TDW - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Tidewater reports results for the three months ending March 31, 2021. My name is John, and I'll be your operator for today's call. [Operator Instructions] Please note, the conference is being recorded. And I will now turn the call over to Jason Stanley, Vice President of ESG and Investor Relations. Jason, you may begin.

Jason Stanley

John. you, Thank and the everyone, Tidewater's conference earnings Good months welcome ended for three March call morning, to XX, XXXX. the Kneen; Officer, of Sales I'm and Daniel Hudson; Counsel on call Marketing, Vice by Secretary, morning joined President our our and CEO, Corporate Quintin Rubio; Piers our Sam Financial and and Chief our General this President Middleton.

the other cause There statements to our During Please company's referring on are only and performance or today's through website materially during call. forward-looking, refer risks today's gov. call, details the the to SEC may by make for these at most conference that presented speaks different stated we'll are document recent comment factors call X, uncertainties actual future from and sec. on This make this May XXXX. additional on at that we the XX-Q or and factors. Information expectations. as tdw.com to that available any certain be plans today, implied of is that

reconciliation measures advised of last now So time longer GAAP press accurate non-GAAP no Quintin. be time-sensitive GAAP call, that, measures. may with non-GAAP in turn release. present information the and financial A any over I'll during to to both replay. at we'll is Also any call included that the And of evening's you're the

Quintin Kneen

everyone, Good welcome the XXXX to morning, Jason. and Call. Thank Earnings you, Conference First Quarter Tidewater

cover remarks of the some then as statement, which then, in we'll our will the sheet. wrap the open on markets Chief usual, I the today up of but income remarks, Financial Piers quarter. commentary appointed And various overview to up an course, Piers questions. presenting operate. in Sam Sam general And the with joining balance the will it in newly for OpEx, G&A, we geographies prepared is prepared call open me our Joining me is also Rubio, will Middleton; Officer.

This quarter. quiet. relatively is The first a first relatively quarter quarter quiet often was

The cash is softest quarter the of with but calendar in the the quarter. generation quarter year, pleased first the I was

quarter You cash behind. flow from was performance much anticipated, last lagged may P&L recall that stronger but we than the generation the

As is Cash operations working from what we came for quarter be for was Free by the cash we below vessel operating X% from earnings proceeds you flows in asset was the caught of often positive were case, $XX.X quarter. months where million up down slightly flow $X.X those for We we and the measure. just the and but quarter. first capital or would pick, to a sales, margins just million. also about they were to That XX cash sales. XX%. flow the was inflows in cash operations, flow trailing million. whether was We press Quarterly months. like, from slightly higher XX measure release pick include next Free revenue anticipate includes it's than you cash flow free it's laid the for flow, sales. to free the flow But asset want measure not cash you flow, whether whatever levered out cash $XX.X bolstered over which expected, the cash $XX.X first costs were XX%, we flow for cash over winding million aiming higher. thought under in Overall, you

XXXX significant We in generated in services. that debt. investments Tidewater debt since off delivering third down margins to million. lowest will $XX.X of quarters. we operator is best-in-class while $XX.X million We've of used For is cash the the the still the outstanding cost is made the Net ensure vessels to quarter safe, pay to XX%. expectation and anticipating up year, we're second still My shortfall make of the

the ultimate and We market adjust changes cash positive, put the remain XX and over flow that to swiftly can test free to that past a have designed design scalable months. infrastructure was

business the should see own have from out is layup. the And in that everything sold, million. scalable in We've that's vessel operating anticipate vessels. six profit by all unfold to in first down. forward of cost million positive it designed the past am and in grows. we We business currently line business than subsequent drop by second free lot the boats I degree of as have in against operating us Once the idle This two the six vessels of After looking in to will of cost has the the end of business be of reducing leverage we the Operating are in $XX.X allow goes in years, the XXXX, the we on what We vessels currently layup Based a half for we assets the in don't category. a recovery operating beginning sale $X.X of times. infrastructure cash be same times it's addition, the significantly profit. I held can of cut fleet there further for million certainly that significant should the cash Annualized, rate sale. out up much vessel scale Importantly, worst leverage. more for the the sold because we these assets of sustainable will quarter XXX% margins has XXXX. held quarter. year flow as market positive to for this per add be getting and profitability bottom operating, getting best the that disproportionate the working the $XX us I XX these will to vessels any left quarter, to on incremental anticipate very day that but sold in have gone flow

