-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V/cd7O1RtqpVEZED7UOrGkfmcxcMXInxsBmfEf4u/Zg8+bvHI3MdM748+mv31vbA Q5fjTLy0ZheiYWjcWXT6jw== /in/edgar/work/0000899243-00-002224/0000899243-00-002224.txt : 20001020 0000899243-00-002224.hdr.sgml : 20001020 ACCESSION NUMBER: 0000899243-00-002224 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIDEWATER INC CENTRAL INDEX KEY: 0000098222 STANDARD INDUSTRIAL CLASSIFICATION: [4400 ] IRS NUMBER: 720487776 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06311 FILM NUMBER: 742444 BUSINESS ADDRESS: STREET 1: 601 POYDRAS ST. STREET 2: SUITE 1900 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045681010 MAIL ADDRESS: STREET 1: 601 POYDRAS ST. STREET 2: SUITE 1900 CITY: NEW ORLEANS STATE: LA ZIP: 70130 FORMER COMPANY: FORMER CONFORMED NAME: TIDEWATER MARINE SERVICE INC DATE OF NAME CHANGE: 19780724 10-Q 1 0001.txt FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2000 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - For the Quarterly Period Ended September 30, 2000 ------------------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -For the Transition Period From _______________________________ to _____________________________________ Commission file number 1-6311 TIDEWATER INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 72-0487776 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 601 Poydras Street, Suite 1900, New Orleans, Louisiana 70130 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (504) 568-1010 --------------------------- - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or of such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ___________ --------- 55,800,558 shares of Tidewater Inc. common stock $.10 par value per share were outstanding on October 16, 2000. Excluded from the calculation of shares outstanding at October 16, 2000 are 4,754,903 shares held by the Registrant's Grantor Stock Ownership Trust. Registrant has no other class of common stock outstanding. -1- PART I. FINANCIAL INFORMATION
Item 1. Financial Statements -------------------- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) - ------------------------------------------------------------------------------------------------------------------- September 30, March 31, ASSETS 2000 2000 - ------------------------------------------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 268,234 226,910 Trade and other receivables 151,506 149,006 Marine operating supplies 29,209 25,405 Other current assets 2,654 2,372 - ------------------------------------------------------------------------------------------------------------------- Total current assets 451,603 403,693 - ------------------------------------------------------------------------------------------------------------------- Investments in, at equity, and advances to unconsolidated companies 9,877 23,275 Properties and equipment: Vessels and related equipment 1,369,010 1,356,177 Other properties and equipment 42,908 42,474 - ------------------------------------------------------------------------------------------------------------------- 1,411,918 1,398,651 Less accumulated depreciation 850,851 842,620 - ------------------------------------------------------------------------------------------------------------------- Net properties and equipment 561,067 556,031 - ------------------------------------------------------------------------------------------------------------------- Goodwill, net 333,421 338,006 Other assets 117,092 111,331 - ------------------------------------------------------------------------------------------------------------------- Total assets $ 1,473,060 1,432,336 =================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------------------------- Current liabilities: Accounts payable and accrued expenses 68,857 66,943 Accrued property and liability losses 6,937 4,322 Income taxes 6,246 3,572 - ------------------------------------------------------------------------------------------------------------------- Total current liabilities 82,040 74,837 - ------------------------------------------------------------------------------------------------------------------- Deferred income taxes 162,566 145,076 Accrued property and liability losses 41,392 49,549 Other liabilities and deferred credits 50,557 48,673 Stockholders' equity: Common stock of $.10 par value, 125,000,000 shares authorized, issued 60,555,461 shares at September and 60,561,892 shares at March 6,056 6,056 Other stockholders' equity 1,130,449 1,108,145 - ------------------------------------------------------------------------------------------------------------------- Total stockholders' equity 1,136,505 1,114,201 - ------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 1,473,060 1,432,336 ===================================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -2-
TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except share and per share data) - ------------------------------------------------------------------------------------------------------------------------- Quarter Ended Six Months Ended September 30, September 30, ------------------------- ---------------------- 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------------------- Revenues: Vessel revenues $ 135,642 129,735 260,947 278,012 Other marine revenues 10,495 9,211 22,074 15,464 - ------------------------------------------------------------------------------------------------------------------------- 146,137 138,946 283,021 293,476 - ------------------------------------------------------------------------------------------------------------------------- Costs and expenses: Vessel operating costs 88,304 77,431 176,255 169,323 Costs of other marine revenues 8,066 7,434 17,309 11,789 Depreciation and amortization 19,455 20,335 38,526 43,277 General and administrative 16,337 16,647 32,277 33,593 - ------------------------------------------------------------------------------------------------------------------------- 132,162 121,847 264,367 257,982 - ------------------------------------------------------------------------------------------------------------------------- 13,975 17,099 18,654 35,494 Other income (expenses): Foreign exchange gain (loss) (139) 275 (62) 203 Gain on sales of assets 19,360 6,605 20,324 8,964 Equity in net earnings of unconsolidated companies 1,693 1,900 4,035 3,886 Minority interests 24 (44) (172) (291) Interest and miscellaneous income 4,661 2,100 8,953 4,014 Interest and other debt costs (163) (163) (324) (289) - ------------------------------------------------------------------------------------------------------------------------- 25,436 10,673 32,754 16,487 - ------------------------------------------------------------------------------------------------------------------------- Earnings before income taxes 39,411 27,772 51,408 51,981 Income taxes 13,114 8,887 16,953 16,634 - ------------------------------------------------------------------------------------------------------------------------- Net earnings $ 26,297 18,885 34,455 35,347 ========================================================================================================================= Earnings per common share $ .47 .34 .62 .64 ========================================================================================================================= Diluted earnings per common share $ .47 .34 .61 .64 ========================================================================================================================= Weighted average common shares outstanding 55,673,269 55,523,727 55,644,550 55,511,093 Incremental common shares from stock options 468,207 304,923 442,589 236,211 - ------------------------------------------------------------------------------------------------------------------------- Adjusted weighted average common shares 56,141,476 55,828,650 56,087,139 55,747,304 ========================================================================================================================= Cash dividends declared per common share $ .15 .15 .30 .30 =========================================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -3-
TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) - ------------------------------------------------------------------------------------------------------------------------ Quarter Ended Six Months Ended September 30, September 30, ------------------------ ---------------------- 2000 1999 2000 1999 - ------------------------------------------------------------------------------------------------------------------------ Net cash provided by operating activities $ 23,752 51,311 57,580 131,846 - ------------------------------------------------------------------------------------------------------------------------ Cash flows from investing activities: Proceeds from sales of assets 39,272 49,647 42,026 53,326 Additions to properties and equipment (37,197) (29,652) (43,807) (42,439) Other --- 25 (23) 62 - ------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) investing activities 2,075 20,020 (1,804) 10,949 ======================================================================================================================== Cash flows from financing activities: Proceeds from issuance of common stock 1,431 38 2,263 188 Cash dividends (8,359) (8,342) (16,715) (16,680) - ------------------------------------------------------------------------------------------------------------------------ Net cash used in financing activities (6,928) (8,304) (14,452) (16,492) - ------------------------------------------------------------------------------------------------------------------------ Net change in cash and cash equivalents 18,899 63,027 41,324 126,303 Cash and cash equivalents at beginning of period 249,335 73,698 226,910 10,422 - ------------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at end of period $ 268,234 136,725 268,234 136,725 ======================================================================================================================== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 128 129 129 326 Income taxes $ 4,615 10,569 8,386 17,348 ========================================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -4- TIDEWATER INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (1) Interim Financial Statements The consolidated financial information for the interim periods presented herein has not been audited by independent accountants, but in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the condensed consolidated balance sheets and the condensed consolidated statements of earnings and cash flows at the dates and for the periods indicated have been made. Results of operations for interim periods are not necessarily indicative of results of operations for the respective full years. (2) Stockholders' Equity