Highlights include:
- Reported revenues of
$466.7 million , an increase of 22% from 2017
- Incurred fourth quarter net loss of
$13.8 million and delivered Adjusted EBITDA of$19.9 million
- Generated
$28.5 million in operating cash flow and$21.9 million in free cash flow allowing for$22.9 million in debt repayments during the quarter
- Secured an 18-month room commitment at
Sitka Lodge from LNG Canada, bringing our total LNG-related contracted revenues to approximatelyC$170 million through 2021
- Awarded a hospitality services contract in
Canada and a renewal inAustralia totaling approximatelyUS$90 million in revenues through 2023 and 2021, respectively
“Civeo produced solid operational execution and made strategic progress in 2018, as we achieved year-over-year growth, completed integration of the Noralta acquisition and announced meaningful new business in
Mr. Dodson continued, “Our fourth quarter results were at the upper end of our expectations, largely driven by continued strong occupancy and favorable market conditions in
Mr. Dodson added, “Looking ahead to 2019, we will focus on executing the contract awards secured in 2018, generating free cash flow, strengthening our balance sheet, expanding our already robust service offerings and pursuing new business opportunities across our core markets. We are well positioned to continue to deliver best-in-class hospitality services to our customers and create value for our shareholders.”
Fourth Quarter 2018 Results
In the fourth 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
By comparison, in the fourth quarter of 2017,
The increase in Adjusted EBITDA and the decrease in net loss in the fourth quarter of 2018 compared to 2017 was primarily due to the contribution from the Noralta assets, lower selling, general and administrative expenses, meaningful performance improvement in our U.S. business and the ongoing recovery in the Australian natural resources market associated with stable met coal prices.
Full Year 2018 Results
For the full year 2018, the Company reported revenues of
The increase in Adjusted EBITDA and decrease in net loss in 2018 as compared to 2017 was primarily due to increased revenues driven by the Noralta acquisition, as well as higher activity levels in certain markets in
Business Segment Results
(Unless otherwise noted, the following discussion compares the quarterly results for the fourth quarter of 2018 to the results for the fourth quarter of 2017. The Adjusted EBITDA amounts discussed below exclude the fixed asset impairment and Noralta-related expenses noted above.)
During the fourth quarter of 2018, the Canadian segment generated revenues of
During the fourth quarter of 2018, the Australian segment generated revenues of
The fourth quarter of 2018 results reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues by
U.S.
The U.S. segment generated revenues of
Income Taxes
Financial Condition
As of December 31, 2018,
Civeo’s total debt outstanding on December 31, 2018 was
During 2018,
First Quarter and Full Year 2019 Guidance
