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Civeo Reports Second Quarter 2023 Results

Second Quarter Highlights include:

  • Reported second quarter revenues of $178.8 million, net income of $4.5 million and operating cash flow of $19.4 million;
  • Delivered second quarter Adjusted EBITDA of $31.6 million and free cash flow of $12.9 million;
  • Recorded highest quarterly occupancy in Civeo’s Australian owned-villages since 2014; and
  • Reduced debt and continued to return capital to shareholders through the share repurchase program.

Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the second quarter ended June 30, 2023.

“In the second quarter of 2023, we delivered financial results in line with our expectations while continuing to operate safely and effectively. We generated solid free cash flow in the quarter which was used to repurchase approximately 212,000 Civeo shares and pay down $6.5 million in debt. The second quarter’s results demonstrate the value of our diversified revenue drivers and were notable for the significant year-over-year growth in our Australian segment, driven by a 33% increase in integrated services revenue related to new contracts as well as a 14% increase in Australian owned-village revenue. This quarter’s Australian village occupancy marks the highest level we’ve experienced since 2014. The improvement in Australia in the quarter was offset by lower LNG-related Canadian lodge occupancy and mobile camp activity,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson concluded, “As we highlighted on the first quarter earnings conference call, our two strategic priorities for the remainder of 2023 were mitigating inflationary pressures in our Western Australian integrated services business and evaluating commercial alternatives for our Canadian McClelland Lake lodge assets. I'm happy to report that during the second quarter we made progress on both. We will provide additional updates regarding these developments on our earnings conference call later today.”

Second Quarter 2023 Results

In the second quarter of 2023, Civeo generated revenues of $178.8 million and reported net income of $4.5 million, or $0.30 per diluted share. During the second quarter of 2023, Civeo produced operating cash flow of $19.4 million, Adjusted EBITDA of $31.6 million and free cash flow of $12.9 million.

By comparison, in the second quarter of 2022, Civeo generated revenues of $185.0 million and reported net income of $9.1 million, or $0.54 per diluted share. During the second quarter of 2022, Civeo produced operating cash flow of $21.7 million, Adjusted EBITDA of $37.1 million and free cash flow of $17.6 million.

The year-over-year decrease in Adjusted EBITDA in the second quarter of 2023 was primarily driven by lower Canadian LNG-related lodge occupancy and mobile camp activity, partially offset by increased billed rooms at the Australian Bowen Basin villages.

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the second quarter of 2023 to the results for the second quarter of 2022.)

Canada

During the second quarter of 2023, the Canadian segment generated revenues of $95.5 million, operating income of $3.2 million and Adjusted EBITDA of $19.8 million, compared to revenues of $109.0 million, operating income of $11.2 million and Adjusted EBITDA of $28.7 million in the second quarter of 2022. Results from the second quarter of 2023 reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $5.1 million and $1.1 million, respectively.

On a constant currency basis, the Canadian segment experienced an 8% period-over-period decrease in revenues largely related to Canadian mobile camp activity winding down as well as a 6% year-over-year decrease in Canadian lodge billed rooms. Adjusted EBITDA for the Canadian segment decreased 27% due to the aforementioned dynamics as well as inflationary pressures across the business.

Australia

During the second quarter of 2023, the Australian segment generated revenues of $82.5 million, operating income of $9.2 million and Adjusted EBITDA of $19.6 million, compared to revenues of $67.8 million, operating income of $5.5 million and Adjusted EBITDA of $15.5 million in the second quarter of 2022. Results from the second quarter of 2023 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $5.7 million and $1.3 million, respectively.

On a constant currency basis, the Australian segment experienced a 30% period-over-period increase in revenues primarily driven by increased integrated services revenue related to new contracts as well as a 16% year-over-year increase in village billed rooms. Adjusted EBITDA for the Australian segment increased 35% due the aforementioned dynamics, partially offset by a weakened Australian dollar relative to the U.S. dollar.

Financial Condition

As of June 30, 2023, Civeo had total liquidity of approximately $89.0 million, consisting of $77.6 million available under its revolving credit facilities and $11.4 million of cash on hand.

Civeo’s total debt outstanding on June 30, 2023 was $136.1 million, a $6.5 million decrease since March 31, 2023.

Civeo reported a net leverage ratio of 1.2x as of June 30, 2023.

During the second quarter of 2023, Civeo invested $6.9 million in capital expenditures compared to $5.1 million invested during the second quarter of 2022. Capital expenditures in both periods were predominantly related to maintenance spending on the Company’s lodges and villages.

