Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $341.1 million, exceeding expectations due to higher average day rates and better utilization, with a gross margin of 48%, which was 200 basis points better than guidance [7][34] - Free cash flow generated in Q3 was $83 million, bringing total free cash flow for the first nine months of 2025 to nearly $275 million [8] - The company ended Q3 with a net debt to EBITDA ratio of 0.4 times, indicating a strong leverage position [18] Business Line Data and Key Metrics Changes - Production support, comprising roughly 50% of the business, remains steady, supported by current commodity prices and the deployment of FPSO units [12] - The EPCI and offshore construction segment is seeing an increase in demand, with backlog converting into vessel demand expected to strengthen in 2026 and 2027 [13] - Average day rates for Q3 were $22,798, which was 2% lower than Q2, while active utilization increased from 76.4% to 78.5% [34] Market Data and Key Metrics Changes - The offshore vessel market is expected to see a recovery in drilling activity towards the end of 2026, with a projected increase in capital expenditures to address hydrocarbon supply deficits [11] - In Europe, day rates faced pressure, particularly in the UK, but utilization improved across the region [26] - The Middle East saw strengthening vessel demand and day rates, driven by EPCI contractors [28] Company Strategy and Development Direction - The company is focused on capital allocation, with a $500 million share repurchase authorization in place, but did not repurchase shares in the last quarter due to competing priorities [8][9] - The strategy includes potential M&A opportunities, with a willingness to add leverage if cash flows allow for quick deleveraging [10][19] - The company remains optimistic about the long-term outlook for the offshore vessel industry and aims to deploy capital effectively to drive shareholder value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore vessel market's recovery, anticipating an uptick in drilling activity in 2026 and beyond [11][25] - The company noted that macro uncertainties and supply chain bottlenecks have impacted near-term drilling activity but expects a return to stronger demand [11] - Management highlighted the importance of maintaining utilization and day rates in the face of potential softness in the drilling market [14] Other Important Information - The company successfully refinanced its debt, resulting in a charge of $27.1 million related to early extinguishment of debt [41] - Drydock costs for 2025 are projected to be $105 million, with an increase to $124 million expected for 2026 [42][44] - The company is optimistic about the potential recovery in the offshore market, particularly in regions like Africa and the Americas [29][30] Q&A Session Summary Question: Thoughts on the production support market and rig levels needed for pricing leverage - Management expects pricing leverage to return sooner due to increasing activity in FPSOs and EPCI, along with vessel attrition over the past two years [49][50] Question: Insights on capital allocation and M&A opportunities - Management acknowledged having material nonpublic information during the quarter, which influenced the decision not to repurchase shares [52] Question: Guidance for 2026 and regional exposure - Management provided guidance for 2026, indicating confidence in achieving at least the same performance as 2025, with Africa and Asia having more exposure to open capacity [58][59] Question: Impact of maintenance on utilization and revenue expectations - Management indicated that the revenue for 2026 is expected to be fairly even throughout the year, with potential upside if drilling activity strengthens [90]

Company Overview - Tidewater has the largest OSV fleet in the world, with 209 owned vessels[10] - The company has a significant number of hybrid vessels, totaling 18[10] - Tidewater's fleet has a high specification, with approximately 68% of OSVs meeting high standards[10] - The company boasts strong liquidity, exceeding $680 million[10] - The average age of Tidewater's vessels is 13 years[10] - The company's estimated EBITDA for 2025 is approximately $552 million[10] - Tidewater's market capitalization stands at $2.7 billion[10] - The net debt to 2025E EBITDA ratio is 0.4x[10] Market Overview - Global shipyard capacity has decreased by approximately 57%[67] - Approximately 37% of the active OSV fleet will age beyond 25 years over the next decade[76] Financials - Tidewater refinanced its debt in July 2025, issuing $650 million in senior unsecured notes due in July 2030[95]

