Civeo Corporation (NYSE:CVEO, Financial) today reported financial and operating results for the third quarter ended September 30, 2024.
“Our Australian segment continues to perform well generating solid growth driven by increased billed rooms at our Civeo-owned villages and new business with an existing integrated services customer. As expected, the Canadian segment declined year-over-year with the ongoing wind-down of Canadian LNG-related activity. This decline was exacerbated by wildfire-related evacuations and delays as well as the effect of the previously discussed pull-forward of customer turnaround and operational activities. We are encouraged by the multi-year contract renewal with a major Canadian oil sands producer and believe this is a testament to our solid operational execution and our strong customer relationships,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer.
Mr. Dodson added, “In the third quarter, we continued to take advantage of the attractive valuation of our shares, and we elevated our repurchases to approximately 515,000 common shares for $14.2 million. We remain well positioned to invest in our growth initiatives while maintaining attractive cash flow generation to facilitate the continued return of capital to shareholders via steady dividends and opportunistic share repurchases.”
Third Quarter 2024 Results
In the third quarter of 2024, Civeo generated revenues of $176.3 million and reported a net loss of $5.1 million, or $0.36 per diluted share. During the third quarter of 2024, Civeo produced operating cash flow of $35.7 million, Adjusted EBITDA of $18.8 million and free cash flow of $28.3 million.
By comparison, in the third quarter of 2023, Civeo generated revenues of $183.6 million and reported net income of $9.0 million, or $0.61 per diluted share. During the third quarter of 2023, Civeo produced operating cash flow of $36.8 million, Adjusted EBITDA of $34.2 million and free cash flow of $31.7 million.
The year-over-year decrease in Adjusted EBITDA in the third quarter of 2024 was primarily driven by the expected wind-down of Canadian LNG-related activity, lower Canadian oil sands turnaround activity due to customers starting their maintenance projects earlier in the year and lower Canadian occupancy related to the recent wildfires. This decrease was partially offset by increased billed rooms at the Australian owned-villages and increased Australian integrated services revenues related to new business with existing clients.
Business Segment Results
(Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2024 to the results for the third quarter of 2023.)
Canada
During the third quarter of 2024, the Canadian segment generated revenues of $57.7 million, operating loss of $8.3 million and Adjusted EBITDA of $3.4 million, compared to revenues of $95.1 million, operating income of $10.8 million and Adjusted EBITDA of $23.2 million in the third quarter of 2023.
The Canadian segment experienced a 39% period-over-period decrease in revenues and an 85% decrease in Adjusted EBITDA driven by the anticipated wind-down of LNG-related activity, including $0.4 million of mobile camp demobilization costs, lower oil sands turnaround activity due to customers starting their projects earlier in the year and lower billed rooms as a result of the Canadian wildfires. The company does not anticipate a material impact from the wildfires in the fourth quarter.
Today, the Company announced the execution of an expected contract renewal with a major oil sands producer to continue providing accommodations and hospitality services through June 2027 with expected revenues totaling approximately C$150 million over 33 months.
Australia
During the third quarter of 2024, the Australian segment generated revenues of $116.6 million, operating income of $12.3 million and Adjusted EBITDA of $22.5 million, compared to revenues of $87.9 million, operating income of $9.1 million and Adjusted EBITDA of $18.9 million in the third quarter of 2023.
Revenue from the Australian segment increased 33% period-over-period and Adjusted EBITDA was up 19% primarily driven by a significant increase in integrated services activity from existing clients and a 4% year-over-year increase to billed rooms, building on a history of substantial multi-year growth.
Financial Condition and Capital Allocation
As of September 30, 2024, Civeo had total liquidity of approximately $211.8 million. Civeo's net debt on September 30, 2024 was $32.2 million, a $7.9 million decrease since June 30, 2024. Civeo reported a net leverage ratio of 0.3x as of September 30, 2024.
During the third quarter of 2024, Civeo invested $7.5 million in capital expenditures compared to $9.5 million invested during the third quarter of 2023. Capital expenditures in both periods were primarily related to maintenance spending on the Company’s lodges and villages. Capital expenditures in the third quarter of 2023 also included $3.6 million related to customer-funded infrastructure upgrades at three Australian villages which were reimbursed by our client.
