TDW - Earnings call transcript Q3 2018

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Operator

Welcome to the Earnings Conference Call for the Three Months ended December 31, 2017 and the Nine Months Transition Period from April 1, 2017 through December 31, 2017. My name is John, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note the conference is being recorded. turn over now Jason will I the to call Stanley. And

Jason Stanley

I and John. Lundstrom, period Tidewater's XXXX. to Tidewater's thank Good would you, your and welcome Investor ended Jason Relations, Director, morning, XX, you the Thank like for everyone, to I Stanley, call earnings December time for Tidewater. am conference Financial this and Bruce morning in Rynd; Quinn General Officer; John Operating CEO, Gorski our Fanning, the Chief call interest Secretary. and Chief and on With me our Jeff our President are Counsel our Officer;

call over a John be I Following review. some then formalities, will for few Quinn's the comments, by his turn John to your the comments, questions. wrap-up call then provide we'll final to initial will financial for and followed open

make and that understand we may factors forward-looking I stated to During are not historical uncertainties call, you in that cause release. measures during know company's comment be statements the future that that today's during Also both risks, by other or is conference measures certain are comments performance of to fact. actual materially that different the there may of we that any press make present call. conference reconciliation GAAP a and call, non-GAAP today's and GAAP last we financial evenings non-GAAP included may implied and from

to be forward-looking Tidewater's With may the results materially of over John. from differ Form statements XX-K. cause in those factors to concerning implied will information that, actual that or by factors turn recent Additional the could the the call most stated I section found risk

John T. Rynd

years team say to I call. has Larry thank as company Rigdon as CEO. the improves at CEO set morning, summary our benefit company's join I'll address some as how of I helm, President market quarter, current the feel see the ahead. highlights am you the progress provide offshore our leadership pleased past Thank with to will for weeks track priorities. on brief joining everyone honored in solid position and and management foundation Good a that the a strongly and few the the the the you, I and With with on a to-date, the Interim maintain sector Tidewater that you right and Tidewater that I first just Jason. of give

based items of charges. For quarter or per $X.XX Credit loss $XX.X loss the $X.XX loss revenues Also or weighted we common impairment EBITDA share per shares Act quarter December million based December's adjusted $XXX.X per million. expense included which stock of reorganization or and includes loss was net $X.X is per Awards. $XX.X the share, $XX.X asset the compensation fourth reported Note million. share million related Jones our XXXX, New average and of on outstanding for $XX.X excludes of that on quarter of share million million,

the Our supply for in quarter reflect the results continued vessel offshore market. weakness

customer the in remain bidding the outlook spending the challenging at XXXX. not OSV bullish appear declines cases observed that global oil activity several have the have inquiries, and to market in to improve new in enough the been relatively the the projects, to While offset With continue and offshore to commit expect we in summer no analyst intent over pickup yet our stabilize, prices North articulated well season some we begun, to modest customers Sea, have somewhat for has increase years. least the a significant by [ph] dismiss and to to past in community,

profitability As a management will and the result, company future work sustained the growth. to position team to continue for

they our in compliant remained execute modern globally service core as a in all fleet with and principles high Tidewater post company, done priorities, safe young will if our I always to and highest to possible position committed say we which operations what am also to team present pleased CEO, realities with business to when this remain consolidator the as and the the as quality just a company the themselves. will These customers and adapt plan. attributes has of supporting joined lengthy operate. water Having time These my to depths During recently restructuring our downturn. write opportunities

segments of from have months, streamlining significant quarter, underway such including Larry significant. were several As the several that geography-based you reporting heard and been consolidation and for Staff, wage management four structures the segments, consolidation. made have reductions as benefit elimination a and reported been result last into initiatives three of of Quinn redundant

and company the recent addition quarters. In in vessels selectively has equipment of stacked disposed under-utilized

nature Going the forward, quarters recently additional company cost of financial savings growth several and and will the to profitability, to opportunities and at at the shrink of we our may associated while based scope in long-term changes occur for identify support I charges and company's continue process, in will operating cash reaching order the XXXX. restructuring cost for of point some our way shore near-term we cost results. be reductions in to affect footprint to objective in may flow reflected Due couple don't a company's look believe of to implemented It breakeven. also fully achieve

from stock-based $XX down XX% run expense As million excluding should rate compensation below G&A, levels. again per pre-downturn XXXX, quarter we or be exit