Fleet and Operations - As of September 30, 2025, the company owned 209 vessels with an average age of 13.0 years[100]. - Total vessel utilization was impacted by the presence of seven stacked vessels as of September 30, 2025, compared to one stacked vessel at December 31, 2024[117]. - The company has one of the broadest geographic operating footprints in the offshore vessel industry, allowing it to respond quickly to changing local market conditions[99]. - The company sold four older crew boats during the third quarter, contributing to improved utilization rates[121]. Financial Performance - Total revenue for the three months ended September 30, 2025, was $341,113, a slight decrease of $318 or 0% compared to $341,431 for June 30, 2025[120]. - Operating income decreased by $18,271 or 23% to $62,651 from $80,922 in the previous quarter[120]. - Net income attributable to Tidewater Inc. was a loss of $806, a decrease of $73,736 or 101% compared to a net income of $72,930 in the prior quarter[120]. - Consolidated total revenue for the nine months ended September 30, 2025, increased by 2% to $1,015,988,000 compared to $1,000,750,000 for the same period in 2024[151]. - Net income attributable to Tidewater Inc. decreased by 20% to $114,777,000 compared to $143,751,000 in the previous year[151]. Revenue by Segment - The Americas segment reported a revenue increase of $8,155 or 12% to $76,913, driven by higher active utilization and average day rates[131]. - The Asia Pacific segment's revenue rose by $8,090 or 18% to $53,786, attributed to higher average vessel day rates[137]. - The Middle East segment experienced a revenue increase of $1,820 or 5% to $42,035, with stable vessel operating costs[140]. - Total revenue for the Europe/Mediterranean segment decreased by 16% to $83,740,000 compared to $99,280,000 in the previous quarter[145]. - Total revenue for the West Africa segment decreased by 1% to $82,017,000 compared to $82,909,000 in the previous quarter[149]. Day Rates and Utilization - Average day rates for vessels are calculated by dividing the revenue earned during a reporting period by the number of days the vessel worked, reflecting demand from offshore exploration and production spending[118]. - Average vessel day rates decreased by $368 or 1.6% to $22,798, influenced by lower demand in West Africa and Europe/Mediterranean[120]. - Utilization rates improved to 75.8%, up from 74.1% in the previous quarter, reflecting increased operational efficiency[120]. - Average vessel day rates increased by 8.6% to $22,753 compared to $20,959 in the previous year[151]. Costs and Capital - Operating costs are primarily driven by crew costs, repair and maintenance costs, and fuel costs, which can fluctuate based on various factors[105]. - The company’s primary sources of capital include cash on hand, internally generated funds, vessel sales, and long-term debt financing[109]. - The company had $431.1 million in cash and cash equivalents and a borrowing capacity of $250.0 million under its Revolving Credit Facility[179]. - The company generated $114.0 million in net income and $226.1 million in cash flow from operating activities for the nine months ended September 30, 2025[182]. Investments and Financing - The company signed agreements for the construction of two ocean-going tugs and eight crew boats, with financing of approximately EUR 24.9 million ($26.7 million)[184]. - Net cash used in investing activities for the nine months ended September 30, 2025 was $7.7 million, reflecting the sale of 10 vessels[191]. - Net cash used in financing activities for the nine months ended September 30, 2025 was $132.4 million, including proceeds from long-term debt of $650.0 million[194]. - The company expects to use net proceeds from any sale of securities for general corporate purposes, including acquisitions and capital expenditures[181]. Dividends and Share Repurchase - The company has not declared any dividends for the nine months ended September 30, 2025 and 2024[187]. - The company repurchased and retired 2,290,204 shares for approximately $90.0 million during the nine months ended September 30, 2025[186]. Market Outlook and Risks - The company's revenues, net earnings, and cash flows are largely dependent on the activity level of its offshore marine vessel fleet, which is influenced by crude oil and natural gas prices[103]. - The outlook for the company is influenced by expectations for worldwide demand for hydrocarbons and the willingness of energy companies to invest in offshore operational activities[111]. - Recent geopolitical events and economic factors have introduced uncertainty, potentially delaying some drilling projects initially expected to commence in late 2025 and early 2026[113].