At September 30, 2000 and March 31, 2000, 4,756,409 and 4,911,445 shares, respectively, of common stock were held in a grantor stock ownership plan trust for the benefit of stock-based employee benefits programs. These shares are not included in common shares outstanding for earnings per share calculations and transactions between the company and the trust, including dividends paid on the company's common stock, are eliminated in consolidating the accounts of the trust and the company. (3) Income Taxes Income tax expense for interim periods is based on estimates of the effective tax rate for the entire fiscal year. The effective tax rate applicable to pre- tax earnings was 33.3% and 33.0% for the quarter and six-month period ended September 30, 2000, respectively. The effective tax rate applicable to pre-tax earnings for the quarter and six-month period ended September 30, 1999 was 32%. (4) Gain on Sales of Assets Gain on sales of assets in the quarter ended September 30, 2000 includes $2.6 million resulting from sales of marine vessels and a $16.8 million gain resulting from the sale of the company's 40% holding in its marine joint venture, National Marine Service (NMS), for approximately $31 million. The after-tax effect of the gain on the sale of the company's interest in NMS was $10.9 million, or $.19 per share. (5) Vessel Fleet Acquisition On October 18, 2000 the company entered into an agreement to purchase eight vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. Closing of the purchase is anticipated for mid to late November 2000. Four of the vessels are large anchor-handling towing supply vessels and four are large North Sea-type platform supply vessels. -5- INDEPENDENT ACCOUNTANTS' REVIEW REPORT -------------------------------------- The Board of Directors and Shareholders Tidewater Inc. We have reviewed the accompanying condensed consolidated balance sheet of Tidewater Inc. and subsidiaries as of September 30, 2000, and the related condensed consolidated statements of earnings and cash flows for the three-month and six-month periods ended September 30, 2000 and 1999. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States. We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet of Tidewater Inc. and subsidiaries as of March 31, 2000, and the related consolidated statements of earnings, stockholders' equity and cash flows for the year then ended, not presented herein, and in our report dated April 25, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 2000, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Ernst & Young LLP New Orleans, Louisiana October 18, 2000 -6- Item 2. Management's Discussion and Analysis ------------------------------------ The company provides services to the international offshore energy industry through the operation of a diversified fleet of marine service vessels. Revenues, net earnings and cash flows from operations are dependent upon the activity level of the vessel fleet which is ultimately dependent upon oil and natural gas prices which, in turn, are determined by the supply/demand relationship for oil and natural gas. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related disclosures. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the company notes that certain statements set forth in this Quarterly Report on Form 10-Q which provide other than historical information and which are forward looking, involve risks and uncertainties that may impact the company's actual results of operations. The company faces many risks and uncertainties, many of which are beyond the control of the company, including: fluctuations in oil and gas prices; changes in capital spending by customers in the energy industry for exploration, development and production; unsettled political conditions, civil unrest and governmental actions, especially in higher risk countries of operations; foreign currency controls; and environmental and labor laws. Readers should consider all of these risk factors as well as other information contained in this report. MARINE OPERATIONS - ----------------- Offshore service vessels provide a diverse range of services to the energy industry. Fleet size, utilization and vessel day rates primarily determine the amount of revenues and operating profit because operating costs and depreciation do not change proportionally when revenue changes. Operating costs primarily consist of crew costs, repair and maintenance, insurance, fuel, lube oil and supplies. Fleet size and utilization are the major factors which affect crew costs. The timing and amount of repair and maintenance costs are influenced by vessel age and scheduled drydockings to satisfy safety and inspection requirements mandated by regulatory agencies. Whenever possible, vessel drydockings are done during seasonally slow periods to minimize the impact on vessel operations and are only done if economically justified, given the vessel's age and physical condition. -7- The following table compares revenues and operating costs (excluding general and administrative expense and depreciation expense) for the quarters and six-month periods ended September 30 and for the quarter ended June 30, 2000. Vessel revenues and operating costs relate to vessels owned and operated by the company while other marine services relate to third-party activities of the company's shipyards, brokered vessels and other miscellaneous marine-related activities.
