tdw20230331_10q.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 March 31, 2023

☐	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 or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

842 West Sam Houston Parkway North, Suite 400

Houston, Texas 77024

(Address of principal executive offices) (Zip code)

(713) 470-5300

Registrant’s telephone number, including area code

Not Applicable

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value per share	TDW	New York Stock Exchange
Series A Warrants to purchase shares of common stock	TDW.WS.A	New York Stock Exchange
Series B Warrants to purchase shares of common stock	TDW.WS.B	New York Stock Exchange
Warrants to purchase shares of common stock	TDW.WS	NYSE American

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 ☐

Emerging Growth Company ☐

Smaller reporting 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 ☐

50,864,557 shares of Tidewater Inc. common stock $0.001 par value per share were outstanding on April 30, 2023.

Table of Contents

PART I		2

ITEM 1.	FINANCIAL STATEMENTS	2
	CONDENSED CONSOLIDATED BALANCE SHEETS	2
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	3
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	4
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
	CONDENSED CONSOLIDATED STATEMENTS OF EQUITY	7
	Notes to the Condensed Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
ITEM 4.	CONTROLS AND PROCEDURES	36

PART II		37

ITEM 1.	LEGAL PROCEEDINGS	37
ITEM 1A.	RISK FACTORS	37
ITEM 6.	EXHIBITS	38

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Thousands, except share and par value data)

	March 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	165,145		$	164,192
Restricted cash		4,972			1,241
Trade and other receivables, less allowance for credit losses of $12,640 and $14,060 at March 31, 2023 and December 31, 2022, respectively		182,198			156,465
Marine operating supplies		24,448			30,830
Assets held for sale		695			4,195
Prepaid expenses and other current assets		18,978			20,985
Total current assets		396,436			377,908
Net properties and equipment		786,168			796,655
Deferred drydocking and survey costs		82,787			61,080
Indemnification assets		27,698			28,369
Other assets		34,058			33,644
Total assets	$	1,327,147		$	1,297,656

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	64,775		$	38,946
Accrued expenses		107,348			105,518
Other current liabilities		43,220			50,323
Total current liabilities		215,343			194,787
Long-term debt		169,423			169,036
Other liabilities		68,968			67,843

Commitments and contingencies

Equity:
Common stock of $0.001 par value, 125,000,000 shares authorized, 50,780,847 and 50,554,179 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		51			51
Additional paid-in capital		1,553,919			1,556,990
Accumulated deficit		(688,911	)		(699,649	)
Accumulated other comprehensive income		8,254			8,576
Total stockholders’ equity		873,313			865,968
Noncontrolling interests		100			22
Total equity		873,413			865,990
Total liabilities and equity	$	1,327,147		$	1,297,656

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In Thousands, except per share data)

	Three Months Ended
	March 31, 2023			March 31, 2022
Revenues:
Vessel revenues	$	191,180		$	103,876
Other operating revenues		1,924			1,853
Total revenue		193,104			105,729
Costs and expenses:
Vessel operating costs		115,459			68,511
Costs of other operating revenues		1,151			361
General and administrative		23,545			18,217
Depreciation and amortization		30,666			26,657
Long-lived asset impairment and other		—			(500	)
Gain on asset dispositions, net		(2,216	)		(207	)
Total costs and expenses		168,605			113,039
Operating income (loss)		24,499			(7,310	)
Other income (expense):
Foreign exchange gain		2,348			946
Interest income and other, net		130			3,486
Interest and other debt costs, net		(4,190	)		(4,175	)
Total other expense		(1,712	)		257
Income (loss) before income taxes		22,787			(7,053	)
Income tax expense		11,971			5,218
Net income (loss)		10,816			(12,271	)
Net income (loss) attributable to noncontrolling interests		78			(103	)
Net income (loss) attributable to Tidewater Inc.	$	10,738		$	(12,168	)
Basic income (loss) per common share	$	0.21		$	(0.29	)
Diluted income (loss) per common share	$	0.21		$	(0.29	)
Weighted average common shares outstanding		50,604			41,412
Dilutive effect of warrants, restricted stock units and stock options		1,368			—
Adjusted weighted average common shares		51,972			41,412

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In Thousands)

	Three Months Ended
	March 31, 2023			March 31, 2022
Net income (loss)	$	10,816		$	(12,271	)
Other comprehensive income (loss):
Unrealized loss on note receivable		(132	)		—
Change in liability of pension plans		(190	)		(197	)
Total comprehensive income (loss)	$	10,494		$	(12,468	)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)