For the first 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; optimism about activity, market demand and commodity price environment in 2019; expected benefits of the agreement with LNG Canada and LNG-related activity and first 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 DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | $ | 114,520 | $ | 101,348 | $ | 466,692 | $ | 382,276 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales and services | 82,564 | 70,575 | 330,382 | 257,258 | ||||||||||||
Selling, general and administrative expenses | 12,314 | 19,290 | 69,068 | 63,431 | ||||||||||||
Depreciation and amortization expense | 26,344 | 29,360 | 125,846 | 126,443 | ||||||||||||
Impairment expense | — | 27,244 | 28,661 | 31,604 | ||||||||||||
Other operating expense | 442 | 407 | 790 | 1,511 | ||||||||||||
121,664 | 146,876 | 554,747 | 480,247 | |||||||||||||
Operating loss | (7,144 | ) | (45,528 | ) | (88,055 | ) | (97,971 | ) | ||||||||
Interest expense, net of capitalized interest | (6,929 | ) | (5,742 | ) | (26,258 | ) | (21,439 | ) | ||||||||
Loss on extinguishment of debt | — | — | (748 | ) | (842 | ) | ||||||||||
Interest income | 134 | 131 | 226 | 200 | ||||||||||||
Other income (expense) | (1,300 | ) | 61 | 1,623 | 1,308 | |||||||||||
Loss before income taxes | (15,239 | ) | (51,078 | ) | (113,212 | ) | (118,744 | ) | ||||||||
Income tax benefit | 1,979 | 3,615 | 31,365 | 13,490 | ||||||||||||
Net loss | (13,260 | ) | (47,463 | ) | (81,847 | ) | (105,254 | ) | ||||||||
Less: Net income attributable to noncontrolling interest | 55 | 116 | 396 | 459 | ||||||||||||
Net loss attributable to Civeo Corporation | (13,315 | ) | (47,579 | ) | (82,243 | ) | (105,713 | ) | ||||||||
Less: Dividends attributable to Class A preferred shares | 489 | — | 49,589 | — | ||||||||||||
Net loss attributable to Civeo Corporation common shareholders | $ | (13,804 | ) | $ | (47,579 | ) | $ | (131,832 | ) | $ | (105,713 | ) | ||||
Net loss per share attributable to Civeo Corporation common shareholders: | ||||||||||||||||
Basic | $ | (0.08 | ) | $ | (0.36 | ) | $ | (0.84 | ) | $ | (0.82 | ) | ||||
Diluted | $ | (0.08 | ) | $ | (0.36 | ) | $ | (0.84 | ) | $ | (0.82 | ) | ||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | 165,599 | 130,894 | 157,231 | 128,365 | ||||||||||||
Diluted | 165,599 | 130,894 | 157,231 | 128,365 |
CIVEO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
||||||||
DECEMBER 31, 2018 |
DECEMBER 31, 2017 |
|||||||
(UNAUDITED) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 12,372 | $ | 32,647 | ||||
Accounts receivable, net | 70,223 | 66,823 | ||||||
Inventories | 4,313 | 7,246 | ||||||
Assets held for sale | 10,297 | 9,462 | ||||||
Prepaid expenses and other current assets | 10,592 | 16,034 | ||||||
Total current assets | 107,797 | 132,212 | ||||||
Property, plant and equipment, net | 658,905 | 693,833 | ||||||
Goodwill, net | 114,207 | — | ||||||
Other intangible assets, net | 119,409 | 22,753 | ||||||
Other noncurrent assets | 1,359 | 5,114 | ||||||
Total assets | $ | 1,001,677 | $ | 853,912 | ||||
Current liabilities: | ||||||||
Accounts payable | $ | 28,334 | $ | 27,812 | ||||
Accrued liabilities | 15,956 | 22,208 | ||||||
Income taxes | 310 | 1,728 | ||||||
Current portion of long-term debt | 33,329 | 16,596 | ||||||
Deferred revenue | 3,035 | 5,442 | ||||||
Other current liabilities | 5,719 | 1,843 | ||||||
Total current liabilities | 86,683 | 75,629 | ||||||
Long-term debt | 342,908 | 277,990 | ||||||
Deferred income taxes | 18,442 | — | ||||||
