Civeo Corporation (NYSE:CVEO) today reported financial and
operating results for the third quarter ended September 30,
2020.
Highlights include:
- Reported third quarter revenues of $142.9 million, net income
of $6.5 million and operating cash flow of $35.4 million;
- Delivered third quarter Adjusted EBITDA of $36.0 million and
free cash flow of $34.4 million;
- Generated $80.7 million of operating cash flow and $77.8
million of free cash flow year-to-date;
- Completed an amendment and extension to its entire credit
agreement to, among other things, extend the maturity date of all
of the Company's total debt outstanding by eighteen months to May
30, 2023;
- Reduced leverage ratio to 2.16x as of September 30, 2020 from
2.34x as of June 30, 2020; and
- Today announced the renewal of four contracts to provide
hospitality services through Civeo's Action Catering business in
Western Australia with expected revenues under these contracts
totaling A$135 million over two-year terms
“The third quarter results demonstrated our company’s emphasis
on safety, revenue diversification and operational execution. I’d
like to once again thank our employees for their continued
dedication to safety and service during these difficult times. In
Australia, our customers' activity in the metallurgical coal and
iron ore markets continues to drive occupancy, contract awards and
renewals. We are pleased today to announce four two-year contract
renewals through our Action Catering business in Western
Australia," stated Bradley J. Dodson, Civeo's President and Chief
Executive Officer.
Mr. Dodson continued, “We were also very pleased to complete the
amendment and eighteen month extension to our credit agreement and
appreciate the continued support of our key bank partners. The
revised agreement affords the Company additional time to pursue our
financial objectives of focusing on free cash flow generation and
debt reduction while we explore longer term debt capital
solutions."
Mr. Dodson added, “Despite the COVID-19 and oil price-related
disruptions this year in Canada, we experienced a sequential
increase in billed rooms across a majority of our lodges in the
third quarter. While our oil sands customers’ production and
turnaround activity was not back to 2019 levels, we are encouraged
by the recovery from second quarter 2020 lows."
Mr. Dodson concluded, "The third quarter results exhibited the
business' free cash flow generation ability, allowing us to further
reduce our aggregate leverage and better position the company for
the future. While we are expecting seasonally reduced billed rooms
sequentially in the fourth quarter of 2020 in both Canada and
Australia due to holiday downtime, we are cautiously optimistic
that the positive trends experienced in the third quarter will
continue into 2021."
Third Quarter 2020 Results
In the third quarter of 2020, Civeo generated revenues of $142.9
million and reported net income of $6.5 million, or $0.03 per
diluted share. During the third quarter of 2020, Civeo produced
operating cash flow of $35.4 million, Adjusted EBITDA of $36.0
million and free cash flow of $34.4 million.
By comparison, in the third quarter of 2019, Civeo generated
revenues of $148.2 million and reported net income of $4.5 million,
or $0.02 per diluted share. During the third quarter of 2019, Civeo
produced operating cash flow of $23.6 million, Adjusted EBITDA of
$36.2 million and free cash flow of $20.3 million. The third
quarter of 2020 Adjusted EBITDA was in line with the third quarter
of 2019 primarily due to increased occupancy in our Australian
Bowen Basin villages and $3.6 million of other income related to
proceeds from the Canada Emergency Wage Subsidy ("CEWS"), largely
offset by decreased occupancy in our Canadian lodges.
(EBITDA is a non-GAAP financial measure that is defined as net
income plus interest, taxes, depreciation and amortization, and
Adjusted EBITDA is defined as EBITDA adjusted to exclude impairment
charges, adjustments regarding an asset retirement obligation
recorded in the third quarter of 2019 and certain costs associated
with Civeo's acquisition of Action. 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.)
Business Segment Results
(Unless otherwise noted, the following discussion compares the
quarterly results for the third quarter of 2020 to the results for
the third quarter of 2019.)
Canada
During the third quarter of 2020, the Canadian segment generated
revenues of $71.8 million, operating income of $1.0 million and
Adjusted EBITDA of $21.3 million, compared to revenues of $91.1
million, operating income of $2.9 million and Adjusted EBITDA of
$25.0 million in the third quarter of 2019. The third quarter of
2020 Adjusted EBITDA included $3.6 million of other income related
to proceeds from the CEWS.
