CALGARY, November 9, 2023 - Tidewater Renewables Ltd. (“Tidewater Renewables” or the “Corporation”) (TSX: LCFS) is pleased to announce that it has filed its condensed interim consolidated financial statements and Management’s Discussion and Analysis (“MD&A”) for the period ended September 30, 2023.

THIRD QUARTER 2023 HIGHLIGHTS

• In the third quarter of 2023, Tidewater Renewables generated Adjusted EBITDA(1) of $14.5 million and a net loss attributable to shareholders of $9.4 million, inclusive of $12.6 million of unrealized losses on derivative contracts. Net cash provided by operating activities totaled $1.5 million, with distributable cash flow(1) of $3.2 million.
• In July 2023, Tidewater Renewables' co-processing projects were approved for credit generation under the Canadian Clean Fuel Regulations (“CFR”). Through its co-processing projects and the HDRD Complex, the Corporation expects to maintain its position as one of Canada’s largest generators of emissions credits.

OPERATIONAL UPDATE

• The HDRD Complex produced its first renewable diesel on October 22 and, as of November 7, has progressed to commercial operations. The facility is currently producing approximately 1,500 bbl/d of on-spec cold weather diesel and the Corporation is actively working on safely increasing production rates towards the facility’s 3,000 bbl/d design capacity.

Gross project costs are expected to increase by $10.2 million, due to increased man hours resulting from the delay in commercial operations and the addition of incremental insulation and heat tracing. However, the project’s economics remain attractive, with payback expected within two to three years. The HDRD Complex makes Tidewater Renewables the first standalone producer of renewable diesel in Canada.

• On November 8, 2023, Robert Colcleugh was appointed Chief Executive Officer of both Tidewater Renewables and Tidewater Midstream and Infrastructure Ltd. (“Tidewater Midstream”). Mr. Colcleugh joined Tidewater Midstream’s board of directors in 2017 and was appointed Interim Chief Executive Officer of both Tidewater Midstream and Tidewater Renewables in November 2022. During his tenure as Interim Chief Executive Officer, he successfully led the commissioning of the HDRD Complex and Tidewater Midstream’s strategic asset review.

“The launching of the HDRD Complex’s commercial operations signifies a step change in the evolution of Tidewater Renewables’ business model. It also marks the arrival of Canada as one of the few countries in the world that produce renewable diesel. The completion of this project was not without challenges, but with unwavering support from the British Columbia Government, the City of Prince George, our capital providers, and our team’s relentless dedication, we got it done. With the completion of the HDRD Complex, Tidewater Renewables is dedicated to strengthening its financial position, reducing its debt, and progressing our strong pipeline of renewables projects” said Chairman and CEO Rob Colcleugh.

(1) Adjusted EBITDA, distributable cash flow, and net debt used throughout this press release are non-GAAP financial measures or ratios. See the “Non-GAAP and Other Financial Measures” in this press release and the Corporation’s MD&A for information on each non-GAAP financial measure or ratio.

Selected financial and operating information are outlined below and should be read with the Corporation’s condensed interim consolidated financial statements and related MD&A for the period ended September 30, 2023, which are available under the Corporation’s profile on SEDAR+ at www.sedarplus.com and on its website at www.tidewater-renewables.com.

Financial Highlights

OUTLOOK AND CORPORATE UPDATE

With the HDRD Complex safely and successfully commissioned, the Corporation is now committed to streamlining the HDRD Complex’s operations, strengthening its financial position, repaying debt and progressing the development of the RNG Facility. Tidewater Renewables continues to work with various counterparties to satisfy their fuel compliance requirements, achieve their ESG commitments and meet their energy needs.

Due to the HDRD Complex’s delay in commercial operations, the Corporation now expects second-half 2023 Adjusted EBITDA to be between $25 and $35 million (previously $35 to $45 million). The Corporation continues to see strong industry fundamentals in North America, including robust prices for renewable fuels and strong demand for environmental credits. This demand is supported by escalating compliance requirements and voluntary environmental commitments.

CONFERENCE CALL

In conjunction with the earnings release, investors will have the opportunity to listen to Tidewater Renewables’ senior management review its third quarter 2023 results via conference call on Thursday, November 9, 2023, at 10:00 am MDT (12:00 pm EDT).

To access the conference call by telephone, dial 416-764-8659 (local / international participant dial in) or 1-888-664-6392 (North American toll free participant dial in). A question and answer session for analysts will follow management's presentation. A live audio webcast of the conference call will be available by following this link: https://app.webinar.net/E5pAY6y7Ldw will also be archived there for 90 days.

