Press Release
Civeo Reports Third Quarter 2017 Results
10/26/17
Highlights include:
- Delivered third quarter revenues of
$97.5 million
- Generated
$31.1 million in operating cash flow and$29.6 million in free cash flow
- Awarded a five-year catering contract to operate a 450 room oil sands operator-owned facility in
Canada with expected revenues totaling approximatelyC$32 million over the contract
- Repaid
$4.2 million of debt in the third quarter, making$52 million of total debt repayments year-to-date. Total debt including$23 million in foreign exchange adjustments was reduced to$328 million as ofSeptember 30, 2017 , down from$357 million at the end of 2016. Total cash balance atSeptember 30, 2017 was$54 million
"During the third quarter, we delivered healthy top line results, and generated strong operating cash flow and free cash flow to delever our balance sheet. Our Canadian segment performed well with improved occupancy at our lodges coupled with the recent catering contract award which is consistent with our strategy of enhancing our operations while expanding the revenue profile of our catering business. Our
Third Quarter 2017 Results
In the third quarter of 2017,
(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, the costs directly associated with Civeo's redomiciliation to
By comparison, in the third quarter of 2016,
Business Segment Results
(Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2017 to the results for the third quarter of 2016. The Adjusted EBITDA amounts discussed below exclude the fixed asset impairment and redomiciliation-related expenses noted above.)
During the third quarter of 2017, the Canadian segment generated revenues of
The financial results of the Australian segment for the third quarter of 2017 were slightly down compared to the third quarter in 2016. Revenue was
The third quarter of 2017 results reflect the impact of a strengthened Australian dollar relative to the
The
Income Taxes
Financial Condition
As of
Civeo's total debt outstanding on
During the third quarter of 2017,
Fourth Quarter and Full Year 2017 Guidance
For the fourth quarter of 2017,
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: views regarding broadening stabilization in its core end markets; improving performance in its Australian and
- Financial Schedules Follow -
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) | |||||||||||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Revenues | $ | 97,489 | $ | 104,238 | $ | 280,928 | $ | 306,309 | |||||||||
Costs and expenses: | |||||||||||||||||
Cost of sales and services | 65,527 | 67,964 | 186,683 | 198,493 | |||||||||||||
Selling, general and administrative expenses | 15,871 | 13,644 | 44,141 | 42,056 | |||||||||||||
Depreciation and amortization expense | 32,700 | 33,721 | 97,083 | 100,444 | |||||||||||||
Impairment expense | 4,360 | 37,729 | 4,360 | 46,129 | |||||||||||||
Other operating expense | 375 | 138 | 1,104 | 356 | |||||||||||||
118,833 | 153,196 | 333,371 | 387,478 | ||||||||||||||
Operating loss | (21,344 | ) | (48,958 | ) | (52,443 | ) | (81,169 | ) | |||||||||
Interest expense to third parties, net of capitalized interest | (5,441 | ) | (6,072 | ) | (15,697 | ) | (16,941 | ) | |||||||||
Loss on extinguishment of debt | - | - | (842 | ) | (302 | ) | |||||||||||
Interest income | 49 | 26 | 69 | 140 | |||||||||||||
Other income (expense) | 517 | 1,338 | 1,247 | 1,058 | |||||||||||||
Loss before income taxes | (26,219 | ) | (53,666 | ) | (67,666 | ) | (97,214 | ) | |||||||||
Income tax benefit | 4,011 | 11,697 | 9,875 | 17,217 | |||||||||||||
Net loss | (22,208 | ) | (41,969 | ) | (57,791 | ) | (79,997 | ) | |||||||||
Less: Net income attributable to noncontrolling interest | 123 | 162 | 343 | 442 | |||||||||||||
Net loss attributable to | $ | (22,331 | ) | $ | (42,131 | ) | $ | (58,134 | ) | $ | (80,439 | ) | |||||
