Company Overview - Tidewater Inc. is a small-cap company with a market capitalization of $2.2 billion, showing improving market fundamentals and an attractive valuation that may not fully reflect its potential earnings in the coming years [1]. Investment Opportunity - The company is considered to have greater opportunities for mis-pricing and finding asymmetric investment opportunities, particularly in the context of smaller, under-covered companies where the downside risk is limited [1].

Group 1 - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, with a focus on banks, telecommunications, logistics, and hotels [1] - The popularity of insurance companies in the Philippines has influenced investment strategies, leading to diversification beyond traditional savings in banks and properties [1] - The investment approach has evolved from focusing solely on blue-chip companies to a more diversified portfolio across various industries and market capitalizations [1] Group 2 - The entry into the US market occurred in 2020, following a period of learning and analysis through platforms like Seeking Alpha [1] - The investor has holdings in US banks, hotels, shipping, and logistics companies, indicating a strategic approach to portfolio diversification [1] - The comparative analysis between the US and Philippine markets has been a key aspect of the investment strategy, enhancing market awareness and decision-making [1]

Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in navigating significant market events such as the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2] - The individual has a background in auditing with PricewaterhouseCoopers before transitioning to day trading [2]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $333.4 million, a decrease of approximately 3% from $345.1 million in Q4 2024 [33] - Gross margin was 50.1%, slightly down from 50.4% in Q4 2024, marking two consecutive quarters above 50% [34] - Free cash flow generated was about $94.7 million, down from $107 million in Q4 2024 [40] - Net income for the quarter was $42.7 million, or $0.83 per share [33] Business Line Data and Key Metrics Changes - Average day rates increased to $22,303, up from the previous quarter [34] - Active utilization improved from 77.7% in Q4 2024 to 78.4% in Q1 2025 [34] - Day rates in the Americas improved by 8% and in the Middle East by almost 5% [38] Market Data and Key Metrics Changes - The Brazilian OSV market has strengthened significantly, while the U.K. North Sea and Mexico markets face demand-side challenges [24][26] - The Middle East, Africa, and Southeast Asia have seen steady improvements in demand [24] - The overall OSV market remains above historical averages despite economic uncertainties [25] Company Strategy and Development Direction - The company views share repurchase programs as a mechanism to return capital to shareholders and take advantage of market inefficiencies [9] - M&A remains a cornerstone of growth strategy, with a focus on unlevered returns and near-term free cash flow generation [10] - The company is optimistic about the long-term fundamentals of the offshore industry despite current economic uncertainties [45] Management's Comments on Operating Environment and Future Outlook - Management noted that the uncertainty regarding global growth is high, but they are familiar with navigating such situations [12] - The outlook for 2025 aligns with prior expectations, with signs of strength in intermediate to long-term plans for customers [14] - Management remains cautious but optimistic about the potential for increased offshore activity in 2026 and beyond [14] Other Important Information - The company has no immediate need to refinance existing debt due to low leverage and no near-term maturities [19] - The company is actively monitoring the debt capital markets for potential refinancing opportunities [19] - The company expects to incur approximately $113 million in drydock costs for the year [41] Q&A Session Summary Question: What is the outlook for offshore activity in 2026 and 2027? - Management indicated that conversations with customers remain positive, with no changes to plans observed [51][53] Question: How does the company expect to benefit from assets moving out of the North Sea? - Management expects to benefit from tightening supply in the North Sea due to vessels moving to Brazil [57] Question: What is the guidance for Q2 revenue and margins? - Guidance for Q2 indicates a revenue decline of about 5% sequentially with gross margins expected at 44% [90] Question: How does the company decide whether to stack a vessel? - The decision involves various factors including rate thresholds, visibility metrics, and region-specific considerations [87] Question: What is the timeline for tenders? - The timeline for tenders varies by customer, with some taking three to six months to finalize [93]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $333.4 million, a decrease of approximately 3% from $345.1 million in Q4 2024 [32] - Net income for the quarter was $42.7 million, or $0.83 per share [32] - Average day rates increased to $22,303, slightly higher than the previous quarter [33] - Active utilization improved from 77.7% in Q4 2024 to 78.4% in Q1 2025 [33] - Gross margin was 50.1%, compared to 50.4% in Q4 2024, marking two consecutive quarters above 50% [33] Business Line Data and Key Metrics Changes - Day rates in the Americas improved by 8% and in the Middle East by almost 5% [37] - The Europe and Mediterranean region saw a decrease of about 4% in day rates due to seasonality [37] - Gross margin increased in the APAC and Middle East regions, while it decreased in Africa and Europe [37] Market Data and Key Metrics Changes - The Brazilian OSV market has strengthened significantly, while the U.K. North Sea and Mexico markets face demand-side challenges [23][25] - The Middle East and Africa markets showed steady improvements, with strong Q1 performance in Africa [27][28] - The overall OSV market remains above historical averages, although diverging trends are noted across regions [23] Company Strategy and Development Direction - The company views share repurchase programs as a mechanism to return capital to shareholders and take advantage of market inefficiencies [8][10] - M&A remains a cornerstone of growth strategy, with a focus on unlevered returns and near-term free cash flow generation [10] - The company is optimistic about the long-term fundamentals of the offshore market despite current macroeconomic uncertainties [45] Management's Comments on Operating Environment and Future Outlook - Management noted that the uncertainty regarding global growth is high, but they are familiar with navigating such situations [12] - There have been no canceled or delayed projects, indicating continued customer conviction [13] - The company expects 2025 to align with prior expectations, with opportunities in subsea construction and production-related activities [14] Other Important Information - The company generated approximately $95 million in free cash flow, the second highest since the offshore recovery began [8] - The company incurred $43.3 million in deferred drydock costs, significantly higher than the previous quarter [41] - The company has not observed any supplier price increases related to tariffs but is monitoring the situation closely [43] Q&A Session Summary Question: Outlook for offshore drilling contractors and subsea contractors - Management indicated that there have been no changes in customer outlook and expectations remain positive for 2026 and 2027 [50][54] Question: Participation in asset movement from North Sea to Brazil - Management expects to benefit from the movement of vessels to Brazil, which will tighten supply in the North Sea [58] Question: Forward margin guidance for Q2 - Management confirmed that Q2 revenue is expected to decline by about 5% sequentially, with margins at 44% [91] Question: Decision-making framework for stacking vessels - The decision to stack vessels is based on rate thresholds, visibility metrics, and region-specific factors [88] Question: Timeline for tenders - Tender timelines vary by customer, with some taking up to a year from issuance to execution [96]

