tdw-10q_20180930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             .

Commission file number: 1-6311

Tidewater Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

72-0487776

(State of incorporation)

 

(I.R.S. Employer Identification No.)

6002 Rogerdale Road, Suite 600

Houston, Texas 77072

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code:     (713) 470-5300

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,  a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company 

Emerging Growth Company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes      No  


27,263,262 shares of Tidewater Inc. common stock $0.001 par value per share were outstanding on November 2, 2018.  Registrant has no other class of common stock outstanding.

 

 

 


 

PART I.  FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and par value data)

 

 

Successor

 

 

 

September 30,

 

 

December 31,

 

ASSETS

 

2018

 

 

2017

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

461,088

 

 

 

432,035

 

Restricted cash

 

 

7,466

 

 

 

21,300

 

Trade and other receivables, net

 

 

88,013

 

 

 

114,184

 

Due from affiliates

 

 

174,349

 

 

 

230,315

 

Marine operating supplies

 

 

27,591

 

 

 

28,220

 

Other current assets

 

 

9,880

 

 

 

19,130

 

Total current assets

 

 

768,387

 

 

 

845,184

 

Investments in, at equity, and advances to unconsolidated companies

 

 

1,129

 

 

 

29,216

 

Net properties and equipment

 

 

776,640

 

 

 

837,520

 

Deferred drydocking and survey costs

 

 

16,053

 

 

 

3,208

 

Other assets

 

 

28,700

 

 

 

31,052

 

Total assets

 

$

1,590,909

 

 

 

1,746,180

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

30,571

 

 

 

38,497

 

Accrued expenses

 

 

46,060

 

 

 

54,806

 

Due to affiliates

 

 

48,064

 

 

 

99,448

 

Accrued property and liability losses

 

 

2,447

 

 

 

2,585

 

Current portion of long-term debt

 

 

7,671

 

 

 

5,103

 

Other current liabilities

 

 

18,894

 

 

 

19,693

 

Total current liabilities

 

 

153,707

 

 

 

220,132

 

Long-term debt

 

 

435,301

 

 

 

443,057

 

Accrued property and liability losses

 

 

4,212

 

 

 

2,471

 

Other liabilities

 

 

53,781

 

 

 

58,576

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Successor Common stock of $0.001 par value, 125,000,000 shares

authorized, 26,815,991 and 22,115,916 shares issued and outstanding

at September 30, 2018 and December 31, 2017, respectively

 

 

27

 

 

 

22

 

Additional paid-in capital

 

 

1,063,603

 

 

 

1,059,120

 

Retained deficit

 

 

(120,274

)

 

 

(39,266

)

Accumulated other comprehensive loss

 

 

(403

)

 

 

(147

)

Total stockholders’ equity

 

 

942,953

 

 

 

1,019,729

 

Noncontrolling interests

 

 

955

 

 

 

2,215

 

Total equity

 

 

943,908

 

 

 

1,021,944

 

Total liabilities and equity

 

$

1,590,909

 

 

 

1,746,180

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

2


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Unaudited)

(In thousands, except share and per share data)

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Period from

 

 

 

Period from

 

 

 

Three Months

 

 

August 1, 2017

 

 

 

July 1, 2017

 

 

 

Ended

 

 

through

 

 

 

through

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

 

July 31, 2017

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel revenues

 

$

97,011

 

 

 

70,571

 

 

 

 

34,340

 

Other operating revenues

 

 

2,181

 

 

 

3,729

 

 

 

 

1,923

 

 

 

 

99,192

 

 

 

74,300

 

 

 

 

36,263

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel operating costs

 

 

65,237

 

 

 

52,301

 

 

 

 

32,665

 

Costs of other operating revenues

 

 

1,681

 

 

 

2,273

 

 

 

 

763

 

General and administrative

 

 

25,546

 

 

 

16,246

 

 

 

 

8,773

 

Vessel operating leases

 

 

 

 

 

1,124

 

 

 

 

623

 

Depreciation and amortization

 

 

13,390

 

 

 

8,142

 

 

 

 

11,160

 

(Gain) / Loss on asset dispositions, net

 

 

1,571

 

 

 

(4

)

 

 