Other noncurrent liabilities | 18,220 | 23,926 | ||||||
Total liabilities | 466,253 | 377,545 | ||||||
Shareholders' equity: | ||||||||
Preferred shares | 56,280 | — | ||||||
Common shares | — | — | ||||||
Additional paid-in capital | 1,562,133 | 1,383,934 | ||||||
Accumulated deficit | (710,551 | ) | (579,113 | ) | ||||
Treasury stock | (1,189 | ) | (358 | ) | ||||
Accumulated other comprehensive loss | (371,249 | ) | (328,213 | ) | ||||
Total Civeo Corporation shareholders' equity | 535,424 | 476,250 | ||||||
Noncontrolling interest | — | 117 | ||||||
Total shareholders' equity | 535,424 | 476,367 | ||||||
Total liabilities and shareholders' equity | $ | 1,001,677 | $ | 853,912 |
CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
TWELVE MONTHS ENDED DECEMBER 31, |
||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (81,847 | ) | $ | (105,254 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 125,846 | 126,443 | ||||||
Impairment charges | 28,661 | 31,604 | ||||||
Inventory write-down | — | 525 | ||||||
Loss on extinguishment of debt | 748 | 842 | ||||||
Deferred income tax benefit | (31,403 | ) | (8,976 | ) | ||||
Non-cash compensation charge | 11,036 | 7,338 | ||||||
Gain loss on disposals of assets | (1,606 | ) | (825 | ) | ||||
Provision (benefit) for loss on receivables, net of recoveries | (276 | ) | 51 | |||||
Other, net | 4,879 | 3,871 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 13,326 | (6,896 | ) | |||||
Inventories | 3,376 | (4,463 | ) | |||||
Accounts payable and accrued liabilities | (17,716 | ) | 12,674 | |||||
Taxes payable | 5,310 | 3,210 | ||||||
Other current assets and liabilities, net | (5,943 | ) | (3,318 | ) | ||||
Net cash flows provided by operating activities | 54,391 | 56,826 | ||||||
Cash flows from investing activities: | ||||||||
Payments related to acquisitions, net of cash acquired | (171,337 | ) | — | |||||
Capital expenditures, including capitalized interest | (17,108 | ) | (11,194 | ) | ||||
Proceeds from disposition of property, plant and equipment | 5,844 | 1,908 | ||||||
Other, net | 654 | 548 | ||||||
Net cash flows used in investing activities | (181,947 | ) | (8,738 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common shares, net | — | 64,734 | ||||||
Term loan repayments | (26,609 | ) | (40,781 | ) | ||||
Revolving credit borrowings (repayments), net | 140,973 | (39,937 | ) | |||||
Debt issuance costs | (4,009 | ) | (1,795 | ) | ||||
Other, net | (832 | ) | (293 | ) | ||||
Net cash flows provided by (used in) financing activities | 109,523 | (18,072 | ) | |||||
Effect of exchange rate changes on cash | (2,242 | ) | 846 | |||||
Net change in cash and cash equivalents | (20,275 | ) | 30,862 | |||||
Cash and cash equivalents, beginning of period | 32,647 | 1,785 | ||||||
Cash and cash equivalents, end of period | $ | 12,372 | $ | 32,647 |
CIVEO CORPORATION SEGMENT DATA (in thousands) (unaudited) |
||||||||||||||||
THREE MONTHS ENDED DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues | ||||||||||||||||
Canada | $ | 69,351 | $ | 63,589 | $ | 296,012 | $ | 245,595 | ||||||||
Australia | 29,696 | 28,057 | 119,238 | 111,221 | ||||||||||||
United States | 15,473 | 9,702 | 51,442 | 25,460 | ||||||||||||
Total revenues | $ | 114,520 | $ | 101,348 | $ | 466,692 | $ | 382,276 | ||||||||
EBITDA (1) | ||||||||||||||||