On a constant currency basis, the Canadian segment experienced a
20% period-over-period decrease in revenues driven by a 42%
year-over-year reduction in billed rooms related to decreased
customer activity due to the decline in oil prices and the COVID-19
pandemic. Adjusted EBITDA for the Canadian segment decreased 15%
year-over-year primarily due to lower billed rooms in the oil sands
lodges, partially offset by the CEWS proceeds.
Australia
During the third quarter of 2020, the Australian segment
generated revenues of $64.7 million, operating income of $9.9
million and Adjusted EBITDA of $21.5 million, compared to revenues
of $47.7 million, operating income of $4.7 million and Adjusted
EBITDA of $17.2 million in the third quarter of 2019. The third
quarter of 2020 results reflect the impact of a strengthened
Australian dollar relative to the U.S. dollar, which increased
revenues and Adjusted EBITDA by $2.8 million and $0.9 million,
respectively.
On a constant currency basis, the Australian segment experienced
a 30% period-over-period increase in revenues primarily driven by
increased activity from our Action Catering business coupled with
increased occupancy at our Bowen Basin villages. Australian village
occupancy increased 13% year-over-year largely due to continued
improvement in metallurgical coal activity across the Bowen Basin.
Adjusted EBITDA from the Australian segment increased 25%
year-over-year due to higher village occupancy coupled with
increased activity from our Action Catering business. Australian
revenues in the third quarter of 2020 increased more year-over-year
than Australian Adjusted EBITDA due to the inherent lower margins
in the service-only business model of Action Catering.
Civeo today announced that it has been awarded four contract
renewals in Western Australia through its Action Catering business
to provide hospitality services. The contracts are expected to
generate A$135 million in revenues over two-year terms.
U.S.
The U.S. segment generated revenues of $6.4 million, operating
loss of $3.2 million and negative Adjusted EBITDA of $1.5 million
in the third quarter of 2020, compared to revenues of $9.3 million,
operating loss of $2.2 million and Adjusted EBITDA of $0.3 million
in the third quarter of 2019. Revenues and Adjusted EBITDA declined
year-over-year primarily due to lower drilling and completion
activity coupled with lower occupancy in the U.S. lodges.
Income Taxes
Civeo recognized an income tax expense of $0.2 million, which
resulted in an effective tax rate of 2%, in the third quarter of
2020. During the third quarter of 2019, Civeo recognized an income
tax benefit of $6.6 million, which resulted in an effective tax
rate of 421%. The effective tax rate for the three months ended
September 30, 2019 was impacted by a tax benefit of $3.0 million
related to a reduction in the Alberta, Canada income tax rate as
well as a $2.1 million tax benefit related to the change in the
valuation allowance in Australia resulting from the July 2019
acquisition of Action Catering.
Financial Condition
As of September 30, 2020, Civeo had total liquidity of
approximately $85.6 million, consisting of $78.7 million available
under its revolving credit facilities and $6.9 million of cash on
hand.
Civeo’s total debt outstanding on September 30, 2020 was $272.5
million, a $27.0 million decrease since June 30, 2020. The decrease
consisted of $33.4 million in debt payments from cash flow
generated by the business, partially offset by an unfavorable
foreign currency translation impact of $6.4 million.
Civeo reduced its leverage ratio from 2.34x as of June 30, 2020
to 2.16x as of September 30, 2020.
Civeo recently announced the completion of an amendment and
eighteen-month extension to its entire credit agreement. Among
other things, the amended credit facility extends the maturity date
of all of the Company's total debt outstanding by eighteen months
to May 30, 2023; increases interest rate spreads above base rates
by approximately 100 basis points above prior spreads; and
decreases the total revolving commitment to $167.3 million, a level
more consistent with currently expected needs, which will reduce
undrawn commitment fees.
During the third quarter of 2020, Civeo invested $2.4 million in
capital expenditures, down from $4.3 million during the third
quarter of 2019 due to the completion of the Sitka lodge expansion
in 2019.
Full Year 2020 Guidance
For the full year of 2020, Civeo is increasing its revenue and
Adjusted EBITDA guidance to a range of $515 million to $520 million
and $100 million to $105 million, respectively. This guidance is
based on our expectations as of the date hereof and assumes no
material changes to the current macro environment, or conditions
related to the COVID-19 pandemic and the responses thereto. The
Company expects full year 2020 capital expenditures of less than
$15 million.