I team area our focus another the our of at rationalization moment is to fleet. for As mentioned vessel continue

region our our future fleet basis. its We customers' suitability evaluating of stacked status are on and the a requirements continuing by region for

heard peers the capacity from our sector. that have us, a significant over in number and a of OSV analysts You there problem is

ownership sold four to A XX is disposed have make are further hard currently or we market that the XX sector near-term but [ph] vessels, of the day scrap. the capable XX idle of currently case advantages years specification which of will to the customers ultimately refine reactivate has sold reduce and report drilling and third business fund Recognizing which gas increases potential December lag has priority the fleet. and when of were disposed for industry, Subsequent modern capacity, vessel scrap. as its generally the last on Tidewater OSV service to activity. cause scrapping us excess reactivations the will offshore were to selling vessels OSV leader, equipment. older, rates, plans inactive do its the expected by either Tidewater outside XX the ability to As can rationalizing tonnage help to progress only in as effectively the can in less to utilization the and comparative the to Tidewater. so, sustained of to the part XX, serve oil continue improvement company will of cost In that do Tidewater impede vessels,

this financial our will I call Now to turn Quinn quarter. Fanning to over the cover performance

Quinn P. Fanning

Thank you, everyone. morning, John. Good

EDGAR will change Form XX-K know, through April XX, press release XXXX we with December our fiscal December service consistent XX, through market X, our you for decision filed issued year-end after on close company's period disclosed today. period from the later The the from March transition filing to nine previously transition XXXX As yesterday. months is earnings A to XX. the be report

supervised position the emergence results and activities. release, XX, the through company's on in will highlighted operations in court restructuring, and adopted be XX, upon of will July fully company start" from explained a was XX-K, "fresh December as July XXXX press its our XX, financial predecessor accounting XXXX, more As earnings report

financial covering data five asset are successor position statistics as of operating Financial periods, on and your both sheet also financial three subsequent our quarters successor with balance data presented included and report geography-based I We presented will attention release. last select is reporting results the activities. to segments. straddling by and evening's financial results, call operations predecessor and operating July to or Similarly, class XX, and based equivalent our tables press activities.

as items charges referenced With of resulted impairment of and includes The calculation Act-related We million performance million, as EBITDA is have share liquidity of for well or from the we Jones GAAP rules. impairment as context, XX that reported that $XX.X loss $X.XX net John $XX.X per financial as noted, the and proceedings. share. directly ended loss the undertaken a during exclusion asset GAAP's million, Chapter to XXXX or reorganization XX, also per and measure included John a measures. noncash the three from the net anti-dilution common consolidated loss most $X.XX to company's which comparable months December in or reconciliations share of Warrants related reviews also per $X.X due U.S. share the per $X.XX period, the to non-GAAP

claim the As New $XX with as of total settlement had the outstanding. previously in shares leaseback and XXXX, mid-February the approximately common Creditor sale million remaining Warrants company disclose, of

equivalent operating economically terms, which margin least was a common As reorganization $XXX million Warrants quarter includes quarter per the of XX, was many strike the New $X.X view, share, ended vessel the Creditor are ended New and vessel operating December items million. you of was Warrants Creditor and approximately XXXX, know price margin compensation months Vessel million for $X.XX shares. of stock-based percentage XX%. asset Consolidated expense $XX one-tenth and XX, at three $XX.X have EBITDA charges of excludes but December for million our in respectively. impairment In the so the revenue for to

