Highlights include:
- Delivered first quarter revenues of
$108.6 million
- Reported first quarter net loss of
$17.5 million and Adjusted EBITDA of$15.9 million
- Generated
$6.3 million in operating cash flow during the quarter
- Significantly improved year-over-year results from the U.S. segment
- Expanded our
Sitka Lodge inBritish Columbia to 754 rooms during the quarter with 1,100 total rooms expected to be on site byJune 2019
“Despite recent macroeconomic headwinds and winter seasonality, we are pleased to deliver first quarter revenue and Adjusted EBITDA in-line with our expectations. Our U.S. business generated significantly improved year-over-year results as our efforts to relocate well site assets into the Permian and Mid-Con regions over the past eighteen months produced materially improved utilization of those assets. Our
Mr. Dodson added, “We expect a sequentially improved second quarter as increased turnaround and maintenance activity in
First Quarter 2019 Results
In the first quarter of 2019,
The first quarter of 2019 was in-line with the Company's expectations as a result of solid operational execution in the U.S. and
By comparison, in the first 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 first quarter of 2019 to the results for the first quarter of 2018. The Adjusted EBITDA amounts discussed below exclude the fixed asset impairment and Noralta-related expenses in the first quarter of 2018 noted above.)
During the first quarter of 2019, the Canadian segment generated revenues of
The Canadian segment saw softening room demand from major customers in the core oil sands lodges related to extended holiday downtime and the continued impact of provincially imposed oil production curtailments. These headwinds were partially offset by the inclusion of the Noralta assets, improving contribution of LNG-related occupancy in
During the first quarter of 2019, the Australian segment generated revenues of
The first quarter of 2019 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 March 31, 2019,
Civeo’s total debt outstanding on March 31, 2019 was
During the first quarter of 2019,
Second Quarter and Full Year 2019 Guidance
For the second 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 agreement with LNG Canada and LNG-related activity and second 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 -
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
Revenues | $ | 108,550 | $ | 101,504 | ||||
Costs and expenses: | ||||||||
Cost of sales and services | 79,630 | 77,701 | ||||||
Selling, general and administrative expenses | 16,096 | 16,514 | ||||||
Depreciation and amortization expense | 30,782 | 30,764 | ||||||
Impairment expense | — | 28,661 | ||||||
Other operating expense (income) | (65 | ) | 379 | |||||
126,443 | 154,019 | |||||||
Operating loss | (17,893 | ) | (52,515 | ) | ||||
Interest expense | (6,635 | ) | (5,822 | ) | ||||
Interest income | 27 | 58 | ||||||
Other income | 2,978 | 2,259 | ||||||
Loss before income taxes | (21,523 | ) | (56,020 | ) | ||||
Income tax benefit | 4,484 | 685 | ||||||
Net loss | (17,039 | ) | (55,335 | ) | ||||
Less: Net income attributable to noncontrolling interest | — | 122 | ||||||
Net loss attributable to Civeo Corporation | (17,039 | ) | (55,457 | ) | ||||
Less: Dividends attributable to Class A preferred shares | 459 | — | ||||||
Net loss attributable to Civeo Corporation common shareholders | $ | (17,498 | ) | $ | (55,457 | ) | ||
Net loss per share attributable to Civeo Corporation common shareholders: | ||||||||
Basic | $ | (0.11 | ) | $ | (0.42 | ) | ||
Diluted | $ | (0.11 | ) | $ | (0.42 | ) | ||
Weighted average number of common shares outstanding: | ||||||||
Basic | 165,330 | 131,631 | ||||||
Diluted | 165,330 | 131,631 | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2019 | December 31, 2018 |
|||||||
(UNAUDITED) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,992 | $ | 12,372 | ||||
Accounts receivable, net | 73,513 | 70,223 | ||||||
Inventories | 4,276 | 4,313 | ||||||
Assets held for sale | 8,058 | 10,297 | ||||||
Prepaid expenses and other current assets | 9,267 | 10,592 | ||||||
Total current assets | 103,106 | 107,797 | ||||||
Property, plant and equipment, net | 650,919 | 658,905 | ||||||
Goodwill, net | 119,158 | 114,207 | ||||||
Other intangible assets, net | 111,542 | 119,409 | ||||||
Operating lease right-of-use assets | 22,225 | — | ||||||
Other noncurrent assets | 1,048 | 1,359 | ||||||
Total assets | $ | 1,007,998 | $ | 1,001,677 | ||||
Current liabilities: | ||||||||
Accounts payable | $ | 30,053 | $ | 28,334 | ||||
Accrued liabilities | 13,371 | 15,956 | ||||||
Income taxes | 572 | 310 | ||||||
Current portion of long-term debt | 34,068 | 33,329 | ||||||
Deferred revenue | 3,598 | 3,035 | ||||||
Other current liabilities | 9,407 | 5,719 | ||||||
Total current liabilities | 91,069 | 86,683 | ||||||
Long-term debt | 346,841 | 342,908 | ||||||