 

(372

)

Asset impairments

 

 

16,853

 

 

 

 

 

 

 

21,325

 

 

 

 

124,278

 

 

 

80,082

 

 

 

 

74,937

 

Operating loss

 

 

(25,086

)

 

 

(5,782

)

 

 

 

(38,674

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

 

1

 

 

 

(58

)

 

 

 

(2,024

)

Equity in net earnings (losses) of unconsolidated companies

 

 

56

 

 

 

1,305

 

 

 

 

269

 

Interest income and other, net

 

 

2,709

 

 

 

873

 

 

 

 

704

 

Reorganization items

 

 

 

 

 

(1,880

)

 

 

 

(1,083,729

)

Interest and other debt costs, net

 

 

(7,585

)

 

 

(5,240

)

 

 

 

(574

)

 

 

 

(4,819

)

 

 

(5,000

)

 

 

 

(1,085,354

)

Loss before income taxes

 

 

(29,905

)

 

 

(10,782

)

 

 

 

(1,124,028

)

Income tax expense

 

 

1,278

 

 

 

4,745

 

 

 

 

(1,529

)

Net loss

 

$

(31,183

)

 

 

(15,527

)

 

 

 

(1,122,499

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

(287

)

 

 

166

 

 

 

 

(24

)

Net loss attributable to Tidewater Inc.

 

$

(30,896

)

 

 

(15,693

)

 

 

 

(1,122,475

)

Basic loss per common share

 

$

(1.16

)

 

 

(0.81

)

 

 

 

(23.82

)

Diluted loss per common share

 

$

(1.16

)

 

 

(0.81

)

 

 

 

(23.82

)

Weighted average common shares outstanding

 

 

26,614,507

 

 

 

19,389,031

 

 

 

 

47,121,407

 

Dilutive effect of stock options and restricted stock

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average common shares

 

 

26,614,507

 

 

 

19,389,031

 

 

 

 

47,121,407

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

3


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Unaudited)

(In thousands, except share and per share data)

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Period from

 

 

 

Period from

 

 

 

Nine Months

 

 

August 1, 2017

 

 

 

January 1, 2017

 

 

 

Ended

 

 

through

 

 

 

through

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

 

July 31, 2017

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel revenues

 

$

288,679

 

 

 

70,571

 

 

 

 

303,501

 

Other operating revenues

 

 

7,607

 

 

 

3,729

 

 

 

 

8,617

 

 

 

 

296,286

 

 

 

74,300

 

 

 

 

312,118

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel operating costs

 

 

194,613

 

 

 

52,301

 

 

 

 

197,283

 

Costs of other operating revenues

 

 

4,797

 

 

 

2,273

 

 

 

 

5,037

 

General and administrative

 

 

73,536

 

 

 

16,246

 

 

 

 

83,559

 

Vessel operating leases

 

 

 

 

 

1,124

 

 

 

 

14,607

 

Depreciation and amortization

 

 

38,192

 

 

 

8,142

 

 

 

 

85,039

 

Gain on asset dispositions, net

 

 

(1,686

)

 

 

(4

)

 

 

 

(9,625

)

Asset impairments

 

 

24,254

 

 

 

 

 

 

 

249,606

 

 

 

 

333,706

 

 

 

80,082

 

 

 

 

625,506

 

Operating loss

 

 

(37,420

)

 

 

(5,782

)

 

 

 

(313,388

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange loss

 

 

(1,349

)

 

 

(58

)

 

 

 

(2,516

)

Equity in net earnings (losses) of unconsolidated companies

 

 

(14,993

)

 

 

1,305

 

 

 

 

7,627

 

Interest income and other, net

 

 

5,495

 

 

 

873

 

 

 

 

3,974

 

Reorganization items

 

 

 

 

 

(1,880

)

 

 

 

(1,396,905

)

Interest and other debt costs, net

 

 

(22,731

)

 

 

(5,240

)

 

 

 

(32,188

)

 

 

 

(33,578

)

 

 

(5,000

)

 

 

 

(1,420,008

)

Loss before income taxes

 

 

(70,998

)

 

 

(10,782

)

 

 

 

(1,733,396

)

Income tax expense

 

 

10,396

 

 

 

4,745

 

 

 

 

483

 

Net loss

 

$

(81,394

)

 

 

(15,527

)

 

 

 

(1,733,879

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

(386

)

 

 

166

 

 

 

 

7,884

 

Net loss attributable to Tidewater Inc.

