Civeo Reports Second Quarter 2024 Results

Second Quarter Highlights include:

• Reported revenues of $188.7 million, net income of $8.2 million and operating cash flow of $32.4 million;
• Delivered Adjusted EBITDA of $31.3 million and free cash flow of $30.9 million;
• Australian segment continues to deliver strong growth, with revenues up 32% on a year-over-year basis, driven by both increased occupancy at Civeo-owned villages and continued growth in our integrated services offering; and
• Returned $10.3 million of capital to shareholders in the quarter through the quarterly dividend and share repurchases.

Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the second quarter ended June 30, 2024.

“In the second quarter of 2024, we delivered increased billed rooms year-over-year in our Canadian lodges and Australian owned-villages as well as increased Australian integrated services business with existing clients. These year-over-year improvements were offset by the expected decline in LNG-related Canadian mobile camp activity and the sale of McClelland Lake Lodge,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson concluded, “We generated significant free cash flow in the quarter and returned $10.3 million of capital to shareholders. Australia continues to produce strong results in 2024, for both Civeo-owned villages and integrated services. At the same time, as expected, our Canadian segment is facing headwinds with the wind down of LNG-related construction activity. Our near-term focus has been and will continue to be managing through the wildfire activity in northern Alberta, Canada. Our employees are working around-the-clock to ensure the safety of our guests, first responders and assets, and while this is a fluid situation, we are not currently expecting a material financial impact to Civeo, negative or positive.”

Second Quarter 2024 Results

In the second quarter of 2024, Civeo generated revenues of $188.7 million and reported net income of $8.2 million, or $0.56 per diluted share. During the second quarter of 2024, Civeo produced operating cash flow of $32.4 million, Adjusted EBITDA of $31.3 million and free cash flow of $30.9 million.

By comparison, 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 same quarter, Civeo produced operating cash flow of $19.4 million, Adjusted EBITDA of $31.6 million and free cash flow of $12.9 million.

The year-over-year modest decrease in Adjusted EBITDA in the second quarter of 2024 was primarily driven by the expected wind-down of LNG-related Canadian mobile camp activity, including $1.4 million in mobile camp demobilization costs. This decrease was largely offset by increased billed rooms at the Canadian lodges and Australian owned-villages coupled with 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 second quarter of 2024 to the results for the second quarter of 2023.)

Canada

During the second quarter of 2024, the Canadian segment generated revenues of $79.5 million, operating income of $4.9 million and Adjusted EBITDA of $17.2 million, compared to revenues of $95.5 million, operating income of $3.2 million and Adjusted EBITDA of $19.8 million in the second quarter of 2023.

The Canadian segment experienced a 17% period-over-period decrease in revenues and a 13% decrease in Adjusted EBITDA driven by the anticipated wind-down of LNG-related mobile camp activity, including $1.4 million of mobile camp demobilization costs.

Australia

During the second quarter of 2024, the Australian segment generated revenues of $108.6 million, operating income of $11.7 million and Adjusted EBITDA of $21.6 million, compared to revenues of $82.5 million, operating income of $9.2 million and Adjusted EBITDA of $19.6 million in the second quarter of 2023.

Revenue from the Australian segment increased 32% period-over-period and Adjusted EBITDA was up 10% driven by a 6% year-over-year increase in billed rooms and increased integrated services activity from existing clients, building on a history of substantial multi-year growth.

Financial Condition and Capital Allocation

As of June 30, 2024, Civeo had total liquidity of approximately $159.0 million, consisting of $151.5 million available under its revolving credit facilities and $7.4 million of cash on hand.

Civeo’s total debt outstanding on June 30, 2024 was $47.5 million, a $31.1 million decrease since March 31, 2024. Civeo's net debt on June 30, 2024 was $40.1 million, a $21.8 million decrease since March 31, 2024.

Civeo reported a net leverage ratio of 0.3x as of June 30, 2024.

During the second quarter of 2024, Civeo invested $5.3 million in capital expenditures compared to $6.9 million invested during the second 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 second quarter of 2024 also included $0.5 million related to customer-funded infrastructure upgrades at three Australian villages, compared to $0.8 million in the second quarter of 2023.

The Company announced today that its board of directors has declared a quarterly cash dividend of $0.25 per common share, payable on September 16, 2024 to shareholders of record as of close of business on August 26, 2024. For purposes of the Income Tax Act (Canada), the Company has designated this dividend to be an "eligible dividend".

In the second quarter of 2024, Civeo repurchased approximately 274,000 shares through its share repurchase program for approximately $6.6 million.

Full Year 2024 Guidance

For the full year of 2024, Civeo is maintaining its previously provided revenue and Adjusted EBITDA guidance ranges of $625 million to $700 million and $80 million to $90 million, respectively. The Company is also maintaining its full year 2024 capital expenditure guidance of $30 million to $35 million.

Conference Call

Civeo will host a conference call to discuss its second 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 [phone] in the United States or [phone] internationally and asking for the Civeo call or using the conference ID 13747979#. A replay will be available after the call by dialing [phone] in the United States or [phone] internationally and using the conference ID 13747979#.