The Company announced today that its board of directors has declared a quarterly cash dividend of $0.25 per common share, payable on December 16, 2024 to shareholders of record as of close of business on November 25, 2024. For purposes of the Income Tax Act (Canada), the Company has designated this dividend to be an "eligible dividend."
In the third quarter of 2024, Civeo repurchased approximately 515,000 shares for approximately $14.2 million. On September 11, the Board announced it renewed its share repurchase authorization for the Company to repurchase up to 5% of its total common shares outstanding over the next twelve months. The Company will continue to be opportunistic about pursuing repurchases. The Board may increase the number of common shares that may be repurchased under the repurchase plan at any time. The repurchase plan does not obligate Civeo to repurchase any particular number of shares, and it may be suspended or terminated at any time.
Full Year 2024 Guidance
For the full year of 2024, Civeo is tightening its previously provided revenue and Adjusted EBITDA guidance ranges to $675 million to $700 million and $83 million to $88 million, respectively. The Company is maintaining its full year 2024 capital expenditure guidance range of $30 million to $35 million.
Conference Call
Civeo will host a conference call to discuss its third quarter 2024 financial results today at 11:00 a.m. Eastern time. This call is being webcast and can be accessed at Civeo's website at www.civeo.com. Participants may also join the conference call by dialing (877) 423-9813 in the United States or (201) 689-8573 internationally and asking for the Civeo call or using the conference ID 13749748#. A replay will be available after the call by dialing (844) 512-2921 in the United States or (412) 317-6671 internationally and using the conference ID 13749748#.
About Civeo
Civeo Corporation is a leading provider of hospitality services with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for lodging hundreds or thousands of workers with its long-term and temporary accommodations and provides food services, housekeeping, facility management, laundry, water and wastewater treatment, power generation, communications systems, security and logistics services. Civeo currently owns and operates a total of 24 lodges and villages in North America and Australia with an aggregate of approximately 26,000 rooms. In addition, Civeo operates and provides hospitality services at 22 customer-owned locations with more than 18,000 rooms. Civeo is publicly traded under the symbol CVEO on the New York Stock Exchange. For more information, please visit Civeo's website at www.civeo.com.
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 herein, including the statements regarding Civeo’s future plans and outlook, strategic priorities, guidance, current trends, expectations with respect to future revenues, share repurchases and dividends, and liquidity needs, 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, spending and developments in the Canadian oil sands, the level of demand for coal and other natural resources from, and investments and opportunities in, Australia, and fluctuations or sharp declines in the current and future prices of oil, natural gas, coal, iron ore and other minerals, risks associated with failure by our customers to reach positive final investment decisions on, or otherwise not complete, projects with respect to which we have been awarded contracts, which may cause those customers to terminate or postpone contracts, risks associated with currency exchange rates, risks associated with inflation and volatility in the banking sector, risks associated with the company’s ability to integrate any future acquisitions, risks associated with labor shortages, risks associated with the development of new projects, including whether such projects will continue in the future, risks associated with the trading price of the company’s common shares, availability and cost of capital, risks associated with general global economic conditions, geopolitical events, inflation, global weather conditions, natural disasters, including wildfires, global health concerns, and security threats and changes to government and environmental regulations, including climate change, and other factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Civeo’s most recent annual report on Form 10-K and other reports the company may file from time to time with the U.S. Securities and Exchange Commission. Each forward-looking statement contained herein speaks only as of the date of this release. Except as required by law, Civeo expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Information
EBITDA, Adjusted EBITDA, free cash flow, net debt, bank-adjusted EBITDA and net leverage ratio are non-GAAP financial measures. See “Non-GAAP Reconciliation” below for definitions and additional information concerning non-GAAP financial measures, including a reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. Non-GAAP financial information supplements and should be read together with, and is not an alternative or substitute for, the Company’s financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures.