Tidewater (TDW) came out with quarterly earnings of $0.83 per share, beating the Zacks Consensus Estimate of $0.49 per share. This compares to earnings of $0.89 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of 69.39%. A quarter ago, it was expected that this offshore energy services provider would post earnings of $0.70 per share when it actually produced earnings of $0.70, delivering no surprise. Over the last four quarters, ...

Company Overview - Tidewater operates the largest OSV fleet in the world with 214 owned vessels[10] - The company has a significant number of hybrid vessels, totaling 18, which is the largest hybrid fleet in the world[10] - Tidewater estimates its 2025 EBITDA to be approximately $558 million[10] - The company's fleet includes 190 OSVs, with a significant presence in Europe (50 OSVs), Africa (49 OSVs), and the Middle East (41 OSVs)[14, 19] Market Overview - Global offshore capex is expected to rebound meaningfully in 2026 and remain elevated in 2027[52] - Newbuild economics require a through-cycle average day rate of approximately $44k/day to achieve "NPV Zero" based on a 20-year useful life for European-built PSVs greater than 900m2[65] - Global shipyard capacity has decreased by approximately 50%[69] Financials - Tidewater projects its 2025 revenue to be $1346 million[82] - The company's adjusted EBITDA for 2025 is projected to be $558 million, representing a 41% margin[82, 86] - Tidewater's net debt to 2025E EBITDA ratio is 05x[10]