In the second quarter of 2023, Civeo repurchased approximately 212,000 shares through its share repurchase program for a total of approximately $4.2 million.

Full Year 2023 Guidance

For the full year of 2023, Civeo is increasing the lower end of its previously provided revenue and Adjusted EBITDA guidance ranges. The revised revenue and Adjusted EBITDA guidance ranges are $640 million to $650 million and $90 million to $95 million, respectively. The Company is decreasing full year 2023 capital expenditure guidance to a range of $35 million to $40 million. The $10 million decrease in capital expenditure guidance is entirely driven by downward revisions to the scope of the customer-funded infrastructure upgrades to three Australian villages announced last quarter. As these upgrades will be fully funded by the customer upfront, this change will not impact our 2023 free cash flow guidance.

Conference Call

Civeo will host a conference call to discuss its second quarter 2023 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 using the conference ID 13740254#. 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 13740254#.

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 operates a total of 26 lodges and villages in Canada, Australia and the U.S., with an aggregate of approximately 28,000 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 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 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, inflation, global weather conditions, natural disasters, 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

 

Six Months Ended

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Revenues

 

$

178,843

 

 

$

184,954

 

 

$

346,434

 

 

$

350,632

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of sales and services

 

 

131,425

 

 

 

130,053

 

 

 

264,939

 

 

 

255,896

 

Selling, general and administrative expenses

 

 

16,459

 

 

 

17,682

 

 

 

32,649

 

 

 

32,895

 

Depreciation and amortization expense

 

 

20,701

 

 

 

23,083

 

 

 

42,363

 

 

 

43,210

 

Other operating expense (income)

 

 

86

 

 

 

(106

)

 

 

215

 

 

 

152

 

 

 

 

168,671

 

 

 

170,712

 

 

 

340,166

 

 

 

332,153

 

Operating income

 

 

10,172

 

 

 

14,242

 

 

 

6,268

 

 

 

18,479

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,604

)

 

 

(2,608

)

 

 

(7,260

)

 

 

(5,076

)

Interest income

 

 

50

 

 

 

2

 

 

 

82

 

 

 

2

 

Other income

 

 

427

 

 

 

415

 

 

 

2,877

 

 

 

2,111

 

Income before income taxes

 

 

7,045

 

 

 

12,051

 

 

 

1,967

 

 

 

15,516

 

Income tax expense

 

 

(2,878

)

 

 

(1,821

)

 

 

(4,111

)

 

 

(3,378

)

Net income (loss)

 

 

4,167

 

 

 

10,230

 

 

 

(2,144

)

 

 

12,138

 

Less: Net income (loss) attributable to noncontrolling interest

 

 

(296

)

 

 

662

 

 

 

(254

)

 

 

1,160

 

Net income (loss) attributable to Civeo Corporation

 

 

4,463

 

 

 

9,568

 

 

 

(1,890

)

 

 

10,978

 

Less: Dividends attributable to Class A preferred shares

 

 

 

 

 

490

 

 

 

 

 

 

977

 

Net income (loss) attributable to Civeo common shareholders

 

$

4,463

 

 

$

9,078

 

 

$

(1,890

)

 

$

10,001

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to Civeo Corporation common shareholders:

 

 

 

 

 

 

Basic

 

$

0.30

 

 

$

0.55

 

 

$

(0.13

)

 

$

0.60

 

Diluted

 

$

0.30

 

 

$

0.54

 

 

$

(0.13

)

 

$

0.60

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

14,970

 

 

 

14,148

 

 

 

15,064

 

 

 

14,122

 

Diluted

 

 

15,000

 

 

 

14,275

 

 

 

15,064

 

 

 

14,271

CIVEO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

June 30, 2023

 

December 31, 2022

 

 

(UNAUDITED)

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

11,421

 

 

$

7,954

 

Accounts receivable, net

 

 

140,090

 

 

 

119,755

 

Inventories

 

 

7,171

 

 

 

6,907

 

Assets held for sale

 

 

8,204

 

 

 

8,653

 

Prepaid expenses and other current assets

 

 

8,992

 

 

 

10,280

 

Total current assets

 

 

175,878

 

 

 

153,549

 

 

 

 

 

 

Property, plant and equipment, net

 

 

275,561

 

 

 

301,890

 

Goodwill, net

 

 

7,522

 

 

 

7,672

 

Other intangible assets, net

 

