Civeo Corporation (NYSE:CVEO) today reported financial and
operating results for the third quarter ended September 30, 2018
and announced initial room commitments at its Sitka Lodge.
Highlights include:
- Delivered third quarter revenues of $120.5 million, an increase
from $97.5 million in
2017
- Generated $11.9 million in operating cash flow and $9.8 million
in free cash flow
- Room commitments from the Coastal GasLink Pipeline Project
(“CGL”) and LNG Canada’s Engineering, Procurement and Construction
firm (“EPC”) at the Sitka Lodge, contingent on Notice To Proceed
(“NTP”), which is expected shortly, anticipated to generate
approximately C$55 million in total revenues over
2018-2020
- Announced completion of an amendment to its credit facility to,
among other things, change certain of the financial covenants to
provide greater flexibility and capital availability heading into
early 2019 in anticipation of capital spending related to the LNG
Canada project
“In the third quarter, we generated solid results from our
Australian and U.S. segments. In Australia, steady commodity price
fundamentals drove sequential improvement in revenue and Adjusted
EBITDA. Our U.S. segment, aided by the geographic reallocation of
our wellsite assets and robust drilling and completion activity in
the Permian and Mid-Con basins, delivered strong EBITDA in the
third quarter. Our Canadian third quarter results were negatively
impacted by overlapping turnaround schedules between two
customers, reduced operations related room demand from a
customer production outage and maintenance-related operational
issues. However, we were pleased to win the room commitments for
our Sitka Lodge,” stated Bradley J. Dodson, President and Chief
Executive Officer.
“Additionally, the Noralta acquisition in Canada continues to
drive year-over-year growth in our business. We have completed the
integration of Noralta and remain on track to generate C$10 million
in annualized synergies by the end of the year. We have also
amended our credit facility to provide our business more
flexibility to capitalize on growth opportunities in 2019 and
2020.”
Mr. Dodson concluded, “We are confident in the health of our
business and believe we will continue to generate free cash flow,
provide best in class service for our customers, and create value
for all our stakeholders.”
Third Quarter 2018 Results
In the third quarter of 2018, Civeo generated revenues of $120.5
million and reported net loss of $14.3 million, or $0.09 per share,
which includes roughly $2 million in fees associated with third
party consulting to support strategic projects. During the third
quarter of 2018, Civeo produced operating cash flow of $11.9
million, Adjusted EBITDA of $22.4 million and free cash flow of
$9.8 million.
(EBITDA is a non-GAAP financial measure that is defined as net
income (loss) attributable to Civeo plus interest, taxes,
depreciation and amortization, and Adjusted EBITDA is defined as
EBITDA adjusted to exclude impairment charges and Noralta
transaction costs. Free cash flow is a non-GAAP financial measure
that is defined as net cash flows provided by operating activities
less capital expenditures plus proceeds from asset sales. Please
see the reconciliations to GAAP measures at the end of this news
release.)
By comparison, in the third quarter of 2017, Civeo generated
revenues of $97.5 million and reported a net loss of $22.3 million,
or $0.17 per share. The loss included a $4.4 million pre-tax loss
($2.7 million after-tax, or $0.02 per diluted share) resulting from
the impairment of open camp assets and land positions in the
Company's Canadian segment. During the third quarter of 2017,
Civeo generated operating cash flow of $31.1 million, Adjusted
EBITDA of $16.1 million and free cash flow of $29.6 million.
Canadian LNG Award
Civeo is pleased to announce today that it has been awarded an
agreement with CGL and LNG Canada’s EPC firm to provide rooms and
services from the Company’s existing Sitka accommodations facility,
contingent on NTP, which is expected shortly. Civeo’s Sitka Lodge,
located in Kitimat, British Columbia, has 646 rooms with plans to
expand to 1,100 rooms to support these commitments.
These room commitments at Sitka are in addition to the
previously announced four contracts totaling C$100 million of
revenues for mobile camps supporting the CGL pipeline project. In
accordance with this agreement, CGL will utilize the existing Civeo
Sitka Lodge for accommodations required for the construction of the
western most portion of the proposed natural gas pipeline, and LNG
Canada’s EPC will utilize this lodge for the initial construction
phases of the LNG Canada export facility. The awards cover
expected room needs over the initial 18 month time period with a
minimum room commitment and options for extension of up to 36
months. Expected revenues for these commitments are estimated
to be approximately C$55 million over the initial 18 months. Civeo
will partner with the local First Nation community at Sitka Lodge
to supply the accommodation needs during the term of the
agreements.
Mr. Dodson stated “We are delighted to confirm the formalization
of the agreement with CGL and LNG Canada’s EPC, further solidifying
our position as the partner of choice for workforce accommodation
solutions in this region, and we expect to secure more room
commitments for Sitka Lodge. In conjunction with our First Nation
partners, we look forward to delivering best-in-class
accommodations on this exciting LNG project.”
