Tidewater Inc.

Thank you for standing by. My name is Dee and I will be your conference operator today. At this time, I would like to welcome everyone to the Tidewater First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to enter a question, please press star one again. Thank you. I would now like to turn the call over to Wes Kocher, Senior Vice President for Strategy, Corporate Development, and Investor Relations. Please go ahead.

Thank you, Dee. Good morning, everyone, and welcome to Tidewater's first quarter 2024 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 and Form 10-Q 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, May 3rd, 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 on our earnings press releases located on our website at tdw.com. And now with that, I'll turn the call over to Quentin.

Thank you, Wes. Good morning, everyone. Welcome to the first quarter of 2024 Tidewater Earnings Conference Call. First quarter revenue and gross margin meaningfully exceeded our expectations. Both day rate and utilization outperformed our expectations. We are certainly pleased with the performance as the first quarter of a given calendar year is typically the slowest from an activity perspective. given the typical seasonal factors impacting a few of our operating regions. We take advantage of this period to front load the dry dock schedule, which serves to prepare our fleet for a busier work season later in the year. This first quarter not only exceeded our expectations, but it exceeded the fourth quarter, and the fourth quarter exceeded the third quarter. This sequential improvement through the typical slow period is the strength of the cycle overwhelming the calendar year seasonality. The seasonality is still there, but the increased average day rate from contracts rolling onto higher rates more than offsets the effect. Day rate momentum during the first quarter was broad-based, with each of our vessel classes posting strong sequential growth, particularly in our large class of anchor handlers. Day rate momentum for this class of vessel was consistent across multiple regions, with the composite rate for this class up about 27%. Large anchor handlers are primarily used to support the mobilization and movement of drilling rigs and typically benefit the most busier, more seasonable favorable periods in the second and third quarters. The first quarter results also indicate that the supply of large anchor handlers is persistently tight and that the continued rolling of all vessels onto new leading edge contracts will continue to drive up the printed quarterly average date rate. During the quarter, we repurchased 3.5 million of shares on the open market, and subsequent to the end of the first quarter, we repurchased an additional 12.5 million of shares on the open market. In addition to the open market repurchases, we used 28.5 million of cash to buy shares from employees so that they can then pay the associated tax benefit with a vesting of their equity compensation in lieu of those employees just issuing those shares into the open market. So, year to date, we've used $44.5 million of cash to reduce the share count by about 492,000 shares. We remain opportunistic on share repurchases and will continue to weigh the merits of share repurchases against other capital allocation opportunities, both relative to our view of the intrinsic value of the shares and against other capital allocation opportunities that may present themselves. We continue to pursue acquisitions, but thus far, shared repurchases have been the most value-added use of capital. Our focus for acquisitions remains on companies located in North and South America, but we remain opportunistic in all geographies. In summary, we are very pleased with the performance of the business during the first quarter, and we remain opportunistic on the continued pace of offshore activity acceleration as a result of the constructive leading indicators we observed during the first quarter, coupled with the persistent tightness in vessel supply and lack of new-build activity. We will remain focused on driving pre-cash flow generation and will continue to deploy capital into those alternatives that maximize shareholder value. And with that, let me turn the call back over to Wes for additional commentary and our financial outlook.