Quarter Quarter Ended Six Months Ended Ended September 30, September 30, June 30, ------------------------ --------------------- --------- (In thousands) 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------ Revenues: Vessel revenues: United States $ 44,807 34,918 81,310 67,676 36,503 International 90,835 94,817 179,637 210,336 88,802 - ------------------------------------------------------------------------------------------------------------------ 135,642 129,735 260,947 278,012 125,305 Other marine revenues 10,495 9,211 22,074 15,464 11,579 - ------------------------------------------------------------------------------------------------------------------ $ 146,137 138,946 283,021 293,476 136,884 ================================================================================================================== Operating costs: Vessel operating costs: Crew costs $ 45,986 44,135 89,351 97,544 43,365 Repair and maintenance 24,190 16,334 50,078 33,396 25,888 Insurance 4,718 4,264 9,687 9,561 4,969 Fuel, lube and supplies 6,711 5,508 12,823 12,492 6,112 Other 6,699 7,190 14,316 16,330 7,617 - ------------------------------------------------------------------------------------------------------------------ 88,304 77,431 176,255 169,323 87,951 Costs of other marine revenues 8,066 7,434 17,309 11,789 9,243 - ------------------------------------------------------------------------------------------------------------------ $ 96,370 84,865 193,564 181,112 97,194 ==================================================================================================================
Marine support services are conducted worldwide with assets that are highly mobile. Revenues are principally derived from offshore service vessels, which regularly and routinely move from one operating area to another, often to and from offshore operating areas in different continents. Because of this asset mobility, revenues and long-lived assets attributable to the company's international marine operations in any one country are not "material" as that term is defined by SFAS No. 131. As a result of the uncertainty of certain customers to make payment of vessel charter hire, the company has deferred the recognition of approximately $9.5 million of billings as of September 30, 2000 ($10.7 million of billings as of March 31, 2000), which would otherwise have been recognized as revenue. The company will recognize the amounts as revenue as cash is collected or at such time as the uncertainty has been significantly reduced. Oil and natural gas prices have appreciated significantly during calendar years 1999 and 2000. The increases in the pricing of oil and natural gas combined with severe tightening of inventory levels for both crude oil and natural gas continue to increase the demand for working drilling rigs and services in the U.S. Gulf of Mexico and on a global basis. Strong demand for natural resources has prompted the oil and gas exploration and production companies to increase capital spending in order to take advantage of improving industry conditions. U.S.-based vessel demand is expected to increase as market conditions and drilling rig utilization rates continue to improve and international-based vessel demand is expected to trend upward as international drilling activity recovers. -8- Marine operating profit and other components of earnings before income taxes for the quarters and six-month periods ended September 30 and for the quarter ended June 30, 2000 consist of the following:
Quarter Quarter Ended Six Months Ended Ended September 30, September 30, June 30, ------------------ -------------------- --------- (In thousands) 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------ Vessel activity: United States $ 420 399 (5,055) 2 (5,475) International 14,559 18,633 26,775 39,680 12,216 - ------------------------------------------------------------------------------------------------------------------ 14,979 19,032 21,720 39,682 6,741 Gain on sales of assets 19,360 6,598 20,324 8,955 964 Other marine services 2,306 1,661 4,536 3,325 2,230 - ------------------------------------------------------------------------------------------------------------------ Operating profit 36,645 27,291 46,580 51,962 9,935 - ------------------------------------------------------------------------------------------------------------------ Equity in net earnings of unconsolidated companies 1,693 1,900 4,035 3,886 2,342 Interest and other debt costs (163) (163) (324) (289) (161) Corporate general and administrative (3,576) (3,120) (6,887) (6,065) (3,311) Other income 4,812 1,864 8,004 2,487 3,192 - ------------------------------------------------------------------------------------------------------------------ Earnings before income taxes $ 39,411 27,772 51,408 51,981 11,997 ==================================================================================================================