Civeo expects to spend approximately C$15 million in capital to
expand the Sitka Lodge to 1,100 rooms, in addition to the
previously announced C$10 million of capital related to the four
mobile camp contracts supporting the CGL pipeline project.
Business Segment Results
(Unless otherwise noted, the following discussion compares the
quarterly results for the third quarter of 2018 to the results for
the third quarter of 2017. The Adjusted EBITDA amounts discussed
below exclude the fixed asset impairment and Noralta-related
expenses noted above.)
Canada
During the third quarter of 2018, the Canadian segment generated
revenues of $76.8 million, operating loss of $7.1 million and
Adjusted EBITDA of $16.5 million, compared to revenues of $63.8
million, operating loss of $11.7 million and Adjusted EBITDA of
$15.6 million for the third quarter of 2017. The third quarter of
2018 results reflect the weakening of the Canadian dollar relative
to the U.S. dollar, which decreased revenues by $3.4 million. On a
constant currency basis, revenues increased $16.3 million due to
the Noralta acquisition, partially offset by the inability to
accommodate two turnaround customers simultaneously, as well as the
closure of a lodge for maintenance-related operational
issues.
Australia
Revenue for the Australian segment was $31.1 million, operating
income was $0.5 million and Adjusted EBITDA was $12.4 million in
the third quarter of 2018, compared to revenues of $27.5 million,
operating loss of $3.7 million and Adjusted EBITDA of $9.7 million
in the third quarter of 2017. The third quarter of 2018 results
reflect the weakening of the Australian dollar relative to the U.S.
dollar, which decreased revenues by $2.5 million and Adjusted
EBITDA by $1.0 million. On a constant currency basis, revenues
increased $6.0 million due to increased occupancy across a majority
of our villages as we continue to see activity strengthen in the
mining sector.
U.S.
The U.S. segment generated revenues of $12.6 million, operating
loss of $1.3 million and Adjusted EBITDA of $2.4 million in the
third quarter of 2018, compared to revenues of $6.1 million,
operating loss of $3.9 million and an Adjusted EBITDA loss of $1.9
million in the third quarter of 2017. The revenue increase was
primarily due to higher wellsite activity in the Permian and
Mid-Con markets and the benefit of the lodge acquisition in
Louisiana completed in February 2018.
Income Taxes
Civeo recognized an income tax benefit of $5.3 million, which
resulted in an effective tax rate of 28.2% in the third quarter of
2018. During the third quarter of 2017, Civeo recognized an income
tax benefit of $4.0 million, which resulted in an effective tax
rate of 15.3%.
Financial Condition
As of September 30, 2018, Civeo had total liquidity of
approximately $44.4 million, consisting of $39.9 million available
under its revolving credit facilities and $4.5 million of cash on
hand.
Civeo announced today completion of an amendment to its credit
facility to, among other things, change certain of the financial
covenants to provide greater flexibility and capital availability
heading into early 2019.
Under the amended credit facility, Civeo's leverage
ratio (Adjusted EBITDA to total debt) has a maximum of 4.5x in the
fourth quarter of 2018 before stepping up to a maximum of 4.75x in
the first quarter of 2019. From there, it steps down to 4.5x again
in the second quarter of 2019, 4.0x in the third quarter of 2019
and 3.5x in the fourth quarter of 2019 and beyond.
Amortization on the term loan facility was also increased
from 10% per annum to 12.5% per annum beginning at December 31,
2018 through maturity.
Civeo’s total debt outstanding at September 30, 2018 was $423.1
million, a $7.1 million decrease since June 30, 2018. The decrease
resulted largely from repayments of $13.8 million made with cash
flow generated by the business, offset by a translation
adjustment.
During the third quarter of 2018, Civeo invested $2.7 million in
capital expenditures, up from $2.0 million during the third quarter
of 2017. Capital expenditures for both periods were primarily for
routine maintenance.
Fourth Quarter and Full Year 2018 Guidance
Civeo continues to see less turnaround and pipeline related
occupancy in Canada than originally expected. These conditions are
likely to persist throughout the fourth quarter of 2018 and into
the first quarter of 2019. On the conference call today, Civeo will
provide a preliminary outlook of expected results for 2019.
For the fourth quarter of 2018, Civeo expects revenues of $113
million to $119 million and EBITDA of $17 million to $20 million.
For the full year of 2018, Civeo expects revenues of $466 million
to $472 million and EBITDA of $74 million to $77 million. Civeo
expects capital expenditures of approximately $15 to $20 million
for the full year 2018.
Conference Call
Civeo will host a conference call to discuss its third quarter
2018 financial results today at 11:00 a.m. Eastern time. This call
is being webcast and can be accessed at Civeo's website at
www.civeo.com Participants may also join the conference call by
dialing (800)-239-9838 in the United States or (323)-794-2551
internationally and using the conference ID 6490112 . A replay will
be available after the call by dialing (844) 512-2921 in the United
States or (412) 317-6671 internationally and using the conference
ID 6490112#.