Canada | $ | 10,579 | $ | (16,281 | ) | $ | 23,671 | $ | 22,818 | |||||||
Australia | 11,759 | 10,294 | 44,821 | 41,398 | ||||||||||||
United States | 1,908 | (1,197 | ) | 5,566 | (5,475 | ) | ||||||||||
Corporate and eliminations | (6,401 | ) | (9,039 | ) | (35,040 | ) | (29,420 | ) | ||||||||
Total EBITDA | $ | 17,845 | $ | (16,223 | ) | $ | 39,018 | $ | 29,321 | |||||||
Adjusted EBITDA (1) | ||||||||||||||||
Canada | $ | 11,780 | $ | 11,356 | $ | 55,848 | $ | 54,815 | ||||||||
Australia | 11,759 | 10,294 | 44,821 | 41,398 | ||||||||||||
United States | 1,908 | (1,197 | ) | 5,566 | (5,475 | ) | ||||||||||
Corporate and eliminations | (5,544 | ) | (7,154 | ) | (29,457 | ) | (27,535 | ) | ||||||||
Total adjusted EBITDA | $ | 19,903 | $ | 13,299 | $ | 76,778 | $ | 63,203 | ||||||||
Operating income (loss) | ||||||||||||||||
Canada | $ | (7,710 | ) | $ | (36,928 | ) | $ | (61,487 | ) | $ | (63,211 | ) | ||||
Australia | 1,843 | (3,244 | ) | (1,950 | ) | (11,528 | ) | |||||||||
United States | (2,195 | ) | (4,079 | ) | (8,640 | ) | (14,426 | ) | ||||||||
Corporate and eliminations | 918 | (1,277 | ) | (15,978 | ) | (8,806 | ) | |||||||||
Total operating loss | $ | (7,144 | ) | $ | (45,528 | ) | $ | (88,055 | ) | $ | (97,971 | ) | ||||
(1) Please see Non-GAAP Reconciliation Schedule. |
CIVEO CORPORATION NON-GAAP RECONCILIATIONS (in thousands) (unaudited) |
||||||||||||||||
THREE MONTHS ENDED DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
|||||||||||||||
2018 | 2017 | 2018 |
2017 |
|||||||||||||
EBITDA (1) | $ | 17,845 | $ | (16,223 | ) | $ | 39,018 | $ | 29,321 | |||||||
Adjusted EBITDA (1) | $ | 19,903 | $ | 13,299 | $ | 76,778 | $ | 63,203 | ||||||||
Free Cash Flow (2) | $ | 21,893 | $ | 8,410 | $ | 43,127 | $ | 47,540 |
(1) The term EBITDA is defined as net income (loss) attributable to
The following table sets forth a reconciliation of EBITDA and Adjusted EBITDA to net loss attributable to
THREE MONTHS ENDED DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss) attributable to Civeo Corporation | $ | (13,315 | ) | $ | (47,579 | ) | $ | (82,243 | ) | $ | (105,713 | ) | ||||
Income tax provision (benefit) | (1,979 | ) | (3,615 | ) | (31,365 | ) | (13,490 | ) | ||||||||
Depreciation and amortization | 26,344 | 29,360 | 125,846 | 126,443 | ||||||||||||
Interest income | (134 | ) | (131 | ) | (226 | ) | (200 | ) | ||||||||
Loss on extinguishment of debt | — | — | 748 | 842 | ||||||||||||
Interest expense | 6,929 | 5,742 | 26,258 | 21,439 | ||||||||||||
EBITDA | $ | 17,845 | $ | (16,223 | ) | $ | 39,018 | $ | 29,321 | |||||||
Adjustments to EBITDA | ||||||||||||||||
Impairment expense (a) | — | 27,244 | 28,661 | 31,604 | ||||||||||||
Noralta transaction costs (b) | 2,058 | 2,278 | 9,099 | 2,278 | ||||||||||||
Adjusted EBITDA | $ | 19,903 | $ | 13,299 | $ | 76,778 | $ | 63,203 |
(a) Relates to the impairment of assets in
(b) Relates to costs incurred associated with
(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 DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net Cash Flows Provided by Operating Activities | $ | 28,529 | $ | 11,301 | $ | 54,391 | $ | 56,826 | ||||||||
Capital expenditures, including capitalized interest | (8,442 | ) | (3,174 | ) | (17,108 | ) | (11,194 | ) | ||||||||
Proceeds from disposition of property, plant and equipment | 1,806 | 283 | 5,844 | 1,908 | ||||||||||||