Financial Performance - Revenue for Q3 2025 was $341.1 million, a 0.2% increase compared to Q3 2024's $340.4 million[3] - Net income for Q3 2025 was a loss of $0.8 million ($0.02 per share), compared to a net income of $46.4 million ($0.87 per share) in Q3 2024[3] - Adjusted EBITDA for Q3 2025 was $137.9 million, with free cash flow of $82.7 million[4] - Full-year 2025 revenue guidance is narrowed to $1.33 to $1.35 billion, with margin guidance of 49% to 50%[5] - Initiating 2026 revenue guidance of $1.32 to $1.37 billion and margin guidance of 48% to 50%[7] - Net cash provided by operating activities for Q3 2025 was $72.1 million[6] - The company experienced a $27.1 million loss on early extinguishment of debt due to refinancing in July 2025[6] - 99% of the full-year revenue guidance for 2025 is covered by completed and contracted revenue[5] - Total revenues for Q3 2025 reached $341.1 million, a slight increase from $340.4 million in Q3 2024[21] - Net income attributable to Tidewater Inc. for the nine months ended September 30, 2025, was $114.8 million, down from $143.8 million in the same period of 2024[21] - Operating income for the nine months ended September 30, 2025, was $218.6 million, compared to $230.0 million in 2024, reflecting a decrease of approximately 5.5%[21] - Total comprehensive income for the nine months ended September 30, 2025, was $115.838 million, compared to $141.979 million for the same period in 2024[25] Cash and Assets - Cash and cash equivalents increased to $428.2 million as of September 30, 2025, up from $324.9 million at the end of 2024[22] - Total assets grew to $2.13 billion as of September 30, 2025, compared to $2.07 billion at the end of 2024[22] - Total stockholders' equity increased to $1.14 billion as of September 30, 2025, compared to $1.11 billion at the end of 2024[22] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $226.1 million, compared to $182.4 million in 2024, representing a 24% increase[24] - The company incurred $650 million in long-term debt issuance during the nine months ended September 30, 2025[24] Vessel Revenues and Costs - Vessel revenues were $338.5 million in Q3 2025, compared to $338.5 million in Q3 2024, indicating stable performance[21] - Total vessel revenues for Q3 2025 reached $338.491 million, a slight increase from $338.485 million in Q3 2024[26] - Vessel operating costs for Q3 2025 were $176.130 million, representing 52% of total vessel revenues, compared to 53% in Q3 2024[26] - Operating income for Q3 2025 was $62.651 million, accounting for 18% of total revenues, down from 21% in Q3 2024[27] - The company reported a vessel operating margin of 48% in Q3 2025, slightly up from 47% in Q3 2024[26] - Crew costs for Q3 2025 were $105.529 million, making up 31% of total vessel operating costs, compared to 32% in Q3 2024[26] - The company incurred corporate expenses of $21.047 million in Q3 2025, which is 6% of total revenues, compared to 4% in Q3 2024[27] Fleet Performance - The total active vessels in the worldwide fleet decreased to 206 in September 2025 from 210 in June 2025, reflecting a reduction of approximately 1.9%[32] - The Americas fleet's available days increased to 3,177 in September 2025, up from 3,074 in June 2025, representing a growth of about 3.4%[33] - The total number of stacked vessels worldwide increased to 7 in September 2025, compared to 6 in June 2025, indicating a rise of approximately 16.7%[32] - The West Africa fleet's total active vessels decreased to 60 in September 2025 from 65 in June 2025, a decline of about 7.7%[32] - The total available days for the West Africa fleet decreased to 6,001 in September 2025 from 6,250 in June 2025, a drop of approximately 4.0%[33] - The total number of active vessels in the Middle East fleet remained stable at 43 for the last four quarters, indicating consistent fleet utilization[32] - The total number of active vessels in the Asia Pacific fleet remained constant at 20 for the last four quarters, indicating stable operations in that region[32] Utilization and Day Rates - The total fleet utilization rate improved to 75.8% in September 2025 compared to 76.2% in September 2024, indicating a slight decline[36] - The Americas fleet's PSV > 900 utilization rate was 83.6% in September 2025, up from 80.3% in September 2024[36] - The Asia Pacific fleet's total utilization rate increased to 74.5% in September 2025 from 73.8% in September 2024[36] - The Middle East fleet's PSV > 900 utilization rate was 82.6% in September 2025, significantly higher than 100.0% in September 2024[36] - The Europe/Mediterranean fleet's total utilization rate was 87.5% in September 2025, compared to 83.9% in September 2024[36] - The West Africa fleet's total utilization rate decreased to 62.3% in September 2025 from 69.2% in September 2024[36] - Average vessel day rates for the Americas fleet rose to $30,487 in September 2025, compared to $27,676 in September 2024, reflecting a year-over-year increase of 10.0%[38] - Average vessel day rates for the Asia Pacific fleet reached $39,196 in September 2025, an increase from $40,419 in September 2024[38] - Average vessel day rates for the Middle East fleet increased to $13,228 in September 2025, compared to $11,661 in September 2024, marking a significant rise of 13.4%[38] - Average vessel day rates for the Europe/Mediterranean fleet were $20,752 in September 2025, compared to $21,484 in September 2024[38] - Average vessel day rates for the West Africa fleet decreased to $21,940 in September 2025 from $22,044 in September 2024[38]