- Financial Schedules Follow -
CIVEO CORPORATION | |||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Three Months Ended
| Nine Months Ended
| ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues | $ | 176,338 | $ | 183,572 | $ | 531,171 | $ | 530,006 | |||||||
Costs and expenses: | |||||||||||||||
Cost of sales and services | 138,542 | 130,296 | 409,821 | 395,235 | |||||||||||
Selling, general and administrative expenses | 19,635 | 20,236 | 55,708 | 52,885 | |||||||||||
Depreciation and amortization expense | 17,440 | 16,914 | 51,269 | 59,277 | |||||||||||
Impairment expense | — | — | 7,823 | — | |||||||||||
(Gain) loss on sale of McClelland Lake Lodge assets, net | 171 | — | (5,817 | ) | — | ||||||||||
Other operating expense | 506 | 87 | 992 | 302 | |||||||||||
176,294 | 167,533 | 519,796 | 507,699 | ||||||||||||
Operating income | 44 | 16,039 | 11,375 | 22,307 | |||||||||||
Interest expense | (1,725 | ) | (3,365 | ) | (6,288 | ) | (10,625 | ) | |||||||
Interest income | 50 | 44 | 147 | 126 | |||||||||||
Other income (expense) | 204 | (4,709 | ) | 967 | (1,832 | ) | |||||||||
Income (loss) before income taxes | (1,427 | ) | 8,009 | 6,201 | 9,976 | ||||||||||
Income tax (expense) benefit | (3,862 | ) | 1,214 | (9,199 | ) | (2,897 | ) | ||||||||
Net income (loss) | (5,289 | ) | 9,223 | (2,998 | ) | 7,079 | |||||||||
Less: Net income (loss) attributable to noncontrolling interest | (198 | ) | 201 | (1,001 | ) | (53 | ) | ||||||||
Net income (loss) attributable to Civeo Corporation | $ | (5,091 | ) | $ | 9,022 | $ | (1,997 | ) | $ | 7,132 | |||||
Net income (loss) per share attributable to Civeo Corporation common shareholders: | |||||||||||||||
Basic | $ | (0.36 | ) | $ | 0.61 | $ | (0.14 | ) | $ | 0.48 | |||||
Diluted | $ | (0.36 | ) | $ | 0.61 | $ | (0.14 | ) | $ | 0.47 | |||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 14,293 | 14,814 | 14,488 | 14,980 | |||||||||||
Diluted | 14,293 | 14,891 | 14,488 | 15,051 | |||||||||||
CIVEO CORPORATION | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
September 30,
| December 31,
| ||||||
(UNAUDITED) | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 17,910 | $ | 3,323 | |||
Accounts receivable, net | 106,707 | 143,222 | |||||
Inventories | 8,769 | 6,982 | |||||
Assets held for sale | — | 5,873 | |||||
Prepaid expenses and other current assets | 12,120 | 15,846 | |||||
Total current assets | 145,506 | 175,246 | |||||
Property, plant and equipment, net | 233,864 | 270,563 | |||||
Goodwill, net | 7,812 | 7,690 | |||||
Other intangible assets, net | 72,426 | 77,999 | |||||
Operating lease right-of-use assets | 10,985 | 12,286 | |||||
Other noncurrent assets | 7,043 | 4,278 | |||||
Total assets | $ | 477,636 | $ | 548,062 | |||
Current liabilities: | |||||||
Accounts payable | $ | 48,497 | $ | 58,699 | |||
Accrued liabilities | 36,485 | 40,523 | |||||
Income taxes payable | 14,026 | 3,831 | |||||
Deferred revenue | 2,792 | 4,849 | |||||
Other current liabilities | 5,039 | 6,334 | |||||
Total current liabilities | 106,839 | 114,236 | |||||
Long-term debt | 50,078 | 65,554 | |||||
Deferred income taxes | 5,241 | 11,803 | |||||
Operating lease liabilities | 7,915 | 9,264 | |||||
Other noncurrent liabilities | 23,619 | 24,167 | |||||
Total liabilities | 193,692 | 225,024 | |||||
Shareholders' equity: | |||||||
Common shares | — | — | |||||
Additional paid-in capital | 1,630,851 | 1,628,972 | |||||
Accumulated deficit | (956,545 | ) | (919,023 | ) | |||
Treasury stock | (10,130 | ) | (9,063 | ) | |||
