Tidewater Reports Results for the Three Months Ending March 31, 2021

May 6, 2021

HOUSTON–(BUSINESS WIRE)–Tidewater Inc. (NYSE:TDW) announced today revenue for the three months ending March 31, 2021 of $83.5 million compared with $116.4 million for the three months ending March 31, 2020. Tidewater’s net losses for the three months ending March 31, 2021, were $35.3 million ($0.87 per common share) compared with $18.4 million ($0.46 per common share) for the three months ending March 31, 2020. Included in the net losses for the three months ending March 31, 2021 were severance expenses totaling $0.1 million; excluding these costs, we would have reported a net loss for the three months ending March 31, 2021 of $35.2 million ($0.86 per common share). Included in the net losses for the three months ending March 31, 2020 were $10.3 million in long-lived asset impairments and one-time severance expenses; excluding these costs, net losses for the three months ending March 31, 2020 were $8.1 million (or $0.20 per common share).

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “I am pleased to report that we once again generated free cash flow for the latest quarter. In the first quarter of 2021, we generated $19.2 million of free cash flow and for the trailing twelve months, which were the most difficult twelve months the company has ever seen, we generated $87.1 million of free cash flow.

“Since late 2018, we have dedicated ourselves to building an offshore vessel company that is able to generate positive free cash flow throughout the business cycle by optimizing the earnings potential of the fleet, being the lowest cost operator and by adroitly managing drydocks and capital investments. The shore base infrastructure we have built is highly scalable and the operations have a substantial degree of operating leverage. I look forward to the acceleration in cash generation that will result from combined benefit of higher day rates as we enter a more balanced supply and demand environment and the lower per unit administrative cost of our scalable shore based infrastructure as more vessels are put to work.

“Compared to the first quarter of last year, revenue was down 28%, which is in line with the expectations we set out on the first quarter call last year after the pandemic broke. Operating costs were down 23%. Pandemic-driven inefficiencies kept operating expenses a bit higher than they otherwise would have been. General and administrative costs are down 25% since the first quarter of 2020. We have demonstrated again that we can swiftly and seamlessly adjust the scale of our operations to meet market demand.

“Our ongoing fleet development program includes the sale or recycling of vessels that are deemed uneconomic or that otherwise do not meet our future strategic goals, and during the first quarter we disposed of six vessels for $11.0 million.

“During the quarter, we reduced outstanding debt by $26.4 million and decreased our net debt position by $14.4 million. We ended the quarter with $143.4 million of cash on hand. We repurchased $11.8 million of the 2022 bonds at 100.5% of par during the first quarter.

“As highlighted in our recently issued inaugural sustainability report, which I encourage you to read, although 2020 posed many unique challenges, nothing caused us to waver from our environmental, social and governance (ESG) standards. While the report covers a great deal of what we have and continue to strive to achieve, I want to underscore that maintaining a safe working environment for our employees is a cornerstone of the Tidewater culture. During calendar year 2020, our employees clocked in more than 17 million hours and we had no lost time incidents. This is a tremendous achievement and I want to thank all of our employees for their dedication to creating a safe working environment.”

In addition to the number of outstanding shares, as of March 31, 2021, the company also has the following in-the-money warrants.

Common shares outstanding			40,731,777
New Creditor Warrants (strike price $0.001 per common share)			657,203
GulfMark Creditor Warrants (strike price $0.01 per common share)			815,575
Total			42,204,555

Tidewater will hold a conference call to discuss results for the three months ending March 31, 2021 on May 7, 2021, at 8:00 a.m. Central Time. Investors and interested parties may listen to the earnings conference call via telephone by calling +1-888-771-4371 if calling from the U.S. or Canada (+1-847-585-4405 if calling from outside the U.S.) and asking for the “Tidewater” call just 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 10:30 a.m. Central Time on May 7, 2021 and will continue until 11:59 p.m. Central Time on June 7, 2021. To access the replay, visit the Investor Relations section of Tidewater’s website at investor.tdw.com

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 involves 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 most recent Forms 10-Q and 10-K.

Tidewater owns and operates one of the largest fleets of offshore support vessels in the industry, with more than 65 years of experience supporting offshore energy exploration, production, and generation activities worldwide.

Note: All per-share amounts are stated on a diluted basis.

Financial information is displayed beginning on the next page.