G&A down. costs G&A reductions. run That's X Our of rate now continue cost consecutive to quarters come

begin we the anticipate of rise for Our $XX from I through quarter will to I XXXX. the down bit because expense $X million, it million as quarter. the annualized was G&A remainder another G&A first a last mentioned actually go

that positions, travel anticipate I've calls, quarterly the the now 'XX. initiatives. going expenses I fill earlier of half as to coming going keeps and frankly, on cost-saving back But I into said down. momentum have few and down we based just and latter last some we of Quite on think get go to culture it it's open

Our approximately figure focus I drydocks in to cost anticipate is moment big minimizing in and ago. the XXXX mentioned cost optimizing million. the vessels the million of a XXXX still cost for be $XX of $XX.X drydocks layup, I

the increased In the it pandemic reassessment time, quality was guidance pandemic we the year. worst, on our of are that moving Pandemic-driven X% second our At currently factored of out, this different our market all Philippines, of $X about latest approximately X% That's We impacts come the million inefficiencies, The spend which XX% India, in mariners, challenges, call which drydock business The call, impacting the broke drydock created first that has of this after quarter second indicated experiencing results quarter estimate we still be is challenge world. thought Earlier the from of quarter. course, first year. that XX% of heavy quarter the the wave fact around in perspective the us of anticipate mariners I of from of it last anticipate associated key first costs was it year years. back people will be approximately before source pandemic. come in months XXXX the the pandemic, cost of from another would we into take the Philippines. of a can most essentially is us Business us. our the we putting with down the be although were the mariners it is devastating margin year-over-year, the the behind to for full rebalance. revenue, of XX back in industry XXXX, was definitely down where generalized would to and first us. quarter Each now as quarter get they X I and supply-and-demand XX%. The impacting XX% from recovery

on circumstances Tidewater XXXX. sustainability challenges update our sustainability wide initiatives look governance, for a a with ESG, the We our look provides report, X% range into costs to and of social that and that recently provides and remainder opportunities. programs revenue key of published first place presented, comprehensive of a to the environmental, to or continue in which We of be but us the respond

is culture the of best business. safety in one Our the

instance, Our despite team by team lost a logged company the over time a XX challenges achieving our record, focus real brought pandemic. no the testament to million hours XXXX in of with dedication the and about added

into the of all to vessel. emissions per to in greenhouse world. the we're the to an about and more now reduce strides we geographies which the We in a other and and call as efficiencies to data actions many opportunity us years, around we invite have operate. the what the some learn take and some systems. work gases update the carbon doing. to for assess on unique including take enable footprint Piers established contribute to also been actions our over a and various on hybrid We read leveraging our and to progress made baseline analysis, quarter. will we cases, through decades, market In for to That's positively company XXXX, technology, for vessel in in which we our shore-based taking communities the operational I were live will I overview our power hand culture, you in fleet we quick to report efforts emissions, provide insight continue an reduce to excited our significant

Piers Middleton

Thank Quintin. you, everyone. Good morning,

comments. published historical our part quick something as core, talk more DNA. clearly ESG. I well always comment been with regions, to commitment of a to has our recently I about make this now it's showcase the each to that just at Quintin's future and stakeholders great Before But report, sustainability is our able And we're our around Tidewater's ESG of as that reiterate want our

the of at still face in the headwinds regions. market year into As look going we the strong all first in XXXX, quarter we

has the XXXX. fleet quarter compared QX the global was only mentioned, down of just to be always utilization has to at quiet whole Quintin active quarter. As relatively XX% on across a a basis, X% But first tended

in vessel that in throughout had X QX to in per quarter to trend XXXX first vessels -- For in continue to year. we Globally, industry fleet was QX than of rise a quarter specifically, day we still a utilization first from XXXX. the a XXXX XXX XX we continue quarter to the QX XXXX. leading XXXX, XX continued $XX,XXX the expect reduce average the compared in of working stacked per rates see in active to in day to of XXXX. fourth of And active compared the deepwater slightly $X,XXX the X average while average vessels quarter X% down of more Average fleet

the of and rest to region Middle East, Pacific quarter Active in solid both the rates quarter from jumped demand continued to day relative the with up XXXX. Asia XX% total first the see world utilization Our QX compared for to to XXXX. XX% utilization average

increased Our in $X,XXX to average down day XXXX. QX the day $X,XXX $XXX,XXX also Vessel quarter rates XXXX. per to the compared revenue compared for region QX in was per to

to Going forward, going this we year. QX expect and QX into pickup of still in see a demand