operating go expense net the expense consolidated $X.X provided asset of period stock-based loss EBITDA on The the structure expense. will lease for EBITDA our XXXX therefore which expense million Again, XX, quarters in a vessel operating owners impairment XX for are that lease factor excludes return $X.X and activates December of in use to but page results. reference $XX.X vessels quarter, financial press and of ended charges, $XX.X reorganizational respective and includes reorganization will EBITDA December the Interest of periods relates vessel was reflects to For capital was items four and XX reorganization release. our the million. million. with compensation equivalent here reconciling not Tables planned operating or cash our course this to million in for for connection be forward

tax over of is last for approximately million or equivalent we generally consistent for with couple the taxes in $X.X cash $X.X taxes quarterly was which period million While same paid quarters outlays periods. the the December benefit during our recognized the quarter,

$XX interest As in is the in flow make tax expense, a you quarter. charge earnings breakeven. particular million and our cash activities point for progress and to cash reasonable measure margin can by the upon relative based in we taxes We consumed prior revenue taxes which operating by a trending to calls, that excluding based or I fixed burden and taxation of driven primarily goal proxy noted produced basis per burden is cash expense stock expense at operating charge quarter-over-quarter jurisdictions. G&A, our our cash interest think towards compensation includes highlight are $XX to company's which fixed the vessel million is and foreign

vessels of the for XXXX. December down the Of which our number XX return average decrease accounted the of XX the XX owners the XX, vessel vessels vessels with leased is fleet, an vessels period of September years. average pursuant ended in fleet, from the XXX at three that vessels, Looking the for that of vessels our had owners, months to reorganization, to quarter-over-quarter, quarter the was Note XX for average vessels. to planned plan age in respective return number leased our connection

As scraped John December otherwise number to and of we vessels of disposed XX. have a subsequent noted,

Of average for are the to Average and point further of XXX also of release. Perhaps the revenue have consistent summarize are fleet active which vessels and the days XXX charges fleet, scrap and for the Utilization were in Average quarters fleet, fleet impairment reduced December service available approximately quarters. average, So average over approximately schedules quarter. couple operating active over in fleet rates likely the the or quarter, were on press that be driven quarter the stacked of and were equivalent we the the operated December quarter, the day X years. owned financial decision active during approximately particular been rates, and of the the I'll that fleet now March over vessels available last the of the to next obviously, December couple XX,XXX in the day with fleet average the to of should recognized return at $XX,XXX in December vessels the and days, rates day our which with function all last owned by utilization Tidewater for quarter. quarter-over-quarter. included days vessels active in XX.X% consistent is quarter the percentage note less our active active periods. a generally couple which were December relatively vessel in up was during

included The call, also the successful are ROV geo-market. the resolved also the two statistics Since note with assets construction operating approximately ton and conference of company asset class the financial disputes all company with million. I'll for additional press of $XX earlier, over noted As that outstanding last by and our release U.S. completed deadweight sales PSVs. its shipyard the also X,XXX earnings

The summer which is large first second and vessels, for to fleet will U.S. flag deepwater increase which in scheduled PSVs. the are delivered the has been asset early of delivery X XX modern

of were dispositions. was at with available $XX,XXX purchased notes notes from classified using prohibited the up we a indenture to realized a related be the restricted that required proceeds are tendered senior of $XXX million company. portion in the Finally, offer, and to sheet $XX.X December report February offer now the by our company commenced The including cash that of such of notes million cash and that to ongoing portion the $XX.X by the Less by governing million, is than To asset terms as will balance to XX, of XXXX, conditions X, our extent notes any of the the of to company purchase balance proceeds. for the we remainder due million is use not the in an asset manner as XXXX, accordance secured purchase at par sheet, that on on disposition likely in has our with restricted by company ultimately requirement offer of were tender $XX.X indenture.

