Tidewater Inc.

President of Finance and Investor Relations to begin the call. West, over to you.

Thank you, Mandeep. Good morning, everyone, and welcome to Tidewater's fourth quarter and full year 2023 earnings conference call. I'm joined on the call this morning by our President and CEO, Quentin Neen, our Chief Financial Officer, Sam Rubio, and our Chief Commercial Officer, Piers Middleton. During today's call, we'll make certain statements that are forward-looking and referring to our plans and expectations. There are risks and uncertainties and other factors that may cause the company's actual performance to be materially different from that stated or implied by any comment that we are making during today's conference call. Please refer to our most recent Form 10-K for additional details on these factors. These documents are available on our website at tdw.com or through the SEC at sec.gov. Information presented on this call speaks only as of today, March 1st, 2024. Therefore, you're advised that any time-sensitive information may no longer be accurate at the time of any replay. Also during the call, we'll present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures can be found in our earnings press releases located on our website at tdw.com. And now with that, I'll turn the call over to Quintin.

Thank you, Wes. Good morning, everyone, and welcome to the fourth quarter 2023 Tidewater Earnings Conference call. Before I start with my prepared remarks on the business, I'd like to mention that we've reorganized the call a bit. I'll begin today's call, but before turning the call over to Pierce and Sam for their prepared remarks, I'll hand the call back to Wes for some perspective on vessel supply and our forward-looking guidance. I'd like to start the call today by highlighting some of the achievements Tidewater realized during 2023 and how that drives our outlook for 2024. The past year was by all measures a successful year marked by consistent growth and robust financial results. We generated over $1 billion in revenue for the year. Revenue and gross margin improved each quarter throughout the year. We acquired 37 PSVs, solidifying Tidewater as the clear global OSV leader and the leading provider of hybrid OSVs. Printed and leading-edge day rates increased each quarter of the year. We generated $111 million of free cash flow during the year, over 80% of which was generated in the second half of the year. And we initiated a share repurchase program during the fourth quarter, repurchasing $35 million worth of shares. We are pleased with the many successes we realized during 2023, and we believe we will have even greater success in 2024. As strong as 2023 was from a financial and operational perspective, we are still not back to a place where the underlying economics on vessels justify new buildings. As a result, given the continued lack of new building orders on a global basis, We believe continued tightness in the global OSB supply will allow for continued day rate increases throughout 2024 and into 2025. Leading edge day rates improved nearly 40% during 2023, ending the year at 29,511. We anticipate that we will continue to see day rate momentum in all of our vessel classes driven by healthy demand across a variety of end markets and persistent tightness in vessel supply. with realized day rates improving each quarter of the year and for the average day rate to improve by approximately $4,000 per day on a year-over-year basis. As the financial performance of the business continues to improve, we expect to continue to generate substantial free cash flow throughout the year. We've repurchased $35 million worth of shares during the fourth quarter of 2023. representing the maximum amount of repurchases permissible under our existing debt agreements and about 60% of our pre-cash flow generated during the fourth quarter. Given the constructive outlook for the year and our view on the intrinsic value of the business, the Board of Directors has authorized the company to repurchase up to an additional $48.6 million of the company's common stock. The new authorization represents the maximum permissible amount of share repurchases under our existing debt agreements. As previously communicated, we will update the repurchase program quarterly based on the utilization of the program and the amount permitted. More broadly, as we think about capital allocations throughout 2024, the share repurchase program will be an important feature of how we allocate our capital. Acquisitions remain a capital allocation priority as we do believe there are viable candidates that can be acquired on an accretive basis that will allow us to leverage our shore-based infrastructure and to take advantage of the economies of scale that the Tidewater platform provides. We will continue to weigh the relative merits of any given acquisition against the value of the share repurchases and pursue the most accretive alternatives. We remain mindful of our balance sheet and we want to maintain a clear line of sight to a net cash position within six quarters. Ultimately, our goal is to establish a long-term debt capital structure more appropriate for a cyclical business, and we will act opportunistically to do so as we progress through the year. In summary, we are very pleased with the performance of the business and with our achievements throughout 2023. We are excited for the opportunities that lie ahead for us in 2024. Our primary objectives for the coming year are geared towards increasing cash flow generation through day rate and utilization expansion and to opportunistically deploy this cash into the highest value alternatives to drive even higher shareholder returns. We remain highly confident that the global shortage of vessels, combined with increasing demand from drilling, subsea construction, floating infrastructure, existing production and offshore wind activities, all combined provide a compelling backdrop to accomplish our financial and operational objectives for 2024. And with that, let me give the call back over to Wes for more color on our view of future vessel supply and more commentary on our financial outlook for 2024. Thank you, Quentin.