Deferred income taxes | 13,838 | 18,442 | ||||||
Operating lease liabilities | 18,529 | — | ||||||
Other noncurrent liabilities | 16,404 | 18,220 | ||||||
Total liabilities | 486,681 | 466,253 | ||||||
Shareholders' equity: | ||||||||
Preferred shares | 56,739 | 56,280 | ||||||
Common shares | — | — | ||||||
Additional paid-in capital | 1,564,667 | 1,562,133 | ||||||
Accumulated deficit | (728,748 | ) | (710,551 | ) | ||||
Treasury stock | (5,471 | ) | (1,189 | ) | ||||
Accumulated other comprehensive loss | (365,870 | ) | (371,249 | ) | ||||
Total Civeo Corporation shareholders' equity | 521,317 | 535,424 | ||||||
Noncontrolling interest | — | — | ||||||
Total shareholders' equity | 521,317 | 535,424 | ||||||
Total liabilities and shareholders' equity | $ | 1,007,998 | $ | 1,001,677 | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (17,039 | ) | $ | (55,335 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 30,782 | 30,764 | ||||||
Impairment charges | — | 28,661 | ||||||
Deferred income tax provision (benefit) | (4,745 | ) | 2 | |||||
Non-cash compensation charge | 2,534 | 2,200 | ||||||
Gain on disposals of assets | (1,452 | ) | (2,147 | ) | ||||
Provision for loss on receivables, net of recoveries | (32 | ) | (35 | ) | ||||
Other, net | (410 | ) | 2,047 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (2,377 | ) | 4,837 | |||||
Inventories | 87 | 2,190 | ||||||
Accounts payable and accrued liabilities | (1,417 | ) | (10,352 | ) | ||||
Taxes payable | 262 | (1,358 | ) | |||||
Other current assets and liabilities, net | 148 | 1,364 | ||||||
Net cash flows provided by operating activities | 6,341 | 2,838 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (9,679 | ) | (2,696 | ) | ||||
Payments related to acquisitions, net of cash acquired | — | (23,771 | ) | |||||
Proceeds from disposition of property, plant and equipment | 4,457 | 2,718 | ||||||
Other, net | 1,518 | 110 | ||||||
Net cash flows used in investing activities | (3,704 | ) | (23,639 | ) | ||||
Cash flows from financing activities: | ||||||||
Term loan repayments | (8,608 | ) | (4,079 | ) | ||||
Revolving credit borrowings (repayments), net | 5,396 | 35,641 | ||||||
Taxes paid on vested shares | (4,282 | ) | (594 | ) | ||||
Net cash flows provided by (used in) financing activities | (7,494 | ) | 30,968 | |||||
Effect of exchange rate changes on cash | 477 | (837 | ) | |||||
Net change in cash and cash equivalents | (4,380 | ) | 9,330 | |||||
Cash and cash equivalents, beginning of period | 12,372 | 32,647 | ||||||
Cash and cash equivalents, end of period | $ | 7,992 | $ | 41,977 | ||||
SEGMENT DATA
(in thousands)
(unaudited)
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
Revenues | ||||||||
Canada | $ | 66,770 | $ | 63,390 | ||||
Australia | 28,421 | 27,875 | ||||||
United States | 13,359 | 10,239 | ||||||
Total revenues | $ | 108,550 | $ | 101,504 | ||||
EBITDA (1) | ||||||||
Canada | $ | 10,173 | $ | (20,026 | ) | |||
Australia | 9,853 | 9,107 | ||||||
United States | 2,796 | (738 | ) | |||||
Corporate and eliminations | (6,955 | ) | (7,957 | ) | ||||
Total EBITDA | $ | 15,867 | $ | (19,614 | ) | |||
Adjusted EBITDA (1) | ||||||||
Canada | $ | 10,173 | $ | 8,903 | ||||
Australia | 9,853 | 9,107 | ||||||
United States | 2,796 | (738 | ) | |||||
Corporate and eliminations | (6,955 | ) | (7,259 | ) | ||||
Total adjusted EBITDA | $ | 15,867 | $ | 10,013 | ||||
Operating income (loss) | ||||||||
Canada | $ | (11,595 | ) | $ | (40,303 | ) | ||
Australia | (385 | ) | (3,166 | ) | ||||
United States | (961 | ) | (3,264 | ) | ||||
Corporate and eliminations | (4,952 | ) | (5,782 | ) | ||||
Total operating loss | $ | (17,893 | ) | $ | (52,515 | ) | ||
(1) Please see Non-GAAP Reconciliation Schedule. | ||||||||
NON-GAAP RECONCILIATIONS
(in thousands)
(unaudited)
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
EBITDA (1) | $ | 15,867 | $ | (19,614 | ) | |||
Adjusted EBITDA (1) | $ | 15,867 | $ | 10,013 | ||||
Free Cash Flow (2) | $ | 1,119 | $ | 2,860 | ||||
(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 March 31, |
||||||||
2019 | 2018 | |||||||
Net income (loss) attributable to Civeo Corporation | $ | (17,039 | ) | $ | (55,457 | ) | ||
Income tax provision (benefit) | (4,484 | ) | (685 | ) | ||||
Depreciation and amortization | 30,782 | 30,764 | ||||||
Interest income | (27 | ) | (58 | ) | ||||
Interest expense | 6,635 | 5,822 | ||||||
EBITDA | $ | 15,867 | $ | (19,614 | ) | |||
Adjustments to EBITDA | ||||||||
Impairment expense (a) | — | 28,661 | ||||||
Noralta transaction costs (b) | — | 966 | ||||||
Adjusted EBITDA | $ | 15,867 | $ | 10,013 |
(a) Relates to the first quarter 2018 impairment of assets in Canada. We recorded a pre-tax loss of
$28.7 million ($20.9 million after-tax, or$0.13 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. During the first quarter 2018, the$1.0 million of costs ($0.9 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.
