Highlights since year-end include:
- Delivered first quarter revenues of
$101.5 million
- Completed acquisition of
Noralta Lodge , a premier accommodations provider in the Canadian Oil Sands region, onApril 2, 2018
- Completed acquisition of a 400 room accommodation facility near
Lake Charles, Louisiana
- Amended and restated the credit facility, extending the maturity date by 18 months to
November 2020 , onApril 2, 2018
“We had a strategically successful start to 2018 highlighted by the close of two important acquisitions for our Company, strengthening our respective positions in the Canadian Oil Sands and
Mr. Dodson continued, “In Canada, the first quarter of 2018 was softer than anticipated with lower average daily rates related to the new McClelland Lake Ft. Hills contract and lower margins from our mobile camp business. However, our Canadian occupancy in March and outlook for April and May is optimistic due to strong turnaround activity. In
First Quarter 2018 Results
In the first quarter of 2018,
(EBITDA is a non-GAAP financial measure that is defined as net income (loss) plus interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA adjusted to exclude impairment charges and certain other 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 first quarter of 2017,
The decline in Adjusted EBITDA was the result of lower EBITDA margins in
Business Segment Results
(Unless otherwise noted, the following discussion compares the quarterly results for the first quarter of 2018 to the results for the first quarter of 2017. The Adjusted EBITDA amounts discussed below exclude the fixed asset impairment and Noralta-related expenses noted above.)
During the first quarter of 2018, the Canadian segment generated revenues of
Revenue for the Australian segment was
The first quarter results reflect the impact of a strengthened Australian dollar relative to the U.S. dollar, which increased revenues by
U.S.
The U.S. segment generated revenues of
Income Taxes
Financial Condition
As of
Civeo’s total debt outstanding on
On
During the first quarter of 2018,
Second Quarter and Full Year 2018 Guidance
For the second quarter of 2018,
Conference Call
About
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; and second 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
- Financial Schedules Follow -
CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) |
|||||||||
THREE MONTHS ENDED MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
Revenues | $ | 101,504 | $ | 91,429 | |||||
Costs and expenses: | |||||||||
Cost of sales and services | 77,328 | 61,672 | |||||||
Selling, general and administrative expenses | 16,887 | 14,210 | |||||||
Depreciation and amortization expense | 30,764 | 32,829 | |||||||
Impairment expense | 28,661 | - | |||||||
Other operating expense | 379 | 450 | |||||||
154,019 | 109,161 | ||||||||
Operating loss | (52,515 | ) | (17,732 | ) | |||||
Interest expense, net of capitalized interest | (5,822 | ) | (5,504 | ) | |||||
Loss on extinguishment of debt | - | (842 | ) | ||||||
Interest income | 58 | 10 | |||||||
Other income | 2,259 | 254 | |||||||
Loss before income taxes | (56,020 | ) | (23,814 | ) | |||||
Income tax benefit | 685 | 2,948 | |||||||
Net loss | (55,335 | ) | (20,866 | ) | |||||
Less: Net income attributable to noncontrolling interest | 122 | 121 | |||||||
Net loss attributable to Civeo Corporation | $ | (55,457 | ) | $ | (20,987 | ) | |||
Net loss per share attributable to Civeo Corporation common shareholders: | |||||||||
Basic | $ | (0.42 | ) | $ | (0.17 | ) | |||
Diluted | $ | (0.42 | ) | $ | (0.17 | ) | |||
Weighted average number of common shares outstanding: | |||||||||
Basic | 131,631 | 120,846 | |||||||
Diluted | 131,631 | 120,846 | |||||||
CIVEO CORPORATION CONSOLIDATED BALANCE SHEETS |
|||||||||
(in thousands) | |||||||||
MARCH 31, 2018 |
DECEMBER 31, 2017 |
||||||||
(UNAUDITED) | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 41,977 | $ | 32,647 | |||||
Accounts receivable, net | 60,882 | 66,823 | |||||||
Inventories | 4,929 | 7,246 | |||||||
Assets held for sale | 9,059 | 9,462 | |||||||
Prepaid expenses and other current assets | 12,856 | 16,034 | |||||||
Total current assets | 129,703 | 132,212 | |||||||
Property, plant and equipment, net | 647,028 | 693,833 | |||||||
Other intangible assets, net | 29,152 | 22,753 | |||||||
