Tidewater Reports Results for the Three Months Ended March 31, 2023

First Quarter 2023 Highlights

• Revenue of $193.1 million; Highest quarterly revenue since fourth quarter of 2015; an 83% increase over the first quarter of 2022
• Highest quarterly global average day rate since third quarter of 2015
• Net income of $10.7 million, or $0.21 per share
• Adjusted EBITDA of $59.1 million; Highest quarterly EBITDA since third quarter of 2015
• Quarter-end net debt balance of $4.3 million

Tidewater Inc. (NYSE:TDW) announced today revenue for the three months ended March 31, 2023 of $193.1 million compared with $105.7 million for the three months ended March 31, 2022. Tidewater's net income for the three months ended March 31, 2023, were $10.7 million ($0.21 per common share) compared with a net loss of $12.2 million ($0.29 per common share) for the three months ended March 31, 2022. Included in the net income for the three months ended March 31, 2023 were merger and severance expenses of $1.4 million. Excluding this item, we would have reported a net income for the three months ended March 31, 2023 of $12.2 million ($0.23 per common share). Included in the net losses for the three months ended March 31, 2022 were long-lived asset impairment credit, gain on bargain purchase and merger and severance expenses of $0.5 million. Excluding these items, we would have reported a net loss for the three months ended March 31, 2022 of $11.7 million ($0.28 per common share).

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “We are encouraged by the continued momentum we saw during the first quarter and the new cyclical revenue and global average day rate high-water marks, especially for what is anticipated to be the slowest quarter of the year due to seasonality in certain markets. Consolidated global average day rates continued the upward trend we saw throughout 2022, with the average day rate increasing nearly $1,100 per day sequentially. In addition, each individual geographic region increased its average day rate during the quarter. Also, all individual vessel classes except the 4-8k AHTS class increased in average day rate during the quarter. Seasonality did play a factor during the quarter as activity in the North Sea and the Mediterranean declined sequentially though, notably, we did see net day rate improvements in these markets during the quarter.

“The first quarter is typically the slowest calendar quarter of the year due to harsher weather conditions, calendar year budgets and the contracting habits of some of our global customers. This year we used the period to reposition vessels and to perform as many drydocks as possible so that we can maximize the utilization and profitability during the higher activity periods we typically see in the second and third quarters. Incidentally, we anticipate a stronger fourth quarter than third quarter, which is atypical, but representative of a market strengthening in excess of the typical calendar year seasonality. The repositioning in the first quarter resulted in disproportionally higher drydock cost and idle time. Drydock days were up approximately 41.0% from the fourth quarter and drydock spend was approximately $31.0 million. Our forecasted drydock spend for the year remains unchanged at $77.0 million. Similar to what we are expecting in the fourth quarter of this year, first quarter revenue actually increased over the fourth quarter, as the $1,100 increase in the global average day rate overtook the active fleet utilization decrease of 1.9 percentage points.

“During the first quarter, we announced an agreement to acquire 37 PSVs from Solstad Offshore. We are excited about the addition of this high-quality fleet of PSVs to the Tidewater fleet. We expect to close the acquisition by the end of the second quarter, and we continue to evaluate a variety of commercial banking and debt capital market financing alternatives with the objective of optimizing the cost of capital and financial flexibility.

“Turning to our regional operating results, the Americas had a strong quarter as utilization improved five percentage points and day rate expanded by over $1,500 per day. This improvement was spread across nearly all of the subregions within the Americas segment, with particular strength in the Caribbean. The Asia Pacific region also experienced a strong quarter with significant sequential day rate expansion of approximately $5,700 per day, although vessels transiting in and out of Australia and drydocks materially impacted utilization. Vessel operating margin in Asia Pacific increased by nearly 16 percentage points to just over 43.0%, driven by the day rate expansion. Utilization in West Africa declined during the quarter as a number of vessels were in-transit within the region and the aforementioned increase in drydock days, nonetheless, the average day rates in the region improved by nearly $800 per day.

“As we survey the market and evaluate the momentum that built during the quarter, particularly as we moved beyond the seasonally slow period of the quarter, we remain confident in our outlook for 2023. As such, we reiterate our 2023 annual guidance of $900 million of revenue and approximately 50.0% vessel operating margin for the legacy Tidewater business and reiterate our updated pro forma 2023 guidance of $1.03 billion of revenue and approximately 50.0% vessel operating margin which contemplates closing the Solstad PSV acquisition by the end of the second quarter of 2023.”