decrease connection our top as remarks as on plan $XXX values gross cash, working five period million. and of million, earnings for the restructuring $XX.X call, paid million sheet negative was by includes capital, which fresh the plan, our and The position of net of [ph] vessel balance cash the $XX.X relates cash. a payment of mentioned the December bearing to was cost. today, following the million in relates respective owners of with $XXX plan $XX.X connection completion in and of reorganization, that operating expense, $X finance in start result, net regards of with debt to and last the excluding at items, cash liabilities, million, million approximately vessels to to interest adjustments. In reorganization merchant's the and XX million we as the month of return operating the and reflect net used think of associated operating Cash lease a debt, of accrued which XX approximately with balance As net of delivering the activities was net my which debt restricted restructuring operating accounting our assets sheet, net services again December million of previously conference at $X.X our related $X.X consideration again professional

restructuring in restructuring and results other my operating charges, are cost related with comments the adjusted for activities margin in modest consistent operating post was fixed vessel restructuring-related relationship items. provided So and related particularly period between cash or used the when to

assets, which value ships December equipment, was million and owned primarily long-term at per carrying $XXX to per-stacked million approximately XX at of which equates properties approximately ship. ship $X.X and active XXX the million, Looking $X.X reflect net

are value XX side approximately have of years an less approximately million than $X.X brake an additional Other the with $X.X value no I with taxes. vessel. XX, average of X,XXX pension XX post five deadweight average, old to XX our less value than carrying $X.X XX of and of forward is long-term per the As interest and than carrying and On XX,XXX our of restructuring is those approximately further modest sheet pretty balance our horsepower approximately of the carrying average those data $X.X hand XX million. bearing vessels $XXX debt and million. million, X,XXX PSVs million. years vessels old cargo are vessels right is carrying of deepwater AHTS carrying tons have that XX points, on deferred note of above capacities will straight average, value liabilities income similar

a zero post essentially -- which December approximately booked per had trades at equity approximately $XX post valuation accounting a we've common XX an or at asset approximately at basis book equity. with approximately December XX, allowance. to $X Jones against position net fact stock net In On outstanding, tax and currently turn billion Act-related over restructure XXX% XX% discount deferred Warrants debt. this I'll was XXXX, we that, share back our restructuring, call With to John. Shareholder's the

John T. Rynd

Quinn. Thanks

focused As a to stability navigate be ensure cash past Quinn trough. that company some be on we and a market year what challenging business may we Achieving remaining mentioned, over several neutral like the respected will is by analysts rates, feel in several on reaching to average of offshore prepared overall follow in utilization based we the quarters, day streamlining activity. our another position terms expect the

be While to development to in increase beyond deepwater. offshore particularly and point, us deepwater for and seems significant XXXX looking and drilling, in behind are exploration at the worst any this we ultra

in the open competitive today. an characterized on operating profile well the footprint the line And that leverage by low fleet, Tidewater and for a you Thank positioned structure, is financial John, with us believe liquidity joining we that a call for offshore position, recovery However, the for global the and sector. we eventual questions. now is a can competitive cost strong

Operator

you. Thank

question-and-answer question [Operator Gibney we first Capital Instructions] Joe session. Now will begin And comes from from the our One.

Joe Gibney

good again. to John. morning, be Good Thanks, you to morning. And talking good

John T. Rynd

Thank you, Joe. morning. Good

Joe Gibney

you what's been [ph] there given market, Just blanket the curious comment we're Gulf North perspective come we over regions just there term, as going customers seeing you perspective more little seeing the based? are not on Jeff, Be would on the then this out the in maybe on from on a curious there more particular of Middle on what strength the broad East and seeking term, [indiscernible]. a more Are maybe if trials? question you seeing and Mexico is it what from in of in Sea, specifically on can on some be away bit of

John T. Rynd

Joe. There Okay, there is you lot that a are asking.

