Press Release
Civeo Announces Third Quarter 2014 Earnings
11/05/14
- Third quarter results exceeded previous quarterly guidance
- Maintaining fourth quarter guidance
-
Announcing 4th quarter dividend of
$0.13 per share
The Company generated revenues of
The Company's President and Chief Executive Officer,
For the first nine months of 2014, the Company reported revenues of
BUSINESS SEGMENT RESULTS
(Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2014 to the results for the third quarter of 2013.)
The Canadian segment generated revenues of
The Australian segment generated revenues of
U.S.
The U.S. segment generated revenues of
INCOME TAXES
The Company recognized income tax expense of
FINANCIAL CONDITION
The Company invested
As of the end of the third quarter, the Company had total liquidity of approximately
The Company announced today that its board of directors has declared a quarterly cash dividend of
ABOUT
FORWARD LOOKING STATEMENTS
The foregoing 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 included herein are based on then current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the Company's announced emphasis on yield as the core component of the company's value proposition and the specifics and timing of the contemplated new dividend policy, payout ratio and extent of return of capital to shareholders, risks associated with the general nature of the accommodations industry,
risks associated with the execution of the redomiciling, including, among other things, risks associated with obtaining any required shareholder approval and changes in tax laws or their interpretations, risks and uncertainties associated with the terms of the arrangements entered into by the Company with
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Per Share Amounts) |
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THREE MONTHS ENDED |
NINE MONTHS ENDED |
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2014 | 2013 | 2014 | 2013 | |
Revenues | $ 243,265 | $ 245,099 | $ 723,197 | $ 782,627 |
Costs and expenses: | ||||
Cost of sales and services | 137,101 | 132,126 | 413,916 | 415,168 |
Selling, general and administrative expenses | 13,216 | 17,212 | 51,069 | 50,377 |
Spin-off and formation costs | 1,028 | -- | 3,497 | -- |
Depreciation and amortization expense | 45,758 | 42,011 | 127,770 | 124,510 |
Impairment expense | -- | -- | 11,610 | -- |
Other operating expense (income) | 165 | 366 | 252 | (3,205) |
197,268 | 191,715 | 608,114 | 586,850 | |
Operating income | 45,997 | 53,384 | 115,083 | 195,777 |
Interest expense to affiliates | -- | (4,563) | (6,980) | (13,857) |
Interest expense to third-parties, net of capitalized interest | (5,335) | (992) | (8,445) | (4,962) |
Loss on extinguishment of debt | -- | -- | (3,455) | (1,207) |
Interest income | 1,048 | 347 | 2,841 | 1,248 |
Other income | 64 | 3,236 | 1,011 | 3,838 |
Income before income taxes | 41,774 | 51,412 | 100,055 | 180,837 |
Income tax provision | (9,011) | (11,418) | (16,411) | (43,350) |
Net income | 32,763 | 39,994 | 83,644 | 137,487 |
Less: Net income attributable to noncontrolling interest | 360 | 353 | 1,053 | 1,064 |
Net income attributable to |
$ 32,403 | $ 39,641 | $ 82,591 | $ 136,423 |
Net income per share attributable to |
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Basic | $ 0.30 | $ 0.37 | $ 0.77 | $ 1.28 |
Diluted | $ 0.30 | $ 0.37 | $ 0.77 | $ 1.28 |
Weighted average number of common shares outstanding (1): | ||||
Basic | 106,311 | 106,293 | 106,300 | 106,293 |
Diluted | 106,495 | 106,460 | 106,474 | 106,460 |
Dividends per common share | $ 0.13 | $ -- | $ 0.13 | $ -- |
(1) On |
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UNAUDITED CONSOLIDATED BALANCE SHEETS |
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(in thousands) | ||
2014 |
2013 |
|
(UNAUDITED) | ||
Current assets: | ||
Cash and cash equivalents | $ 241,814 | $ 224,128 |
Accounts receivable, net | 203,331 | 177,845 |
Inventories | 14,896 | 29,815 |
Prepaid expenses and other current assets | 29,313 | 7,956 |
Total current assets | 489,354 | 439,744 |
Property, plant and equipment, net | 1,364,918 | 1,325,867 |
Goodwill, net | 255,283 | 261,056 |
Other intangible assets, net | 59,589 | 75,675 |
Other noncurrent assets | 18,975 | 20,895 |
Total assets | $ 2,188,119 | $ 2,123,237 |
Current liabilities: | ||
Accounts payable | $ 50,272 | $ 45,376 |
Accrued liabilities | 22,884 | 26,874 |
Income taxes | 24 | 2,761 |