 

80,635

 

 

 

81,747

 

Operating lease right-of-use assets

 

 

14,023

 

 

 

15,722

 

Other noncurrent assets

 

 

5,343

 

 

 

5,604

 

Total assets

 

$

558,962

 

 

$

566,184

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

47,763

 

 

$

51,087

 

Accrued liabilities

 

 

27,524

 

 

 

39,211

 

Income taxes

 

 

100

 

 

 

178

 

Current portion of long-term debt

 

 

14,664

 

 

 

28,448

 

Deferred revenue

 

 

3,097

 

 

 

991

 

Other current liabilities

 

 

9,534

 

 

 

8,342

 

Total current liabilities

 

 

102,682

 

 

 

128,257

 

 

 

 

 

 

Long-term debt

 

 

120,999

 

 

 

102,505

 

Deferred income taxes

 

 

8,628

 

 

 

4,778

 

Operating lease liabilities

 

 

11,446

 

 

 

12,771

 

Other noncurrent liabilities

 

 

19,874

 

 

 

14,172

 

Total liabilities

 

 

263,629

 

 

 

262,483

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

Common shares

 

 

 

 

 

 

Additional paid-in capital

 

 

1,626,556

 

 

 

1,624,512

 

Accumulated deficit

 

 

(939,983

)

 

 

(930,123

)

Treasury stock

 

 

(9,063

)

 

 

(9,063

)

Accumulated other comprehensive loss

 

 

(385,350

)

 

 

(385,187

)

Total Civeo Corporation shareholders' equity

 

 

292,160

 

 

 

300,139

 

Noncontrolling interest

 

 

3,173

 

 

 

3,562

 

Total shareholders' equity

 

 

295,333

 

 

 

303,701

 

Total liabilities and shareholders' equity

 

$

558,962

 

 

$

566,184

 

CIVEO CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Six Months Ended

June 30,

 

 

2023

 

2022

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

(2,144

)

 

$

12,138

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

42,363

 

 

 

43,210

 

Deferred income tax expense

 

 

3,985

 

 

 

3,256

 

Non-cash compensation charge

 

 

2,044

 

 

 

1,974

 

Gains on disposals of assets

 

 

(2,445

)

 

 

(1,895

)

Provision for credit losses, net of recoveries

 

 

(65

)

 

 

(24

)

Other, net

 

 

1,242

 

 

 

1,544

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(19,669

)

 

 

(23,119

)

Inventories

 

 

(297

)

 

 

(1,180

)

Accounts payable and accrued liabilities

 

 

(14,713

)

 

 

(6,713

)

Taxes payable

 

 

(78

)

 

 

(99

)

Other current and noncurrent assets and liabilities, net

 

 

9,538

 

 

 

(5,461

)

Net cash flows provided by operating activities

 

 

19,761

 

 

 

23,631

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

 

(11,717

)

 

 

(8,647

)

Proceeds from dispositions of property, plant and equipment

 

 

2,719

 

 

 

3,302

 

Other, net

 

 

 

 

 

190

 

Net cash flows used in investing activities

 

 

(8,998

)

 

 

(5,155

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Term loan repayments

 

 

(14,942

)

 

 

(15,763

)

Revolving credit borrowings (repayments), net

 

 

15,993

 

 

 

(2,576

)

Repurchases of common shares

 

 

(7,970

)

 

 

(542

)

Taxes paid on vested shares

 

 

 

 

 

(1,013

)

Net cash flows used in financing activities

 

 

(6,919

)

 

 

(19,894

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(377

)

 

 

(82

)

Net change in cash and cash equivalents

 

 

3,467

 

 

 

(1,500

)

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

 

7,954

 

 

 

6,282

 

Cash and cash equivalents, end of period

 

$

11,421

 

 

$

4,782

 

CIVEO CORPORATION

SEGMENT DATA

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

Revenues

 

 

 

 

 

 

 

 

Canada

 

$

95,470

 

 

$

109,023

 

 

$

184,923

 

 

$

204,975

 

Australia

 

 

82,544

 

 

 

67,820

 

 

 

159,533

 

 

 

131,349

 

Other (2)

 

 

829

 

 

 

8,111

 

 

 

1,978

 

 

 

14,308

 

Total revenues

 

$

178,843

 

 

$

184,954

 

 

$

346,434

 

 

$

350,632

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

 

 

 

 

 

 

 

Canada

 

$

19,818

 

 

$

28,659

 