In addition to the number of outstanding shares, as of March 31, 2023, the company also has the following in-the-money warrants.

Tidewater will hold a conference call to discuss results for the three months ending March 31, 2023 on May 9, 2023, at 8:00 a.m. Central Time. Investors and interested parties may listen to the earnings conference call via telephone by calling +1.888.770.7135 if calling from the U.S. or Canada (+1.929.203.0820 if calling from outside the U.S.) and provide Conference ID: 2444624 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 11:00 a.m. Central Time on May 9, 2023 and will continue until 11:59 p.m. Central Time on June 9, 2023. To access the replay, visit the Investor Relations section of Tidewater’s website at investor.tdw.com.

About Tidewater

Tidewater owns and operates the largest fleet of offshore support vessels in the industry, with 65 years of experience supporting offshore energy exploration, production and offshore wind activities worldwide. To learn more, visit www.tdw.com.

Cautionary Statement

This news release contains “forward-looking statements” within the meaning of the U.S. federal securities laws – that is, any statements that are not historical facts. Such statements often contain words such as “expect,” “believe,” “think,” “anticipate,” “predict,” “plan,” “assume,” “estimate,” “forecast,” “target,” “projections,” “intend,” “should,” “will,” “shall” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain and based on our management’s current expectations and beliefs concerning future developments and their potential impact on Tidewater Inc. and its subsidiaries (the “Company”).

These forward-looking statements involve risks and uncertainties that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: fluctuations in worldwide energy demand and oil and gas prices; fleet additions by competitors and industry overcapacity; limited capital resources available to replenish our asset base as needed, including through acquisitions or vessel construction, and to fund our capital expenditure needs; uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable terms, if at all; changes in decisions and capital spending by customers based on industry expectations for offshore exploration, field development and production; consolidation of our customer base; loss of a major customer; changing customer demands for vessel specifications, which may make some of our older vessels technologically obsolete for certain customer projects or in certain markets; rapid technological changes; delays and other problems associated with vessel maintenance; the continued availability of qualified personnel and our ability to attract and retain them; the operating risks normally incident to our lines of business, including the potential impact of liquidated counterparties; our ability to comply with covenants in our indentures and other debt instruments; acts of terrorism and piracy; the impact of regional or global public health crises or pandemics; the impact of potential information technology, cybersecurity or data security breaches; integration of acquired businesses and entry into new lines of business; disagreements with our joint venture partners; natural disasters or significant weather conditions; unsettled political conditions, war, civil unrest and governmental actions, such as expropriation or enforcement of customs or other laws that are not well developed or consistently enforced; risks associated with our international operations, including local content, local currency or similar requirements especially in higher political risk countries where we operate; interest rate and foreign currency fluctuations; labor changes proposed by international conventions; increased regulatory burdens and oversight; changes in laws governing the taxation of foreign source income; retention of skilled workers; enforcement of laws related to the environment, labor and foreign corrupt practices; increased global concern, regulation and scrutiny regarding climate change; increased stockholder activism; the potential liability for remedial actions or assessments under existing or future environmental regulations or litigation; the effects of asserted and unasserted claims and the extent of available insurance coverage; the resolution of pending legal proceedings; and other risks and uncertainties detailed in our most recent Forms 10-K, Form 10-Qs and Form 8-Ks filed with or furnished to the SEC.

If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this presentation regarding our environmental, social and other sustainability plans, goals or activities are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards still developing, internal controls and processes that we continue to evolve, and assumptions subject to change in the future. Statements in this release are made as of the date hereof, and the Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Financial information is displayed beginning on the next page.

The financial statements and supplementary information presented in this press release were not audited. This press release presents extracts from the Consolidated Balance Sheets at March 31, 2023 and December 31, 2022; the Consolidated Statements of Operations and Consolidated Statements of Equity for the three months ended March 31, 2023 and 2022; and the Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022. Extracts are drawn from the March 31, 2023 unaudited quarterly and year to date financial statements and the December 31, 2022 audited annual financial statements of Tidewater Inc. All per-share amounts are stated on a diluted basis.

In conjunction with the acquisition of Swire Pacific Offshore (SPO), we realigned our reportable segments to better reflect the post-acquisition operating environment. The previous Middle East/Asia Pacific segment has been split into the Middle East segment and the Asia Pacific segment. Our previous operations in Southeast Asia and Australia, along with the legacy SPO operations in the Asia Pacific region, now form the new Asia Pacific segment. Our segment disclosures reflect the current segment alignment for all periods presented.

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

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