circle let back. So me

in of rates summer. an think comment is I hope there expectation improvement Sea, happens. first I in all for spot the North is that this

we're anything fulfill. to haven't hoping We to-date. for But the see promise

deepwater of we're are in hope the I to there the to further other this In to in issue activity Mexico, of Gulf hold for East utilization. in out, where supporting are very be Middle terms some opportunities are side? we'll lows. construction there the seen drilling holds the Southeast Gulf Mexico looking see of mature terms this the on of movement basins. looking And on, in continued uptick upon our going we floating in are of us is customer area The and strong play oil other people and XXXX, business, some into that is I that continued the backed seeing rigs of we'll even places terms on. continues talk you hopefully strong of activities you XXXX this in Was for those really hope drilling very, some maybe Asia, for in from there but only haven't it. stability in not and other improvement of but kind what what they North in of at any are for and improvement in later forecasting like our also think Sea about utilization aware price is looking And is the continues in that but as to we itself, sector specific though activity, we competitors in market, if we've is which when stays that ultimately see look customers for. side year, of we

Joe Gibney

your No, term come here that in more was well, it. a I we trough? off bit was perspective as little customers as just curious on the seeking term

John T. Rynd

Joe. sorry Yes,

the some where doing are term are for investment. already The interesting. have of places really we places our longer-term request it's where sort seen So customers

sort some true very or So exploration looking greenfield any at know you developments as of type is of further limited.

of few those the around have We seen world. a

picking to looking of not term some could a a interest So maybe asking of recently longer to month spot considered here six increase two that. terms have we across this customers of seeing at situation multiyear operating the consider extended this we're seen of forward larger an in activity we well duration. term, the program, overwhelmingly which of the we're window where working, globe be Actually for which in so versus globally up three more seems a we're or someone's seeing are the for one rig place least month what growing be

Joe Gibney

over can XX the of fleet, trying Thanks I since were not granular you helpful. then next a about just based a December said just the sold Okay just 'XX characterized And Quinn vessels went to cost that understand, to as two little there. coming three the was out of bit we just a more curious were to CapEx XX, for flowing of you, trying and you believe scrap the question on, scrap quarters to think and active sold through get

Quinn P. Fanning

to a and over that or make better whole price we think scrapping. as was just We again larger thousand but in that is market we on industry need a rationalizing little out think about that particularly than service you million a think sit are vessels markets, between non-oil into ASHTS that the as committed rather really to into proposition, to end to and couple to recover. we of the low bit and in vessel I equipment, the But trying oil was terms know the that you some to it’s our you seriously going but hundred where scrapped, are the a as if overhang a dollar gas tries fleet. of typically operational maybe scrapping gas distinguish point and equipment the supply one recollection continuing we industry are maybe of which markets maybe get fleet as dollar the they do are sold My can active sold leaders vessels maybe more the idle

Joe Gibney

term? Understood, and near CapEx

Quinn P. Fanning

mentioned CapEx of we deepwater delivery PSVs near U.S. timetable. be will term we the that the took as building probably two delivered the are Last in one I in one June of

million delivery connection expect last outflow the our we the that renewal in on and program. is modest I or think CapEx something that otherwise very final with like really payment fleet $X.X that a modification replacement that’s in with typically customer connection and whether communications or vessel economically the to reached life requirement very its extension a assumed enhancement useful that already whatever life. specific or rare package its is depreciated or

expect once we takes opportunity. we unless would trial lot course this look to PSVs significantly an last decided So of a CapEx at we to deepwater M&A

proceeds, is you over quarters So driven look back by the flow consideration cash again and of payouts if connection the from in of our realization with cash financing was emergence CapEx essentially number completion our activities the last is modest impact December particularly from is typically our of a the investing deposition in use activities have dispositions which fact cash RV then cash in CapEx. for then source quarter opposed a because higher [ph] to as

actually we cash activities So generating investing at in couple last from quarters. of least are

Joe Gibney

thank it, appreciate I Okay, guys, you.

Quinn P. Fanning

Joe. Thank

Operator

Holm question next from Turner is Our Clarkson from Platou.