About Civeo
Civeo Corporation is a leading provider of workforce
accommodations with prominent market positions in the Canadian oil
sands and the Australian natural resource regions. Civeo offers
comprehensive solutions for housing hundreds or thousands of
workers with its long-term and temporary accommodations and
provides catering, facility management, water systems and logistics
services. Civeo currently operates a total of 30 lodges and
villages in operation in Canada and Australia, with an aggregate of
approximately 32,000 rooms. Civeo is publicly traded under the
symbol CVEO on the New York Stock Exchange. For more information,
please visit Civeo's website at www.civeo.com.
Forward Looking Statements
This news release contains forward-looking statements within the
meaning of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements are
those that do not state historical facts and are, therefore,
inherently subject to risks and uncertainties. The forward looking
statements in this news release include the statements regarding
Civeo’s future plans, priorities and borrowing needs; growth
opportunities; optimism about activity, market demand and commodity
price environment in 2018; expected benefits of the agreement with
CGL and LNG Canada’s EPC and fourth quarter and full year 2018
guidance. The forward-looking statements included herein are based
on then current expectations and entail various risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by these forward-looking
statements. Such risks and uncertainties include, among other
things, risks associated with the general nature of the
accommodations industry, risks associated with the level of supply
and demand for oil, coal, iron ore and other minerals, including
the level of activity and developments in the Canadian oil sands,
the level of demand for coal and other natural resources from
Australia, and fluctuations in the current and future prices of
oil, coal, iron ore and other minerals, risks associated with
currency exchange rates, risks associated with the Noralta
acquisition, risks associated with the development of new projects,
including whether such projects will continue in the future, and
other factors discussed in the "Management’s Discussion and
Analysis of Financial Condition and Results of Operations" and
"Risk Factors" sections of Civeo’s annual report on Form 10-K for
the year ended December 31, 2017 and other reports the Company may
file from time to time with the U.S. Securities and Exchange
Commission. Each forward-looking statement contained in this news
release speaks only as of the date of this release. Except as
required by law, Civeo expressly disclaims any intention or
obligation to revise or update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
- Financial Schedules Follow
|
CIVEO
CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
120,491 |
|
|
$ |
97,489 |
|
|
$ |
352,172 |
|
|
$ |
280,928 |
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
sales and services |
|
|
81,753 |
|
|
|
65,527 |
|
|
|
247,818 |
|
|
|
186,683 |
|
Selling,
general and administrative expenses |
|
|
17,328 |
|
|
|
15,871 |
|
|
|
56,754 |
|
|
|
44,141 |
|
Depreciation and amortization expense |
|
|
34,468 |
|
|
|
32,700 |
|
|
|
99,502 |
|
|
|
97,083 |
|
Impairment expense |
|
|
- |
|
|
|
4,360 |
|
|
|
28,661 |
|
|
|
4,360 |
|
Other
operating expense |
|
|
(163 |
) |
|
|
375 |
|
|
|
348 |
|
|
|
1,104 |
|
|
|
|
133,386 |
|
|
|
118,833 |
|
|
|
433,083 |
|
|
|
333,371 |
|
Operating loss |
|
|
(12,895 |
) |
|
|
(21,344 |
) |
|
|
(80,911 |
) |
|
|
(52,443 |
) |
|
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest |
|
|
(6,404 |
) |
|
|
(5,441 |
) |
|
|
(19,329 |
) |
|
|
(15,697 |
) |
Loss on extinguishment
of debt |
|
|
- |
|
|
|
- |
|
|
|
(748 |
) |
|
|
(842 |
) |
Interest income |
|
|
16 |
|
|
|
49 |
|
|
|
92 |
|
|
|
69 |
|
Other income |
|
|
412 |
|
|
|
517 |
|
|
|
2,923 |
|
|
|
1,247 |
|
Loss
before income taxes |
|
|
(18,871 |
) |
|
|
(26,219 |
) |
|
|
(97,973 |
) |
|
|
(67,666 |
) |
Income tax benefit |
|
|
5,330 |
|
|
|
4,011 |
|
|
|
29,386 |