Core Insights - Tidewater Inc. reported revenue of $341.1 million for Q3 2025, a slight increase from $340.4 million in Q3 2024, and total revenue of $1,016.0 million for the nine months ended September 30, 2025, compared to $1,000.8 million for the same period in 2024 [1][1][1] - The company's net income for Q3 2025 was a loss of $(0.8) million, equating to $(0.02) per common share, while for the nine months ended September 30, 2025, net income was $114.8 million, or $2.27 per common share [1][1][1]

Core Viewpoint - Tidewater Inc. is set to release its financial results for the three months ending September 30, 2025, on November 10, 2025, followed by a conference call on November 11, 2025, at 8:00 a.m. Central Time, where the CEO will discuss the results [1][2]. Financial Performance - For the six months ended June 30, 2025, Tidewater reported revenue of $674.9 million, an increase from $660.4 million for the same period in 2024, indicating a year-over-year growth of approximately 2.3% [7]. - The net income for the same period was $115.6 million, or $2.27 per common share, compared to a net income of $115.6 million for the previous year [7]. Company Operations - Tidewater operates the largest fleet of offshore support vessels in the industry, with over 65 years of experience in supporting offshore energy exploration, production, and offshore wind activities globally [5].

Group 1 - Black Bear Value Fund reported a return of -7.1% in September, -1.0% in the quarter, and -12.7% year-to-date, contrasting with the S&P 500's returns of +3.6% in September, +8.1% in the quarter, and +14.8% year-to-date [1] - The HFRI Value Index showed returns of +1.3% in September, +5.9% in the quarter, and +13.7% year-to-date [1] Group 2 - Tidewater Inc. (NYSE:TDW) experienced a one-month return of -11.73% and a 52-week loss of 21.45%, with its stock closing at $52.96 and a market capitalization of $2.621 billion on October 8, 2025 [2] - Tidewater Inc. operates one of the world's largest fleets of offshore support vessels, providing services to the energy industry, including transporting crew and supplies, towing and anchoring drillships, and supporting offshore construction projects [3] Group 3 - The long-term outlook for international and offshore markets is strong, although the near-term outlook is less certain due to a slowdown in current resource plays like the Permian [3] - Global demand for oil is expected to grow, leading to a rebound in offshore capital commitments in the next 1-2 years [3]