Other noncurrent assets | 1,088 | 5,114 | |||||||
Total assets | $ | 806,971 | $ | 853,912 | |||||
Current liabilities: | |||||||||
Accounts payable | $ | 26,337 | $ | 27,812 | |||||
Accrued liabilities | 12,418 | 22,208 | |||||||
Income taxes | 333 | 1,728 | |||||||
Current portion of long-term debt | 16,175 | 16,596 | |||||||
Deferred revenue | 3,490 | 5,442 | |||||||
Other current liabilities | 1,755 | 1,843 | |||||||
Total current liabilities | 60,508 | 75,629 | |||||||
Long-term debt to third-parties | 302,215 | 277,990 | |||||||
Other noncurrent liabilities | 24,656 | 23,926 | |||||||
Total liabilities | 387,379 | 377,545 | |||||||
Shareholders' equity: | |||||||||
Common shares | - | - | |||||||
Additional paid-in capital | 1,390,634 | 1,383,934 | |||||||
Accumulated deficit | (634,176 | ) | (579,113 | ) | |||||
Treasury stock | (952 | ) | (358 | ) | |||||
Accumulated other comprehensive loss | (336,034 | ) | (328,213 | ) | |||||
Total Civeo Corporation shareholders' equity | 419,472 | 476,250 | |||||||
Noncontrolling interest | 120 | 117 | |||||||
Total shareholders' equity | 419,592 | 476,367 | |||||||
Total liabilities and shareholders' equity | $ | 806,971 | $ | 853,912 | |||||
CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
(in thousands) | |||||||||
THREE MONTHS ENDED MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (55,335 | ) | $ | (20,866 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 30,764 | 32,829 | |||||||
Impairment charges | 28,661 | - | |||||||
Loss on extinguishment of debt | - | 842 | |||||||
Deferred income tax expense (benefit) | 2 | (3,120 | ) | ||||||
Non-cash compensation charge | 2,200 | 1,867 | |||||||
Gains on disposals of assets | (2,147 | ) | (416 | ) | |||||
Benefit for loss on receivables, net of recoveries | (35 | ) | (60 | ) | |||||
Other, net | 2,047 | 795 | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | 4,837 | 3,258 | |||||||
Inventories | 2,190 | (440 | ) | ||||||
Accounts payable and accrued liabilities | (10,352 | ) | (4,521 | ) | |||||
Taxes payable | (1,358 | ) | 320 | ||||||
Other current assets and liabilities, net | 1,364 | (640 | ) | ||||||
Net cash flows provided by operating activities | 2,838 | 9,848 | |||||||
Cash flows from investing activities: | |||||||||
Asset acquisitions | (23,771 | ) | - | ||||||
Capital expenditures, including capitalized interest | (2,696 | ) | (3,883 | ) | |||||
Proceeds from disposition of property, plant and equipment | 2,718 | 578 | |||||||
Other, net | 110 | - | |||||||
Net cash flows used in investing activities | (23,639 | ) | (3,305 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from issuance of common stock | - | 64,847 | |||||||
Term loan repayments | (4,079 | ) | (3,947 | ) | |||||
Revolving credit borrowings (repayments), net | 35,641 | (39,964 | ) | ||||||
Debt issuance costs | - | (1,772 | ) | ||||||
Other | (594 | ) | (279 | ) | |||||
Net cash flows provided by financing activities | 30,968 | 18,885 | |||||||
Effect of exchange rate changes on cash | (837 | ) | (77 | ) | |||||
Net change in cash and cash equivalents | 9,330 | 25,351 | |||||||
Cash and cash equivalents, beginning of period | 32,647 | 1,785 | |||||||
Cash and cash equivalents, end of period | $ | 41,977 | $ | 27,136 | |||||
CIVEO CORPORATION SEGMENT DATA (in thousands) (unaudited) |
|||||||||
THREE MONTHS ENDED MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
Revenues | |||||||||
Canada | $ | 63,390 | $ | 60,506 | |||||
Australia | 27,875 | 27,016 | |||||||
United States | 10,239 | 3,907 | |||||||
Total revenues | $ | 101,504 | $ | 91,429 | |||||
EBITDA (1) | |||||||||
Canada | $ | (19,653 | ) | $ | 13,189 | ||||
Australia | 9,107 | 10,621 | |||||||
United States | (738 | ) | (1,262 | ) | |||||
Corporate and eliminations | (8,330 | ) | (7,318 | ) | |||||
Total EBITDA | $ | (19,614 | ) | $ | 15,230 | ||||
Adjusted EBITDA (1) | |||||||||
Canada | $ | 9,276 | $ | 13,189 | |||||
Australia | 9,107 | 10,621 | |||||||
United States | (738 | ) | (1,262 | ) | |||||
Corporate and eliminations | (7,632 | ) | (7,318 | ) | |||||
Total adjusted EBITDA | $ | 10,013 | $ | 15,230 | |||||
Operating income (loss) | |||||||||
Canada | $ | (39,930 | ) | $ | (5,006 | ) | |||
Australia | (3,166 | ) | (1,201 | ) | |||||
United States | (3,264 | ) | (2,802 | ) | |||||
Corporate and eliminations | (6,155 | ) | (8,723 | ) | |||||