Turner Holm

morning gentlemen new congratulation on John Hey, the role. good and

John T. Rynd

very you much. Thank

Turner Holm

given your take Yeah, tenure. we in you that try easy on it a few just you, are will to weeks John

and all approaching wants utilization look see in. active the increasing of So steadily now last the be this XX for the question When chime XX. quarters utilization pretty it's I you who couple to high been you at up operating anyone in guess over

XX% the seems curious period. to do will, be what point seasonal magic carrying in trend what into I that you the if secondly of you is the tipping see quarter are XX% is basis, an weak S am in that it that this if terms rates. day improvement potential active And you then of where the for? on understanding first number So with looking March sort

Jeffrey A. Gorski

this Gorski. is Turner, So Jeff

terms are think as well. also other that more side and in be from tendering on rig I are we operators to tends all of hearing what of First you the interest hearing

to you perspective. next of it we tenders we the I utilization's to of be of you timing space With going geographical into and to because actually level of really what will what in to think continue. at to terms I to quarter, fruition complexity players pricing, that least come going looking that think do from get terms drive and things the point those got the active and think if at in from of utilization in So at standpoint, amount regards the going where start the LSV a is believe

I think when we opportunities starts market shorter it get the do into tight spot getting to term availability. has and vessel really with the

are not to opportunity we the back more into we for going more three it. a So sense. sort million, at we are three through it’s looking have and drydock to that up business job. ahead six them if to money Maybe a maybe the of spend same at and are vessels continue months and go past the to million makes exact will. get year But little how vessel Maybe you think someone of we but some than bit X business, a activate from that’s longer a are X.X term they for can taking three next months look substantial perspective the or we going to to we

are -- that’s helps, to a what's area, that’s can really you think geographic by I going rates vessels ultimately to going So available to what with of to think Turner. and drive Hopefully we if really reactivation something has geographic overnight. point as not and do the to do I it’s that’s be really

Turner Holm

– it does Yes

Quinn P. Fanning

asking think I delta active percentage to the And color, bit little price. relates or to give utilization. got is our you ability and the There think the point two. to experience obviously you I utilization push historical vessel overall you about XXs, even high a we an or peer into see would owners guess the a XX question are that overall I the think as utilization between more into have XXs had should

idle I think investment, after what maintenance the experienced particularly that it’s a in special the down maybe easily little crises have the whatever. last we substantial without back than is financial are we the today that coming surveys deferred of market in into is not experiencing or lot couple whether today turns is bit different equipment, or

has that that that's So equipment see than is of for expect overall much I additional basis levels market. in we going make because on so large than think seen long. to investment been again be the historically equipment recovery in to trend But of the may bit primarily push higher what little we I you available seeing would see this you sideline a different lower the have are to as on to be because the going past, required price utilization some the at ability

Turner Holm

agree, question I is what I which are denominator that’s the least seeing most… we in at right but Yeah the guess

Quinn P. Fanning

on I But substantial. think paper supply the overhang is

smaller I to probably related again reality to investment in be people assume, think than this is is largely that most reactivations. made the lot

Turner Holm

getting it of understand new lot you a Indeed. opportunistic feeling deal, Well do it is What’s thought just time trying it a in about bit clearly turn in consolidation a driving got process say the little of make there? approach, now to attention. the turn a Is and I will what’s gets CEO is position, it you to to a breakeven, cash a an about the is Tidewater place. to going very to strong which sort in seeing market.

John T. Rynd

is I take This first the will Turner, that. at short John.

good I Obviously, are we very peers. think and to unique relative consolidation. can't position that in a our force you

but and look distressed it no good your timeline if one at team its position that individual something to of hard which on we opportunities into key no can it’s is you assets are any will plug at whether that is there or consolidation markets. and here So M&A be do another fleet table are obvious looks peer the that that management deals and we there in and a entire

process So take I opportunistically will think this market balance we that and of strength look will our sheet. be ongoing Tidewater the of at place to advantage the

Turner Holm

Okay, I I turn in I John. thank much queue. back that. will you jump it very back. will appreciate

Operator

[ph] Sunovi question from Jones is next Our Pareto. from

John T. Rynd

Sunovi. Hi

Unidentified Analyst

questions. Good morning, guys. Two Thank me questions you for from my please. taking