Conference Call
Civeo will host a conference call to discuss its third quarter
2020 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 (866) 548-4713 in the United States or (323) 794-2093
internationally and using the conference ID 6194051#. 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 6194051#.
About Civeo
Civeo Corporation is a leading provider of hospitality services
with prominent market positions in the Canadian oil sands and the
Australian natural resource regions. Civeo offers comprehensive
solutions for lodging hundreds or thousands of workers with its
long-term and temporary accommodations and provides food services,
housekeeping, facility management, laundry, water and wastewater
treatment, power generation, communications systems, security and
logistics services. Civeo currently operates a total of 28 lodges
and villages in Canada, Australia and the U.S., with an aggregate
of approximately 30,000 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 herein include the statements regarding Civeo’s future
plans and outlook, including guidance, current trends and liquidity
needs, 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 global health concerns and pandemics,
including the COVID-19 pandemic and the risk that room occupancy
may decline if our customers are limited or restricted in the
availability of personnel who may become ill or be subjected to
quarantine, 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, spending and developments in the Canadian
oil sands, the level of demand for coal and other natural resources
from, and investments and opportunities in, Australia, and
fluctuations or sharp declines in the current and future prices of
oil, natural gas, coal, iron ore and other minerals, risks
associated with failure by our customers to reach positive final
investment decisions on, or otherwise not complete, projects with
respect to which we have been awarded contracts, which may cause
those customers to terminate or postpone contracts, risks
associated with currency exchange rates, risks associated with the
company’s ability to integrate acquisitions, risks associated with
the development of new projects, including whether such projects
will continue in the future, risks associated with the trading
price of the company’s common shares, availability and cost of
capital, risks associated with our ability to remain in compliance
with our financial covenants in our debt agreements, risks
associated with general global economic conditions, global weather
conditions, natural disasters and security threats and changes to
government and environmental regulations, including climate change,
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, 2019 and other reports the company may
file from time to time with the U.S. Securities and Exchange
Commission. Each forward-looking statement contained herein 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,
2020
2019
2020
2019
Revenues
$
142,857
$
148,163
$
396,351
$
378,866
Costs and expenses:
Cost of sales and services
97,434
99,480
283,880
264,350
Selling, general and administrative
expenses
13,462
14,334
38,889
42,960
Depreciation and amortization expense
24,820
31,196
72,527
92,974
Impairment expense
—
—
144,120
5,546
Other operating expense
51
277
755
109
135,767
145,287
540,171
405,939
Operating income (loss)
7,090
2,876
(143,820)
(27,073)
Interest expense
(3,646)
(7,315)
(13,095)
(20,670)
Loss on extinguishment of debt
(383)
—
(383)
—
Interest income
—
17
20
66
Other income
4,542
2,849
17,209
6,882
Income (loss) before income taxes
7,603
(1,573)
(140,069)
(40,795)
Income tax (expense) benefit
(180)
6,629
8,509
13,963
Net income (loss)
7,423
5,056
(131,560)
(26,832)
Less: Net income attributable to
noncontrolling interest
434
60
914
60
Net income (loss) attributable to Civeo
Corporation
6,989
4,996
(132,474)
(26,892)
Less: Dividends attributable to Class A
preferred shares
472
464
1,411
1,384
Net income (loss) attributable to Civeo
common shareholders
$
6,517
$
4,532
$
(133,885)
$
(28,276)
Net income (loss) per share attributable
to Civeo Corporation common shareholders:
Basic
$
0.03
$
0.02
$
(0.79)
$
(0.17)
Diluted
$
0.03
$
0.02
$
(0.79)
$
(0.17)
Weighted average number of common shares
outstanding:
Basic
169,924