 

$

31,829

 

 

$

45,878

 

Australia

 

 

19,606

 

 

 

15,537

 

 

 

33,815

 

 

 

30,974

 

Corporate, other and eliminations (2)

 

 

(7,828

)

 

 

(7,118

)

 

 

(13,882

)

 

 

(14,212

)

Total EBITDA

 

$

31,596

 

 

$

37,078

 

 

$

51,762

 

 

$

62,640

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (1)

 

 

 

 

 

 

 

 

Canada

 

$

19,818

 

 

$

28,659

 

 

$

31,829

 

 

$

45,878

 

Australia

 

 

19,606

 

 

 

15,537

 

 

 

33,815

 

 

 

30,974

 

Corporate, other and eliminations (2)

 

 

(7,828

)

 

 

(7,118

)

 

 

(13,882

)

 

 

(14,212

)

Total adjusted EBITDA

 

$

31,596

 

 

$

37,078

 

 

$

51,762

 

 

$

62,640

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

Canada

 

$

3,177

 

 

$

11,197

 

 

$

(1,325

)

 

$

15,235

 

Australia

 

 

9,176

 

 

 

5,452

 

 

 

14,073

 

 

 

11,587

 

Corporate, other and eliminations (2)

 

 

(2,181

)

 

 

(2,407

)

 

 

(6,480

)

 

 

(8,343

)

Total operating income

 

$

10,172

 

 

$

14,242

 

 

$

6,268

 

 

$

18,479

 

 

 

 

 

 

 

 

 

 

(1) Please see Non-GAAP Reconciliation Schedule.

 

 

 

 

 

 

 

 

 

 

 

(2) Prior to the first quarter of 2023, we presented the U.S. operating segment as a separate reportable segment. Our operating segment in the U.S. no longer meets the reportable segment quantitative thresholds, and is included within the Other and Corporate, other and eliminations categories. Prior periods have been adjusted.

 

 

 

 

 

 

 

 

 

 

 

 

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

Twelve Months Ended

June 30,

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

$

31,596

 

$

37,078

 

$

51,762

 

$

62,640

 

 

Adjusted EBITDA (1)

 

$

31,596

 

$

37,078

 

$

51,762

 

$

62,640

 

 

Free Cash Flow (2)

 

$

12,912

 

$

17,561

 

$

10,763

 

$

18,286

 

 

Net Leverage Ratio (3)

 

 

 

 

 

 

 

 

 

1.2x

(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. 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

 

Six Months Ended

 

Twelve Months Ended

June 30,

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Civeo Corporation

 

$

4,463

 

 

$

9,568

 

 

$

(1,890

)

 

$

10,978

 

 

$

(8,871

)

Income tax expense

 

 

2,878

 

 

 

1,821

 

 

 

4,111

 

 

 

3,378

 

 

 

5,135

 

Depreciation and amortization

 

 

20,701

 

 

 

23,083

 

 

 

42,363

 

 

 

43,210

 

 

 

86,367

 

Interest income

 

 

(50

)

 

 

(2

)

 

 

(82

)

 

 

(2

)

 

 

(119

)

Interest expense

 

 

3,604

 

 

 

2,608

 

 

 

7,260

 

 

 

5,076

 

 

 

13,658

 

EBITDA

 

$

31,596

 

 

$

37,078

 

 

$

51,762

 

 

$

62,640

 

 

$

96,170

 

Adjustments to EBITDA

 

 

 

 

 

 

 

 

 

 

Impairment of long-lived assets (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,721

 

Adjusted EBITDA

 

$

31,596

 

 

$

37,078

 

 

$

51,762

 

 

$

62,640

 

 

$

101,891

 

   

(a)

 

Relates to asset impairments in the fourth quarter of 2022. In the fourth quarter of 2022, we recorded a pre-tax loss related to the impairment of long-lived assets in our Australian segment of $3.8 million and a pre-tax loss related to the impairment of long-lived assets in the U.S. of $1.9 million.