U.S.-based vessel revenues for the quarter and six-month periods ended September 30, 2000 have increased approximately 28% and 20%, respectively, as compared to the same periods in fiscal 2000 as a result of higher utilization and average day rates. Improving market conditions and vessel demand in the U.S. Gulf of Mexico continue to apply upward pressure on average day rates for the U.S.-based towing supply/supply vessels, the company's major income producing asset. As of September 30, 2000, the towing supply/supply vessels operating in the U.S. Gulf of Mexico are experiencing approximately $5,000 average day rates and 66% utilization. U.S.-based operating profit for the quarter ended September 30, 2000 increased slightly as compared to the same period in fiscal 2000 primarily as a result of increases in vessel revenues offset by higher repair and maintenance costs and crew costs. U.S.-based operating profit for the six-month period ended September 30, 2000 decreased from the comparative period in fiscal 2000 despite increases in vessel revenues primarily as a result of higher repair and maintenance costs and crew costs. Repair and maintenance costs increased as a result of costs incurred from an intense drydocking program the company initiated during the first quarter of fiscal 2001 and continued during the second quarter of fiscal 2001 in order to ready equipment for an expected improvement in demand for its vessels. The company initiated this drydocking program while vessel demand and average day rates in the domestic market have not fully recovered; thus sacrificing short-term profitability in anticipation of higher average day rates and vessel demand when market conditions in the U.S. Gulf of Mexico improve. The company will continue to perform vessel drydockings and consequently incur high repair and maintenance costs as more vessels are removed from stack as a result of improving market conditions in the U.S. Gulf of Mexico. Crew costs increased due to employing more vessel personnel as a result of stronger demand for the company's services in the domestic market. Current quarter U.S.-based vessel revenues increased 23% as compared to the previous quarter due to higher average day rates and utilization resulting from improved market conditions and vessel demand in the U.S. Gulf of Mexico. U.S.- based operating profit increased during the current quarter as compared to the previous quarter as a result of higher average day rates and utilization. International-based vessel revenues for the quarter and six-month periods ended September 30, 2000 decreased 4% and 15%, respectively, from the comparative periods in fiscal 2000 as a result -9- of lower average day rates and a decrease in the number of active vessels in the international-based fleet. The company sold its safety/standby vessels in July 1999, as it did not conform to the company's long-range strategies. International vessel demand has trended upwards in recent months as international drilling activity recovers from the curtailments in customer spending due to the oil industry slow down. International-based operating profit for the quarter and six-month periods ended September 30, 2000 decreased 22% and 33%, respectively, from the comparative periods in fiscal 2000 as a result of lower vessel revenues and higher repair and maintenance costs. Repair and maintenance costs increased primarily due to a higher number of international-based vessels drydockings being performed. International vessel utilization rates increased during the comparative periods, but primarily as a result of withdrawing 25 older, little-used vessels from active service during the latter part of fiscal 2000 at which time they were removed from the utilization statistics. Vessel utilization rates are a function of vessel days worked and vessel days available. Current quarter international-based vessel revenues increased slightly as compared to the previous quarter as a result of higher average day rates. International-based operating profit increased 19% as compared to the previous quarter as a result of higher vessel revenues and lower repair and maintenance costs primarily due to fewer international-based vessel drydockings being performed during the quarter. Gain on sales of assets increased during the current quarter due to a $16.8 million gain resulting from the sale of the company's 40% holding in its marine joint venture, National Marine Service. Other income increased during the current six-month period as a result of interest income earned on an increased cash balance. Vessel utilization is determined primarily by market conditions and to a lesser extent by drydocking requirements. Vessel day rates are determined by the demand created through the level of offshore exploration, development and production spending by energy companies relative to the supply of offshore service vessels. Suitability of equipment and the degree of service provided also influence vessel day rates. The following tables compare day-based utilization percentages and average day rates by vessel class and in total for the quarters and six- month periods ended September 30 and for the quarter ended June 30, 2000: -10-
