Highlights include:
-
Reported third quarter revenues of
$148.2 million , net income of$4.5 million and operating cash flow of$23.6 million
-
Delivered third quarter Adjusted EBITDA of
$36.2 million , up 62% year-over-year, and free cash flow of$20.3 million
-
Reduced leverage ratio from 4.26x as of
June 30, 2019 to 3.52x as ofSeptember 30, 2019
-
Completed strategic acquisition of
Action Industrial Catering (“Action”) onJuly 1, 2019 , expanding the Company’s presence in both theIntegrated Services and Western Australian markets
-
Completed an amendment and extension to its entire credit agreement to, among other things, extend the maturity date of the revolving commitments and term loan commitments for the majority of lenders by twelve months to
November 30, 2021 , and preferentially adjust the permitted leverage ratio to provide the Company more financial flexibility through the maturity of the agreement
-
Today announced contract extensions from two major customers in
Australia with expected contracted revenues of approximatelyA$37 million
“The third quarter results demonstrated the diverse activity drivers and operating leverage of our lodge and village operations in our Canadian and Australian segments. In
Mr. Dodson added, "We generated improved year-over-year revenue and Adjusted EBITDA, up 23% and 62%, respectively. The significant year-over-year improvement is primarily due to increased
Mr. Dodson concluded, “We are encouraged by the Company's achievements this quarter and we will continue to focus on operational execution, revenue diversification, free cash flow generation, deleveraging our balance sheet and winning new work as opportunities present themselves."
Third Quarter 2019 Results
In the third quarter of 2019,
Overall, the third quarter of 2019 outperformed the third quarter of 2018 due to stronger results in
By comparison, in the third quarter of 2018,
(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 and certain costs associated with
Business Segment Results
(Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2019 to the results for the third quarter of 2018.)
During the third quarter of 2019, the Canadian segment generated revenues of
On a constant currency basis, the Canadian segment experienced a 20% period-over-period increase in revenues driven by a 7% year-over-year increase in billed rooms related to oil sands maintenance and turnaround activity and the contribution from the newly expanded
During the third quarter of 2019, the Australian segment generated revenues of
On a constant currency basis, the Australian segment experienced a 61% period-over-period increase in revenues primarily driven by contributions from the acquisition of
-
A contract extension from
BHP Mitsubishi Alliance Coal Operations Pty Ltd (“BMA”) at Civeo’s existingDysart accommodation facility that will generate approximatelyA$27 million in contracted revenues from 2019 to 2021.Civeo will continue to provide rooms and hospitality services atDysart to BMA for an additional two years throughSeptember 2021 . As part of the extension agreement, the “take-or-pay” committed rooms will increase from 280 rooms to 480 rooms. -
A contract extension from a major coal producer at Civeo’s existing Coppabella accommodation facility that will generate approximately
A$10 million in contracted revenues over 2019-2022.Civeo will continue to provide rooms and hospitality services at Coppabella to this producer for an additional 30 months throughAugust 2022 .
U.S.