|
|
|
9,875 |
|
Net loss |
|
|
(13,541 |
) |
|
|
(22,208 |
) |
|
|
(68,587 |
) |
|
|
(57,791 |
) |
Less: Net income attributable to noncontrolling interest |
|
|
97 |
|
|
|
123 |
|
|
|
341 |
|
|
|
343 |
|
Net loss attributable
to Civeo Corporation |
|
|
(13,638 |
) |
|
|
(22,331 |
) |
|
|
(68,928 |
) |
|
|
(58,134 |
) |
Less: Dividends attributable to Class A preferred
shares |
|
|
612 |
|
|
|
- |
|
|
|
49,100 |
|
|
|
- |
|
Net loss attributable
to Civeo Corporation common shareholders |
|
$ |
(14,250 |
) |
|
$ |
(22,331 |
) |
|
$ |
(118,028 |
) |
|
$ |
(58,134 |
) |
|
|
|
|
|
|
|
|
|
Net loss
per share attributable to Civeo Corporation common
shareholders: |
|
|
|
|
|
|
Basic |
|
$ |
(0.09 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.76 |
) |
|
$ |
(0.46 |
) |
Diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.76 |
) |
|
$ |
(0.46 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
165,855 |
|
|
|
130,889 |
|
|
|
154,411 |
|
|
|
127,512 |
|
Diluted |
|
|
165,855 |
|
|
|
130,889 |
|
|
|
154,411 |
|
|
|
127,512 |
|
|
|
|
|
|
|
|
|
|
|
CIVEO CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
|
|
|
|
|
|
SEPTEMBER 30,
2018 |
|
DECEMBER 31,
2017 |
|
|
(UNAUDITED) |
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
4,540 |
|
|
$ |
32,647 |
|
Accounts
receivable, net |
|
|
85,238 |
|
|
|
66,823 |
|
Inventories |
|
|
6,543 |
|
|
|
7,246 |
|
Assets
held for sale |
|
|
12,318 |
|
|
|
9,462 |
|
Prepaid
expenses and other current assets |
|
|
29,603 |
|
|
|
16,034 |
|
Total
current assets |
|
|
138,242 |
|
|
|
132,212 |
|
|
|
|
|
|
Property, plant and
equipment, net |
|
|
708,455 |
|
|
|
693,833 |
|
Goodwill, net |
|
|
119,444 |
|
|
|
- |
|
Other
intangible assets, net |
|
|
130,497 |
|
|
|
22,753 |
|
Other
noncurrent assets |
|
|
1,998 |
|
|
|
5,114 |
|
Total
assets |
|
$ |
1,098,636 |
|
|
$ |
853,912 |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
32,787 |
|
|
$ |
27,812 |
|
Accrued
liabilities |
|
|
20,057 |
|
|
|
22,208 |
|
Income
taxes |
|
|
513 |
|
|
|
1,728 |
|
Current
portion of long-term debt |
|
|
28,146 |
|
|
|
16,596 |
|
Deferred
revenue |
|
|
4,415 |
|
|
|
5,442 |
|
Other
current liabilities |
|
|
4,406 |
|
|
|
1,843 |
|
Total
current liabilities |
|
|
90,324 |
|
|
|
75,629 |
|
|
|
|
|
|
Long-term debt |
|
|
392,161 |
|
|
|
277,990 |
|
Deferred income
taxes |
|
|
22,875 |
|
|
|
- |
|
Other noncurrent
liabilities |
|
|
30,035 |
|
|
|
23,926 |
|
Total
liabilities |
|
|
535,395 |
|
|
|
377,545 |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Preferred
shares |
|
|
55,791 |
|
|
|
- |
|
Common
shares |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
1,558,901 |
|
|
|
1,383,934 |
|
Accumulated deficit |
|
|
(696,747 |
) |
|
|
(579,113 |
) |
Treasury
stock |
|
|
(990 |
) |
|
|
(358 |
) |
Accumulated other comprehensive loss |
|
|
(353,812 |
) |
|
|
(328,213 |
) |
Total
Civeo Corporation shareholders' equity |
|
|
563,143 |
|
|
|
476,250 |
|
Noncontrolling interest |
|
|
98 |
|
|
|
117 |
|
Total
shareholders' equity |
|
|
563,241 |
|
|
|
476,367 |
|
Total
liabilities and shareholders' equity |
|
$ |
1,098,636 |
|
|
$ |
853,912 |
|
|
|
|
|
|
|
CIVEO CORPORATION UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
|
|
|
|
|
|
|
NINE MONTHS ENDED SEPTEMBER
30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
Net loss |
|
$ |
(68,587 |
) |
|
$ |
(57,791 |
) |
Adjustments to
reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
99,502 |
|
|
|
97,083 |
|
Impairment charges |
|
|
28,661 |
|
|
|
4,360 |
|
Loss on
extinguishment of debt |
|
|
748 |
|
|
|
842 |
|
Deferred
income tax benefit |
|
|
(29,272 |
) |
|
|
(11,026 |
) |
Non-cash
compensation charge |
|
|
7,804 |
|
|
|
5,481 |
|
Gains on
disposals of assets |
|
|
(2,714 |
) |
|
|
(1,193 |
) |
Provision
(benefit) for loss on receivables, net of recoveries |
|
|
(106 |
) |
|
|
8 |
|
Other,
net |
|
|
3,959 |
|
|
|
3,307 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
|
89 |
|
|
|
(2,845 |
) |
Inventories |
|
|
1,342 |
|
|
|
(1,507 |
) |
Accounts
payable and accrued liabilities |
|
|
(10,787 |
) |
|
|
5,910 |
|
Taxes
payable |
|