 

$

(81,008

)

 

 

(15,693

)

 

 

 

(1,741,763

)

Basic loss per common share

 

$

(3.23

)

 

 

(0.81

)

 

 

 

(36.98

)

Diluted loss per common share

 

$

(3.23

)

 

 

(0.81

)

 

 

 

(36.98

)

Weighted average common shares outstanding

 

 

25,073,284

 

 

 

19,389,031

 

 

 

 

47,104,117

 

Dilutive effect of stock options and restricted stock

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average common shares

 

 

25,073,284

 

 

 

19,389,031

 

 

 

 

47,104,117

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 


4


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Period from

 

 

 

Period from

 

 

 

Three Months

 

 

August 1, 2017

 

 

 

July 1, 2017

 

 

 

Ended

 

 

through

 

 

 

through

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

 

July 31, 2017

 

Net loss

 

$

(31,183

)

 

 

(15,527

)

 

 

 

(1,122,499

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on available for sale securities,

   net of tax of $0, $0 and $0

 

 

 

 

 

82

 

 

 

 

77

 

Change in loss on derivative contract, net of tax of

   $0, $0 and $823

 

 

 

 

 

 

 

 

 

 

Change in supplemental executive retirement plan liability,

   net of tax of $0, $0 and $0

 

 

 

 

 

 

 

 

 

(536

)

Change in pension plan minimum liability, net of tax

   of $0, $0 and $0

 

 

 

 

 

 

 

 

 

(594

)

Change in other benefit plan minimum liability, net of tax

   of $0, $0 and $0

 

 

 

 

 

 

 

 

 

(1,468

)

Total comprehensive loss

 

$

(31,183

)

 

 

(15,445

)

 

 

 

(1,125,020

)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Period from

 

 

 

Period from

 

 

 

Nine Months

 

 

August 1, 2017

 

 

 

January 1, 2017

 

 

 

Ended

 

 

through

 

 

 

through

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

 

July 31, 2017

 

Net loss

 

$

(81,394

)

 

 

(15,527

)

 

 

 

(1,733,879

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on available for sale securities,

   net of tax of $0, $0 and $61

 

 

(256

)

 

 

82

 

 

 

 

67

 

Change in loss on derivative contract, net of tax of

   $0, $0 and $823

 

 

 

 

 

 

 

 

 

1,317

 

Change in supplemental executive retirement plan liability,

   net of tax of $0, $0 and ($927)

 

 

 

 

 

 

 

 

 

(2,257

)

Change in pension plan minimum liability, net of tax

   of $0, $0 and $215

 

 

 

 

 

 

 

 

 

(195

)

Change in other benefit plan minimum liability, net of tax

   of $0, $0 and ($2,046)

 

 

 

 

 

 

 

 

 

(5,267

)

Total comprehensive loss

 

$

(81,650

)

 

 

(15,445

)

 

 

 

(1,740,214

)

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

5


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Period from

 

 

 

Period from

 

 

 

Nine Months

 

 

August 1, 2017

 

 

 

January 1, 2017

 

 

 

Ended

 

 

through

 

 

 

through

 

 

 

September 30, 2018

 

 

September 30, 2017

 

 

 

July 31, 2017

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(81,394

)

 

$

(15,527

)

 

 

 

(1,733,879

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Reorganization items

 

 

 

 

 

 

 

 

 

1,368,882

 

Depreciation and amortization

 

 

33,949

 

 

 

8,138

 

 

 

 

85,039

 

Amortization of deferred drydocking and survey costs

 

 

4,243

 

 

 

4

 

 

 

 

 

Amortization of debt premium and discounts

 

 

(1,371

)

 

 

(281

)

 

 

 

 

Provision for deferred income taxes

 

 

 

 

 

 

 

 

 

(7,743

)

Gain on asset dispositions, net

 

 

(1,686

)

 

 

(4

)

 

 

 

(9,625

)