Free Cash Flow | $ | 21,893 | $ | 8,410 | $ | 43,127 | $ | 47,540 |
CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) |
||||||||||||||||
THREE MONTHS ENDING MARCH 31, 2019 |
YEAR ENDING DECEMBER 31, 2019 |
|||||||||||||||
EBITDA Range (1) | $ | 13.0 | $ | 16.0 | $ | 95.0 | $ | 105.0 |
(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 MARCH 31, 2019 |
YEAR ENDING DECEMBER 31, 2019 |
|||||||||||||||
(estimated) | (estimated) | |||||||||||||||
Net loss | $ | (23.5 | ) | $ | (21.5 | ) | $ | (58.0 | ) | $ | (50.0 | ) | ||||
Income tax provision (benefit) | (3.5 | ) | (2.5 | ) | (7.0 | ) | (5.0 | ) | ||||||||
Depreciation and amortization | 33.5 | 33.5 | 135.0 | 135.0 | ||||||||||||
Interest expense | 6.5 |
6.5 | 25.0 | 25.0 | ||||||||||||
EBITDA | $ | 13.0 | $ | 16.0 | $ | 95.0 | $ | 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 DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
|||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Supplemental Operating Data - Canadian Segment | ||||||||||||||||
Revenues | ||||||||||||||||
Accommodation revenue (1) | $ | 62,641 | $ | 58,171 | $ | 266,899 | $ | 228,062 | ||||||||
Mobile facility rental revenue (2) | 33 | 2,555 | 9,316 | 3,935 | ||||||||||||
Food and other services revenue (3) | 4,519 | 2,770 | 15,601 | 11,891 | ||||||||||||
Manufacturing revenue (4) | 2,158 | 93 | 4,196 | 1,707 | ||||||||||||
Total Canadian revenues | $ | 69,351 | $ | 63,589 | $ | 296,012 | $ | 245,595 | ||||||||
Costs | ||||||||||||||||
Accommodation cost | $ | 42,868 | $ | 36,304 | $ | 180,355 | $ | 141,901 | ||||||||
Mobile facility rental cost | 248 | 3,142 | 9,985 | 4,200 | ||||||||||||
Food and other services cost | 4,435 | 2,532 | 14,756 | 9,229 | ||||||||||||
Manufacturing cost | 2,622 | 819 | 4,995 | 4,478 | ||||||||||||
Indirect other cost | 4,345 | 3,431 | 15,134 | 11,869 | ||||||||||||
Total Canadian cost of sales and services | $ | 54,518 | $ | 46,228 | $ | 225,225 | $ | 171,677 | ||||||||
Average daily rates (5) | $ | 91 | $ | 90 | $ | 89 | $ | 92 | ||||||||
Billed rooms (6) | 687,217 | 647,282 | 3,007,229 | 2,469,899 | ||||||||||||
Canadian dollar to U.S. dollar | $ | 0.757 | $ | 0.787 | $ | 0.772 | $ | 0.771 | ||||||||
Supplemental Operating Data - Australian Segment | ||||||||||||||||
Accommodation revenue (1) | $ | 29,553 | $ | 28,057 | $ | 117,896 | $ | 111,221 | ||||||||
Food and other services revenue (3) | 143 | — | 1,342 | — | ||||||||||||
Total Australian revenues | $ | 29,696 | $ | 28,057 | $ | 119,238 | $ | 111,221 | ||||||||
Costs | ||||||||||||||||
Accommodation cost | $ | 14,424 | $ | 13,442 | $ | 57,366 | $ | 53,406 | ||||||||
Food and other services cost | 125 | — | 1,150 | — | ||||||||||||
Indirect other cost | 630 | 527 | 2,552 | 2,316 | ||||||||||||
Total Australian cost of sales and services | $ | 15,179 | $ | 13,969 | $ | 61,068 | $ | 55,722 | ||||||||
Average daily rates (5) | $ | 74 | $ | 79 | $ | 78 | $ | 80 | ||||||||
Billed rooms (6) | 397,335 | 355,019 | 1,512,030 | 1,385,087 | ||||||||||||
Australian dollar to U.S. dollar | $ | 0.718 | $ | 0.768 | $ | 0.748 | $ | 0.767 |
(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.
CONTACT:
Executive Vice President & Chief Financial Officer
713-510-2400
713-353-5407
Source: Civeo Corporation