|
939 |
|
|
|
9,928 |
|
Other
current assets and liabilities, net |
|
|
(5,716 |
) |
|
|
(7,032 |
) |
Net cash
flows provided by operating activities |
|
|
25,862 |
|
|
|
45,525 |
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
Payments
related to acquisitions, net of cash acquired |
|
|
(181,589 |
) |
|
|
- |
|
Capital
expenditures, including capitalized interest |
|
|
(8,666 |
) |
|
|
(8,020 |
) |
Proceeds
from disposition of property, plant and equipment |
|
|
4,038 |
|
|
|
1,625 |
|
Other,
net |
|
|
111 |
|
|
|
548 |
|
Net cash
flows used in investing activities |
|
|
(186,106 |
) |
|
|
(5,847 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
Proceeds
from issuance of common stock |
|
|
- |
|
|
|
64,817 |
|
Term loan
repayments |
|
|
(18,177 |
) |
|
|
(12,214 |
) |
Revolving
credit borrowings (repayments), net |
|
|
155,410 |
|
|
|
(39,937 |
) |
Debt
issuance costs |
|
|
(2,742 |
) |
|
|
(1,795 |
) |
Other |
|
|
(632 |
) |
|
|
(293 |
) |
Net cash
flows provided by financing activities |
|
|
133,859 |
|
|
|
10,578 |
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
(1,722 |
) |
|
|
1,961 |
|
Net change in cash and
cash equivalents |
|
|
(28,107 |
) |
|
|
52,217 |
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period |
|
|
32,647 |
|
|
|
1,785 |
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
|
$ |
4,540 |
|
|
$ |
54,002 |
|
|
|
|
|
|
CIVEO
CORPORATION SEGMENT DATA (in
thousands) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Revenues |
|
|
|
|
|
|
|
|
Canada |
|
$ |
76,753 |
|
|
$ |
63,832 |
|
|
$ |
226,661 |
|
|
$ |
182,006 |
|
Australia |
|
|
31,090 |
|
|
|
27,541 |
|
|
|
89,542 |
|
|
|
83,164 |
|
United
States |
|
|
12,648 |
|
|
|
6,116 |
|
|
|
35,969 |
|
|
|
15,758 |
|
Total
revenues |
|
$ |
120,491 |
|
|
$ |
97,489 |
|
|
$ |
352,172 |
|
|
$ |
280,928 |
|
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
|
|
|
|
|
|
|
Canada |
|
$ |
16,094 |
|
|
$ |
11,201 |
|
|
$ |
13,092 |
|
|
$ |
39,099 |
|
Australia |
|
|
12,426 |
|
|
|
9,673 |
|
|
|
33,062 |
|
|
|
31,104 |
|
United
States |
|
|
2,414 |
|
|
|
(1,933 |
) |
|
|
3,658 |
|
|
|
(4,278 |
) |
Corporate
and eliminations |
|
|
(9,046 |
) |
|
|
(7,191 |
) |
|
|
(28,639 |
) |
|
|
(20,381 |
) |
Total
EBITDA |
|
$ |
21,888 |
|
|
$ |
11,750 |
|
|
$ |
21,173 |
|
|
$ |
45,544 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1) |
|
|
|
|
|
|
|
|
Canada |
|
$ |
16,494 |
|
|
$ |
15,561 |
|
|
$ |
44,068 |
|
|
$ |
43,459 |
|
Australia |
|
|
12,426 |
|
|
|
9,673 |
|
|
|
33,062 |
|
|
|
31,104 |
|
United
States |
|
|
2,414 |
|
|
|
(1,933 |
) |
|
|
3,658 |
|
|
|
(4,278 |
) |
Corporate
and eliminations |
|
|
(8,982 |
) |
|
|
(7,191 |
) |
|
|
(23,913 |
) |
|
|
(20,381 |
) |
Total
adjusted EBITDA |
|
$ |
22,352 |
|
|
$ |
16,110 |
|
|
$ |
56,875 |
|
|
$ |
49,904 |
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
|
|
|
|
|
|
Canada |
|
$ |
(7,129 |
) |
|
$ |
(11,691 |
) |
|
$ |
(53,777 |
) |
|
$ |
(26,283 |
) |
Australia |
|
|
472 |
|
|
|
(3,667 |
) |
|
|
(3,793 |
) |
|
|
(8,284 |
) |
United
States |
|
|
(1,349 |
) |
|
|
(3,941 |
) |
|
|
(6,445 |
) |
|
|
(10,347 |
) |
Corporate
and eliminations |
|
|
(4,889 |
) |
|
|
(2,045 |
) |
|
|
(16,896 |
) |
|
|
(7,529 |
) |
Total
operating loss |
|
$ |
(12,895 |
) |
|
$ |
(21,344 |
) |
|
$ |
(80,911 |
) |
|
$ |
(52,443 |
) |
|
|
|
|
|
|
|
|
|
(1) Please
see Non-GAAP Reconciliation Schedule. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CIVEO
CORPORATION NON-GAAP RECONCILIATIONS
(in thousands) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
EBITDA (1) |
|
$ |
21,888 |
|
|
$ |
11,750 |
|
|
$ |
21,173 |
|
|
$ |
45,544 |
|
Adjusted EBITDA
(1) |
|
$ |
22,352 |
|
|
$ |
16,110 |
|
|
$ |
56,875 |
|
|
$ |
49,904 |
|
Free Cash Flow (2) |
|
$ |
9,762 |
|
|
$ |
29,606 |
|
|
$ |
21,234 |
|
|
$ |
39,130 |
|
|
|
|
|
|
|
|
|
|
(1) The term EBITDA is defined as net
income (loss) attributable to Civeo Corporation plus interest,
taxes, depreciation and amortization. The term Adjusted EBITDA is
defined as EBITDA adjusted to exclude impairment charges and
certain costs associated with Civeo's acquisition of Noralta.