Fleet and Operations - As of March 31, 2025, the company owned 214 vessels with an average age of 12.6 years[83] - The company's revenues are primarily driven by active fleet size, vessel utilization, and day rates, with operating profit largely dependent on revenue levels[86] - Vessel utilization is influenced by market conditions and drydocking requirements, with average day rates calculated based on revenue earned during the reporting period[99] - The company has experienced a sustained period of growth in offshore exploration and production over the past two years, leading to higher activity levels and day rates for vessels[94] - The company took delivery of five new crew boats in the first quarter of 2025, contributing to an increase in active utilization[103] - The company signed agreements for the construction of ten new vessels, with nine delivered by March 31, 2025, and financing agreements totaling approximately $24.9 million[135] - The company had six stacked vessels as of March 31, 2025, an increase from one stacked vessel at December 31, 2024, primarily due to idled older crew boats[128] Financial Performance - Total revenue for the three months ended March 31, 2025, was $333,444,000, a decrease of $11,641,000 or 3% compared to $345,085,000 for the previous quarter[102] - Net income attributable to Tidewater Inc. increased by $5,748,000 or 16% to $42,653,000 for the first quarter of 2025, compared to $36,905,000 in the fourth quarter of 2024[102] - Operating income decreased by $6,330,000 or 8% to $75,047,000, down from $81,377,000 in the previous quarter[102] - Average vessel day rates slightly increased by $67 to $22,303, while average total vessels increased from 216 to 217[102] - The Americas segment reported total revenue of $54,852,000, a decrease of $5,388,000 or 9% from $60,240,000 in the previous quarter[112] - The Asia Pacific segment's total revenue decreased by $2,815,000 or 6% to $48,228,000 compared to $51,043,000 in the previous quarter[115] - The Middle East segment experienced a revenue increase of $2,530,000 or 6%, reaching $43,302,000, up from $40,772,000[117] - Total revenue for the Europe/Mediterranean segment decreased by 7% to $78.2 million for the three months ended March 31, 2025, compared to $84.1 million in the previous quarter[121] - Vessel operating profit in the Europe/Mediterranean segment fell by 37% to $7.4 million, down from $11.6 million in the prior quarter[121] - In the West Africa segment, total revenue slightly decreased by 1% to $106.1 million from $107.3 million in the previous quarter[125] - Vessel operating profit in the West Africa segment decreased by 5% to $51.6 million, down from $54.2 million in the prior quarter[125] - The company generated $86.0 million in cash flow from operating activities for the three months ended March 31, 2025, compared to $54.8 million in the same period of 2024[139] - As of March 31, 2025, the company had $349.9 million in cash and cash equivalents, with $360.7 million in working capital[129] - The company repurchased 910,481 shares for approximately $39.3 million during the three months ended March 31, 2025, and an additional 1,379,723 shares for approximately $50.8 million in April 2025[137] Market Conditions and Risks - Recent geopolitical events, including OPEC+ production increases and U.S. tariffs, have introduced significant uncertainty, causing oil prices to drop to the low $60s per barrel[95] - The outlook for the offshore energy industry is influenced by worldwide demand for hydrocarbons and the willingness of energy companies to invest in offshore activities[93] - Operating costs are significantly impacted by crew costs, repair and maintenance costs, and fuel prices, which can fluctuate based on various factors[87] - The company does not generally purchase business interruption insurance, relying instead on coverage for potential liabilities stemming from third-party losses and cybersecurity breaches[89] - The primary customer in Mexico has an outstanding receivable balance of $35.1 million, with $25.5 million over 90 days past due, representing approximately 11.2% of total trade receivables[132] - The company has not experienced any material changes in market risk exposure since December 31, 2024[150] Liquidity and Financing - The company’s liquidity is primarily generated from cash flow from operations, vessel sales, and long-term debt financing[91] - Interest expense decreased due to principal payments of $12.5 million made in the first quarter of 2025, following a $14.0 million payment in the previous quarter[107] Accounting and Reporting - For detailed information on new accounting pronouncements, refer to Note (2) in the financial statements[148]