Accumulated other comprehensive loss | (382,017 | ) | (380,715 | ) | |||
Total Civeo Corporation shareholders' equity | 282,159 | 320,171 | |||||
Noncontrolling interest | 1,785 | 2,867 | |||||
Total shareholders' equity | 283,944 | 323,038 | |||||
Total liabilities and shareholders' equity | $ | 477,636 | $ | 548,062 | |||
CIVEO CORPORATION | |||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in thousands) | |||||||
Nine Months Ended
| |||||||
2024 | 2023 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (2,998 | ) | $ | 7,079 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 51,269 | 59,277 | |||||
Impairment charges | 7,823 | — | |||||
Deferred income tax expense (benefit) | (6,487 | ) | 2,688 | ||||
Non-cash compensation charge | 1,879 | 3,297 | |||||
(Gains) losses on disposals of assets | (6,134 | ) | 2,264 | ||||
Provision for credit losses, net of recoveries | 15 | 120 | |||||
Other, net | 1,886 | 1,900 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 35,771 | (37,411 | ) | ||||
Inventories | (1,690 | ) | 420 | ||||
Accounts payable and accrued liabilities | (13,586 | ) | 4,767 | ||||
Taxes payable | 9,681 | (5 | ) | ||||
Other current and noncurrent assets and liabilities, net | (3,415 | ) | 12,197 | ||||
Net cash flows provided by operating activities | 74,014 | 56,593 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (18,405 | ) | (21,179 | ) | |||
Proceeds from dispositions of property, plant and equipment | 10,700 | 7,070 | |||||
Other, net | 183 | — | |||||
Net cash flows used in investing activities | (7,522 | ) | (14,109 | ) | |||
Cash flows from financing activities: | |||||||
Term loan repayments | — | (22,338 | ) | ||||
Revolving credit borrowings (repayments), net | (9,246 | ) | (6,732 | ) | |||
Debt issuance costs | (2,976 | ) | — | ||||
Dividends paid | (10,984 | ) | (3,731 | ) | |||
Repurchases of common shares | (24,060 | ) | (9,222 | ) | |||
Taxes paid on vested shares | (1,067 | ) | — | ||||
Net cash flows used in financing activities | (48,333 | ) | (42,023 | ) | |||
Effect of exchange rate changes on cash | (3,572 | ) | (598 | ) | |||
Net change in cash and cash equivalents | 14,587 | (137 | ) | ||||
Cash and cash equivalents, beginning of period | 3,323 | 7,954 | |||||
Cash and cash equivalents, end of period | $ | 17,910 | $ | 7,817 | |||
CIVEO CORPORATION | |||||||||||||||
SEGMENT DATA | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended
| Nine Months Ended
| ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues | |||||||||||||||
Canada | $ | 57,736 | $ | 95,144 | $ | 204,423 | $ | 280,067 | |||||||
Australia | 116,622 | 87,885 | 316,967 | 247,418 | |||||||||||
Other | 1,980 | 543 | 9,781 | 2,521 | |||||||||||
Total revenues | $ | 176,338 | $ | 183,572 | $ | 531,171 | $ | 530,006 | |||||||
EBITDA (1) | |||||||||||||||
Canada | $ | 3,171 | $ | 18,154 | $ | 31,944 | $ | 49,983 | |||||||
Australia | 22,421 | 18,785 | 58,494 | 52,600 | |||||||||||
Corporate, other and eliminations | (7,706 | ) | (8,896 | ) | (25,826 | ) | (22,778 | ) | |||||||
Total EBITDA | $ | 17,886 | $ | 28,043 | $ | 64,612 | $ | 79,805 | |||||||
Adjusted EBITDA (1) | |||||||||||||||
Canada | $ | 3,434 | $ | 23,201 | $ | 26,454 | $ | 55,320 | |||||||
Australia | 22,474 | 18,869 | 64,417 | 52,817 | |||||||||||
Corporate, other and eliminations | (7,130 | ) | (7,906 | ) | (22,374 | ) | (20,167 | ) | |||||||
Total adjusted EBITDA | $ | 18,778 | $ | 34,164 | $ | 68,497 | $ | 87,970 | |||||||
Operating income (loss) | |||||||||||||||