(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

 

Six Months Ended

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Net Cash Flows Provided by Operating Activities

 

$

19,403

 

 

$

21,678

 

 

$

19,761

 

 

$

23,631

 

Capital expenditures

 

 

(6,945

)

 

 

(5,055

)

 

 

(11,717

)

 

 

(8,647

)

Proceeds from dispositions of property, plant and equipment

 

 

454

 

 

 

938

 

 

 

2,719

 

 

 

3,302

 

Free Cash Flow

 

$

12,912

 

 

$

17,561

 

 

$

10,763

 

 

$

18,286

 

(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 June 30,

 

 

2023

 

 

 

Total debt

 

$

136,105

Less: Cash and cash equivalents

 

 

11,421

Net debt

 

$

124,684

 

 

 

Adjusted EBITDA for the twelve months ended June 30, 2023 (a)

 

$

101,891

Adjustments to Adjusted EBITDA

 

 

Stock-based compensation

 

 

3,857

Interest income

 

 

119

Bank-adjusted EBITDA

 

$

105,867

 

 

 

Net leverage ratio (b)

 

1.2x

 

 

 

(a) See footnote 1 above for reconciliation of Adjusted EBITDA to net income (loss) attributable to Civeo Corporation

(b) Calculated as net debt divided by bank-adjusted EBITDA

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS - GUIDANCE

(in millions)

(unaudited)

 

 

 

Year Ending

December 31, 2023

 

 

 

 

 

EBITDA Range (1)

 

$

90.0

 

$

95.0

(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):

 

 

 

 

Year Ending

December 31, 2023

 

 

(estimated)

 

 

 

 

 

Net income

 

$

(13.0

)

 

$

(10.0

)

Income tax expense

 

 

11.0

 

 

 

13.0

 

Depreciation and amortization

 

 

79.0

 

 

 

79.0

 

Interest expense

 

 

13.0

 

 

 

13.0

 

EBITDA

 

$

90.0

 

 

$

95.0

 

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

 

Six Months Ended

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Supplemental Operating Data - Canadian Segment

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Accommodation revenue (1)

 

$

72,355

 

$

79,431

 

$

136,583

 

$

146,625

Mobile facility rental revenue (2)

 

 

17,407

 

 

24,058

 

 

37,438

 

 

48,076

Food and other services revenue (3)

 

 

5,708

 

 

5,534

 

 

10,902

 

 

10,274

Total Canadian revenues

 

$

95,470

 

$

109,023

 

$

184,923

 

$

204,975

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

Accommodation cost

 

$

52,431

 

$

53,108

 

$

104,529

 

$

106,235

Mobile facility rental cost

 

 

11,598

 

 

14,458

 

 

26,100

 

 

29,342

Food and other services cost

 

 

5,060

 

 

4,976

 

 

9,834

 

 

9,335

Indirect other cost

 

 

2,756

 

 

2,467

 

 

5,287

 

 

5,303

Total Canadian cost of sales and services

 

$

71,845

 

$

75,009

 

$

145,750

 

$

150,215

 

 

 

 

 

 

 

 

 

Average daily rates (4)

 

$

100

 

$

103

 

$

98

 

$

104

 

 

 

 

 

 

 

 

 

Billed rooms (5)

 

 

724,299

 

 

771,267

 

 

1,367,095

 

 

1,406,822

 

 

 

 

 

 

 

 

 

Canadian dollar to U.S. dollar

 

$

0.745

 

$

0.784

 

$

0.742

 

$

0.787

 

 

 

 

 

 

 

 

 

Supplemental Operating Data - Australian Segment

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Accommodation revenue (1)

 

$

44,342

 

$

39,052

 

$

84,941

 

$

76,651

Food and other services revenue (3)

 

 

38,202

 

 

28,768

 

 

74,592

 

 

54,698

Total Australian revenues

 

$

82,544

 

$

67,820

 

$

159,533

 

$

131,349

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

Accommodation cost

 

$

20,948

 

$

18,840

 

$

41,266

 

$

37,247

Food and other services cost

 

 

35,372

 

 

27,008

 

 

71,234

 

 

51,371

Indirect other cost

 

 

2,225

 

 

1,844

 

 

4,353

 

 

3,588

Total Australian cost of sales and services

 

$

58,545

 

$

47,692

 

$

116,853

 

$

92,206

 

 

 

 

 

 

 

 

 

Average daily rates (4)

 

$

75

 

$

77

 

$

76

 

$

78

 

 

 

 

 

 

 

 

 

Billed rooms (5)

 

 

587,855

 

 

505,310

 

 

1,110,568

 

 

979,784

 

 

 

 

 

 

 

 

 

Australian dollar to U.S. dollar

 

$

0.668

 

$

0.715

 

$

0.676

 

$

0.719

(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.

 

Contacts

Carolyn J. Stone

Civeo Corporation

Senior Vice President & Chief Financial Officer

713-510-2400

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