For those accessing the call via Cision's investor website, we suggest logging in at least 15 minutes prior to the start of the live event. For those dialing in, participants should ask to be joined into the Tidewater Renewables Ltd. earnings call.

ABOUT TIDEWATER RENEWABLES

Tidewater Renewables is a multi-faceted, energy transition company. The Corporation is focused on the production of low carbon fuels, including renewable diesel, renewable hydrogen and renewable natural gas, as well as carbon capture through future initiatives. The Corporation was created in response to the growing demand for renewable fuels in North America and to capitalize on its potential to efficiently turn a wide variety of renewable feedstocks (such as tallow, used cooking oil, distillers corn oil, soybean oil, canola oil and other biomasses) into low carbon fuels. Tidewater Renewables’ objective is to become one of the leading Canadian renewable fuel producers. Organically, Tidewater Renewables seeks to leverage the existing infrastructure and engineering expertise of Tidewater Midstream and Infrastructure Ltd., regarding the development of the Corporation’s portfolio of greenfield and brownfield capital projects as well as the expansion of the Corporation’s product offerings. Additional information relating to Tidewater Renewables is available on SEDAR+ at www.sedarplus.com and at www.tidewater-renewables.com.

NON-GAAP AND OTHER FINANCIAL MEASURES

Throughout this press release and in other materials disclosed by the Corporation, Tidewater Renewables uses a number of financial measures when assessing its results and measuring overall performance. The intent of non-GAAP measures and ratios is to provide additional useful information to investors and analysts. Certain of these financial measures do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other entities. As such, these measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with GAAP. For more information with respect to financial measures which have not been defined by GAAP, including reconciliations to the closest comparable GAAP measure, see the “Non-GAAP and Other Financial Measures” section of Tidewater Renewables’ most recent MD&A which is available on SEDAR+.

Non-GAAP Financial Measures

The non-GAAP financial measures used by the Corporation are Adjusted EBITDA and distributable cash flow.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is calculated as income (or loss) before finance costs, taxes, depreciation, share-based compensation, unrealized gains/losses on derivative contracts, gains/ losses on warrant liability revaluation, non-cash items, transaction costs, lease payments under IFRS 16 Leases and other items considered non-recurring in nature plus the Corporation’s proportionate share of EBITDA in its equity investment.

Adjusted EBITDA is used by management to set objectives, make operating and capital investment decisions, monitor debt covenants and assess performance. In addition to its use by management, Tidewater Renewables also believes Adjusted EBITDA is a measure widely used by securities analysts, investors, lending institutions and others to evaluate the financial performance of the Corporation and other companies in the renewable industry.

The following table reconciles net income (loss), the nearest GAAP measure, to Adjusted EBITDA:

Distributable Cash Flow

Distributable cash flow is a non-GAAP measure. Management believes distributable cash flow is a useful metric for investors when assessing the amount of cash flow generated from normal operations. These cash flows are relevant to the Corporation’s ability to internally fund growth projects, alter its capital structure, or distribute returns to shareholders. Distributable cash flow is calculated as net cash provided by operating activities before changes in non-cash working capital plus cash distributions from investments, transaction costs, non-recurring expenses, and after any expenditures that use cash from operations. Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of seasonal fluctuations or other temporary changes and are generally funded with short-term debt or cash flows from operating activities. Deducted from distributable cash flow are maintenance capital expenditures, including turnarounds, as they are ongoing recurring expenditures which are funded from operating cash flows. Transaction costs are added back as they vary significantly quarter to quarter based on the Corporation’s acquisition and disposition activity. It also excludes non-recurring transactions that do not reflect Tidewater Renewables’ ongoing operations.

The following table reconciles net cash provided by operating activities, the nearest GAAP measure, to distributable cash flow:

Non-GAAP Financial Ratios

Distributable Cash Flow Per Common Share

Distributable cash flow per common share is calculated as distributable cash flow over the weighted average number of common shares outstanding for the three and nine months ended September 30, 2023.

Distributable cash flow is a non-GAAP financial measure. Management believes that distributable cash flow per common share provides investors an indicator of funds generated from the business that could be allocated to each shareholder’s equity position.

Capital Management Measures

Net Debt

Net debt is defined as bank debt, less cash. Net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation’s overall financial strength.

The following table reconciles net debt:

For additional information, please see the full press release.

For further information:

Robert Colcleugh,
Chairman and CEO
Tidewater Renewables Ltd.
Phone: 587.475.0210
Email: rcolcleugh@tidewatermidstream.com

Ray Kwan,
CFO
Tidewater Renewables Ltd.
Phone: 587.776.0042
Email: rkwan@tidewater-renewables.com