Net loss per share attributable to | |||||||||||||||||
Basic | $ | (0.17 | ) | $ | (0.39 | ) | $ | (0.46 | ) | $ | (0.75 | ) | |||||
Diluted | $ | (0.17 | ) | $ | (0.39 | ) | $ | (0.46 | ) | $ | (0.75 | ) | |||||
Weighted average number of common shares outstanding: | |||||||||||||||||
Basic | 130,889 | 107,118 | 127,512 | 106,989 | |||||||||||||
Diluted | 130,889 | 107,118 | 127,512 | 106,989 | |||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(in thousands) | |||||||||
2017 | 2016 | ||||||||
(UNAUDITED) | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 54,002 | $ | 1,785 | |||||
Accounts receivable, net | 63,113 | 56,302 | |||||||
Inventories | 4,857 | 3,112 | |||||||
Prepaid expenses and other current assets | 16,229 | 21,369 | |||||||
Total current assets | 138,201 | 82,568 | |||||||
Property, plant and equipment, net | 756,138 | 789,710 | |||||||
Other intangible assets, net | 24,700 | 28,039 | |||||||
Other noncurrent assets | 10,711 | 10,129 | |||||||
Total assets | $ | 929,750 | $ | 910,446 | |||||
Current liabilities: | |||||||||
Accounts payable | $ | 23,893 | $ | 20,675 | |||||
Accrued liabilities | 19,429 | 14,822 | |||||||
Income taxes | 407 | 111 | |||||||
Current portion of long-term debt | 16,671 | 15,471 | |||||||
Deferred revenue | 4,016 | 6,792 | |||||||
Other current liabilities | 1,625 | 2,572 | |||||||
Total current liabilities | 66,041 | 60,443 | |||||||
Long-term debt to third-parties | 307,522 | 337,800 | |||||||
Deferred income taxes | - | 9,194 | |||||||
Other noncurrent liabilities | 30,358 | 27,019 | |||||||
Total liabilities | 403,921 | 434,456 | |||||||
Shareholders' equity: | |||||||||
Common shares | - | - | |||||||
Additional paid-in capital | 1,382,160 | 1,311,226 | |||||||
Accumulated deficit | (531,534 | ) | (472,764 | ) | |||||
| (358 | ) | (65 | ) | |||||
Accumulated other comprehensive loss | (324,563 | ) | (362,930 | ) | |||||
| 525,705 | 475,467 | |||||||
Noncontrolling interest | 124 | 523 | |||||||
Total shareholders' equity | 525,829 | 475,990 | |||||||
Total liabilities and shareholders' equity | $ | 929,750 | $ | 910,446 | |||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
NINE MONTHS ENDED | |||||||||
2017 | 2016 | ||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (57,791 | ) | $ | (79,997 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 97,083 | 100,444 | |||||||
Impairment charges | 4,360 | 46,129 | |||||||
Inventory write-down | - | 850 | |||||||
Loss on extinguishment of debt | 842 | 302 | |||||||
Deferred income tax benefit | (11,026 | ) | (25,239 | ) | |||||
Non-cash compensation charge | 5,481 | 4,535 | |||||||
Losses (gains) on disposals of assets | (1,193 | ) | 259 | ||||||
Provision (benefit) for loss on receivables, net of recoveries | 8 | (74 | ) | ||||||
Other, net | 3,307 | 2,546 | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (2,845 | ) | (2,920 | ) | |||||
Inventories | (1,507 | ) | 1,484 | ||||||
Accounts payable and accrued liabilities | 5,910 | 2,766 | |||||||
Taxes payable | 9,928 | 4,832 | |||||||
Other current assets and liabilities, net | (7,032 | ) | (7,062 | ) | |||||
Net cash flows provided by operating activities | 45,525 | 48,855 | |||||||
Cash flows from investing activities: | |||||||||
Capital expenditures, including capitalized interest | (8,020 | ) | (15,246 | ) | |||||
Proceeds from disposition of property, plant and equipment | 1,625 | 4,465 | |||||||
Other, net | 548 | (761 | ) | ||||||
Net cash flows used in investing activities | (5,847 | ) | (11,542 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from issuance of common stock | 64,817 | - | |||||||
Term loan repayments | (12,214 | ) | (37,107 | ) | |||||
Revolving credit borrowings (repayments), net | (39,937 | ) | (6,616 | ) | |||||
Debt issuance costs | (1,795 | ) | (2,037 | ) | |||||
Other | (293 | ) | (65 | ) | |||||