The U.S. segment generated revenues of
Income Taxes
During the third quarter of 2018,
Financial Condition
As of
Civeo’s total debt outstanding on
During the third quarter of 2019,
Fourth Quarter and Full Year 2019 Guidance
For the fourth quarter of 2019,
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, contracted revenues and borrowing needs; growth opportunities and ability to adapt to market conditions; expectations about activity, market demand and commodity price environment in 2019; expected benefits of the contract extensions from two major Australian customers and fourth quarter and full year 2019 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
|
|
Nine Months Ended
|
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
148,163 |
|
|
$ |
120,491 |
|
|
$ |
378,866 |
|
|
$ |
352,172 |
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of sales and services |
99,480 |
|
|
82,227 |
|
|
264,350 |
|
|
249,383 |
|
||||
Selling, general and administrative expenses |
14,334 |
|
|
16,854 |
|
|
42,960 |
|
|
55,189 |
|
||||
Depreciation and amortization expense |
31,196 |
|
|
34,468 |
|
|
92,974 |
|
|
99,502 |
|
||||
Impairment expense |
— |
|
|
— |
|
|
5,546 |
|
|
28,661 |
|
||||
Other operating expense (income) |
277 |
|
|
(163 |
) |
|
109 |
|
|
348 |
|
||||
|
145,287 |
|
|
133,386 |
|
|
405,939 |
|
|
433,083 |
|
||||
Operating income (loss) |
2,876 |
|
|
(12,895 |
) |
|
(27,073 |
) |
|
(80,911 |
) |
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense |
(7,315 |
) |
|
(6,404 |
) |
|
(20,670 |
) |
|
(19,329 |
) |
||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
(748 |
) |
||||
Interest income |
17 |
|
|
16 |
|
|
66 |
|
|
92 |
|
||||
Other income |
2,849 |
|
|
412 |
|
|
6,882 |
|
|
2,923 |
|
||||
Loss before income taxes |
(1,573 |
) |
|
(18,871 |
) |
|
(40,795 |
) |
|
(97,973 |
) |
||||
Income tax benefit |
6,629 |
|
|
5,330 |
|
|
13,963 |
|
|
29,386 |
|
||||
Net income (loss) |
5,056 |
|
|
(13,541 |
) |
|
(26,832 |
) |
|
(68,587 |
) |
||||
Less: Net income attributable to noncontrolling interest |
60 |
|
|
97 |
|
|
60 |
|
|
341 |
|
||||
Net income (loss) attributable to Civeo Corporation |
4,996 |
|
|
(13,638 |
) |
|
(26,892 |
) |
|
(68,928 |
) |
||||
Less: Dividends attributable to Class A preferred shares |
464 |
|
|
612 |
|
|
1,384 |
|
|
49,100 |
|
||||
Net income (loss) attributable to Civeo common shareholders |
$ |
4,532 |
|
|
$ |
(14,250 |
) |
|
$ |
(28,276 |
) |
|
$ |
(118,028 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per share attributable to Civeo Corporation common shareholders: |
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.02 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.76 |
) |
Diluted |
$ |
0.02 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.76 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
167,640 |
|
|
165,855 |
|
|
166,842 |
|
|
154,411 |
|
||||
Diluted |
167,642 |
|
|
165,855 |
|
|
166,842 |
|
|
154,411 |
|
CIVEO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
|||||||
|
September 30, 2019 |
|
December 31, 2018 |
||||
|
(UNAUDITED) |
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
8,072 |
|
|
$ |
12,372 |
|
Accounts receivable, net |
106,792 |
|
|
70,223 |
|
||
Inventories |
6,823 |
|
|
4,313 |
|
||
Assets held for sale |