Canada | $ | (8,282 | ) | $ | 10,811 | $ | (2,801 | ) | $ | 9,486 | |||||
Australia | 12,349 | 9,067 | 30,033 | 23,140 | |||||||||||
Corporate, other and eliminations | (4,023 | ) | (3,839 | ) | (15,857 | ) | (10,319 | ) | |||||||
Total operating income (loss) | $ | 44 | $ | 16,039 | $ | 11,375 | $ | 22,307 | |||||||
(1) Please see Non-GAAP Reconciliation Schedule. | |||||||||||||||
CIVEO CORPORATION | |||||||||||||||
NON-GAAP RECONCILIATIONS | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended
| Nine Months Ended
| Twelve Months
| |||||||||||||
2024 | 2023 | 2024 | 2023 | 2024 | |||||||||||
EBITDA (1) | $ | 17,886 | $ | 28,043 | $ | 64,612 | $ | 79,805 | $ | 113,744 | |||||
Adjusted EBITDA (1) | $ | 18,778 | $ | 34,164 | $ | 68,497 | $ | 87,970 | $ | 87,021 | |||||
Free Cash Flow (2) | $ | 28,278 | $ | 31,721 | $ | 66,309 | $ | 42,484 | |||||||
Net Leverage Ratio (3) | 0.3x | ||||||||||||||
(1) | The term EBITDA is a non-GAAP financial measure that is defined as net income (loss) attributable to Civeo Corporation plus interest, taxes, depreciation and amortization. The term Adjusted EBITDA is a non-GAAP financial measure that is defined as EBITDA adjusted to exclude certain other unusual or non-operating items. For the three months ended September 30, 2024, Civeo revised its definition of Adjusted EBITDA to exclude non-cash share-based compensation. Comparative periods presented were also updated to reflect this revision. 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 income (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
| Twelve Months
| |||||||||||||||||
2024 | 2023 | 2024 | 2023 | 2024 | |||||||||||||||
Net income (loss) attributable to Civeo Corporation | $ | (5,091 | ) | $ | 9,022 | $ | (1,997 | ) | $ | 7,132 | $ | 21,028 | |||||||
Income tax expense (benefit) | 3,862 | (1,214 | ) | 9,199 | 2,897 | 16,935 | |||||||||||||
Depreciation and amortization | 17,440 | 16,914 | 51,269 | 59,277 | 67,134 | ||||||||||||||
Interest income | (50 | ) | (44 | ) | (147 | ) | (126 | ) | (193 | ) | |||||||||
Interest expense | 1,725 | 3,365 | 6,288 | 10,625 | 8,840 | ||||||||||||||
EBITDA | $ | 17,886 | $ | 28,043 | $ | 64,612 | $ | 79,805 | $ | 113,744 | |||||||||
Adjustments to EBITDA | |||||||||||||||||||
Impairment of long-lived assets (a) | — | — | 7,823 | — | 9,218 | ||||||||||||||
Net (gain) loss on disposition of McClelland Lake Lodge assets (b) | 171 | 4,868 | (5,817 | ) | 4,868 | (38,983 | ) | ||||||||||||
Share-based compensation (c) | 721 | 1,253 | 1,879 | 3,297 | 3,042 | ||||||||||||||
Adjusted EBITDA | $ | 18,778 | $ | 34,164 | $ | 68,497 | $ | 87,970 | $ | 87,021 | |||||||||
(a) | Relates to asset impairments in the first quarter of 2024 and the fourth quarter of 2023. In the first quarter of 2024, we recorded a pre-tax loss related to the impairment of long-lived assets in our Australian segment of $5.7 million and a pre-tax loss related to the impairment of long-lived assets in the U.S. of $2.1 million. In the fourth quarter of 2023, we recorded a pre-tax loss related to the impairment of long-lived assets in the U.S. of $1.4 million. | |