Net cash flows provided by (used in) financing activities | 10,578 | (45,825 | ) | ||||||
Effect of exchange rate changes on cash | 1,961 | 3,205 | |||||||
Net change in cash and cash equivalents | 52,217 | (5,307 | ) | ||||||
Cash and cash equivalents, beginning of period | 1,785 | 7,837 | |||||||
Cash and cash equivalents, end of period | $ | 54,002 | $ | 2,530 | |||||
SEGMENT DATA (in thousands) (unaudited) | |||||||||||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Revenues | |||||||||||||||||
| $ | 63,832 | $ | 73,539 | $ | 182,006 | $ | 216,168 | |||||||||
| 27,541 | 27,679 | 83,164 | 80,694 | |||||||||||||
| 6,116 | 3,020 | 15,758 | 9,447 | |||||||||||||
Total revenues | $ | 97,489 | $ | 104,238 | $ | 280,928 | $ | 306,309 | |||||||||
EBITDA (1) | |||||||||||||||||
| $ | 11,201 | $ | (19,841 | ) | $ | 39,099 | $ | 17,950 | ||||||||
| 9,673 | 10,992 | 31,104 | 32,781 | |||||||||||||
| (1,933 | ) | (1,343 | ) | (4,278 | ) | (15,244 | ) | |||||||||
Corporate and eliminations | (7,191 | ) | (3,869 | ) | (20,381 | ) | (15,596 | ) | |||||||||
Total EBITDA | $ | 11,750 | $ | (14,061 | ) | $ | 45,544 | $ | 19,891 | ||||||||
Adjusted EBITDA (1) | |||||||||||||||||
| $ | 15,561 | $ | 19,595 | $ | 43,459 | $ | 57,627 | |||||||||
| 9,673 | 10,992 | 31,104 | 32,801 | |||||||||||||
| (1,933 | ) | (1,343 | ) | (4,278 | ) | (6,844 | ) | |||||||||
Corporate and eliminations | (7,191 | ) | (3,869 | ) | (20,381 | ) | (14,586 | ) | |||||||||
Total adjusted EBITDA | $ | 16,110 | $ | 25,375 | $ | 49,904 | $ | 68,998 | |||||||||
Operating income (loss) | |||||||||||||||||
| $ | (11,691 | ) | $ | (44,742 | ) | $ | (26,283 | ) | $ | (53,758 | ) | |||||
| (3,667 | ) | (1,918 | ) | (8,284 | ) | (4,454 | ) | |||||||||
| (3,941 | ) | (3,271 | ) | (10,347 | ) | (20,662 | ) | |||||||||
Corporate and eliminations | (2,045 | ) | 973 | (7,529 | ) | (2,295 | ) | ||||||||||
Total operating loss | $ | (21,344 | ) | $ | (48,958 | ) | $ | (52,443 | ) | $ | (81,169 | ) | |||||
(1) Please see Non-GAAP Reconciliation Schedule. |
NON-GAAP RECONCILIATIONS (in thousands) (unaudited) | |||||||||||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
EBITDA (1) | $ | 11,750 | $ | (14,061 | ) | $ | 45,544 | $ | 19,891 | ||||||||
Adjusted EBITDA (1) | $ | 16,110 | $ | 25,375 | $ | 49,904 | $ | 68,998 | |||||||||
Free Cash Flow (2) | $ | 29,606 | $ | 10,669 | $ | 39,130 | $ | 38,074 | |||||||||
(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 | |||||||||||||||||
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 | NINE MONTHS ENDED | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Net loss | $ | (22,331 | ) | $ | (42,131 | ) | $ | (58,134 | ) | $ | (80,439 | ) | |||||
Income tax benefit | (4,011 | ) | (11,697 | ) | (9,875 | ) | (17,217 | ) | |||||||||
Depreciation and amortization | 32,700 | 33,721 | 97,083 | 100,444 | |||||||||||||
Interest income | (49 | ) | (26 | ) | (69 | ) | (140 | ) | |||||||||
Loss on extinguishment of debt | - | - | 842 | 302 | |||||||||||||
Interest expense | 5,441 | 6,072 | 15,697 | 16,941 | |||||||||||||
EBITDA | $ | 11,750 | $ | (14,061 | ) | $ | 45,544 | $ | 19,891 | ||||||||
Adjustments to EBITDA | |||||||||||||||||
Impairment expense (a) | 4,360 | 38,579 | 4,360 | 46,979 | |||||||||||||
Redomiciliation costs (b) | - | - | - | 1,271 | |||||||||||||
Severance (c) | - | 857 | - | 857 | |||||||||||||
Adjusted EBITDA | $ | 16,110 | $ | 25,375 | $ | 49,904 | $ | 68,998 | |||||||||
(a) Relates to the impairment of assets in | |||||||||||||||||
(b) Relates to costs incurred associated with | |||||||||||||||||
(c) Relates to severance costs associated with
the termination of executives. The | |||||||||||||||||
(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. | |||||||||||||||||
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 | NINE MONTHS ENDED | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Net Cash Flows Provided by Operating Activities | $ | 31,124 | $ | 13,662 | $ | 45,525 | $ | 48,855 | |||||||||
