Tidewater Inc. (NYSE: TDW) announced today revenue for the three and twelve months ended December 31, 2019, of $118.8 million and $486.5 million, and net losses for the same periods of $59.9 million and $141.7 million (or $3.71 per common share), respectively.

Excluding long-lived asset impairments and one time expenses, net losses for the three and twelve months ended December 31, 2019 were $25.2 million (or $0.64 per common share) and $91.4 million (or $2.39) per common share), respectively. Highlights for the three months ended December 31, 2019: Generated revenue of $118.8 million, an 8%, or $8.5 million, increase from the same period in the prior year; driven by a 4% increase in average day rate and a 4% increase in active vessel days.

Continued significant streamlining of shore-based operations resulted in a pro forma run rate for general and administrative expense of $81.0 million.

Active utilization increased to 81.4% for the fourth quarter, up from 80.4% in the third quarter.

Net cash flows provided by operating activities for the quarter was a positive of $5.3 million, and free cash flow for the quarter was a positive $12.5 million.

Completed a bond consent and $125 million tender to improve debt covenants, lower overall debt, and reduce pro-forma negative interest carry by $8.0 million.

Continued high-grading active fleet by identifying 46 lower specification vessels to be disposed of in 2020.

Quintin Kneen, Tidewater's President and Chief Executive Officer, commented, 'Over the course of 2019, Tidewater has taken a series of strategic actions to streamline our fleet and increase our efficiency across the entire organization. These actions were part of our continuing efforts to achieve our near-term goal of becoming free cash flow positive and part of our longer-term goal of attaining an acceptable free cash flow return on our assets.

'The team made significant strides in the fourth quarter and we are pleased to report that the business had positive operating cash flow in the fourth quarter, was free cash flow positive in the fourth quarter, and the strong performance in the fourth quarter also resulted in the business being free cash flow positive for the entire year of 2019. Free cash flow for the quarter was $12.5 million and $5.5 million for the year.

'Market conditions around the world continue to improve. Our anticipated revenue for 2020 is similar to our total revenue for 2019, but with fewer ships as we continue to high-grade the active fleet. As of this call, we have $440 million of backlog for 2020, which is over 90% of the revenue we recorded for the prior year. Key operational objectives for 2020 are to continue to improve our active utilization percentage, which results in higher profitability per vessel day, and to lower our annual spend on dry docks and vessel modifications by over $20 million as compared to 2019.

'Through process improvements, headcount reductions and technology implementation, the team successfully achieved merger-related general and administrative cost synergies of $65 million, significantly exceeding the original target of $45 million. We finished 2019 with an annual general and administrative spend run rate of $81 million, which was $19 million lower than our original $100 million target, and substantially lower than Tidewater's pre-merger general and administrative spend on a stand-alone basis. The improvement in active utilization, reduced spend on drydocks and vessel modifications, and reduced spend on general and administrative costs should result in us nearing our longer-term goal of attaining an acceptable free cash flow return on our assets.

'Part of achieving our return objectives is positioning the Tidewater fleet for the future by obtaining the highest disposal value for our fleet in lay-up. You will notice that we took the step of separating the value of the ongoing fleet from the value of the fleet we intend to sell or scrap, which we are now presenting on the balance sheet as 'assets held for sale', which is stated at our expected net realizable value. Marking that portion of the fleet to net realizable value resulted in an impairment in the fourth quarter of $26.7 million, and results in a value of assets to be disposed of totaling $39.3 million. The value that remains on the balance sheet as Net Property and Equipment reflects the book value of the fleet we intend to remain operational.'

Kneen concluded, 'All of these actions are part of our efforts to achieve our goal of maximizing free cash flow generation while preserving our pristine balance sheet. We believe the result is a nimble, efficient and scalable platform that will enable us to support our growth initiatives and further advance our leadership position in the offshore industry. This accomplishment was the result of our more than 5,000 employees pulling together to create a new culture focused on establishing the safest, most profitable, most investable offshore vessel company in the world.'

Included in the net loss for the three months and nine months ended December 31, 2019 were general and administrative expenses of $2.1 million ($0.05 per common share) and $12.6 million ($0.33 per common share), respectively, for severance and similar expenses related to integrating Tidewater and GulfMark operations.

Non-GAAP Financial Measures

We disclose and discuss EBITDA and Adjusted EBITDA as non-GAAP financial measures in our public releases, including quarterly earnings releases, investor conference calls and other filings with the Securities and Exchange Commission. We define EBITDA as earnings (net income) before interest and other debt costs, income tax expense, depreciation and amortization. Additionally, Adjusted EBITDA excludes impairment charges, merger and integration related costs and losses on the extinguishment of debt prior to maturity. Our measures of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies. Other companies may calculate EBITDA and Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.

Because EBITDA and Adjusted EBITDA are not measures of financial performance calculated in accordance with GAAP, they should not be considered in isolation or as a substitute for operating income, net income or loss, cash provided (used) in operating activities, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP.

EBITDA and Adjusted EBITDA are widely used by investors and other users of our financial statements as a supplemental financial measure that, when viewed with our GAAP results and the accompanying reconciliations, we believe provide additional information that is useful to gain an understanding of the factors and trends affecting our ability to service debt, pay taxes and fund drydocking and survey costs and capital expenditures. We also believe the disclosure of EBITDA and Adjusted EBITDA helps investors meaningfully evaluate and compare our cash flow generating capacity from quarter-to-quarter and year-to-year.

EBITDA and Adjusted EBITDA are also financial metrics used by management (i) as a supplemental internal measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; (ii) to compare to the EBITDA and Adjusted EBITDA of other companies when evaluating potential acquisitions and (iii) to assess our ability to service existing fixed charges and incur additional indebtedness.

Contact:

Jason Stanley

Tel: 713-470-5300

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