However, To region to region. for $XXX the we were quarter. where XXXX, due an the previous per moving may per increased the in revenues of right slightly increase projects to the rates day day, see QX or day quarter $XXX,XXX compared vessel X West during X to the from Africa by $X,XXX COVID-related average delays

but have expectation demand. downturn active average activity last incremental which by the slightly Vessel per rising the working of in rates slowly was X in compared which year meet an move had throughout with in we of area. a $XX,XXX QX we to in the the we Mediterranean said we year, see reactivate in be from QX, our decreased some to more to that region, driven uptick XXXX. to decreased In vessels QX in the QX we of the QX we XXXX, in from Africa historically that quarter, XXXX, in XXXX Med will XXXX, ships tends region to area the to we in small to but the XX% as utilization and revenues grow return the XX% softest for $X million Europe As per decrease slowly bore to in to in the brunt start XXXX $XX,XXX the demand active the And expect QX started also West contributing quarter. through see day QX as day

industry reinforcing an Egypt, for focus another world's in the to operator of quieter commitment in first stronger reactivating in historically we're in While the on as of international have, hybrid on work market, market much largest months and to OSVs our winter the the OSVs starting battery are for our a the Mediterranean, the for vessel we emissions work in truly the next quarters. area, Sea North addition Similarly, develop a one basis. European moved X the in see reducing to Med, global to through

to QX in QX for per Lastly, in Americas X% XXXX up to was and from up the USD quarter QX the were rates region, XXXX day in compared average XXXX. active XX,XXX day slightly XX,XXX USD utilization

Thank activity and active pickup which mentioned on Caribbean point see was to the fleet the in X half an the to in still you as million Mexico compared to second year. last but challenges areas, in towards a to region which improved However, tendering over QX both compared the call, XXXX, down Sam. and decrease The we'll the to start of in $X.X faces vessels contributed for the QX revenues XXXX, XXXX. quarter

Sam Rubio

I you, quarter our these that fourth take discussion that to focus in results components discuss quarter XXXX results to of XXXX. financial morning, results through and on compared will primarily like from you the Thank the believe first and Piers, some good future. will make My everyone. be quarter-to-quarter also would factors the key we and of up

we As for or reported of our earnings $X.XX share. noted quarter yesterday, press on net million filed release $XX.X a per the loss

than in quarter XXXX the shorter-term of the XX% $XX.X than slightly million in offset ended of for lower-value, higher-value replaced at Active Our the XXXX. utilization region. quarter previous the is fourth The revenue by December million. mainly average rates that in with This was decrease was result is or first less the X% of decrease Americas day was lagging a contracts $X.X quarter the but and contracts. higher

North fourth the less to we any addition, the of as Sea. activity mild and in seasonality In first have year quarters are subject

pandemic. unforecasted quarter higher activity While ongoing from from additional increase is the impacts in areas some mentioned, we the worst of the That of all revenue our we in expect as contracts and, we the XXXX, us resulted the benefited experiencing pandemic that of to behind said, fourth of latter for still are Piers mix quarter mainly $XX Vessel the salary costs due $X.X lower of mariners travel mariners throughout million, XXXX, as result costs operating mariner the from period. of a the a into vessel especially and of was to activity decrease the for year. or the needed million half QX fewer in in

insurance due We the decrease supplies offset was consumables fees. and and from of R&M $X professional costs. incurred to cost benefits lower lower by somewhat vessel also G&A and higher QX lower salaries quarter for mainly and a $XX million, lower million

Quintin reduce G&A of have ninth allowed worth consecutive noting the the response have up has at both did activity quarter also development It been the the this In time losses in rapid changes in pandemic timely XXXX, that or ramp able revenue. and no is quarter $X fourth impairment record earlier, to us abilities with quick with activity. asset operating reduced In million have beginning is charge of costs through the short, our real As expense costs. quarter to first our the to such vessel to we we recorded of and in team's we reduce XXXX. mentioned responses a of that charter G&A

the of cost one less in the been increase since in primary As the result, our operating was control spite have large XXXX $X million than and reductions merger. G&A decrease. focuses our loss a revenue of

quarter XXXX. million Our the in $XX annualized incurred for G&A million. We was expense first $XX

anticipate drydock costs costs stand-alone, million. compared deferred for drydock year, XXXX of for XXXX prior G&A full to quarter, the to approximately anticipate our QX. million heaviest it XXXX in XXXX million. In GulfMark will $X.X $X.X Tidewater G&A We costs $XXX anticipate benchmark, we And to $XX million. be $XX for the now $X $XX to million QX to be we year Our we be call, quarter the the our million. we cost million. be which be was had the combined targeted and On