EBITDA and Adjusted EBITDA are not measures of financial
performance under generally accepted accounting principles and
should not be considered in isolation from or as a substitute for
net income or cash flow measures prepared in accordance with
generally accepted accounting principles or as a measure of
profitability or liquidity. Additionally, EBITDA and Adjusted
EBITDA may not be comparable to other similarly titled measures of
other companies. Civeo has included EBITDA and Adjusted EBITDA as
supplemental disclosures because its management believes that
EBITDA and Adjusted EBITDA provide useful information regarding its
ability to service debt and to fund capital expenditures and
provide investors a helpful measure for comparing the Civeo's
operating performance with the performance of other companies that
have different financing and capital structures or tax rates. Civeo
uses EBITDA and Adjusted EBITDA to compare and to monitor the
performance of its business segments to other comparable public
companies and as a benchmark for the award of incentive
compensation under its annual incentive compensation
plan. |
|
The following table sets forth a
reconciliation of EBITDA and Adjusted EBITDA to net loss
attributable to Civeo Corporation, which is the most directly
comparable measure of financial performance calculated under
generally accepted accounting principles (in thousands)
(unaudited): |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to Civeo Corporation |
|
$ |
(13,638 |
) |
|
$ |
(22,331 |
) |
|
$ |
(68,928 |
) |
|
$ |
(58,134 |
) |
Income tax provision (benefit) |
|
|
(5,330 |
) |
|
|
(4,011 |
) |
|
|
(29,386 |
) |
|
|
(9,875 |
) |
Depreciation and amortization |
|
|
34,468 |
|
|
|
32,700 |
|
|
|
99,502 |
|
|
|
97,083 |
|
Interest income |
|
|
(16 |
) |
|
|
(49 |
) |
|
|
(92 |
) |
|
|
(69 |
) |
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
748 |
|
|
|
842 |
|
Interest
expense |
|
|
6,404 |
|
|
|
5,441 |
|
|
|
19,329 |
|
|
|
15,697 |
|
EBITDA |
|
$ |
21,888 |
|
|
$ |
11,750 |
|
|
$ |
21,173 |
|
|
$ |
45,544 |
|
Adjustments to EBITDA |
|
|
|
|
|
|
|
|
Impairment expense (a) |
|
|
- |
|
|
|
4,360 |
|
|
|
28,661 |
|
|
|
4,360 |
|
Noralta transaction costs (b) |
|
|
464 |
|
|
|
- |
|
|
|
7,041 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
22,352 |
|
|
$ |
16,110 |
|
|
$ |
56,875 |
|
|
$ |
49,904 |
|
|
|
|
|
|
|
|
|
|
(a) Relates to the first quarter 2018 and
third quarter 2017 impairment of assets in Canada. During the
first quarter 2018, we recorded a pre-tax loss of $28.7 million
($20.9 million after-tax, or $0.14 per diluted share), which is
included in Impairment expense on the unaudited statements of
operations. During the third quarter 2017, we recorded a
pre-tax loss of $4.4 million ($3.2 million after-tax, or $0.02 per
diluted share), which is included in Impairment expense on the
unaudited statements of operations. |
|
|
|
|
|
|
|
|
|
(b) Relates to costs incurred associated
with Civeo's acquisition of Noralta Lodge Ltd. For the nine
month period ended September 30, 2018, the $7.0 million of costs in
2018 ($6.3 million after-tax, or $0.04, per diluted share), are
reflected in the Canada ($2.3 million) and Corporate and
eliminations ($4.7 million) reportable segments and are included in
Costs of sales and services ($0.3 million) and Selling, general and
administrative expenses ($6.7 million) on the unaudited statements
of operations. For the three month period ended September 30,
2018, the $0.5 million of costs in 2018 ($0.4 million after-tax, or
$0.00, per diluted share), are reflected in the Canada ($0.4
million) and Corporate and eliminations ($0.1 million) reportable
segments and are included in Costs of sales and services ($0.2
million) and Selling, general and administrative expenses ($0.3
million) on the unaudited statements of operations. |
|
|
|
|
|
|
|
|
|