167,640
169,420
166,842
Diluted
170,544
168,282
169,420
166,842
CIVEO CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
September 30, 2020
December 31, 2019
(UNAUDITED)
Current assets:
Cash and cash equivalents
$
6,938
$
3,331
Accounts receivable, net
92,754
99,493
Inventories
5,775
5,877
Assets held for sale
—
7,589
Prepaid expenses and other current
assets
17,106
15,151
Total current assets
122,573
131,441
Property, plant and equipment, net
481,394
590,309
Goodwill, net
8,086
110,173
Other intangible assets, net
98,907
111,837
Operating lease right-of-use assets
20,426
24,876
Other noncurrent assets
1,550
1,276
Total assets
$
732,936
$
969,912
Current liabilities:
Accounts payable
$
37,116
$
36,971
Accrued liabilities
22,229
21,755
Income taxes
379
328
Current portion of long-term debt
32,978
35,080
Deferred revenue
7,801
7,165
Other current liabilities
6,353
8,741
Total current liabilities
106,856
110,040
Long-term debt
236,876
321,792
Deferred income taxes
—
9,452
Operating leases liabilities
18,035
21,231
Other noncurrent liabilities
17,557
16,592
Total liabilities
379,324
479,107
Shareholders' equity:
Preferred shares
59,540
58,129
Common shares
—
—
Additional paid-in capital
1,577,053
1,572,249
Accumulated deficit
(905,475)
(771,590)
Treasury stock
(6,930)
(5,472)
Accumulated other comprehensive loss
(371,212)
(363,173)
Total Civeo Corporation shareholders'
equity
352,976
490,143
Noncontrolling interest
636
662
Total shareholders' equity
353,612
490,805
Total liabilities and shareholders'
equity
$
732,936
$
969,912
CIVEO CORPORATION
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2020
2019
Cash flows from operating activities:
Net loss
$
(131,560)
$
(26,832)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
72,527
92,974
Impairment charges
144,120
5,546
Loss on extinguishment of debt
383
—
Deferred income tax benefit
(8,941)
(14,732)
Non-cash compensation charge
4,804
7,601
Gains on disposals of assets
(2,581)
(4,095)
Provision (benefit) for loss on
receivables, net of recoveries
45
(39)
Other, net
(2,730)
2,530
Changes in operating assets and
liabilities:
Accounts receivable
5,355
(30,227)
Inventories
194
(1,175)
Accounts payable and accrued
liabilities
1,247
4,958
Taxes payable
51
345
Other current assets and liabilities,
net
(2,239)
(3,328)
Net cash flows provided by operating
activities
80,675
33,526
Cash flows from investing activities:
Capital expenditures
(6,244)
(25,517)
Payments related to acquisitions, net of
cash acquired
—
(16,439)
Proceeds from disposition of property,
plant and equipment
3,336
5,482
Other, net
4,619
1,762
Net cash flows provided by (used in)
investing activities
1,711
(34,712)
Cash flows from financing activities:
Term loan repayments
(31,092)
(26,085)
Revolving credit borrowings (repayments),
net
(44,511)
29,548
Debt issuance costs
(2,583)
(1,950)
Taxes paid on vested shares
(1,458)
(4,283)
Net cash flows used in financing
activities
(79,644)
(2,770)
Effect of exchange rate changes on
cash
865
(344)
Net change in cash and cash
equivalents
3,607
(4,300)
Cash and cash equivalents, beginning of
period
3,331
12,372
Cash and cash equivalents, end of
period
$
6,938
$
8,072
CIVEO CORPORATION
SEGMENT DATA
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Revenues
Canada
$
71,785
$
91,071
$
204,119
$
235,943
Australia
64,685
47,743
170,869
107,160
United States
6,387
9,349
21,363
35,763
Total revenues
$
142,857
$
148,163
$
396,351
$
378,866
EBITDA (1)
Canada
$
21,289
$
24,955
$
(78,976)
$
51,434
Australia
21,517
17,915
56,476
34,308
United States
(1,478)
252
(14,920)
5,634
Corporate and eliminations
(5,310)
(6,261)
(17,578)
(18,653)
Total EBITDA
$
36,018
$
36,861
$
(54,998)
$
72,723
Adjusted EBITDA (1)
Canada
$
21,289
$
24,955
$
48,015
$
51,434
Australia
21,517
17,207
56,476
40,070
United States
(1,478)
252
(2,481)
5,634
Corporate and eliminations
(5,310)
(6,261)
(17,578)
(18,653)
Total adjusted EBITDA
$
36,018
$
36,153
$
84,432
$
78,485
Operating income (loss)
Canada
$
1,007
$
2,919
$
(142,343)
$
(14,437)
Australia
9,890
4,662
24,245
(1,302)
United States
(3,197)
(2,167)
(19,954)
(4,484)
Corporate and eliminations
(610)
(2,538)
(5,768)
(6,850)
Total operating income (loss)
$
7,090
$
2,876
$
(143,820)
$
(27,073)
(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,