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
	Three Months Ended
	March 31,			March 31,
	2021			2020
Revenues:
Vessel revenues	$	80,993		$	111,974
Other operating revenues		2,511			4,394
Total revenues		83,504			116,368
Costs and expenses:
Vessel operating costs		61,020			78,825
Costs of other operating revenues		1,067			2,673
General and administrative		16,043			21,420
Depreciation and amortization		29,727			27,107
Long-lived asset impairments and other		—			10,207
(Gain) loss on asset dispositions, net		1,948			(5,331	)
		109,805			134,901
Operating loss		(26,301	)		(18,533	)
Other income (expense):
Foreign exchange gain (loss)		(850	)		864
Equity in net losses of unconsolidated companies		(1,849	)		—
Interest income and other, net		23			116
Interest and other debt costs, net		(4,541	)		(6,142	)
Total other expense		(7,217	)		(5,162	)
Loss before income taxes		(33,518	)		(23,695	)
Income tax (benefit) expense		2,009			(5,171	)
Net loss	$	(35,527	)	$	(18,524	)
Less: Net loss attributable to noncontrolling interests		(212	)		(79	)
Net loss attributable to Tidewater Inc.	$	(35,315	)	$	(18,445	)
Basic loss per common share	$	(0.87	)	$	(0.46	)
Diluted loss per common share	$	(0.87	)	$	(0.46	)
Weighted average common shares outstanding		40,716			40,101
Dilutive effect of stock options and restricted stock		—			—
Adjusted weighted average common shares		40,716			40,101

TIDEWATER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and par value data)
	March 31,			December 31,
ASSETS	2021			2020
Current assets:
Cash and cash equivalents	$	131,858		$	149,933
Restricted cash		9,061			2,079
Trade and other receivables, less allowance for credit losses of $2,136 and $1,516 at March 31, 2021 and December 31, 2020, respectively		99,865			112,623
Due from affiliate, less allowance for credit losses of $71,595 and $71,800 at March 31, 2021 and December 31, 2020, respectively		62,474			62,050
Marine operating supplies		15,676			15,876
Assets held for sale		31,214			34,396
Prepaid expenses and other current assets		13,594			11,692
Total current assets		363,742			388,649
Net properties and equipment		754,707			780,318
Deferred drydocking and survey costs		46,648			56,468
Other assets		23,833			25,742
Total assets	$	1,188,930		$	1,251,177

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	14,622		$	16,981
Accrued expenses		48,466			52,422
Due to affiliates		56,356			53,194
Current portion of long-term debt		18,201			27,797
Other current liabilities		35,003			32,785
Total current liabilities		172,648			183,179
Long-term debt		148,337			164,934
Other liabilities and deferred credits		79,234			79,792

Commitments and contingencies

Equity:
Common stock		41			41
Additional paid-in-capital		1,372,846			1,371,809
Accumulated deficit		(584,246	)		(548,931	)
Accumulated other comprehensive loss		(875	)		(804	)
Total stockholder’s equity		787,766			822,115
Noncontrolling interests		945			1,157
Total equity		788,711			823,272
Total liabilities and equity	$	1,188,930		$	1,251,177

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands)
	Three Months Ended
	March 31,			March 31,
	2021			2020
Net loss	$	(35,527	)	$	(18,524	)
Other comprehensive income (loss):
Change in pension plan and supplemental pension plan liability, net of tax of $0 and $0, respectively		(71	)		369
Total comprehensive loss	$	(35,598	)	$	(18,155	)

TIDEWATER INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
	Three Months			Three Months
	Ended			Ended
	March 31,			March 31,
	2021			2020
Operating activities:
Net loss	$	(35,527	)	$	(18,524	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		18,470			17,285
Amortization of deferred drydocking and survey costs		11,257			9,822
Amortization of debt premiums and discounts		1,108			675
Provision for deferred income taxes		30			—
(Gain) loss on asset dispositions, net		1,948			(5,331	)
Loss on debt extinguishment		59			—
Long-lived asset impairments and other		—			10,207
Stock-based compensation expense		1,172			1,335
Changes in operating assets and liabilities, net:
Trade and other receivables		12,758			(9,438	)
Changes in due to/from affiliate, net		2,738			(2,405	)
Accounts payable		(2,359	)		3,210
Accrued expenses		(4,270	)		(1,146	)
Deferred drydocking and survey costs		(2,722	)		(24,867	)
Other, net		1,054			(8,348	)
Net cash provided by (used in) operating activities		5,716			(27,525	)
Cash flows from investing activities:
Proceeds from sales of assets		10,983			9,452
Additions to properties and equipment		(1,196	)		(2,449	)
Net cash provided by investing activities		9,787			7,003
Cash flows from financing activities:
Principal payments on long-term debt		(26,414	)		(2,600	)
Debt modification costs		(725	)		—
Debt extinguishment premium		(59	)		—
Tax on share-based awards		(135	)		(531	)
Net cash used in financing activities		(27,333	)		(3,131	)
Net change in cash, cash equivalents and restricted cash		(11,830	)		(23,653	)
Cash, cash equivalents and restricted cash at beginning of period		155,225			227,608
Cash, cash equivalents and restricted cash at end of period	$	143,395		$	203,955


Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest, net of amounts capitalized	3,746	5,442
Income taxes	2,535	2,550

Note (A): Cash, cash equivalents and restricted cash at March 31, 2021 includes $2.5 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 (loss)			interest			Total
Balance at December 31, 2020	$	41		1,371,809		(548,931	)		(804	)		1,157			823,272
Total comprehensive loss		—		—		(35,315	)		(71	)		(212	)		(35,598	)
Amortization of share-based awards		—		1,037		—			—			—			1,037
Balance at March 31, 2021	$	41		1,372,846		(584,246	)		(875	)		945			788,711

Balance at December 31, 2019	$	40		1,367,521		(352,526	)		(236	)		1,611			1,016,410
Total comprehensive loss		—		—		(18,445	)		369			(79	)		(18,155	)
Adoption of credit loss accounting standard		—		—		(163	)		—			—			(163	)
Amortization of share-based awards		—		804		—			—			—			804
Balance at March 31, 2020	$	40		1,368,325		(371,134	)		133			1,532			998,896

The company’s vessel revenues and vessel operating costs and the related percentage of total vessel revenues, were as follows:

	Three Months Ended
	March 31,					March 31,
	2021					2020
(In thousands)			%					%
Vessel revenues:
Americas	$	26,224		32	%	$	31,859		28	%
Middle East/Asia Pacific		24,414		30	%		24,828		22	%
Europe/Mediterranean		14,749		18	%		29,491		26	%
West Africa		15,606		19	%		25,796		23	%
Total vessel revenues	$	80,993		100	%	$	111,974		100	%
Vessel operating costs:
Crew costs	$	35,162		43	%	$	44,487		40	%
Repair and maintenance		9,437		12	%		10,598		9	%
Insurance		623		1	%		1,785		2	%
Fuel, lube and supplies		5,860		7	%		9,752		9	%
Other		9,938		12	%		12,203		11	%
Total vessel operating costs		61,020		75	%		78,825		70	%
Vessel operating margin (A)	$	19,973		25	%	$	33,149		30	%

Note (A): Vessel operating margin equals revenues less vessel operating costs and excludes general and administrative expenses and depreciation and amortization.

The company’s operating loss and other components of loss before income taxes and its related percentage of total revenues, were as follows:

	Three Months Ended
	March 31,						March 31,
	2021						2020
(In thousands)				%						%
Vessel operating profit (loss):
Americas	$	(1,651	)		(2	)%	$	(1,164	)		(1	)%
Middle East/Asia Pacific		(1,853	)		(2	)%		(856	)		(1	)%
Europe/Mediterranean		(8,021	)		(10	)%		1,547			1	%
West Africa		(6,767	)		(8	)%		(4,863	)		(4	)%
Other operating profit		1,444			2	%		1,721			1	%
		(16,848	)		(20	)%		(3,615	)		(3	)%

Corporate expenses (A)		(7,505	)		(9	)%		(10,042	)		(9	)%
Gain (loss) on asset dispositions, net		(1,948	)		(2	)%		5,331			5	%
Long-lived asset impairments and other		—			0	%		(10,207	)		(9	)%
Operating loss	$	(26,301	)		(31	)%	$	(18,533	)		(16	)%

Note (A): General and administrative expenses for the three months ended March 31, 2021 and 2020 include stock-based compensation of $1.2 million and $1.3 million, respectively. In addition, vessel operating and general and administrative costs for the three months ended March 31, 2021 and 2020, respectively, both included $0.1 million in one-time restructuring and integration related costs.