(2) The term Free Cash Flow is defined as
net cash flows provided by operating activities less capital
expenditures plus proceeds from asset sales. Free Cash Flow is not
a measure of financial performance under generally accepted
accounting principles and should not be considered in isolation
from or as a substitute for cash flow measures prepared in
accordance with generally accepted accounting principles or as a
measure of profitability or liquidity. Additionally, Free Cash Flow
may not be comparable to other similarly titled measures of other
companies. Civeo has included Free Cash Flow as a supplemental
disclosure because its management believes that Free Cash Flow
provides useful information regarding the cash flow generating
ability of its business relative to its capital expenditure and
debt service obligations. Civeo uses Free Cash Flow to compare and
to understand, manage, make operating decisions and evaluate
Civeo's business. It is also used as a benchmark for the
award of incentive compensation under its Free Cash Flow
plan. |
|
The following table sets forth a
reconciliation of Free Cash Flow to Net Cash Flows Provided by
Operating Activities, which is the most directly comparable measure
of financial performance calculated under generally accepted
accounting principles (in thousands) (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Net Cash
Flows Provided by Operating Activities |
|
$ |
11,885 |
|
|
$ |
31,124 |
|
|
$ |
25,862 |
|
|
$ |
45,525 |
|
Capital expenditures, including capitalized interest |
|
|
(2,723 |
) |
|
|
(1,983 |
) |
|
|
(8,666 |
) |
|
|
(8,020 |
) |
Proceeds from disposition of property, plant and
equipment |
|
600 |
|
|
|
465 |
|
|
|
4,038 |
|
|
|
1,625 |
|
Free Cash Flow |
|
$ |
9,762 |
|
|
$ |
29,606 |
|
|
$ |
21,234 |
|
|
$ |
39,130 |
|
|
CIVEO CORPORATION NON-GAAP
RECONCILIATIONS - GUIDANCE (in millions)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDINGDECEMBER 31,
2018 |
|
YEAR ENDING DECEMBER 31,
2018 |
EBITDA Range (1) |
|
$ |
17.0 |
|
|
$ |
20.0 |
|
|
$ |
38.3 |
|
|
$ |
41.3 |
|
Adjusted EBITDA Range
(1) |
|
$ |
17.0 |
|
|
$ |
20.0 |
|
|
$ |
74.0 |
|
|
$ |
77.0 |
|
|
|
|
|
|
|
|
|
|
(1) The following table sets forth a reconciliation of
estimated EBITDA and Adjusted EBITDA to estimated net loss, which
is the most directly comparable measure of financial performance
calculated under generally accepted accounting principles (in
millions) (unaudited): |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDINGDECEMBER 31,
2018 |
|
YEAR ENDING DECEMBER 31,
2018 |
|
|
(estimated) |
|
(estimated) |
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(20.5 |
) |
|
$ |
(18.5 |
) |
|
$ |
(89.3 |
) |
|
$ |
(87.3 |
) |
Income
tax provision (benefit) |
|
|
(3.0 |
) |
|
|
(2.0 |
) |
|
|
(32.4 |
) |
|
|
(31.4 |
) |
Depreciation and amortization |
|
|
34.5 |
|
|
|
34.5 |
|
|
|
134.0 |
|
|
|
134.0 |
|
Interest
expense |
|
|
6.0 |
|
|
|
6.0 |
|
|
|
26.0 |
|
|
|
26.0 |
|
EBITDA |
|
$ |
17.0 |
|
|
$ |
20.0 |
|
|
$ |
38.3 |
|
|
$ |
41.3 |
|
Adjustments to EBITDA |
|
|
|
|
|
|
|
|
Impairment expense (a) |
|
|
- |
|
|
|
- |
|
|
|
28.7 |
|
|
|
28.7 |
|
Noralta
transaction costs (b) |
|
|
- |
|
|
|
- |
|
|
|
7.0 |
|
|
|
7.0 |
|
Adjusted
EBITDA |
|
$ |
17.0 |
|
|
$ |
20.0 |
|
|
$ |
74.0 |
|
|
$ |
77.0 |
|
|
|
|
|
|
|
|
|
|
(a) Relates to the first quarter 2018 impairment of assets in
Canada. During the first quarter 2018, we recorded a pre-tax
loss of $28.7 million ($20.9 million after-tax, or $0.14 per
diluted share), which is included in Impairment expense on the
unaudited statements of operations. |
|
|
|
|
|
|
|
|
|
(b) Relates to costs incurred associated with Civeo's
acquisition of Noralta Lodge Ltd. For the nine month period
ended September 30, 2018, the $7.0 million of costs in 2018 ($6.3
million after-tax, or $0.04, per diluted share), are reflected in