Quarter Quarter Ended Six Months Ended Ended September 30, September 30, June 30, -------------------- --------------------- ----------- 2000 1999 2000 1999 2000 - ---------------------------------------------------------------------------------------------------------------- UTILIZATION: ----------- Domestic-based fleet: --------------------- Towing-supply/supply 64.2% 52.3 60.7 49.7 57.1 Crew/utility 89.2 74.1 88.1 75.7 86.9 Offshore tugs 40.6 46.8 37.1 42.8 33.5 Other 23.9 76.8 27.3 61.1 30.7 Total 61.7% 55.2 58.8 52.3 56.0 International-based fleet: ------------------------- Towing-supply/supply 75.7% 67.0 76.2 69.5 76.7 Crew/utility 91.5 90.4 92.7 89.8 93.9 Offshore tugs 67.3 51.2 67.0 58.2 66.8 Safety/standby --- --- --- 77.5 --- Other 47.0 48.3 44.7 50.2 42.4 Total 74.1% 66.3 74.3 69.2 74.5 Worldwide fleet: --------------- Towing-supply/supply 71.3% 61.6 70.2 62.1 69.0 Crew/utility 90.7 84.9 91.1 85.0 91.5 Offshore tugs 55.0 49.4 53.4 51.7 51.9 Safety/standby --- --- --- 77.5 --- Other 42.0 54.4 41.0 52.6 39.9 Total 69.4% 62.3 68.4 63.2 67.5 =================================================================================================================== AVERAGE VESSEL DAY RATES: ------------------------ Domestic-based fleet: -------------------- Towing-supply/supply $ 4,533 3,484 4,275 3,603 3,990 Crew/utility 2,197 1,790 2,123 1,798 2,046 Offshore tugs 5,927 5,922 6,062 5,969 6,235 Other 1,643 1,250 1,455 1,288 1,305 Total $ 4,169 3,427 3,962 3,496 3,735 International-based fleet: ------------------------- Towing-supply/supply $ 5,149 5,522 5,108 5,613 5,066 Crew/utility 2,246 2,172 2,242 2,211 2,237 Offshore tugs 4,224 3,818 4,017 3,944 3,814 Safety/standby --- --- --- 6,087 --- Other 1,318 1,383 1,463 1,322 1,624 Total $ 4,245 4,401 4,209 4,548 4,173 Worldwide fleet: --------------- Towing-supply/supply $ 4,936 4,878 4,829 5,012 4,717 Crew/utility 2,229 2,059 2,201 2,086 2,173 Offshore tugs 4,804 4,638 4,664 4,646 4,516 Safety/standby --- --- --- 6,087 --- Other 1,357 1,343 1,461 1,313 1,572 Total $ 4,220 4,088 4,129 4,237 4,035 ===================================================================================================================
-11- The following table compares the average number of vessels by class and geographic distribution for the quarters and six-month periods ended September 30 and for the quarter ended June 30, 2000:
Quarter Ended Six Months Ended Quarter September 30, September 30, Ended ------------------ ------------------- June 30, 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------ Domestic-based fleet: - -------------------- Towing-supply/supply 121 129 123 130 125 Crew/utility 26 26 26 26 26 Offshore tugs 33 36 33 37 32 Other 9 9 9 9 9 - ------------------------------------------------------------------------------------------------------------------ Total 189 200 191 202 192 - ------------------------------------------------------------------------------------------------------------------ International-based fleet: - ------------------------- Towing-supply/supply 195 219 194 219 193 Crew/utility 48 50 48 50 48 Offshore tugs 38 52 39 51 40 Safety/standby --- --- --- 12 --- Other 33 33 33 33 33 - ------------------------------------------------------------------------------------------------------------------ Total 314 354 314 365 314 - ------------------------------------------------------------------------------------------------------------------ Owned or chartered vessels included in marine revenues 503 554 505 567 506 Vessels held for sale 48 43 50 47 52 Joint-venture and other 34 44 42 45 51 - ------------------------------------------------------------------------------------------------------------------ Total 585 641 597 659 609 ==================================================================================================================
The company's sale of its 40% holding in one of its unconsolidated joint venture companies during the current quarter resulted in a decrease in the joint venture vessel count by 24 vessels. As the sale occurred during August 2000, the current quarter average joint venture vessel count does not reflect the total vessel reduction. The company sold all of its safety/standby vessels for approximately $40 million in an all cash transaction during the second quarter of fiscal 2000. This specialized fleet was sold because it did not conform to the company's long- range strategies. In July 1999 the company acquired six new-build vessels from an industry competitor for an aggregate price of approximately $22 million. During the latter part of fiscal 2000, the company withdrew from active service, 39 older, little-used vessels. Fourteen of the vessels were withdrawn from the domestic-based fleet and 25 were withdrawn from the international-based fleet. Vessels withdrawn from active service are intended to be sold. General and administrative expenses for the quarters and six-month periods ended September 30 and for the quarter ended June 30, 2000 were as follows:
Quarter Ended Six Months Ended Quarter September 30, September 30, Ended ------------------- ------------------ June 30, (In thousands) 2000 1999 2000 1999 2000 - ------------------------------------------------------------------------------------------------------------------- Personnel $ 10,052 9,916 20,142 20,049 10,090 Office and property 2,758 2,752 5,482 5,651 2,724 Sales and marketing 1,079 1,058 2,198 2,168 1,119 Professional services 1,144 1,353 1,994 2,585 850 Other 1,304 1,568 2,461 3,140 1,157 - ------------------------------------------------------------------------------------------------------------------- $ 16,337 16,647 32,277 33,593 15,940 ===================================================================================================================
-12- LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS - ---------------------------------------------- The company's current ratio, level of working capital and amount of cash flows from continuing operations for any year are directly related to fleet activity and vessel day rates. Fleet activity and vessel day rates are ultimately determined by the supply/demand relationship for oil and natural gas. Variations from year-to-year in these items are primarily the result of market conditions. Cash from ongoing operations in combination with available lines of credit provide the company, in management's opinion, with adequate resources to satisfy present financing requirements. At September 30, 2000, all of the company's $200 million revolving line of credit was available for future financing needs. Continued payment of dividends, currently $.15 per quarter per common share, is subject to declaration by the Board of Directors. Investing activities for the six-months ended September 30, 2000 used $1.8 million of cash which included $42 million from proceeds from the sale of assets, primarily the sale of the company's 40% holding in National Marine Service for approximately $31 million during the current quarter. Sale proceeds were offset by additions to properties and equipment totaling $43.8 million comprised of approximately $6.0 million in capitalized repairs and maintenance and $36.4 million for the construction of offshore marine vessels and the acquisition of one platform supply vessel. Investing activities for the six- months ended September 30, 1999 provided $10.9 million of cash which included proceeds primarily from the sale of the safety/standby fleet offset by new construction additions to property plant and equipment. Financing activities includes quarterly cash dividends of $.15 per share. In order to better meet and service the needs of its customers, the company announced on January 20, 2000 a new-build program estimated to cost in the range of $200 - $300 million. The vessels, which will be designed to cover operational capabilities the company currently does not possess, will include very large anchor handling towing supply vessels and large platform supply vessels capable of working in most of the deepwater markets of the world. The company expects to finance the new-build program from its current cash balances, its projected cash flow and its existing revolving credit facility. As of September 30, 2000 the company has committed to the construction of two platform supply vessels for an aggregate cost of approximately $45.5 million of which $1.9 million has been expended. The two vessels are expected to be delivered to the market before the end of fiscal 2002. In addition to the new-build program discussed above during the current quarter the company committed to the purchase of three platform supply vessels currently under construction for an aggregate cost of approximately $48.4 million of which $5.0 million has been expended as of September 30, 2000. One of the three vessels is expected to be delivered to the market before the end of fiscal 2001 while the remaining two vessels will be delivered during the first quarter of fiscal 2002. On October 18, 2000 the company entered into an agreement to purchase eight vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. Closing of the purchase is anticipated for mid to late November 2000. Four of the vessels are large anchor-handling towing supply vessels and four are large North Sea-type platform supply vessels. INFLATION AND CURRENCY FLUCTUATIONS - ----------------------------------- Because of its significant international operations, the company is exposed to currency fluctuations and exchange risks. To minimize the financial impact of these items the company attempts to contract a majority of its services in United States dollars. Day-to-day operating costs are generally affected by inflation. However, because the energy services industry requires specialized goods and services, general economic inflationary trends may -13- not affect the company's operating costs. The major impact on operating costs is the level of offshore exploration, development and production spending by energy exploration and production companies. As this spending increases, prices of goods and services used by the energy industry and the energy services