Core Insights - The Black Bear Value Fund has underperformed compared to broader indices, returning -12.7% year-to-date against the S&P 500's +14.8% [11] - The fund's strategy focuses on long-term investments in underappreciated businesses, particularly in sectors currently facing challenges but with potential for recovery [4][28] Performance Overview - The Black Bear Value Fund returned -7.1% in September, -1.0% for the quarter, and -12.7% year-to-date [11] - In contrast, the S&P 500 returned +3.6% in September, +8.1% for the quarter, and +14.8% year-to-date [11] Investment Strategy - The fund emphasizes a private investing mindset, looking beyond short-term market noise to identify long-term value [4] - The portfolio is heavily weighted in sectors like homebuilding, chemical production, and metallurgical coal, which are currently underperforming but have long-term growth potential [4][28] Key Holdings Builders FirstSource (BLDR) - BLDR is experiencing a structural housing shortage in the USA, with management reducing their 2025 cash flow outlook from $800 million-$1.2 billion to $800 million-$1 billion [6][8] - The company has shifted focus to value-added products, which now account for over 40% of revenue, and has been actively buying back stock [7][9] Flagstar Financial (FLG) - FLG has undergone a significant turnaround, raising over $1 billion in capital and stabilizing its balance sheet [12][13] - The bank is trading at approximately 65% of a conservatively marked balance sheet, with potential for a 50-150% increase in value over the next 1-3 years [15] Lanxess (LXS.DE) - LXS has shifted its focus from cyclical, capital-intensive businesses to more stable, lower-capital businesses, increasing its US sales from 15% to nearly 30% [17] - The company is expected to generate €200-250 million in free cash flow in a normalized environment, with a potential cash inflow of €500 million from a joint venture [19][20] Tidewater (TDW) - TDW operates one of the largest fleets of offshore support vessels, with a strong long-term outlook despite near-term uncertainties [21] - The company is currently generating over $300 million in free cash flow, with expectations to increase this to $500 million-$1 billion in a normalized environment [23] Warrior Met Coal (HCC) - HCC is investing heavily in the Blue Creek mine, which is expected to significantly boost free cash flow once the investment period concludes [24][25] - The company anticipates generating $200 million-$850 million in annual free cash flow post-investment, translating to a 6-25% unlevered annual free cash flow yield [26][27]

Core Viewpoint - Tidewater Inc. (NYSE:TDW) is currently priced at $54.45, reflecting a 0.83% increase in the current market session, but has experienced a decline of 12.52% over the past month and 22.90% over the past year, raising questions about whether the stock is undervalued despite the company's current performance [1]. Group 1: P/E Ratio Analysis - The P/E ratio is a critical metric that compares the current share price to the company's earnings per share (EPS), helping long-term investors assess the company's performance against historical data and industry benchmarks [5]. - Tidewater's P/E ratio is lower than the aggregate P/E of 23.04 for the Energy Equipment & Services industry, suggesting that the stock may be undervalued, even though it could also indicate expectations of poorer performance compared to peers [6]. - A lower P/E ratio can imply that shareholders do not anticipate future growth, and it should not be used in isolation; other financial metrics and qualitative factors must also be considered for informed investment decisions [9].

Industry Overview - Oil and energy stocks are experiencing a notable surge, with crude prices rising above $60 a barrel due to supply constraints, geopolitical tensions, and market dynamics [1] - OPEC+ is gradually unwinding previous production cuts, limiting supply growth as demand recovers from the pandemic, while U.S. sanctions on Russian and Venezuelan oil further impact supply [2] Market Dynamics - The International Energy Agency (IEA) noted stronger-than-expected oil consumption in advanced economies for 2025, coinciding with record refinery crude throughputs in August, indicating strong demand for refined products [3] Company Analysis: California Resources (CRC) - California Resources reported robust Q2 results, exceeding EPS and sales expectations by 20%, leading to a more than 15% increase in full-year EPS estimates for fiscal 2025 and FY26 [4] - Analysts remain bullish on CRC stock, with price targets raised to between $66-$70, supported by strong revenue growth and operational discipline [5] - CRC has a 2.82% annual dividend yield, with an average price target of $65.58 suggesting a 19% upside [6] Company Analysis: NCS Multistage (NCSM) - NCS Multistage has outperformed its peers with shares skyrocketing 90% YTD, aided by a capital-light business model and geographic expansion [9] - NCS's top line is expected to increase by 8% in FY25 and FY26, with projections nearing $200 million, and EPS projected to increase 6% this year and spike another 20% in FY26 [10][11] Company Analysis: Tidewater (TDW) - Tidewater, the largest Offshore Support Vessel operator, has seen fiscal 2025 earnings estimates increase 15% recently, following a Q2 earnings surprise of 339% [13][14] - The company maintained a record average day rate per vessel of $23,000 with a gross margin of 50.1%, and TDW shares have risen over 20% in the last three months [15] - EPS is projected to climb to $5.04 next year, with revisions up 5% in the last 60 days [15] Conclusion - California Resources, NCS Multistage, and Tidewater are leading the rally in oil and energy stocks, benefiting from strong quarterly reports and rising earnings estimate revisions [17]