Current portion of long-term debt | 9,687 | -- |
Deferred revenue | 24,150 | 19,571 |
Other current liabilities | 2,389 | 2,470 |
Total current liabilities | 109,406 | 97,052 |
Long-term debt to affiliates | -- | 335,171 |
Long-term debt to third-parties | 765,313 | -- |
Deferred income taxes | 63,753 | 79,739 |
Other noncurrent liabilities | 25,248 | 18,530 |
Total liabilities | 963,720 | 530,492 |
Stockholders' equity / Net investment: | ||
Common stock | 1,067 | -- |
Additional paid-in capital | 1,312,823 | -- |
Retained earnings | 27,017 | -- |
Oil States International, Inc. net investment | -- | 1,651,013 |
Accumulated other comprehensive loss | (118,692) | (59,979) |
Total |
1,222,215 | 1,591,034 |
Noncontrolling interest | 2,184 | 1,711 |
Total stockholders' equity / net investment | 1,224,399 | 1,592,745 |
Total liabilities and stockholders' equity / net investment | $ 2,188,119 | $ 2,123,237 |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands) | ||
NINE MONTHS ENDED |
||
2014 | 2013 | |
Cash flows from operating activities: | ||
Net income | $ 83,644 | $ 137,487 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 127,770 | 124,510 |
Impairment charges | 11,610 | -- |
Loss on extinguishment of debt | 3,455 | 1,207 |
Deferred income tax provision (benefit) | (1,989) | 11,388 |
Non-cash compensation charge | 5,892 | 4,857 |
Gains on disposals of assets | (776) | (2,574) |
Provision for loss on receivables | (1,196) | 1,081 |
Fair value adjustment of contingent consideration | -- | (4,014) |
Other, net | 2,687 | 112 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (32,119) | 17,459 |
Inventories | 13,897 | (5,036) |
Accounts payable and accrued liabilities | 10,957 | (14,609) |
Taxes payable | (17,340) | (20,583) |
Other current assets and liabilities, net | 1,773 | 12,560 |
Net cash flows provided by operating activities | 208,265 | 263,845 |
Cash flows from investing activities: | ||
Capital expenditures, including capitalized interest | (208,297) | (234,794) |
Proceeds from disposition of property, plant and equipment | 1,607 | 6,413 |
Net cash flows used in investing activities | (206,690) | (228,381) |
Cash flows from financing activities: | ||
Revolving credit borrowings and (repayments), net | -- | (47,901) |
Term loan borrowings, net of issuance costs | 775,000 | -- |
Debt issuance costs | (9,460) | -- |
Term loan repayments | -- | (82,762) |
Dividends paid | (13,893) | -- |
Distributions to Oil States | (750,000) | -- |
Contributions from Oil States | 28,257 | 103,628 |
Net cash flows provided by (used in) financing activities | 29,904 | (27,035) |
Effect of exchange rate changes on cash | (13,793) | (12,664) |
Net change in cash and cash equivalents | 17,686 | (4,235) |
Cash and cash equivalents, beginning of period | 224,128 | 161,396 |
Cash and cash equivalents, end of period | $ 241,814 | $ 157,161 |
SEGMENT DATA (in thousands) (unaudited) |
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THREE MONTHS ENDED |
NINE MONTHS ENDED |
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2014 | 2013 | 2014 | 2013 | |
Revenues | ||||
|
$ 174,111 | $ 167,207 | $ 510,914 | $ 535,810 |
|
54,000 | 59,738 | 163,847 | 191,510 |
|
15,154 | 18,154 | 48,436 | 55,307 |
Total revenues | $ 243,265 | $ 245,099 | $ 723,197 | $ 782,627 |
EBITDA (1) | ||||
|
$ 67,100 | $ 64,965 | $ 175,704 | $ 211,717 |
|
27,042 | 33,374 | 74,268 | 104,460 |
|
3,890 | 2,142 | 8,067 | 13,133 |
Corporate and eliminations | (6,573) | (2,203) | (15,228) | (6,249) |
Total EBITDA | $ 91,459 | $ 98,278 | $ 242,811 | $ 323,061 |
Adjusted EBITDA (1) | ||||
|
$ 67,104 | $ 64,965 | $ 179,830 | $ 211,717 |
|
27,073 | 33,374 | 83,531 | 104,460 |
|
3,959 | 2,142 | 10,850 | 9,128 |
Corporate and eliminations | (5,649) | (2,203) | (12,176) | (6,249) |
Total adjusted EBITDA | $ 92,487 | $ 98,278 | $ 262,035 | $ 319,056 |
Operating income (loss) | ||||
|
$ 43,277 | $ 39,553 | $ 110,743 | $ 145,827 |
|
10,520 | 17,591 | 26,158 | 54,684 |
|
(1,236) | (1,596) | (6,664) | 1,407 |
Corporate and eliminations | (6,564) | (2,164) | (15,154) | (6,141) |
Total operating income (loss) | $ 45,997 | $ 53,384 | $ 115,083 | $ 195,777 |