8,132 |
|
|
10,297 |
|
||
Prepaid expenses and other current assets |
14,376 |
|
|
10,592 |
|
||
Total current assets |
144,195 |
|
|
107,797 |
|
||
|
|
|
|
||||
Property, plant and equipment, net |
599,950 |
|
|
658,905 |
|
||
Goodwill, net |
128,077 |
|
|
114,207 |
|
||
Other intangible assets, net |
111,888 |
|
|
119,409 |
|
||
Operating lease right-of-use assets |
25,034 |
|
|
— |
|
||
Other noncurrent assets |
1,679 |
|
|
1,359 |
|
||
Total assets |
$ |
1,010,823 |
|
|
$ |
1,001,677 |
|
|
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
35,266 |
|
|
$ |
28,334 |
|
Accrued liabilities |
19,355 |
|
|
15,956 |
|
||
Income taxes |
910 |
|
|
310 |
|
||
Current portion of long-term debt |
34,372 |
|
|
33,329 |
|
||
Deferred revenue |
4,442 |
|
|
3,035 |
|
||
Other current liabilities |
9,098 |
|
|
5,719 |
|
||
Total current liabilities |
103,443 |
|
|
86,683 |
|
||
|
|
|
|
||||
Long-term debt |
356,704 |
|
|
342,908 |
|
||
Deferred income taxes |
6,085 |
|
|
18,442 |
|
||
Operating lease liabilities |
20,992 |
|
|
— |
|
||
Other noncurrent liabilities |
18,081 |
|
|
18,220 |
|
||
Total liabilities |
505,305 |
|
|
466,253 |
|
||
|
|
|
|
||||
Shareholders' equity: |
|
|
|
||||
Preferred shares |
57,664 |
|
|
56,280 |
|
||
Common shares |
— |
|
|
— |
|
||
Additional paid-in capital |
1,569,734 |
|
|
1,562,133 |
|
||
Accumulated deficit |
(739,526 |
) |
|
(710,551 |
) |
||
Treasury stock |
(5,472 |
) |
|
(1,189 |
) |
||
Accumulated other comprehensive loss |
(376,882 |
) |
|
(371,249 |
) |
||
Total Civeo Corporation shareholders' equity |
505,518 |
|
|
535,424 |
|
||
Noncontrolling interest |
— |
|
|
— |
|
||
Total shareholders' equity |
505,518 |
|
|
535,424 |
|
||
Total liabilities and shareholders' equity |
$ |
1,010,823 |
|
|
$ |
1,001,677 |
|
CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
|||||||
|
Nine Months Ended
|
||||||
|
2019 |
|
2018 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(26,832 |
) |
|
$ |
(68,587 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
92,974 |
|
|
99,502 |
|
||
Impairment charges |
5,546 |
|
|
28,661 |
|
||
Loss on extinguishment of debt |
— |
|
|
748 |
|
||
Deferred income tax benefit |
(14,732 |
) |
|
(29,272 |
) |
||
Non-cash compensation charge |
7,601 |
|
|
7,804 |
|
||
Gains on disposals of assets |
(4,095 |
) |
|
(2,714 |
) |
||
Provision for loss on receivables, net of recoveries |
(39 |
) |
|
(106 |
) |
||
Other, net |
2,530 |
|
|
3,959 |
|
||
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
(30,227 |
) |
|
89 |
|
||
Inventories |
(1,175 |
) |
|
1,342 |
|
||
Accounts payable and accrued liabilities |
4,958 |
|
|
(10,787 |
) |
||
Taxes payable |
345 |
|
|
939 |
|
||
Other current and noncurrent assets and liabilities, net |
(3,328 |
) |
|
(5,716 |
) |
||
Net cash flows provided by operating activities |
33,526 |
|
|
25,862 |
|
||
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
(25,517 |
) |
|
(8,666 |
) |
||
Payments related to acquisitions, net of cash acquired |
(16,439 |
) |
|
(181,589 |
) |
||
Proceeds from disposition of property, plant and equipment |
5,482 |
|
|
4,038 |
|
||
Other, net |
1,762 |
|
|
111 |
|
||
Net cash flows used in investing activities |
(34,712 |
) |
|
(186,106 |
) |
||
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Term loan repayments |