2020
2019
2020
2019
EBITDA (1)
$
36,018
$
36,861
$
(54,998)
$
72,723
Adjusted EBITDA (1)
$
36,018
$
36,153
$
84,432
$
78,485
Free Cash Flow (2)
$
34,399
$
20,291
$
77,767
$
13,491
(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, adjustments
regarding an asset retirement obligation recorded in the second and
third quarter of 2019, proceeds from a representations and
warranties claim related to a prior acquisition and certain costs
associated with Civeo's acquisition of Action Catering. 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,
2020
2019
2020
2019
Net income (loss) attributable to Civeo
Corporation
$
6,989
$
4,996
$
(132,474)
$
(26,892)
Income tax expense (benefit)
180
(6,629)
(8,509)
(13,963)
Depreciation and amortization
24,820
31,196
72,527
92,974
Interest income
—
(17)
(20)
(66)
Loss on extinguishment of debt
383
—
383
—
Interest expense
3,646
7,315
13,095
20,670
EBITDA
$
36,018
$
36,861
$
(54,998)
$
72,723
Adjustments to EBITDA
Impairment of long-lived assets (a)
—
—
50,514
5,546
Impairment of goodwill (b)
—
—
93,606
—
Australia ARO adjustment (c)
—
(924)
—
—
Representations and warranties settlement
(d)
—
—
(4,690)
—
Action transaction costs (e)
—
216
—
216
Adjusted EBITDA
$
36,018
$
36,153
$
84,432
$
78,485
(a)
Relates to asset impairments in the first
quarter of 2020 and the second quarter of 2019. In the first
quarter of 2020, we recorded a pre-tax loss related to the
impairment of long-lived assets in our Canadian segment of $38.1
million ($38.1 million after-tax, or $0.23 per diluted share) and a
pre-tax loss related to the impairment of long-lived assets in our
U.S. segment of $12.4 million ($12.4 million after-tax, or $0.07
per diluted share), which is included in Impairment expense on the
unaudited statements of operations.
In the second quarter 2019, we recorded a
pre-tax loss related to the impairment of assets in Australia of
$5.5 million ($5.5 million after-tax, or $0.03 per diluted share),
which is included in Impairment expense on the unaudited statements
of operations. This includes $1.0 million of impairment expense
related to an error corrected in the second quarter 2019. During
the second quarter of 2019, we identified a future liability
related to an asset retirement obligation (ARO) at one of our
villages in Australia that should have been recorded in 2011. We
determined that the error was not material to our previously issued
financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2018, and therefore, corrected the
error in the second quarter of 2019.
(b)
Relates to the impairment of goodwill in
the first quarter of 2020. The $93.6 million impairment ($93.6
million after-tax, or $0.56 per diluted share) is related to our
Canada reporting unit and is included in Impairment expense on the
statements of operations.
(c)
As noted above, during the second quarter
of 2019, we identified a future liability related to an ARO at one
of our villages in Australia that should have been recorded in
2011. The correction included a $0.9 million ($0.9 million
after-tax, or $0.01 per diluted share) adjustment, which was
included in Cost of sales and services on the unaudited statements
of operations during the second quarter of 2019. This amount
represented the prior period impact of this correction.
In the third quarter 2019, we sold the
village in Australia with the ARO noted above. The ARO was assumed
by the purchaser. Accordingly, the ARO liability was released and a
gain on sale was recognized. As the $0.9 million adjustment in the
second quarter 2019 was not included in Adjusted EBITDA, we have
added back the corresponding release of the liability. The impact
of the adjustment for the three month period ended September 30,
2019 totals $0.9 million ($0.9 million after tax, or $0.01 per
diluted share), and is included in Other income on the unaudited
statement of operations, resulting in a net impact of zero for the
nine months ended September 30, 2019.
(d)
In the second quarter of 2020, we recorded
$4.7 million of income ($4.7 million after-tax, or $0.03 per
diluted share) associated with the settlement of a representations
and warranties claim related to the Noralta acquisition, which is
included in Other income on the unaudited statements of
operations.
