Tidewater Inc. — FY2020 Form 10-K
Reporting period: Year ended December 31, 2020; filed March 4, 2021. Tidewater provides offshore marine support services to the global energy industry. This is an annual report, not a standalone fourth-quarter filing. Comparisons below are primarily with FY2019.
Key financial results and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Total revenue | $397.0 million | $486.5 million |
| Vessel revenue | $386.2 million | $477.0 million |
| Operating loss | $186.8 million | $86.6 million |
| Net loss | $196.7 million | $141.2 million |
| Loss per share, diluted | $4.86 | $3.71 |
| Cash from operating activities | $4.0 million | Cash used of $31.4 million |
- Revenue fell 18.4%. Vessel operating costs declined to $268.8 million from $329.2 million; vessel revenue less vessel operating costs was $117.4 million, or about 30% of vessel revenue, versus about 31% in 2019.
- Operating loss included $74.1 million of long-lived asset impairment and $53.0 million of affiliate credit-loss impairment, plus a $2.0 million affiliate guarantee obligation expense. Net gains on asset dispositions were $7.6 million.
- Cash and cash equivalents were $149.9 million, with $2.1 million restricted cash, at year-end. Management cited $155.2 million of cash and cash equivalents including restricted cash. Current assets were $388.6 million and current liabilities $183.2 million.
- Debt was $198.0 million before unamortized discount and premium, including $147.0 million of 8% secured notes due August 2022 and $50.9 million of Troms Offshore debt. The balance-sheet carrying amount was $192.7 million, including current debt of $27.8 million. The company repaid approximately $98.1 million of principal during 2020.
- Capital additions were $14.9 million; proceeds from asset sales were $38.3 million. Cash, cash equivalents and restricted cash declined by $72.4 million during the year.
- The filing provides no consolidated EBITDA figure or formal financial guidance.
Material changes versus FY2019
- COVID-19-related contract cancellations and delays reduced 2020 revenue by approximately 18% and added about $18 million in operating costs, mainly crew, mobilization and vessel-stacking costs.
- Average active vessels declined by 32 year over year; active utilization fell from 80.4% to 77.0%. Worldwide average day rates rose from $10,046 to $10,563.
- West Africa and Europe/Mediterranean were particularly weak: vessel revenue fell 37.5% and 32.4%, respectively. West Africa shifted from $8.3 million operating profit to a $27.5 million operating loss. Middle East/Asia Pacific vessel revenue increased $6.8 million; Americas revenue decreased 7.5%.
- The company designated 32 additional vessels for sale, sold 56 vessels in total, and recorded $75.2 million of impairment on assets held for sale. Twenty-three vessels remained held for sale at year-end; 35 active-fleet vessels were stacked.
- Affiliate credit-loss impairments reflected exposure to Angolan joint venture Sonatide ($40.9 million) and Nigerian joint venture DTDW ($12.1 million). Sonatide also paid Tidewater a $17.2 million dividend, recorded as income.
- General and administrative expense declined to $73.4 million from $103.7 million, reflecting cost reductions and lower severance charges. Depreciation and amortization increased to $116.7 million from $101.9 million, driven chiefly by deferred drydocking-cost amortization.
Outlook, risks and unusual items
- Management expected COVID-19, reduced oil demand and lower customer offshore spending to continue negatively affecting 2021 demand, utilization and rates. The duration and financial impact were not reasonably estimable.
- Management said year-end cash, operating cash flow and expected 2021 asset-sale proceeds would be sufficient to meet 2021 debt obligations. The company had no revolving credit facility; it also reported a waiver of the secured-notes interest-coverage covenant from April through December 2021. Minimum liquidity and other covenants remained in effect.
- Planned 2020 drydock spending of approximately $23.3 million was postponed; budgeted 2021 drydock spending was approximately $19.0 million. Further delays or cancellations were possible.
- Key risks include continued weak oil and gas markets, vessel oversupply and competitive rate pressure, customer concentration, contract cancellation or nonrenewal, debt covenants and refinancing access, and international currency, political, regulatory and joint-venture exposures. Chevron represented 14.3% and Saudi Aramco 11.5% of 2020 revenue; the five and ten largest customers represented 41.8% and 59.8%.
- Other notable matters: $40.5 million of outstanding letters of credit, surety and performance bonds; $35.3 million of uncertain-tax-position liabilities; and $55.5 million of stated pension obligations. Management said ordinary-course legal matters were not expected to materially affect the company. No dividends were declared and no shares were repurchased in 2020.
Most important facts for investors to verify
- Current liquidity, cash accessibility across foreign subsidiaries, and compliance with minimum-liquidity and debt covenants, particularly after the 2021 waiver period.
- 2022 secured-note maturity and the company’s ability to refinance, repay or otherwise address the debt.
- Actual 2021 vessel utilization, day rates, contract renewals and COVID-19-related cancellations versus management’s stated expectations.
- Recoverability of the $62.1 million year-end net due-from-affiliate balance and any further losses involving Sonatide or DTDW.
- Proceeds and losses on remaining held-for-sale vessels, additional impairment exposure, and required drydock and fleet-maintenance spending.
The financial statements received an unqualified audit opinion, and the auditor also expressed an unqualified opinion on internal control over financial reporting. The auditor identified uncertain tax positions, vessel impairments and held-for-sale vessel valuations as critical audit matters.