to incurred million. XXXX, pandemic. over found cash And anticipate cash of free $X generating cash million. trend in sales million has the achieved a free in cash We year for a of still million we the free $XX capital key quarter, in $X.X beginning first flow April continuing that cash be focus spend $XX.X from flow in once the was also million the Free achievement we generated the $X.X flow full activities again, strong We $XX by and million expenditures starting us. vessel in of The of flow. achieved operating quarter. is the X, Since pandemic proceeds have of

customer last has -- timely. the been good call, we paying not Mexico On paying been a in has ours discussed that of

another $XX end balance we in million payment even we've with Our $X still million free received QX, improved goals. of at work in We million flow received Pemex, these Pemex collections achieving role our with XXXX. was as days have do approximately patterns XXXX ago. cash few than more just in a have a $X the big Their some better, play but to

Our began assets based over and we and will equipment open QX on Most time. and to that, XXXX, vessels In vessels we another normalized optimistic of of at for constant. a leaving that balance sale. the XXXX, these few sale, is we XX XX, at the them reclassifying get for that from on sold held And In been held And dialogue XX XX year-end. to added this time, balance we sheet stacked property vessels assets months. reclassified vessels. balance have our for with considerable next we remain we

active for from from X vessels X -- During fleet first sold million. active another $XX the quarter, we more plus the

$X sell left expect them have we more since We for XX currently this and sold million, April to and year. vessels X have in vessels

under repaid eliminated covenant in for interest million we of loan indenture and the our debt of XXXX, just During EBITDA and remainder tranche $XXX to XXXX.

XXXX continued bonds debt was is the of of QX million end the another a effort by million in end million of at tranche which our of the the XXXX. $XX.X We down million, of $XX.X open Net in repurchasing QX debt. $XX.X this and paying $XX.X from market decrease

We continue debt in to fully already in bond cash and positive. we with refinancing cash than But maturity bank flow XXXX. -- we have we capital the our more have bond markets intend today continue and free to maturity the evaluate to balance options the to be regards

are debt maturities. to focus As in I ability like performance manage confident would regions. in the now the our our such, to on we

Our prior Americas operated the utilization segment XXXX. million operating revenue was quarter. to X in the quarter income The million vessels area active the of QX. in Active The reported million for QX $X.X compared quarter. area an to operating reported loss the $XX.X million in of $XX.X in QX XX% compared in XX% to for less of compared $X.X quarter

$XX,XXX per However, day $XX,XXX XX decreased in QX. day rates per -- to in from QX day

QX compared in operated Middle operating did $XX X.X Active QX. compared XX% to area a increase East, Pacific reported Asia less to to utilization The the of Our in million quarter. of $X.X XX% in million of in $XX.X active million area loss -- revenue quarter QX million in compared XXXX. QX in the vessels QX and X loss to an $X.X reported for

However, day day to day from QX. per $X,XXX rates in declined $X,XXX in per QX

reported in vessels $X loss The $XX.X $XX.X $X.X reported active a Med to QX million X QX. The QX. quarter. QX operated region to of revenue more and in operating the in Europe million area of million of in area in loss compared Our an compared million

was XX% QX. utilization day per compared $XX,XXX in day from And QX QX to $XX,XXX decreased in to rates in in per QX. XX% However, active day

in loss vessels Our QX compared of QX QX. in The million a active West QX. Active million $XX. an loss in for XX% area to $X.X more QX. Revenue in compared QX. in of operated QX million from was $XX.X million decreased utilization region Africa $X.X operating to reported to XX% X X in

number in $X,XXX Pacific did Middle pandemic, rates results compared regions total of and similar regions -- to to results, Africa Europe these quarter, reductions the our and experienced first in increase of showing than QX was a day day posted vessels in a per Asia overall. Americas region results season regions. we West North the West winter Sea. But Africa. lower However, have the in also in the 'XX experienced the reduction beginning operating quarter, reductions most per been of also employed, have and in experienced have has Since East, day The small prior The inactivity employing in increase the prepandemic profit. pandemic Europe only caused Med significant our results Med QX were vessels. were operations, prepandemic by these QX. by in revenues range this significant to In comparable $X,XXX affected the both slight areas but and

these call We to I to Quintin. areas of the will remainder of expect improve over back year. the throughout both now results the turn

Quintin Kneen

Thank you, open will Sam. And on it that note, questions. John, any for up we

Quintin Kneen

for very and you, everyone, thank good, John, Well, listening.

will We in update Goodbye. again you August.

Operator

participating. Thank and That you call. gentlemen. today's you, for ladies Thank concludes

disconnect. now may You

Tidewater (TDW) 10 May 212021 Q1 Earnings call transcript