TIDEWATER INC. CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) – QUARTERLY DATA (Unaudited) (In thousands, except per share data)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2021			2020			2020			2020			2020
Revenues:
Vessel revenues	$	80,993			87,830			85,395			100,975			111,974
Other operating revenues		2,511			4,029			1,072			1,369			4,394
Total revenues		83,504			91,859			86,467			102,344			116,368
Costs and expenses:
Vessel operating costs (A)		61,020			63,397			61,784			64,774			78,825
Costs of other operating revenue		1,067			342			219			171			2,673
General and administrative (A)		16,043			16,992			17,438			17,597			21,420
Depreciation and amortization		29,727			30,681			30,777			28,144			27,107
Long-lived asset impairments and other		—			6,475			1,945			55,482			10,207
Affiliate credit loss impairment expense		—			(600	)		—			53,581			—
Affiliate guarantee obligation		—			—			—			2,000			—
(Gain) loss on asset dispositions, net		1,948			(80	)		(520	)		(1,660	)		(5,331	)
Total operating costs and expenses		109,805			117,207			111,643			220,089			134,901
Operating loss		(26,301	)		(25,348	)		(25,176	)		(117,745	)		(18,533	)
Other income (expense):
Foreign exchange gain (loss)		(850	)		(2,880	)		(1,153	)		(2,076	)		864
Equity in net earnings (losses) of unconsolidated companies		(1,849	)		164			—			—			—
Dividend income from unconsolidated company		—			—			—			17,150			—
Interest income and other, net		23			144			272			696			116
Interest and other debt costs, net		(4,541	)		(5,984	)		(6,071	)		(5,959	)		(6,142	)
Total other expense		(7,217	)		(8,556	)		(6,952	)		9,811			(5,162	)
Loss before income taxes		(33,518	)		(33,904	)		(32,128	)		(107,934	)		(23,695	)
Income tax (benefit) expense		2,009			(4,477	)		5,953			2,730			(5,171	)
Net loss		(35,527	)		(29,427	)		(38,081	)		(110,664	)		(18,524	)
Net income (loss) attributable to noncontrolling interests		(212	)		(180	)		(154	)		(41	)		(79	)
Net loss attributable to Tidewater Inc.	$	(35,315	)		(29,247	)		(37,927	)		(110,623	)		(18,445	)
Basic loss per common share		(0.87	)		(0.72	)		(0.94	)		(2.74	)		(0.46	)
Diluted loss per common share		(0.87	)		(0.72	)		(0.94	)		(2.74	)		(0.46	)
Weighted average common shares outstanding		40,716			40,604			40,405			40,306			40,101
Dilutive effect of stock options and restricted stock		—			—			—			—			—
Adjusted weighted average common shares		40,716			40,604			40,405			40,306			40,101
Vessel operating margin	$	19,973			24,433			23,611			36,201			33,149


Note (A) One-time restructuring and integration related costs	$	103			291			641			446			129

TIDEWATER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
	March 31,			December 31,			September 30,			June 30,			March 31,
ASSETS	2021			2020			2020			2020			2020

Current assets:
Cash and cash equivalents	$	131,858			149,933			192,243			203,119			187,802
Restricted cash		9,061			2,079			26,401			19,880			12,461
Trade and other receivables, net		99,865			112,623			100,583			115,008			119,455
Due from affiliate, net		62,474			62,050			65,692			65,766			128,204
Marine operating supplies		15,676			15,876			17,808			20,580			21,944
Assets held for sale		31,214			34,396			19,163			29,064			26,142
Prepaid expenses and other current assets		13,594			11,692			18,925			20,350			22,185
Total current assets		363,742			388,649			440,815			473,767			518,193
Net properties and equipment		754,707			780,318			820,876			839,912			922,979
Deferred drydocking and survey costs		46,648			56,468			63,975			74,585			81,981
Other assets		23,833			25,742			25,108			27,411			29,971
Total assets	$	1,188,930			1,251,177			1,350,774		$	1,415,675		$	1,553,124

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	14,622			16,981			12,953			17,111			30,711
Accrued expenses		48,466			52,422			55,811			60,993			72,854
Due to affiliates		56,356			53,194			53,355			48,803			50,013
Current portion of long-term debt		18,201			27,797			9,576			9,437			9,104
Other current liabilities		35,003			32,785			31,599			25,815			26,953
Total current liabilities		172,648			183,179			163,294			162,159			189,635
Long-term debt		148,337			164,934			246,179			273,215			273,015
Other liabilities and deferred credits		79,234			79,792			87,724			90,301			91,578