And improvement anticipated objective on utilization, to in the is And by on question initiatives be and/or second driven on and day by scrapping even and cash-flow objective terms on near seeing much a The first and you your characteristics one cost you if of the a forward sort costs? for scrapping? driven Thank year coming could fit that going rates term expected how you. an the in should is your how scrapping vessel much expect which assets. Where of from good find me bit regions? we is in of of also comment break most

John T. Rynd

take Quinn, you and why go don't that. ahead

Quinn P. Fanning

Sure.

is I supposed the reality to As point for in Sunovi, the starting dealing I us as think objective. revenue highlighted revenue with

on XXX plus are in are revenue the tax context break leverage in We trying is dollars after a of do get where vessel and we in what million that size a to terms an structure quarter are and to basis. we even to cost after

maybe today, be and we that our or the where flow John, trying. of Larry, think breakeven and have the can I a Board mandate something get from close clear, now to the just or I that market it very to parenthetically is basis die cash to on

structural think to I look the structure. at point cost So the to adjustments

think like think in about we support we have cost of significant is of particular whether of basis the benefits also look we hanging chain have as or that that an to go thinking of kind on forward a I purchasing supply at significant start basis wage, particularly economies, continue and savings our about going a rationalization area forward levels been we John it's global to "low shore as reductions region, additional staffing the reactivating base most go vessels potential something stuff in a highlighted on a in fruit" and upturn. harvested for or term are as

think see of better some would run-rate we the we the activity. as market the breakeven into in two we year So XXXX when like current positive making flow signs day based are the but get and or to not we will the are decisions downsizing see are in drilling recovery said point quarter decisions significant utilization, but better I and some closures least on achieve the in there we That at banking quarters, don’t get cash uptick to again get trying form potentially rates of on current know one particularly to those a there market some we or in progresses that on the basis I run-rate, certainly as revenue revenue. we office

I but how there think that’s extent. market -- positive to the is some out wait we will just develops to see signs have there to

looking In disposition, a decisions are here younger we driving basis. terms you been we there. vessel scrap fifteen of focused We are older equipment probably is it older as believe The years somewhat that expect decide years don’t characteristics of that’s vessels that vessel or fifteen a specification. generally of is lot a in terms and forward have we news when age and go than relates to the vessel that’s that good on or a our to market on

that will decisions at were and in are se that occasion. be would of equipment, those a move the as primarily a we vessel we targeted to per utilized scrapping really your But and think it another one region region. sell it's looking oil but equipment in If industry. terms our good outside on gas in not I drives questions market better we age of market specification or scrap got

Unidentified Analyst

clear, will I hop you. you. to thank queue. back the Okay, Thank

Operator

Our next [indiscernible]. from question is

Unidentified Analyst

morning my question. taking guys. for Thank you Good

a on got but cost. answered I them actually short one think a lot of

is good items QX costs down some just in QX. it will or I think that, that you drove quarter? or special progress the that in QX somewhat changes or wondering all drydocks there anything back is much this I picture Is like any as bump or was the sequentially in showed as stuff any structural? did that

Quinn P. Fanning

us restructuring I think we at related a point. behind costs is putting are lot seeing this us of primarily

December numbers when at related essentially the down the will potentially of and but costs, think think the trickle don't services a restructuring we to are a have significant. we in March I quarter professional bid in I quarter terms be

I wage January that effective take XXXX. our implemented a X, became we trends of comfort it number think reductions particular benefit look go-forward on at a the that other G&A as basis, and thing have the we was on we in

put of Some place behind January. the restructuring we related, in stay in are us incentive of starting that

excluding when I we So expense, as talks quarter John for where stock I in based million per costs below outlook G&A, compensation see on $XX that’s think of getting level, the think terms a highly from, we terms confident XXXX in I XX think $XX December below we exit quarterly million are the at be going I quarter in as trend think the of that will and or we about G&A.

in are the So direction during in put incentives we generally that the we are of of the some right the lot place putting in us. part and related behind professional we moving restructure now restructuring stay services costs because are

Unidentified Analyst

Okay, thanks.