(b) | Relates to proceeds received and expenses incurred associated with the dismantlement and sale of the McClelland Lake Lodge. In the third quarter of 2024, we recorded expenses associated with the sale of our McClelland Lake Lodge of $0.2 million, which are included in (Gain) loss on sale of McClelland Lake Lodge assets, net on the unaudited statements of operations. In the second quarter of 2024, we recorded expenses associated with the sale of our McClelland Lake Lodge of $0.1 million, which are included in (Gain) loss on sale of McClelland Lake Lodge assets, net on the unaudited statements of operations. In the first quarter of 2024, we recorded gains associated with the sale of the McClelland Lake Lodge of $6.1 million, which are included in (Gain) loss on sale of McClelland Lake Lodge assets, net on the unaudited statements of operations. In the fourth quarter of 2023, we recorded gains associated with the sale of the McClelland Lake Lodge of $33.2 million, which are included in (Gain) loss on sale of McClelland Lake Lodge assets, net ($23.5 million) and Other income ($9.7 million) on the unaudited statements of operations. In the third quarter of 2023, we recorded expenses associated with the sale of our McClelland Lake Lodge of $4.9 million, which are included in Other income (expense) on the unaudited statements of operations. | |
(c) | Represents share-based compensation expense associated with performance share awards, restricted share awards, restricted share units and deferred share awards. | |
(2) | The term 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. 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. | |
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
| ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net Cash Flows Provided by Operating Activities | $ | 35,671 | $ | 36,832 | $ | 74,014 | $ | 56,593 | |||||||
Capital expenditures | (7,476 | ) | (9,462 | ) | (18,405 | ) | (21,179 | ) | |||||||
Proceeds from dispositions of property, plant and equipment | 83 | 4,351 | 10,700 | 7,070 | |||||||||||
Free Cash Flow | $ | 28,278 | $ | 31,721 | $ | 66,309 | $ | 42,484 | |||||||
(3) | The term net leverage ratio is a non-GAAP financial measure that is defined as net debt divided by bank-adjusted EBITDA. Net debt, bank-adjusted EBITDA and net leverage ratio are not financial measures under GAAP and should not be considered in isolation from or as a substitute for total debt, net income (loss) or cash flow measures prepared in accordance with GAAP or as a measure of profitability or liquidity. Additionally, net debt, bank-adjusted EBITDA and net leverage ratio may not be comparable to other similarly titled measures of other companies. Civeo has included net debt, bank-adjusted EBITDA and net leverage ratio as a supplemental disclosure because its management believes that this data provides useful information regarding the level of the Company’s indebtedness and its ability to service debt. Additionally, per Civeo’s credit agreement, the Company is required to maintain a net leverage ratio below 3.0x every quarter to remain in compliance with the credit agreement. |
The following table sets forth a reconciliation of net debt, bank-adjusted EBITDA and net leverage ratio to the most directly comparable measures of financial performance calculated under GAAP (in thousands) (unaudited): |
As of
| |||
2024 | |||
Total debt | $ | 50,078 | |
Less: Cash and cash equivalents | 17,910 | ||
Net debt | $ | 32,168 | |
Adjusted EBITDA for the twelve months ended September 30, 2024 (a) | $ | 87,021 | |
Adjustments to Adjusted EBITDA | |||
Interest income | 193 | ||
Incremental adjustments for McClelland Lake Lodge disposition (b) | 13,781 | ||
Bank-adjusted EBITDA | $ | 100,995 | |
Net leverage ratio (c) | 0.3x | ||
(a)See footnote 1 above for reconciliation of Adjusted EBITDA to net income (loss) attributable to Civeo Corporation | |||