(e)
Relates to costs incurred associated with
Civeo's acquisition of Action. For the three and nine month periods
ended September 30, 2019, the $0.2 million of costs ($0.2 million
after-tax, or $0.00, per diluted share), are reflected in the
Australia reportable segment and are included in Selling, general
and administrative expenses 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.
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,
2020
2019
2020
2019
Net Cash Flows Provided by Operating
Activities
$
35,357
$
23,566
$
80,675
$
33,526
Capital expenditures
(2,397)
(4,309)
(6,244)
(25,517)
Proceeds from disposition of property,
plant and equipment
1,439
1,034
3,336
5,482
Free Cash Flow
$
34,399
$
20,291
$
77,767
$
13,491
CIVEO CORPORATION
NON-GAAP RECONCILIATIONS -
GUIDANCE
(in millions)
(unaudited)
Year Ending December 31,
2020
EBITDA Range (1)
$
(39.4)
$
(34.4)
Adjusted EBITDA Range (1)
$
100.0
$
105.0
(1)
The following table sets forth a
reconciliation of estimated Adjusted EBITDA to estimated net loss,
which is the most directly comparable measure of financial
performance calculated under generally accepted accounting
principles (in million) (unaudited):
Year Ending December 31,
2020
(estimated)
Net loss
$
(145.1)
$
(140.1)
Income tax benefit
(8.3)
(8.3)
Depreciation and amortization
97.0
97.0
Interest expense
17.0
17.0
EBITDA
$
(39.4)
$
(34.4)
Adjustments to EBITDA
Impairment expense
144.1
144.1
Representations and warranties
settlement
(4.7)
(4.7)
Adjusted EBITDA
$
100.0
$
105.0
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,
2020
2019
2020
2019
Supplemental Operating Data - Canadian
Segment
Revenues
Accommodation revenue (1)
$
49,798
$
79,939
$
156,068
$
203,774
Mobile facility rental revenue (2)
13,135
3,048
21,715
5,648
Food and other services revenue (3)
8,852
8,084
26,336
25,507
Manufacturing revenue (4)
—
—
—
1,014
Total Canadian revenues
$
71,785
$
91,071
$
204,119
$
235,943
Costs
Accommodation cost
$
32,490
$
49,377
$
109,143
$
137,140
Mobile facility rental cost
8,557
2,059
17,099
4,735
Food and other services cost
7,595
7,319
23,773
23,620
Manufacturing cost
164
150
461
1,007
Indirect other cost
2,587
3,372
7,654
9,698
Total Canadian cost of sales and
services
$
51,393
$
62,277
$
158,130
$
176,200
Average daily rates (5)
$
96
$
91
$
95
$
91
Billed rooms (6)
508,449
875,891
1,626,668
2,241,510
Canadian dollar to U.S. dollar
$
0.751
$
0.757
$
0.739
$
0.752
Supplemental Operating Data -
Australian Segment
Accommodation revenue (1)
$
39,470
$
33,056
$
106,988
$
92,473
Food and other services revenue (3)
25,215
14,687
63,881
14,687
Total Australian revenues
$
64,685
$
47,743
$
170,869
$
107,160
Costs
Accommodation cost
$
16,401
$
14,954
$
46,665
$
44,816
Food and other services cost
21,161
12,807
53,627
12,807
Indirect other cost
967
903
2,703
2,095
Total Australian cost of sales and
services
$
38,529
$
28,664
$
102,995
$
59,718
Average daily rates (4)
$
77
$
73
$
72
$
74
Billed rooms (5)
513,587
454,859
1,487,819
1,253,856
Australian dollar to U.S. dollar
$
0.716
$
0.686
$
0.677
$
0.699
(1)
Includes revenues related to lodge and
village rooms and hospitality services for owned rooms for the
periods presented.
(2)
Includes revenues related to mobile camps
for the periods presented.
(3)
Includes revenues related to food service,
laundry and water and wastewater treatment services, and facilities
management for the periods presented.
(4)
Includes revenues related to modular
construction and offshore manufacturing services for the periods
presented.
(5)
Average daily rate is based on billed
rooms and accommodation revenue.
(6)
Billed rooms represents total billed days
for the periods presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201028005194/en/
Carolyn J. Stone Civeo Corporation Senior Vice President &
Chief Financial Officer 713-510-2400 Jeffrey Spittel FTI Consulting
832-667-5140
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