quarter earnings results conference call for the period ended September 30, 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, 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 turn the call over to Dean.

Dean Taylor

Thank you, Joe. Good morning, everyone. Earlier today, we reported fully diluted loss per share for our second fiscal quarter of $0.09, inclusive of non-cash goodwill impairment charge of $30.9 million, $22.1 million after tax or $0.43 per share. This goodwill impairment charge resulted from the company's decision to change its reportable segments during the September 2011 quarter. Quinn will provide more details regarding the change in segment reporting and the resulting goodwill impairment charge in just a minute.

We've re-ramped our reporting disclosure to provide you greater detail about our operations by four geographical regions, rather than our historical presentation of only two regions. This additional information should provide you great visibility and to the performance of our global operations.

Exclusive of the goodwill impairment charge, current quarter fully diluted earnings per share was $0.34 per share compared to $0.38 in the year ago quarter and $0.48 reported for our June 2011 quarter. Last year's quarter did include a $0.09 charge for settlement of an FCPA investigation.

In our past two quarterly earnings calls, we have commented that we were increasingly confident that we were close to the bottom of the industry. In fact, on our last call we stated that based on that quarter's results we believe we had hit bottom for this cycle.

I also cautioned though that the recovery may not be V-shaped, rather we believed that second half of our fiscal year would be better than the first half, recognizing that we could still experience some unforeseen challenges in the near term. Our second quarter reflects some of those challenges.

We also felt last quarter that the headwinds we have been sailing into were slowly shifting to tailwinds. We still believe that to be the case today. We believe we're balancing along our bottom and expect it over the next several quarters and improving fundamentals we see for the offshore industry will translate into improved operating results for Tidewater.

This prognosis is consistent with our views expressed for more than a year. Improved results would not probably occur until the second half of fiscal 2012 at the early. We continue to believe that will be the case.

And we stated in our preannouncement on September 22 and as Quinn will detail, our reported results did not match the guidance of our prior conference call in regard that we had anticipated. But rather specific situations related primarily to contract startups in Saudi Arabia and Australia. Our press release this morning includes an update on the Saudi Aramco work and Quinn will provide additional color in just a second on these matters.

And before I turn the call over to Quinn, let me comment that we had another solid quarter of safety performance. There were no lost time accidents in the quarter and our total recordable incident rate for the fiscal year today is 0.13 per 200,000 man hours, matching our previous safety record performance achieved in 2010.

Equally noteworthy is that we are now, touchwood, well into our fiscal year with no lost time accidents, an objective we were a part to achieve everyday. Operating safely continues to be one of our top priorities in Nigeria that was unlawfully boarded by pirates, and our vessel captain kidnapped. We're thankful that the captain was safely returned to his family within a few days. That reminds us though that we and others that support the offshore energy business need to remain vigilant.

Now, let met turn the call over to Quinn to review the financial details for the quarter. I will then return to discuss our outlook for the market and our business strategy. Quinn?

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