(b) Related to incremental adjustments associated with the sale of the McClelland Lake Lodge assets as required by our credit facility | |||
(c) Calculated as net debt divided by bank-adjusted EBITDA | |||
CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) | |||||
Year Ending
| |||||
EBITDA Range (1) | $ | 78.2 | $ | 83.2 | |
Adjusted EBITDA Range (1) | $ | 83.0 | $ | 88.0 | |
(1) | The following table sets forth a reconciliation of estimated EBITDA and 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): |
Year Ending
| |||||||
(estimated) | |||||||
Net loss | $ | (11.8 | ) | $ | (8.8 | ) | |
Income tax expense | 12.0 | 14.0 | |||||
Depreciation and amortization | 70.0 | 70.0 | |||||
Interest expense | 8.0 | 8.0 | |||||
EBITDA | $ | 78.2 | $ | 83.2 | |||
Adjustments to EBITDA | |||||||
Impairment expense | 7.8 | 7.8 | |||||
Net gain on disposition of McClelland Lake Lodge assets | (6.0 | ) | (6.0 | ) | |||
Share-based compensation | 3.0 | 3.0 | |||||
Adjusted EBITDA | $ | 83.0 | $ | 88.0 | |||
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
| Nine Months Ended
| ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Supplemental Operating Data - Canadian Segment | |||||||||||
Revenues | |||||||||||
Accommodation revenue (1) | $ | 48,747 | $ | 71,417 | $ | 180,793 | $ | 208,000 | |||
Mobile facility rental revenue (2) | 123 | 17,314 | 1,473 | 54,752 | |||||||
Food and other services revenue (3) | 8,866 | 6,413 | 22,157 | 17,315 | |||||||
Total Canadian revenues | $ | 57,736 | $ | 95,144 | $ | 204,423 | $ | 280,067 | |||
Costs | |||||||||||
Accommodation cost | $ | 38,762 | $ | 46,063 | $ | 132,679 | $ | 150,592 | |||
Mobile facility rental cost | 361 | 11,636 | 4,413 | 37,736 | |||||||
Food and other services cost | 8,385 | 5,867 | 20,839 | 15,701 | |||||||
Indirect other cost | 2,544 | 2,406 | 8,227 | 7,693 | |||||||
Total Canadian cost of sales and services | $ | 50,052 | $ | 65,972 | $ | 166,158 | $ | 211,722 | |||
Average daily rates (4) | $ | 100 | $ | 98 | $ | 97 | $ | 98 | |||
Billed rooms (5) | 483,767 | 726,364 | 1,846,163 | 2,093,459 | |||||||
Canadian dollar to U.S. dollar | $ | 0.733 | $ | 0.746 | $ | 0.735 | $ | 0.743 | |||
Supplemental Operating Data - Australian Segment | |||||||||||
Revenues | |||||||||||
Accommodation revenue (1) | $ | 51,370 | $ | 46,012 | $ | 147,391 | $ | 130,953 | |||
Food and other services revenue (3) | 65,252 | 41,873 | 169,576 | 116,465 | |||||||
Total Australian revenues | $ | 116,622 | $ | 87,885 | $ | 316,967 | $ | 247,418 | |||
Costs | |||||||||||
Accommodation cost | $ | 24,783 | $ | 22,404 | $ | 70,990 | $ | 63,670 | |||
Food and other services cost | 58,787 | 38,898 | 154,218 | 110,132 | |||||||
Indirect other cost | 3,497 | 2,293 | 9,009 | 6,646 | |||||||
Total Australian cost of sales and services | $ | 87,067 | $ | 63,595 | $ | 234,217 | $ | 180,448 | |||
Average daily rates (4) | $ | 79 | $ | 74 | $ | 78 | $ | 76 | |||
Billed rooms (5) | 647,358 | 623,436 | 1,886,647 | 1,734,004 | |||||||
Australian dollar to U.S. dollar | $ | 0.670 | $ | 0.655 | $ | 0.662 | $ | 0.669 | |||
(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 assets for the periods presented. |
(3) | Includes revenues related to food services, laundry and water and wastewater treatment services, and facilities management for the periods presented. |
(4) | Average daily rate is based on billed rooms and accommodation revenue. |
(5) | Billed rooms represents total billed days for owned assets for the periods presented. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030544227/en/