Total operating loss | $ | (52,515 | ) | $ | (17,732 | ) | |||
(1) Please see Non-GAAP Reconciliation Schedule. | |||||||||
CIVEO CORPORATION NON-GAAP RECONCILIATIONS (in thousands) (unaudited) |
|||||||||
THREE MONTHS ENDED MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
EBITDA (1) | $ | (19,614 | ) | $ | 15,230 | ||||
Adjusted EBITDA (1) | $ | 10,013 | $ | 15,230 | |||||
Free Cash Flow (2) | $ | 2,860 | $ | 6,543 | |||||
(1) The term EBITDA is defined as net income (loss) 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 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, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles (in thousands) (unaudited): | |||||||||
THREE MONTHS ENDED MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
Net loss | $ | (55,457 | ) | $ | (20,987 | ) | |||
Income tax provision (benefit) | (685 | ) | (2,948 | ) | |||||
Depreciation and amortization | 30,764 | 32,829 | |||||||
Interest income | (58 | ) | (10 | ) | |||||
Loss on extinguishment of debt | - | 842 | |||||||
Interest expense | 5,822 | 5,504 | |||||||
EBITDA | $ | (19,614 | ) | $ | 15,230 | ||||
Adjustments to EBITDA | |||||||||
Impairment expense (a) | 28,661 | - | |||||||
Noralta transaction costs (b) | 966 | - | |||||||
Adjusted EBITDA | $ | 10,013 | $ | 15,230 | |||||
(a) Relates to the first quarter 2018 impairment of assets in Canada. We recorded a pre-tax loss of $28.7 million ($28.7 million after-tax, or $0.22 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. The $1.0 million of costs in 2018 ($1.0 million after-tax, or $0.01, per diluted share), which are primarily corporate in nature, 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. 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 MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
Net Cash Flows Provided by Operating Activities | $ | 2,838 | $ | 9,848 | |||||
Capital expenditures, including capitalized interest | (2,696 | ) | (3,883 | ) | |||||
Proceeds from disposition of property, plant and equipment | 2,718 | 578 | |||||||
Free Cash Flow | $ | 2,860 | $ | 6,543 |
CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) |
|||||||||||||||||
THREE MONTHS ENDING JUNE 30, 2018 |
YEAR ENDING DECEMBER 31, 2018 |
||||||||||||||||
EBITDA Range (1) | $ | 28.0 | $ | 30.0 | $ | 93.0 | $ | 100.0 | |||||||||
(1) The following table sets forth a reconciliation of estimated 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 ENDING JUNE 30, 2018 |
YEAR ENDING DECEMBER 31, 2018 |
||||||||||||||||
(estimated) | (estimated) | ||||||||||||||||
Net loss | $ | (14.0 | ) | $ | (11.5 | ) | $ | (64.0 | ) | $ | (58.0 | ) | |||||
Income tax provision (benefit) | 1.0 | 0.5 | (1.5 | ) | (0.5 | ) | |||||||||||
Depreciation and amortization | 34.5 | 34.5 | 133.5 | 133.5 | |||||||||||||
Interest expense | 6.5 | 6.5 | 25.0 | 25.0 | |||||||||||||
EBITDA | $ | 28.0 | $ | 30.0 | $ | 93.0 | $ | 100.0 | |||||||||
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 MARCH 31, |
|||||||||
2018 | 2017 | ||||||||
Supplemental Operating Data - Canadian Segment | |||||||||
Revenues | |||||||||
Accommodation revenue (1) | $ | 50,647 | $ | 56,230 | |||||
Mobile facility rental revenue (2) | 7,794 | 559 | |||||||
Catering and other services revenue (3) | 3,739 | 3,443 | |||||||
Manufacturing revenue (4) | 1,210 | 274 | |||||||
Total Canadian revenues | $ | 63,390 | $ | 60,506 | |||||
Average available lodge rooms (5) | 14,720 | 14,720 | |||||||
Rentable rooms (6) | 8,484 | 8,859 | |||||||
Average daily rates (7) | $ | 88 | $ | 97 | |||||
Billed rooms (8) | 572,888 | 575,571 | |||||||
Occupancy in lodges (9) | 75 | % | 72 | % | |||||
Canadian dollar to U.S. dollar | $ | 0.791 | $ | 0.756 | |||||
Supplemental Operating Data - Australian Segment | |||||||||
Revenues (1) | $ | 27,875 | $ | 27,016 | |||||
Average available village rooms (5) | 9,346 | 9,386 | |||||||
Rentable rooms (6) | 8,721 | 8,776 | |||||||
Average daily rates (7) | $ | 81 | $ | 81 | |||||
Billed rooms (8) | 341,579 | 331,208 | |||||||
Occupancy in villages (9) | 44 | % | 42 | % | |||||
Australian dollar to U.S. dollar | $ | 0.786 | $ | 0.758 | |||||
(1) Includes revenues related to lodge 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. | |||||||||
CONTACT:
Senior Vice President & Chief Financial Officer
713-510-2400
713-353-5407
Source: Civeo Corporation