Capital expenditures, including capitalized interest | (1,983 | ) | (5,353 | ) | (8,020 | ) | (15,246 | ) | |||||||||
Proceeds from disposition of property, plant and equipment | 465 | 2,360 | 1,625 | 4,465 | |||||||||||||
Free Cash Flow | $ | 29,606 | $ | 10,669 | $ | 39,130 | $ | 38,074 | |||||||||
NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) | |||||||||||||||||
THREE MONTHS ENDING | YEAR ENDING
| ||||||||||||||||
$ | 13.0 | $ | 16.0 | $ | 58.6 | $ | 61.6 | ||||||||||
$ | 13.0 | $ | 16.0 | $ | 63.0 | $ | 66.0 | ||||||||||
(1) The following table sets forth a reconciliation of estimated EBITDA and Adjusted EBITDA to estimated net income (loss), which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles (in millions) (unaudited): | |||||||||||||||||
THREE MONTHS ENDING | YEAR ENDING | ||||||||||||||||
(estimated) | (estimated) | ||||||||||||||||
Net loss | $ | (21.5 | ) | $ | (17.5 | ) | $ | (79.5 | ) | $ | (75.5 | ) | |||||
Income tax benefit | (2.5 | ) | (3.5 | ) | (12.4 | ) | (13.4 | ) | |||||||||
Depreciation and amortization | 32.0 | 32.0 | 129.0 | 129.0 | |||||||||||||
Interest expense | 5.0 | 5.0 | 21.5 | 21.5 | |||||||||||||
EBITDA | $ | 13.0 | $ | 16.0 | $ | 58.6 | $ | 61.6 | |||||||||
Adjustments to EBITDA | |||||||||||||||||
Impairment of fixed assets (a) | - | - | 4.4 | 4.4 | |||||||||||||
Adjusted EBITDA | $ | 13.0 | $ | 16.0 | $ | 63.0 | $ | 66.0 | |||||||||
(a) Relates to the impairment of assets in Canada. During the third quarter 2017, we recorded a pre-tax loss of |
SUPPLEMENTAL QUARTERLY SEGMENT AND OPERATING DATA ( (unaudited) | |||||||||||||||||
THREE MONTHS ENDED | NINE MONTHS ENDED | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Supplemental Operating Data - Canadian Segment | |||||||||||||||||
Revenues | |||||||||||||||||
Lodge revenues (1) | $ | 59,484 | $ | 61,712 | $ | 168,654 | $ | 182,899 | |||||||||
Mobile, open camp and product revenues | 4,348 | 11,827 | 13,352 | 33,269 | |||||||||||||
Total Canadian revenues | $ | 63,832 | $ | 73,539 | $ | 182,006 | $ | 216,168 | |||||||||
Average available lodge rooms (2) | 14,720 | 14,670 | 14,720 | 14,647 | |||||||||||||
Rentable rooms (3) | 8,698 | 10,588 | 8,564 | 10,199 | |||||||||||||
Average daily rates (4) | $ | 92 | $ | 100 | $ | 93 | $ | 106 | |||||||||
Occupancy in lodges (5) | 81 | % | 64 | % | 78 | % | 62 | % | |||||||||
Canadian dollar to | $ | 0.799 | $ | 0.767 | $ | 0.766 | $ | 0.757 | |||||||||
Supplemental Operating Data - Australian Segment | |||||||||||||||||
Revenues | |||||||||||||||||
Village revenues (1) | $ | 27,541 | $ | 27,679 | $ | 83,164 | $ | 80,694 | |||||||||
Average available village rooms (2) | 9,359 | 9,344 | 9,377 | 9,317 | |||||||||||||
Rentable rooms (3) | 8,725 | 8,675 | 8,753 | 8,700 | |||||||||||||
Average daily rates (4) | $ | 81 | $ | 81 | $ | 81 | $ | 75 | |||||||||
Occupancy in villages (5) | 42 | % | 43 | % | 43 | % | 45 | % | |||||||||
Australian dollar to | $ | 0.790 | $ | 0.758 | $ | 0.766 | $ | 0.742 | |||||||||
(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 relate to Canadian lodges and Australian villages and includes rooms that are utilized for our personnel. | |||||||||||||||||
(3) Rentable rooms relate to Canadian lodges and Australian villages and excludes rooms that are utilized for our personnel and out-of-service rooms. | |||||||||||||||||
(4) Average daily rate is based on rentable rooms and lodge/village revenue. | |||||||||||||||||
(5) Occupancy represents total billed days divided by rentable days. Rentable days excludes staff rooms and out-of-service rooms. | |||||||||||||||||
Contacts:
Frank C. Steininger
Civeo Corporation
Senior Vice President and Chief Financial Officer
713-510-2400
Marc Cunningham
Jeffrey Spittel
FTI Consulting
713-353-5407
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