the Canada ($2.3 million) and Corporate and eliminations ($4.7
million) reportable segments and are included in Costs of sales and
services ($0.3 million) and Selling, general and administrative
expenses ($6.7 million) on the unaudited statements of
operations. |
|
|
|
|
|
|
|
|
|
|
CIVEO
CORPORATION SUPPLEMENTAL QUARTERLY SEGMENT AND
OPERATING DATA (U.S. dollars in thousands, except
for room counts and average daily rates)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS
ENDED SEPTEMBER 30, |
|
NINE MONTHS ENDED
SEPTEMBER 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Supplemental
Operating Data - Canadian Segment |
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Accommodation revenue (1) |
|
$ |
72,991 |
|
|
$ |
60,018 |
|
|
$ |
204,258 |
|
|
$ |
169,891 |
|
Mobile
facility rental revenue (2) |
|
|
135 |
|
|
|
579 |
|
|
|
9,283 |
|
|
|
1,380 |
|
Catering
and other services revenue (3) |
|
|
3,627 |
|
|
|
3,037 |
|
|
|
11,082 |
|
|
|
9,121 |
|
Manufacturing revenue (4) |
|
|
- |
|
|
|
198 |
|
|
|
2,038 |
|
|
|
1,614 |
|
Total
Canadian revenues |
|
$ |
76,753 |
|
|
$ |
63,832 |
|
|
$ |
226,661 |
|
|
$ |
182,006 |
|
|
|
|
|
|
|
|
|
|
Average
available lodge rooms (5) |
|
|
22,707 |
|
|
|
14,720 |
|
|
|
19,975 |
|
|
|
14,720 |
|
|
|
|
|
|
|
|
|
|
Rentable
rooms (6) |
|
|
13,406 |
|
|
|
8,698 |
|
|
|
12,362 |
|
|
|
8,564 |
|
|
|
|
|
|
|
|
|
|
Average
daily rates (7) |
|
$ |
89 |
|
|
$ |
92 |
|
|
$ |
88 |
|
|
$ |
93 |
|
|
|
|
|
|
|
|
|
|
Billed
rooms (8) |
|
|
816,295 |
|
|
|
646,642 |
|
|
|
2,320,012 |
|
|
|
1,822,617 |
|
|
|
|
|
|
|
|
|
|
Occupancy
in lodges (9) |
|
|
66 |
% |
|
|
81 |
% |
|
|
69 |
% |
|
|
78 |
% |
|
|
|
|
|
|
|
|
|
Canadian
dollar to U.S. dollar |
|
$ |
0.765 |
|
|
$ |
0.799 |
|
|
$ |
0.777 |
|
|
$ |
0.766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Operating Data - Australian Segment |
|
|
|
|
|
|
|
|
Accommodation revenue (1) |
|
$ |
30,679 |
|
|
$ |
27,541 |
|
|
$ |
88,343 |
|
|
$ |
83,164 |
|
Catering
and other services revenue (3) |
|
|
411 |
|
|
|
- |
|
|
|
1,199 |
|
|
|
- |
|
Total
Australian revenues |
|
$ |
31,090 |
|
|
$ |
27,541 |
|
|
$ |
89,542 |
|
|
$ |
83,164 |
|
|
|
|
|
|
|
|
|
|
Average
available village rooms (5) |
|
|
9,346 |
|
|
|
9,359 |
|
|
|
9,346 |
|
|
|
9,377 |
|
|
|
|
|
|
|
|
|
|
Rentable
rooms (6) |
|
|
8,739 |
|
|
|
8,725 |
|
|
|
8,731 |
|
|
|
8,753 |
|
|
|
|
|
|
|
|
|
|
Average
daily rates (7) |
|
$ |
77 |
|
|
$ |
81 |
|
|
$ |
79 |
|
|
$ |
81 |
|
|
|
|
|
|
|
|
|
|
Billed
rooms (8) |
|
|
396,747 |
|
|
|
340,467 |
|
|
|
1,114,695 |
|
|
|
1,030,068 |
|
|
|
|
|
|
|
|
|
|
Occupancy
in villages (9) |
|
|
49 |
% |
|
|
42 |
% |
|
|
47 |
% |
|
|
43 |
% |
|
|
|
|
|
|
|
|
|
Australian dollar to U.S. dollar |
|
$ |
0.731 |
|
|
$ |
0.790 |
|
|
$ |
0.758 |
|
|
$ |
0.766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes revenues related to
lodge, village and open camp rooms. |
|
|
|
|
|
|
|
|
|
(2) Includes revenues related to
mobile camps. |
|
|
|
|
|
|
|
|
|
(3) Includes revenues related to
catering and food services, laundry and water and wastewater
treatment services. |
|
|
|
|
|
|
|
|
|
(4) Includes revenues related to
modular construction and manufacturing services. |
|
|
|
|
|
|
|
|
|
(5) Average available rooms relate
to Canadian lodges and Australian villages and includes rooms that
are utilized for our personnel. |
|
|
|
|
|
|
|
|
|
(6) Rentable rooms relate to
Canadian lodges and Australian villages and excludes rooms that are
utilized for our personnel and out-of-service rooms. |
|
|
|
|
|
|
|
|
|
(7) Average daily rate is based on
rentable rooms and lodge/village revenue. |
|
|
|
|
|
|
|
|
|
(8) Billed rooms represents total
billed days. |
|
|
|
|
|
|
|
|
|
(9) Occupancy represents total
billed days divided by rentable days. Rentable days excludes
staff rooms and out-of-service rooms. |
|
|
|
|
|
|
|
|
|
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