	Three Months			Three Months
	Ended			Ended
	March 31, 2023			March 31, 2022
Operating activities:
Net income (loss)	$	10,816		$	(12,271	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		21,048			17,673
Amortization of deferred drydocking and survey costs		9,618			8,984
Amortization of debt premium and discounts		420			375
Provision for deferred income taxes		35			177
Gain on asset dispositions, net		(2,216	)		(207	)
Gain on bargain purchase		—			(1,300	)
Long-lived asset impairment and other		—			(500	)
Stock-based compensation expense		2,103			1,458
Changes in assets and liabilities, net of effects of business acquisition:
Trade and other receivables		(25,733	)		(15,570	)
Changes in due to/from affiliates, net		—			(20	)
Accounts payable		25,829			2,825
Accrued expenses		1,830			3,207
Deferred drydocking and survey costs		(31,325	)		(12,612	)
Other, net		369			(3,843	)
Net cash provided by (used in) operating activities		12,794			(11,624	)
Cash flows from investing activities:
Proceeds from asset dispositions		5,716			4,628
Acquisitions, net of cash acquired		—			(1,039	)
Additions to properties and equipment		(8,651	)		(1,229	)
Net cash provided by (used in) investing activities		(2,935	)		2,360
Cash flows from financing activities:
Acquisition of non-controlling interest in a majority owned subsidiary		(1,427	)		—
Debt issuance and modification costs		—			(263	)
Tax on share-based awards		(3,747	)		(1,017	)
Net cash used in financing activities		(5,174	)		(1,280	)
Net change in cash, cash equivalents and restricted cash		4,685			(10,544	)
Cash, cash equivalents and restricted cash at beginning of period		167,977			154,276
Cash, cash equivalents and restricted cash at end of period	$	172,662		$	143,732

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

(Unaudited)

(In Thousands)

	Three Months		Three Months
	Ended		Ended
	March 31, 2023		March 31, 2022
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	98	$	—
Income taxes	$	17,057	$	3,200

Cash, cash equivalents and restricted cash at March 31, 2023 includes $2.5 million in long-term restricted cash, which is included in other assets in our condensed consolidated balance sheet.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(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, 2022	$	51	$	1,556,990		$	(699,649	)	$	8,576		$	22		$	865,990
Total comprehensive income (loss)		—		—			10,738			(322	)		78			10,494
Acquisition of non-controlling interest in a majority owned subsidiary		—		(1,427	)		—			—			—			(1,427	)
Amortization of share-based awards		—		(1,644	)		—			—			—			(1,644	)
Balance at March 31, 2023	$	51	$	1,553,919		$	(688,911	)	$	8,254		$	100		$	873,413

Balance at December 31, 2021	$	41	$	1,376,494		$	(677,900	)	$	2,668		$	466		$	701,769
Total comprehensive loss		—		—			(12,168	)		(197	)		(103	)		(12,468	)
Issuance of common stock		1		(1	)		—			—			—			—
Amortization of share-based awards		—		441			—			—			—			441
Balance at March 31, 2022	$	42	$	1,376,934		$	(690,068	)	$	2,471		$	363		$	689,742

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

(1)

INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive income, cash flows, and changes in stockholders’ equity of Tidewater Inc., a Delaware corporation, and its consolidated subsidiaries, collectively referred to as the “company”, “Tidewater”, “we”, “our”, or “us”.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 27, 2023 (2022 Annual Report). In the opinion of management, the accompanying financial information reflects all normal recurring adjustments necessary to fairly state our results of operations, financial position and cash flows for the periods presented and are not indicative of the results that may be expected for a full year.

Our financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all subsidiaries (entities in which we have a controlling financial interest), and all intercompany accounts and transactions have been eliminated. We use the equity method to account for equity investments over which we exercise significant influence but do not exercise control and are not the primary beneficiary.

Certain prior year amounts have been reclassified to conform to the current year presentation. Unless otherwise specified, all per share information included in this document is on a diluted basis.

(2)

RECENTLY ISSUED OR ADOPTED ACCOUNTING PRONOUNCEMENTS

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Disclosures of Supplier Finance Program Obligations, which requires disclosures about supplier finance programs including the nature of the program, activity during the period, changes from period to period and potential magnitude. The guidance is effective for annual periods beginning after December 15, 2022, with early adoption permitted, and most disclosures are applied retrospectively to each period in which a balance sheet is presented. We adopted this standard on January 1, 2023 and it did not have any impact on our consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends Topic 805, Business Combinations, to require an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The guidance is effective for annual and interim periods beginning after December 15, 2022, with early adoption permitted. We adopted this standard on January 1, 2023, and it did not have any impact on our consolidated financial statements and related disclosures.

(3)

ACQUISITION OF SWIRE PACIFIC OFFSHORE HOLDINGS LTD

On April 22, 2022 (Closing Date), we acquired Swire Pacific Offshore Holdings Ltd., a limited company organized under the laws of Bermuda (SPO), which at closing owned 50 offshore support vessels operating primarily in West Africa, Southeast Asia and the Middle East. On the Closing Date, we paid $42.0 million in cash and issued 8,100,000 warrants, each exercisable at $0.001 per share for one share of our common stock (SPO acquisition warrants). In addition, we paid $19.6 million at closing and received an $8.8 million post-closing working capital refund related to pre-closing working capital adjustments, for a total consideration of $215.5 million.

Assets acquired and liabilities assumed in the business combination were recorded at their estimated fair values as of the Closing Date under the acquisition method of accounting.

As of March 31, 2023, the following recorded fair value amounts for the assets acquired and liabilities assumed were final, with no material measurement period adjustments made during the quarter:

(In Thousands)

Assets
Cash	$	33,152
Trade and other receivables		64,621
Marine operating supplies		5,122
Assets held for sale		2,500
Prepaid expenses and other current assets		4,174
Net properties and equipment		174,415
Indemnification assets (A)		32,279
Other assets		1,153
Total assets		317,416

Liabilities
Accounts payable		1,594
Accrued expenses		54,924
Other current liabilities		28,511
Other liabilities

SEC Form 10-Q filed by Tidewater Inc.