(1) The term EBITDA is defined as net income plus interest, taxes, depreciation and amortization. The term Adjusted EBITDA is defined as EBITDA adjusted to exclude impairment charges and certain other costs such as those incurred associated with the Spin-Off. 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. The Company has included EBITDA and Adjusted EBITDA as supplemental disclosures because its management believes that EBITDA and Adjusted EBITDA provides useful information regarding our ability to service debt and to fund capital expenditures and provides investors a helpful measure for comparing its operating performance with the performance of other companies that have different financing and capital structures or tax rates. The Company 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 income, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles (in thousands) (unaudited): | ||||
THREE MONTHS ENDED |
NINE MONTHS ENDED |
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2014 | 2013 | 2014 | 2013 | |
Net income | $ 32,403 | $ 39,641 | $ 82,591 | $ 136,423 |
Income tax provision | 9,011 | 11,418 | 16,411 | 43,350 |
Depreciation and amortization | 45,758 | 42,011 | 127,770 | 124,510 |
Interest income | (1,048) | (347) | (2,841) | (1,248) |
Interest expense | 5,335 | 5,555 | 18,880 | 20,026 |
EBITDA | $ 91,459 | $ 98,278 | $ 242,811 | $ 323,061 |
Adjustments to EBITDA | ||||
Impairment of intangible asset (a) | 8,989 | |||
Impairment of fixed assets (b) | 2,621 | |||
Severance costs (c) | 4,117 | |||
Transition costs (d) | 1,028 | 3,497 | ||
Reversal of earnout liability (e) | (4,005) | |||
Adjusted EBITDA | $ 92,487 | $ 98,278 | $ 262,035 | $ 319,056 |
(a) Relates to the impairment of an intangible asset in Australia. Due to the Spin-Off, and the resulting rebranding of the Company's Australian operations from The Mac to Civeo Australia, it was determined that the fair value of an intangible asset associated with The Mac brand was zero. The |
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(b) Relates to the impairment of certain fixed assets which are not in our custody, and for which return has been determined to be uncertain. The |
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(c) Relates to severance costs associated with the termination of an executive. The |
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(d) Relates to transition costs incurred associated with becoming a stand-alone company. The |
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(e) Relates to the reversal of an estimated earnout liability associated with a prior acquisition. The |
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SUPPLEMENTAL QUARTERLY SEGMENT AND OPERATING DATA (unaudited) |
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THREE MONTHS ENDED |
NINE MONTHS ENDED |
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2014 | 2013 | 2014 | 2013 | |
Supplemental Operating Data - Canadian Segment | ||||
Revenues ($ in thousands) | ||||
Lodge revenues (1) | $ 134,600 | $ 139,357 | $ 379,700 | $ 417,162 |
Mobile, open camp and product revenues | 39,511 | 27,850 | 131,214 | 118,648 |
Total Canadian revenues | $ 174,111 | $ 167,207 | $ 510,914 | $ 535,810 |
Average available lodge rooms (2) | 13,067 | 11,799 | 12,404 | 11,515 |
RevPAR for lodges (3) | $ 112 | $ 128 | $ 112 | $ 133 |
Occupancy in lodges (4) | 84% | 92% | 86% | 91% |
Canadian dollar to U.S. dollar | $ 0.918 | $ 0.963 | $ 0.914 | $ 0.977 |
Supplemental Operating Data - Australian Segment | ||||
Revenues ($ in thousands) | ||||
Village revenues (1) | $ 54,000 | $ 59,738 | $ 163,847 | $ 191,510 |
Average available village rooms (2) | 9,269 | 9,116 | 9,263 | 8,818 |
RevPAR for villages (3) | $ 63 | $ 71 | $ 65 | $ 80 |
Occupancy in villages (4) | 65% | 80% | 69% | 83% |
Australian dollar to U.S. dollar | $ 0.924 | $ 0.917 | $ 0.918 | $ 0.982 |
(1) Includes revenue related to rooms as well as the fees associated with catering, laundry and other services including facilities management. | ||||
(2) Average available rooms include rooms that are utilized for our personnel. | ||||
(3) RevPAR, or revenue per available room, is defined as lodge revenue divided by the product of (a) average available rooms and (b) days in the period. An available room is defined as a calendar day during which the room is available for occupancy. | ||||
(4) Occupancy represents total billed days divided by rentable days. Rentable days excludes staff rooms and out of service rooms. | ||||
CONTACT: Company Contact:Source:Frank C. Steininger Civeo Corporation Senior Vice President and Chief Financial Officer 713-510-2400
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