Equity:
Common stock		41			41			40			40			40
Additional paid-in-capital		1,372,846			1,371,809			1,370,778			1,369,645			1,368,325
Accumulated deficit		(584,246	)		(548,931	)		(519,684	)		(481,757	)		(371,134	)
Accumulated other comprehensive income (loss)		(875	)		(804	)		1,106			581			133
Total stockholder’s equity		787,766			822,115			852,240			888,509			997,364
Noncontrolling interests		945			1,157			1,337			1,491			1,532
Total equity		788,711			823,272			853,577			890,000			998,896
Total liabilities and equity	$	1,188,930			1,251,177			1,350,774			1,415,675			1,553,124

Supplemental information
Due from related parties, net of due to related parties:
Sonatide (Angola)	$	6,118			8,856			12,337			16,963			64,184
DTDW (Nigeria)		—			—			—			—			14,007
Total	$	6,118			8,856			12,337			16,963			78,191

TIDEWATER INC. UNAUDITED OTHER FLEET AND FINANCIAL DATA (In thousands)
	Three Months Ended
	March 31,		December 31,		September 30,			June 30,		March 31,
	2021		2020		2020			2020		2020
VESSEL REVENUE BY VESSEL CLASS

Americas fleet:
Deepwater	$	19,876		25,706		22,836			27,858		22,882
Towing-supply		4,817		4,603		4,119			4,455		7,243
Other		1,531		1,759		1,750			1,731		1,734
Total		26,224		32,068		28,705			34,044		31,859
Middle East/Asia Pacific fleet:
Deepwater	$	15,931		16,822		13,819			14,195		14,326
Towing-supply		8,483		8,220		9,461			9,788		10,502
Total		24,414		25,042		23,280			23,983		24,828
Europe/Mediterranean fleet:
Deepwater	$	14,588		15,621		17,578			20,476		29,163
Towing-supply		—		—		(13	)		—		179
Other		161		154		151			144		149
Total		14,749		15,775		17,716			20,620		29,491
West Africa fleet:
Deepwater	$	7,909		6,237		4,905			8,748		12,102
Towing-supply		4,879		5,202		7,711			11,029		10,521
Other		2,818		3,506		3,078			2,552		3,173
Total	$	15,606		14,945		15,694			22,329		25,796
Worldwide fleet:
Deepwater	$	58,304		64,386		59,137			71,277		78,473
Towing-supply		18,179		18,025		21,278			25,271		28,445
Other		4,510		5,419		4,980			4,427		5,056
Total	$	80,993		87,830		85,395			100,975		111,974

TIDEWATER INC. UNAUDITED OTHER FLEET AND FINANCIAL DATA
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2021			2020			2020			2020			2020
AVERAGE NUMBER OF VESSELS:

Americas fleet:
Deepwater		29			32			32			32			32
Towing-supply		8			10			12			15			17
Other		3			3			3			3			3
Total		40			45			47			50			52
Stacked vessels		(12	)		(15	)		(17	)		(17	)		(17	)
Active vessels		28			30			30			33			35
Middle East/Asia Pacific fleet:
Deepwater		21			21			22			26			27
Towing-supply		20			22			23			26			28
Total		41			43			45			52			55
Stacked vessels		(3	)		(3	)		(4	)		(9	)		(10	)
Active vessels		38			40			41			43			45
Europe/Mediterranean fleet:
Deepwater		31			31			32			36			39
Towing-supply		—			—			—			1			2
Total		31			31			32			37			41
Stacked vessels		(14	)		(16	)		(17	)		(17	)		(11	)
Active vessels		17			15			15			20			30
West Africa fleet:
Deepwater		20			20			25			26			26
Towing-supply		12			13			17			18			19
Other		26			23			16			19			20
Total		58			56			58			63			65
Stacked vessels		(25	)		(26	)		(31	)		(21	)		(21	)
Active vessels		33			30			27			42			44
Worldwide fleet:
Deepwater		101			104			111			120			124
Towing-supply		40			45			52			60			66
Other		29			26			19			22			23
Total		170			175			182			202			213
Stacked vessels		(54	)		(60	)		(69	)		(64	)		(60	)
Active vessels		116			115			113			138			153

Total active		116			115			113			138			153
Total stacked		54			60			69			64			60
Total joint venture and other vessels		3			3			3			3			3
Total		173			178			185			205			216