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, |
||||||||
2019 | 2018 | |||||||
Net Cash Flows Provided by Operating Activities | $ | 6,341 | $ | 2,838 | ||||
Capital expenditures, including capitalized interest | (9,679 | ) | (2,696 | ) | ||||
Proceeds from disposition of property, plant and equipment | 4,457 | 2,718 | ||||||
Free Cash Flow | $ | 1,119 | $ | 2,860 | ||||
NON-GAAP RECONCILIATIONS - GUIDANCE
(in millions)
(unaudited)
Three Months Ending June 30, 2019 |
Year Ending December 31, 2019 |
|||||||||||||||
EBITDA Range (1) | $ | 21.0 | $ | 23.5 | $ | 95.0 | $ | 101.0 |
(1) (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, 2019 |
Year Ending December 31, 2019 |
|||||||||||||||
(estimated) | (estimated) | |||||||||||||||
Net loss | $ | (16.0 | ) | $ | (14.5 | ) | $ | (53.0 | ) | $ | (50.0 | ) | ||||
Income tax provision (benefit) | (3.0 | ) | (2.0 | ) | (12.0 | ) | (9.0 | ) | ||||||||
Depreciation and amortization | 33.5 | 33.5 | 135.0 | 135.0 | ||||||||||||
Interest expense | 6.5 | 6.5 | 25.0 | 25.0 | ||||||||||||
EBITDA | $ | 21.0 | $ | 23.5 | $ | 95.0 | $ | 101.0 | ||||||||
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, |
||||||||
2019 | 2018 | |||||||
Supplemental Operating Data - Canadian Segment | ||||||||
Revenues | ||||||||
Accommodation revenue (1) | $ | 57,652 | $ | 50,647 | ||||
Mobile facility rental revenue (2) | 781 | 7,794 | ||||||
Food and other services revenue (3) | 8,337 | 3,739 | ||||||
Manufacturing revenue (4) | — | 1,210 | ||||||
Total Canadian revenues | $ | 66,770 | $ | 63,390 | ||||
Costs | ||||||||
Accommodation cost | $ | 42,217 | $ | 37,038 | ||||
Mobile facility rental cost | 649 | 7,404 | ||||||
Food and other services cost | 8,236 | 3,218 | ||||||
Manufacturing cost | 189 | 1,239 | ||||||
Indirect other cost | 3,356 | 2,997 | ||||||
Total Canadian cost of sales and services | $ | 54,647 | $ | 51,896 | ||||
Average daily rates (5) | $ | 92 | $ | 88 | ||||
Billed rooms (6) | 625,992 | 572,888 | ||||||
Canadian dollar to U.S. dollar | $ | 0.752 | $ | 0.791 | ||||
Supplemental Operating Data - Australian Segment | ||||||||
Accommodation revenue (1) | $ | 28,421 | $ | 27,698 | ||||
Food and other services revenue (3) | — | 177 | ||||||
Total Australian revenues | $ | 28,421 | $ | 27,875 | ||||
Costs | ||||||||
Accommodation cost | $ | 14,397 | $ | 14,506 | ||||
Food and other services cost | — | 163 | ||||||
Indirect other cost | 602 | 664 | ||||||
Total Australian cost of sales and services | $ | 14,999 | $ | 15,333 | ||||
Average daily rates (5) | $ | 74 | $ | 81 | ||||
Billed rooms (6) | 382,581 | 341,579 | ||||||
Australian dollar to U.S. dollar | $ | 0.712 | $ | 0.786 | ||||
(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