(26,085 |
) |
|
(18,177 |
) |
||
Revolving credit borrowings (repayments), net |
29,548 |
|
|
155,410 |
|
||
Debt issuance costs |
(1,950 |
) |
|
(2,742 |
) |
||
Taxes paid on vested shares |
(4,283 |
) |
|
(632 |
) |
||
Net cash flows provided by (used in) financing activities |
(2,770 |
) |
|
133,859 |
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash |
(344 |
) |
|
(1,722 |
) |
||
Net change in cash and cash equivalents |
(4,300 |
) |
|
(28,107 |
) |
||
|
|
|
|
||||
Cash and cash equivalents, beginning of period |
12,372 |
|
|
32,647 |
|
||
Cash and cash equivalents, end of period |
$ |
8,072 |
|
|
$ |
4,540 |
|
CIVEO CORPORATION SEGMENT DATA (in thousands) (unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Canada |
$ |
91,071 |
|
|
$ |
76,753 |
|
|
$ |
235,943 |
|
|
$ |
226,661 |
|
Australia |
47,743 |
|
|
31,090 |
|
|
107,160 |
|
|
89,542 |
|
||||
United States |
9,349 |
|
|
12,648 |
|
|
35,763 |
|
|
35,969 |
|
||||
Total revenues |
$ |
148,163 |
|
|
$ |
120,491 |
|
|
$ |
378,866 |
|
|
$ |
352,172 |
|
|
|
|
|
|
|
|
|
||||||||
EBITDA (1) |
|
|
|
|
|
|
|
||||||||
Canada |
$ |
24,955 |
|
|
$ |
15,620 |
|
|
$ |
51,434 |
|
|
$ |
11,527 |
|
Australia |
17,915 |
|
|
12,426 |
|
|
34,308 |
|
|
33,062 |
|
||||
United States |
252 |
|
|
2,414 |
|
|
5,634 |
|
|
3,658 |
|
||||
Corporate and eliminations |
(6,261 |
) |
|
(8,572 |
) |
|
(18,653 |
) |
|
(27,074 |
) |
||||
Total EBITDA |
$ |
36,861 |
|
|
$ |
21,888 |
|
|
$ |
72,723 |
|
|
$ |
21,173 |
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (1) |
|
|
|
|
|
|
|
||||||||
Canada |
$ |
24,955 |
|
|
$ |
16,020 |
|
|
$ |
51,434 |
|
|
$ |
42,503 |
|
Australia |
17,207 |
|
|
12,426 |
|
|
40,070 |
|
|
33,062 |
|
||||
United States |
252 |
|
|
2,414 |
|
|
5,634 |
|
|
3,658 |
|
||||
Corporate and eliminations |
(6,261 |
) |
|
(8,508 |
) |
|
(18,653 |
) |
|
(22,348 |
) |
||||
Total adjusted EBITDA |
$ |
36,153 |
|
|
$ |
22,352 |
|
|
$ |
78,485 |
|
|
$ |
56,875 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
|
|
|
|
|
||||||||
Canada |
$ |
2,919 |
|
|
$ |
(7,603 |
) |
|
$ |
(14,437 |
) |
|
$ |
(55,342 |
) |
Australia |
4,662 |
|
|
472 |
|
|
(1,302 |
) |
|
(3,793 |
) |
||||
United States |
(2,167 |
) |
|
(1,349 |
) |
|
(4,484 |
) |
|
(6,445 |
) |
||||
Corporate and eliminations |
(2,538 |
) |
|
(4,415 |
) |
|
(6,850 |
) |
|
(15,331 |
) |
||||
Total operating income (loss) |
$ |
2,876 |
|
|
$ |
(12,895 |
) |
|
$ |
(27,073 |
) |
|
$ |
(80,911 |
) |
|
|
|
|
|
|
|
|
||||||||
(1) Please see Non-GAAP Reconciliation Schedule. |
|
|
CIVEO CORPORATION NON-GAAP RECONCILIATIONS (in thousands) (unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
||||||||
EBITDA (1) |
$ |
36,861 |
|
|
$ |
21,888 |
|
|
$ |
72,723 |
|
|
$ |
21,173 |
|
Adjusted EBITDA (1) |
$ |
36,153 |
|
|
$ |
22,352 |
|
|
$ |
78,485 |
|
|
$ |
56,875 |
|
Free Cash Flow (2) |
$ |
20,291 |
|
|
$ |
9,762 |
|
|
$ |
13,491 |
|
|
$ |
21,234 |
|
(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 acquisitions of Noralta and Action. 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
|
|
Nine Months Ended
|
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Civeo Corporation |
$ |
4,996 |
|
|
$ |
(13,638 |
) |
|
$ |
(26,892 |
) |
|
$ |
(68,928 |
) |
Income tax benefit |
(6,629 |
) |
|
(5,330 |
) |