industry will increase. Future increases in vessel day rates may mitigate the effects on the company from the inflationary effects on operating costs. ENVIRONMENTAL MATTERS - --------------------- During the ordinary course of business the company's operations are subject to a wide variety of environmental laws and regulations. The company attempts to comply with these laws and regulations in order to avoid costly accidents and related environmental damage. Compliance with existing governmental regulations which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had, nor is expected to have, a material effect on the company. The company is proactive in establishing policies and operating procedures for safeguarding the environment against any environmentally hazardous material aboard its vessels and at shore base locations. Whenever possible, hazardous materials are maintained or transferred in confined areas to ensure containment if accidents occur. In addition the company has established operating policies that are intended to increase awareness of actions that may harm the environment. -14- Item 3. Quantitative and Qualitative Disclosure About Market Risk --------------------------------------------------------- No change from fiscal 2000 annual report disclosure. -15- PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- A. The Annual Meeting of Stockholders of the company was held in New Orleans, Louisiana on July 27, 2000. B. Listed below are the nominees who were elected directors at the Annual Meeting and the name of each other director whose term of office continued after the Meeting. Nominee or Director Name Continuing in Office ---- -------------------- Robert H. Boh Director Continuing in Office Donald T. Bollinger Director Continuing in Office Arthur R. Carlson Nominee Larry D. Hornbeck Director Continuing in Office Jon C. Madonna Nominee Paul W. Murrill Director Continuing in Office William C. O'Malley Nominee Lester Pollack Director Continuing in Office J. Hugh Roff, Jr. Director Continuing in Office Donald G. Russell Director Continuing in Office C. The company's Stockholders voted as follows with respect to the proposals presented at the meeting: 1. Arthur R. Carlson was elected director with 52,663,296 votes cast for and 1,149,760 votes withheld. 2. Jon C. Madonna was elected director with 52,665,572 votes cast for and 1,147,484 votes withheld. 3. William C. O'Malley was elected director with 52,659,684 votes cast for and 1,153,372 votes withheld. 4. The selection of Ernst & Young LLP as the company's independent accountants for the fiscal year ending March 31, 2001 was ratified with 53,720,209 votes cast for, 50,744 votes against and 42,103 abstentions. 16 Item 6. Exhibits and Reports on Form 8-K -------------------------------- A. At page 19 of this report is the index for those exhibits required to be filed as a part of this report. B. The company did not file any reports during the quarter for which this report is filed. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TIDEWATER INC. --------------------------------------------------- (Registrant) Date: October 19, 2000 /s/ William C. O'Malley --------------------------------------------------- William C. O'Malley Chairman of the Board, President and Chief Executive Officer Date: October 19, 2000 /s/ J. Keith Lousteau --------------------------------------------------- J. Keith Lousteau Senior Vice President and Chief Financial Officer Date: October 19, 2000 /s/ Joseph M. Bennett --------------------------------------------------- Joseph M. Bennett Vice President and Corporate Controller (Principal Accounting Officer) 18 EXHIBIT INDEX Exhibit Number - ------ 15 Letter re Unaudited Interim Financial Information 27 Financial Data Schedule 19 EX-15 2 0002.txt UNAUDITED INTERIM FINANCIAL STATEMENTS EXHIBIT 15 The Board of Directors and Shareholders Tidewater Inc. We are aware of the incorporation by reference in the Registration Statements (Forms S-8 No. 33-63094, No. 33-38240, No. 333-32729 and No. 333-47687) of Tidewater Inc. of our report dated October 18, 2000 relating to the unaudited condensed consolidated interim financial statements of Tidewater Inc. that are included in its Form 10-Q for the quarter ended September 30, 2000. Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part of the registration statements prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Ernst & Young LLP New Orleans, Louisiana October 18, 2000 20 EX-27 3 0003.txt FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEETS AND THE CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AT THE DATE AND FOR THE PERIOD INDICATED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. ALL AMOUNTS SHOWN ARE IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA. 1 6-MOS MAR-31-2001 APR-01-2000 SEP-30-2000 268,234 0 159,812 8,306 29,209 451,603 1,411,918 850,851 1,473,060 82,040 0 0 0 6,056 1,130,449 1,473,060 283,021 283,021 264,367 264,367 0 0 324 51,408 16,953 34,455 0 0 0 34,455 $.62 $.61
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