Tidewater Reports Results for the Three and Nine Months Ended September 30, 2024

Third Quarter 2024 Highlights

• Revenue of $340.4 million, an increase of $1.1 million from the prior quarter
• Average day rate increased to $22,275 per day, $1,145 higher than the prior quarter
• Net income of $46.4 million and Adjusted EBITDA of $142.6 million
• Net cash provided by operating activities of $49.1 million and free cash flow of $67.0 million

Share Repurchases and 2024 Guidance

• Repurchased 189,738 shares since the end of the second quarter of 2024 through the end of October for $15.0 million at an average price of $79.06 per share
• Board approves additional share repurchase authorization of $10.1 million, for a total current outstanding authorized capacity of $42.8 million, the maximum permissible amount under existing debt agreements
• Updated 2024 revenue guidance to $1.33 to $1.35 billion and 2024 gross margin guidance of 48%

Tidewater Inc. (NYSE:TDW) announced today revenue for the three and nine months ended September 30, 2024 of $340.4 million and $1,000.8 million, respectively, compared with $299.3 million and $707.3 million, respectively, for the three and nine months ended September 30, 2023. Tidewater's net income for the three and nine months ended September 30, 2024, was $46.4 million ($0.87 per common share) and $143.8 million ($2.70 per common share), respectively, compared with net income of $26.2 million ($0.49 per common share) and $59.5 million ($1.13 per common share), respectively, for the three and nine months ended September 30, 2023.

Quintin Kneen, Tidewater’s President and Chief Executive Officer, commented, “Third quarter revenue of $340.4 million and gross margin of 47.2% came in as expected, with our consolidated average day rate up over 5% to $22,275. In particular, the average day rate and average leading-edge day rates in our large PSV and anchor handler fleets continued to show sequential quarterly improvement. Utilization declined in all of our geographic segments and is principally related to project start-up delays, but also due to higher-than-expected idle time between contracts and days in drydock.

“Cash flow from operations for the first nine months of 2024 was $182.5 million, the best performance Tidewater has seen in 8 years. During the same period the company spent $75.2 million on reducing the number of shares outstanding and $89.0 million on the required amortization of outstanding debt. Our expectation for the next two quarters is that quarterly free cash flow generation will increase. Our ability under our existing debt agreements to repurchase shares will increase substantially in the same time frame and our desire to repurchase shares at current trading levels is very strong. The Board has authorized the maximum permissible amount of share repurchases under our existing debt agreements, and our current unused repurchase capacity is now $42.8 million. The company anticipates share repurchase capacity to increase by close to $100 million in the first quarter of 2025.

“Although we are confident in the visibility of free cash flow growth over the next two quarters, the visibility into the continued pace of growth in offshore activity throughout 2025 is more limited. We will be closely monitoring market dynamics in the coming months and look forward to providing updated thoughts around full-year 2025 in our next earnings press release. Global industry discussion on new vessel orders and reactivations, which popped up briefly over the summer, has dropped off significantly from that time due to the same limited visibility.

“Over the past several years, we have employed a contracting strategy appropriate for an improving market, emphasizing shorter-duration contracts, trading off longer-term contract coverage and higher utilization for the opportunity to push day rates and contract terms. This has proven to be a successful strategy, with our realized day rate now more than double our realized day rate at the beginning of 2022 when the offshore vessel recovery began. We believe this remains the correct contracting strategy as day rates have still not returned to a point at which newbuilding vessel activity makes economic sense, which is reflected in the continued record low newbuild OSV orderbook. The lack of newbuild activity combined with vessel attrition expected to occur over the coming years points to persistent longer-term vessel supply constraints.

“The outlook on the timing of the growth in offshore vessel activity has become uncertain recently due to concerns around slower acceleration in oil demand driven by lower-than-expected growth in China and geopolitical events as well as the growth in non-OPEC oil supply. We continue to believe that these concerns will clarify themselves in the coming months and that the longer-term outlook for Tidewater remains quite attractive. The world’s demand for energy of all types will continue to grow and the displacement rate from the growth of renewable energy sources appears to be lower than previously predicted. As such, hydrocarbon energy sources will remain a critical element of satisfying the world’s demand for energy and offshore hydrocarbons will increasingly fill this need. Our customers’ commitment to long cycle exploration and development programs is indicative of the long-term conviction in the role of offshore hydrocarbons in the global energy mix and underpins our outlook for consistently strong offshore vessel demand. Our customers have executed sizable drilling campaigns over the last few years and seem to be taking time to evaluate the outcomes of these projects before they proceed with incremental future activity. The improvements in demand for offshore vessels coming from subsea activities is very evident but it is not clear to what extent that will offset the expected pause in the growth of offshore drilling activity.

“Given our conviction around the positive and improving structural supply and demand fundamentals and Tidewater’s strong position in the offshore vessel industry, we believe that market inefficiencies will provide for opportunities to continue our past success in enhancing shareholder value as the long-term supply and demand fundamentals continue to develop in our favor.”

In addition to the number of outstanding shares, as of September 30, 2024, the Company also has the following in-the-money warrants.

Tidewater will hold a conference call to discuss results for the three months ending September 30, 2024 on November 8, 2024, at 8:00 a.m. Central Time. Investors and interested parties may listen to the earnings conference call via telephone by calling +1.800.715.9871 if calling from the U.S. or Canada (+1.647.932.3411 if calling from outside the U.S. or Canada) and provide Conference ID: 6513877 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 November 8, 2024. 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 Form 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 September 30, 2024 and December 31, 2023; the Consolidated Statements of Operations and Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and 2023; and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023. Extracts are drawn from the September 30, 2024 unaudited quarterly and year to date financial statements and the December 31, 2023 audited annual financial statements of Tidewater Inc. All per-share amounts are stated on a diluted basis.