Financial Performance - Revenue for Q1 2025 was $333.4 million, a 3.8% increase compared to $321.2 million in Q1 2024[3]. - Net income for Q1 2025 was $42.7 million ($0.83 per share), down from $47.0 million ($0.89 per share) in Q1 2024[3][7]. - Operating income for Q1 2025 was $75.0 million, compared to $81.9 million in Q1 2024[19]. - Net income for the three months ended March 31, 2025, was $42,320 thousand, down 9.3% from $46,745 thousand for the same period in 2024[21]. - Total comprehensive income for the three months ended March 31, 2025, was $42,867 thousand, compared to $46,688 thousand in the same period of 2024, a decrease of 8.0%[21]. - Net income attributable to Tidewater Inc. for Q1 2025 was $42,653,000, an increase of 15.0% from $36,905,000 in Q4 2024[26]. - EBITDA for the same period was $149,854,000, compared to $133,286,000 in the prior quarter, reflecting a 12.5% increase[43]. - Adjusted EBITDA for Q1 2025 was $154,179,000, up from $138,392,000 in Q4 2024, indicating a 11.4% growth[49]. Cash Flow and Liquidity - Free cash flow for Q1 2025 was $94.7 million, demonstrating strong cash generation despite significant drydock spending[4]. - Cash flows from operating activities increased to $85,973 thousand for the three months ended March 31, 2025, compared to $54,765 thousand in the same period of 2024, marking a significant increase of 56.9%[22]. - Net cash provided by operating activities was $85,973,000, down from $91,303,000 in the previous quarter, a decline of 5.8%[49]. - Cash, cash equivalents, and restricted cash at the end of the period increased to $349,914 thousand, up from $289,653 thousand at the end of March 31, 2024, representing a growth of 20.9%[22]. - Cash interest expense for Q1 2025 was $17,505,000, an increase from $12,816,000 in the previous quarter[49]. Revenue and Vessel Performance - Total vessel revenues increased to $330,699 thousand for the three months ended March 31, 2025, compared to $318,686 thousand in the prior year, reflecting a growth of 3.5%[24]. - Vessel revenues for Q1 2025 were $330,699,000, a decrease of 3.5% from $343,463,000 in Q4 2024[26]. - Total revenue for the worldwide fleet was $330,699,000, a decrease from $343,463,000 in the previous quarter, reflecting a decline of about 3.5%[29]. - Vessel operating margin improved to $165,720 thousand, representing 50% of total vessel revenues, compared to $151,130 thousand or 47% in the same period last year[24]. - Total vessel operating costs for the same period were $164,979,000, down from $170,384,000, reflecting a reduction of 3.4%[42]. Guidance and Future Outlook - 2025 revenue guidance is reiterated at $1.32 billion to $1.38 billion, with gross margin guidance of 48% to 50%[6][7]. - Tidewater remains well-positioned to benefit from long-term growth in offshore energy demand despite macroeconomic uncertainties[8]. Shareholder Returns - Year-to-date share repurchases totaled 2.3 million shares for $90.0 million at an average price of $39.31 per share[5][7]. - The company repurchased and retired common stock amounting to $39,712 thousand during the three months ended March 31, 2025[23]. Asset and Liability Management - Total assets decreased to $2,066,166 thousand as of March 31, 2025, from $2,074,904 thousand at December 31, 2024, representing a decline of approximately 0.4%[20]. - Total current liabilities rose slightly to $337,544 thousand as of March 31, 2025, from $331,613 thousand at December 31, 2024, an increase of approximately 1.1%[20]. - Long-term debt decreased to $555,994,000 in Q1 2025 from $571,710,000 in Q4 2024, a reduction of 2.7%[27]. - Total stockholders' equity was $1,113,624,000 in Q1 2025, marginally down from $1,114,111,000 in Q4 2024[27]. Fleet Utilization and Performance - The total fleet utilization rate for March 2025 was 76.0%, down from 81.5% in March 2024, representing a decrease of 5.5 percentage points[34]. - The total number of active vessels in the worldwide fleet decreased to 210 in March 2025 from 217 in March 2024, representing a decline of approximately 3.2%[30]. - The total available days for the worldwide fleet decreased to 18,885 in March 2025 from 19,730 in March 2024, a decline of approximately 4.3%[33]. - The average vessel day rate for the worldwide fleet was $22,303 for the three months ended March 31, 2025, an increase from $19,563 in the same period last year[36]. Regional Performance - Vessel revenues in the Americas for Q1 2025 were $54,852,000, a decrease of 9.1% from $60,240,000 in Q4 2024[37]. - Vessel revenues in the Asia Pacific for Q1 2025 were $48,228,000, a decrease of 5.3% from $51,043,000 in Q4 2024[38]. - Vessel revenues in the Middle East for Q1 2025 were $43,302,000, an increase of 3.9% from $40,772,000 in Q4 2024[39]. - In the Europe/Mediterranean region, vessel revenues were $78,205,000, down from $84,109,000, a decline of 3.4%[40]. - In West Africa, vessel revenues were $106,112,000, a slight decrease from $107,299,000, reflecting a 1.1% decline[41].

Group 1 - The focus has shifted from primarily tech stocks to include offshore drilling, supply industry, and shipping sectors such as tankers, containers, and dry bulk [1] - There is an emerging interest in the fuel cell industry, which is still in its nascent stage [1] Group 2 - The individual has extensive experience in auditing with PricewaterhouseCoopers before transitioning to day trading nearly 20 years ago [2] - The individual successfully navigated significant market events including the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2]