|
(13,963 |
) |
|
(29,386 |
) |
||||
Depreciation and amortization |
31,196 |
|
|
34,468 |
|
|
92,974 |
|
|
99,502 |
|
||||
Interest income |
(17 |
) |
|
(16 |
) |
|
(66 |
) |
|
(92 |
) |
||||
Loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
|
|
748 |
|
||||
Interest expense |
7,315 |
|
|
6,404 |
|
|
20,670 |
|
|
19,329 |
|
||||
EBITDA |
$ |
36,861 |
|
|
$ |
21,888 |
|
|
$ |
72,723 |
|
|
$ |
21,173 |
|
Adjustments to EBITDA |
|
|
|
|
|
|
|
||||||||
Impairment expense (a) |
— |
|
|
— |
|
|
5,546 |
|
|
28,661 |
|
||||
Noralta transaction costs (b) |
— |
|
|
464 |
|
|
— |
|
|
7,041 |
|
||||
Australia ARO adjustment (c) |
(924 |
) |
|
— |
|
|
— |
|
|
— |
|
||||
Action transaction costs (d) |
216 |
|
|
— |
|
|
216 |
|
|
— |
|
||||
Adjusted EBITDA |
$ |
36,153 |
|
|
$ |
22,352 |
|
|
$ |
78,485 |
|
|
$ |
56,875 |
|
(a) |
Relates to asset impairments recorded in the second quarter 2019 and the first quarter 2018. 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. |
||
|
|||
In the first quarter 2018, we recorded a pre-tax loss related to the impairment of assets in Canada 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. For the nine month period ended September 30, 2018, the $7.0 million of costs ($6.3 million after-tax, or $0.04, per diluted shares), 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 ($0.4 million) and Selling, general and administrative expenses ($6.7 million) on the unaudited statements of operations. During the third quarter 2018, the $0.5 million of costs ($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. |
||
|
|||
(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) |
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. 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
|
|
Nine Months Ended
|
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net Cash Flows Provided by Operating Activities |
$ |
23,566 |
|
|
$ |
11,885 |
|
|
$ |
33,526 |
|
|
$ |
25,862 |
|
Capital expenditures, including capitalized interest |
(4,309 |
) |
|
(2,723 |
) |
|
(25,517 |
) |
|
(8,666 |
) |
||||
Proceeds from disposition of property, plant and equipment |
1,034 |
|
|
600 |
|
|
5,482 |
|
|
4,038 |
|
||||
Free Cash Flow |
$ |
20,291 |
|
|
$ |
9,762 |
|
|
$ |
13,491 |
|
|
$ |
21,234 |
|
CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) |
||||||||||||||||
|
|
Three Months Ending
|
|
Year Ending
|
||||||||||||
EBITDA Range (1) |
|
$ |
19.5 |
|
|
$ |
23.5 |
|
|
$ |
92.3 |
|
|
$ |
96.3 |
|
Adjusted EBITDA Range (1) |
|
$ |
19.5 |
|
|
$ |
23.5 |
|
|
$ |
98.0 |
|
|
$ |
102.0 |
|
(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 millions) (unaudited): |
|
|
Three Months Ending December 31, 2019 |
|
Year Ending December 31, 2019 |
||||||||||||
|
|
(estimated) |
|
(estimated) |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(13.5 |
) |
|
$ |
(10.5 |
) |
|
$ |
(40.4 |
) |
|
$ |
(37.4 |
) |
Income tax provision (benefit) |
|
(4.0 |
) |
|
(3.0 |
) |
|
(18.0 |
) |
|
(17.0 |
) |
||||
Depreciation and amortization |
|
30.0 |
|
|
30.0 |
|
|
123.0 |
|
|
123.0 |
|
||||
Interest expense |
|
7.0 |
|
|
7.0 |
|
|
27.7 |
|
|
27.7 |
|
||||
EBITDA |
|
$ |
19.5 |
|
|
$ |
23.5 |
|
|
$ |
92.3 |
|
|
$ |
96.3 |
|
Adjustments to EBITDA |
|
|
|
|
|
|
|
|
||||||||
Impairment expense (a) |
|
— |
|
|
— |
|
|
5.5 |