use can quarter as third the into yard we to the use a fourth that’s So going guess or operating costs good quarter stick forward then? I -- second a

Quinn P. Fanning

I Just was referred vessel operating to clear SG&A expense. not to be

Unidentified Analyst

Okay, just so SG&A. that’s

thinking more costs. about vessel the operating So I was total

Quinn P. Fanning

you. I spoke I over am sorry,

Unidentified Analyst

Yeah, I terms was operating thinking vessel costs the of forward. in total more crew and costs about go

Quinn P. Fanning

and on your margin active vessels vessel anticipate would and would the on Yes, a be be to which for you again quarters activity active relatively back the to level. guidance providing operating on that’s market operating think of whatever based going focus are stable function numbers upon couple next level in trends I focus of vessels we depending expect expenses. you more that to we I

the vessel to two move to going operating and crew We to that expect that maybe mid-XX% a on generate are but lag it revenue manage into equipment extent particularly trying and activate same we the margin we that costs those generally to between would are cost, direction. that in we

Unidentified Analyst

for Okay, me. thanks, that’s all

Quinn P. Fanning

Thank you.

Operator

from question is next John from [indiscernible] Pinnacle. Our

Unidentified Analyst

good Hi, morning,

John T. Rynd

morning. Good

Unidentified Analyst

Just a question scrapping. the on

you be by would this scrapping scrapped Where How many vessels think the XX You you year-to-date. year-end? do year? total might anticipate you vessels mentioned scrapping

Quinn P. Fanning

vessels. quarter end So at December had XX we stacked

XX December of XX, highlighted were disposed to of not vessels John XX As we which subsequent scrapped, XX.

think going won't by an cost for additional minus a $XXX of guidance his basis, where want as zero remarks. market, we savings terms the -- of cost forward are low or provide year-to-date mentioned is but sell now at you equipment a we there beyond including that in fleet in XX day we in is idle never stacked we we or I scrapping significant potential maintain upturn we into scrap elements are be look continue from a the by to We terms inactive I is of or stack until That get what eliminating plus disposing dispositions, to will see already specific scrapping. me, closer mid at have get to John on to excuse reactivating vessels. seventies, which plan into but to we the a number getting but either the that to fleet prepared vessel, done in to scrap a go

Unidentified Analyst

fine. Okay,

that it’s like. continue So rates, at to not sounds it going

Quinn P. Fanning

youngest think are the it's the I in dispose the out and quality pruning that I idle average probably and to the gas a i.e. inactive just up, And to our of expect but is think stack are that vessels as age potentially that don’t the the service highest or would rate, quality fleet that in in vessels even we not oil because higher we moving point and we remain at things return it’s market to those No, fleet spec, reasonable as assume other result vessels. is the a fleet, overall.

Unidentified Analyst

got been makes company’s two now? now? headquarters close company Has sense. is that Okay, Houston there it, where the is headquarter right And or

Quinn P. Fanning

to this opposed press from from of at is at as migration quarter release are least saw look Houston consolidation John you headquarters mentioned away Houston. As Orleans. continuing the that toward than but we to issued office staff the rather from it’s New the

not downsizing would we and So Orleans to New be closing the expect if ultimately operation.

Unidentified Analyst

thank much. you very great, Okay,

Operator

Our next from is Platou. Clarkson from question Turner Holm

Turner Holm

Hi, were guys, my answered. and additional asked questions

just So else offline. take anything I'll

So yes, you. thank good XXXX, luck in

John T. Rynd

Turner. Thanks,

Quinn P. Fanning

you. Thank

Operator

further this Instruction] And no at time. are there questions [Operator

Jason Stanley

it Tidewater develops. everybody’s we and will stay XXXX appreciate Okay tune interest for we as in

John T. Rynd

Thank you.

Operator

conference. and and gentlemen, that Thank ladies today’s participating, you you concludes you, may disconnect. now for Thank

Tidewater (TDW) 16 Mar 182018 Q3 Earnings call transcript