Asset impairments

 

 

24,254

 

 

 

 

 

 

 

249,606

 

Changes in investments in, at equity, and advances

     to unconsolidated companies

 

 

28,087

 

 

 

(1,044

)

 

 

 

(9,314

)

Compensation expense - stock-based

 

 

9,967

 

 

 

1,173

 

 

 

 

819

 

Excess tax liability on stock option activity

 

 

 

 

 

 

 

 

 

4,927

 

Changes in assets and liabilities, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

(10,744

)

 

 

(3,775

)

 

 

 

57,337

 

Changes in due to/from related parties, net

 

 

28,290

 

 

 

(3,920

)

 

 

 

26,262

 

Marine operating supplies

 

 

(1,411

)

 

 

1,005

 

 

 

 

(320

)

Other current assets

 

 

9,032

 

 

 

5,714

 

 

 

 

(8,298

)

Accounts payable

 

 

1,719

 

 

 

(317

)

 

 

 

(10,715

)

Accrued expenses

 

 

(10,719

)

 

 

(10,555

)

 

 

 

24,339

 

Accrued property and liability losses

 

 

(138

)

 

 

13

 

 

 

 

(813

)

Other current liabilities

 

 

5,802

 

 

 

3,753

 

 

 

 

(7,131

)

Other liabilities

 

 

(232

)

 

 

(847

)

 

 

 

4,768

 

Cash paid for deferred drydocking and survey costs

 

 

(17,088

)

 

 

(392

)

 

 

 

 

Other, net

 

 

1,670

 

 

 

(947

)

 

 

 

14,422

 

Net cash provided by (used in) operating activities

 

 

22,230

 

 

 

(17,809

)

 

 

 

48,563

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sales of assets

 

 

16,499

 

 

 

4,875

 

 

 

 

4,636

 

Additions to properties and equipment

 

 

(9,116

)

 

 

(589

)

 

 

 

(10,620

)

Proceeds related to novated vessel construction contract

 

 

 

 

 

 

 

 

 

5,272

 

Net cash provided by (used in) investing activities

 

 

7,383

 

 

 

4,286

 

 

 

 

(712

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal payment on long-term debt

 

 

(4,020

)

 

 

 

 

 

 

(7,856

)

Payments to General Unsecured Creditors

 

 

(8,377

)

 

 

(87,366

)

 

 

 

(122,806

)

Other

 

 

(1,997

)

 

 

1

 

 

 

 

(6,127

)

Net cash used in financing activities

 

 

(14,394

)

 

 

(87,365

)

 

 

 

(136,789

)

Net change in cash, cash equivalents and restricted cash

 

 

15,219

 

 

 

(100,888

)

 

 

 

(88,938

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

453,335

 

 

 

560,866

 

 

 

 

649,804

 

Cash, cash equivalents and restricted cash at end of period

 

$

468,554

 

 

$

459,978

 

 

 

 

560,866

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized

 

$

24,218

 

 

$

59

 

 

 

 

9,795

 

Income taxes

 

$

13,679

 

 

$

1,392

 

 

 

 

6,907

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

6


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Retained

 

 

other

 

 

Non

 

 

 

 

 

 

 

Common

 

 

paid-in

 

 

(deficit)

 

 

comprehensive

 

 

controlling

 

 

 

 

 

 

 

stock

 

 

capital

 

 

earnings

 

 

loss

 

 

interest

 

 

Total

 

Balance at December 31, 2017 (Successor)

 

$

22

 

 

 

1,059,120

 

 

 

(39,266

)

 

 

(147

)

 

 

2,215

 

 

 

1,021,944

 

Total comprehensive loss

 

 

 

 

 

 

 

 

(81,008

)

 

 

(256

)

 

 

(386

)

 

 

(81,650

)

Issuance of common stock

 

 

5

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

3

 

Amortization of restricted stock units

 

 

 

 

 

5,611

 

 

 

 

 

 

 

 

 

 

 

 

5,611

 

Acquisition of noncontrolling interest

 

 

 

 

 

(1,126

)

 

 

 

 

 

 

 

 

(874

)

 

 

(2,000

)

Balance at September 30, 2018 (Successor)