|
|
5.5 |
|
||||
Action transaction costs (b) |
|
— |
|
|
— |
|
|
0.2 |
|
|
0.2 |
|
||||
Adjusted EBITDA |
|
$ |
19.5 |
|
|
$ |
23.5 |
|
|
$ |
98.0 |
|
|
$ |
102.0 |
|
(a) |
Relates to asset impairments recorded in the second quarter 2019 in Australia. |
||
(b) |
Relates to costs incurred associated with Civeo's acquisition of Action. |
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
|
|
Nine Months Ended
|
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Supplemental Operating Data - Canadian Segment |
|
|
|
|
|
|
|
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Accommodation revenue (1) |
$ |
79,939 |
|
|
$ |
72,991 |
|
|
$ |
203,774 |
|
|
$ |
204,258 |
|
Mobile facility rental revenue (2) |
3,048 |
|
|
135 |
|
|
5,648 |
|
|
10,036 |
|
||||
Food and other services revenue (3) |
8,084 |
|
|
3,627 |
|
|
25,507 |
|
|
11,082 |
|
||||
Manufacturing revenue (4) |
— |
|
|
— |
|
|
1,014 |
|
|
1,285 |
|
||||
Total Canadian revenues |
$ |
91,071 |
|
|
$ |
76,753 |
|
|
$ |
235,943 |
|
|
$ |
226,661 |
|
|
|
|
|
|
|
|
|
||||||||
Costs |
|
|
|
|
|
|
|
||||||||
Accommodation cost |
$ |
49,377 |
|
|
$ |
48,394 |
|
|
$ |
137,140 |
|
|
$ |
139,052 |
|
Mobile facility rental cost |
2,059 |
|
|
834 |
|
|
4,735 |
|
|
10,438 |
|
||||
Food and other services cost |
7,319 |
|
|
3,624 |
|
|
23,620 |
|
|
10,321 |
|
||||
Manufacturing cost |
150 |
|
|
229 |
|
|
1,007 |
|
|
1,672 |
|
||||
Indirect other cost |
3,372 |
|
|
3,738 |
|
|
9,698 |
|
|
10,789 |
|
||||
Total Canadian cost of sales and services |
$ |
62,277 |
|
|
$ |
56,819 |
|
|
$ |
176,200 |
|
|
$ |
172,272 |
|
|
|
|
|
|
|
|
|
||||||||
Average daily rates (5) |
$ |
91 |
|
|
$ |
89 |
|
|
$ |
91 |
|
|
$ |
88 |
|
|
|
|
|
|
|
|
|
||||||||
Billed rooms (6) |
875,891 |
|
|
816,295 |
|
|
2,241,510 |
|
|
2,320,012 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Canadian dollar to U.S. dollar |
$ |
0.757 |
|
|
$ |
0.765 |
|
|
$ |
0.752 |
|
|
$ |
0.777 |
|
|
|
|
|
|
|
|
|
||||||||
Supplemental Operating Data - Australian Segment |
|
|
|
|
|
|
|
||||||||
Accommodation revenue (1) |
$ |
33,056 |
|
|
$ |
30,679 |
|
|
$ |
92,473 |
|
|
$ |
88,343 |
|
Food and other services revenue (3) |
14,687 |
|
|
411 |
|
|
14,687 |
|
|
1,199 |
|
||||
Total Australian revenues |
$ |
47,743 |
|
|
$ |
31,090 |
|
|
$ |
107,160 |
|
|
$ |
89,542 |
|
|
|
|
|
|
|
|
|
||||||||
Costs |
|
|
|
|
|
|
|
||||||||
Accommodation cost |
$ |
14,954 |
|
|
$ |
14,199 |
|
|
$ |
44,816 |
|
|
$ |
42,942 |
|
Food and other services cost |
12,807 |
|
|
365 |
|
|
12,807 |
|
|
1,025 |
|
||||
Indirect other cost |
903 |
|
|
643 |
|
|
2,095 |
|
|
1,922 |
|
||||
Total Australian cost of sales and services |
$ |
28,664 |
|
|
$ |
15,207 |
|
|
$ |
59,718 |
|
|
$ |
45,889 |
|
|
|
|
|
|
|
|
|
||||||||
Average daily rates (5) |
$ |
73 |
|
|
$ |
77 |
|
|
$ |
74 |
|
|
$ |
79 |
|
Billed rooms (6) |
454,859 |
|
|
396,747 |
|
|
1,253,856 |
|
|
1,114,695 |
|
||||
Australian dollar to U.S. dollar |
$ |
0.686 |
|
|
$ |
0.731 |
|
|
$ |
0.699 |
|
|
$ |
0.758 |
|
(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 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/20191025005065/en/
Source:
Frank C. Steininger
Civeo Corporation
Executive Vice President & Chief Financial Officer
713-510-2400
Jeffrey Spittel
FTI Consulting
832-667-5140