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 24 lodges and villages in Canada, Australia and the U.S., with an aggregate of approximately 26,000 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 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

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Revenues

$

188,713

 

 

$

178,843

 

 

$

354,833

 

 

$

346,434

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of sales and services

 

140,834

 

 

 

131,425

 

 

 

271,279

 

 

 

264,939

 

Selling, general and administrative expenses

 

17,433

 

 

 

16,459

 

 

 

36,073

 

 

 

32,649

 

Depreciation and amortization expense

 

17,059

 

 

 

20,701

 

 

 

33,829

 

 

 

42,363

 

Impairment expense

 

—

 

 

 

—

 

 

 

7,823

 

 

 

—

 

(Gain) loss on sale of McClelland Lake Lodge assets, net

 

87

 

 

 

—

 

 

 

(5,988

)

 

 

—

 

Other operating expense

 

188

 

 

 

86

 

 

 

486

 

 

 

215

 

 

 

175,601

 

 

 

168,671

 

 

 

343,502

 

 

 

340,166

 

Operating income

 

13,112

 

 

 

10,172

 

 

 

11,331

 

 

 

6,268

 

 

 

 

 

 

 

 

 

Interest expense

 

(2,203

)

 

 

(3,604

)

 

 

(4,563

)

 

 

(7,260

)

Interest income

 

54

 

 

 

50

 

 

 

97

 

 

 

82

 

Other income

 

310

 

 

 

427

 

 

 

763

 

 

 

2,877

 

Income before income taxes

 

11,273

 

 

 

7,045

 

 

 

7,628

 

 

 

1,967

 

Income tax expense

 

(3,786

)

 

 

(2,878

)

 

 

(5,337

)

 

 

(4,111

)

Net income (loss)

 

7,487

 

 

 

4,167

 

 

 

2,291

 

 

 

(2,144

)

Less: Net loss attributable to noncontrolling interest

 

(740

)

 

 

(296

)

 

 

(803

)

 

 

(254

)

Net income (loss) attributable to Civeo Corporation

$

8,227

 

 

$

4,463

 

 

$

3,094

 

 

$

(1,890

)

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Basic

$

0.57

 

 

$

0.30

 

 

$

0.21

 

 

$

(0.13

)

Diluted

$

0.56

 

 

$

0.30

 

 

$

0.21

 

 

$

(0.13

)

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

14,518

 

 

 

14,970

 

 

 

14,586

 

 

 

15,064

 

Diluted

 

14,600

 

 

 

15,000

 

 

 

14,678

 

 

 

15,064

 

 

 

 

 

 

 

 

 

CIVEO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

June 30, 2024

 

December 31, 2023

 

(UNAUDITED)

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

7,435

 

 

$

3,323

 

Accounts receivable, net

 

124,337

 

 

 

143,222

 

Inventories

 

8,353

 

 

 

6,982

 

Assets held for sale

 

—

 

 

 

5,873

 

Prepaid expenses and other current assets

 

11,468

 

 

 

15,846

 

Total current assets

 

151,593

 

 

 

175,246

 

 

 

 

 

Property, plant and equipment, net

 

236,842

 

 

 

270,563

 

Goodwill, net

 

7,538

 

 

 

7,690

 

Other intangible assets, net

 

72,707

 

 

 

77,999

 

Operating lease right-of-use assets

 

11,709

 

 

 

12,286

 

Other noncurrent assets

 

2,845

 

 

 

4,278

 

Total assets

$

483,234

 

 

$

548,062

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

47,151

 

 

$

58,699

 

Accrued liabilities

 

32,207

 

 

 

40,523

 

Income taxes payable

 

9,685

 

 

 

3,831

 

Deferred revenue

 

4,187

 

 

 

4,849

 

Other current liabilities

 

4,855

 

 

 

6,334

 

Total current liabilities

 

98,085

 

 

 

114,236

 

 

 

 

 

Long-term debt

 

47,489

 

 

 

65,554

 

Deferred income taxes

 

7,176

 

 

 

11,803

 

Operating lease liabilities

 

8,571

 

 

 

9,264

 

Other noncurrent liabilities

 

22,525

 

 

 

24,167

 

Total liabilities

 

183,846

 

 

 

225,024

 

 

 

 

 

Shareholders' equity:

 

 

 

Common shares

 

—

 

 

 

—

 

Additional paid-in capital

 

1,630,130

 

 

 

1,628,972

 

Accumulated deficit

 

(933,346

)

 

 

(919,023

)

Treasury stock

 

(10,130

)

 

 

(9,063

)

Accumulated other comprehensive loss

 

(389,229

)

 

 

(380,715

)

Total Civeo Corporation shareholders' equity

 

297,425

 

 

 

320,171

 

Noncontrolling interest

 

1,963

 

 

 

2,867

 

Total shareholders' equity

 

299,388

 

 

 

323,038

 

Total liabilities and shareholders' equity

$

483,234

 

 

$

548,062

 

CIVEO CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

 

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

2,291

 

 

$

(2,144

)

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

 

 

 

Depreciation and amortization

 

33,829

 

 

 

42,363

 

Impairment charges

 

7,823

 

 

 

—

 

Deferred income tax expense (benefit)

 

(4,344

)

 

 

3,985

 

Non-cash compensation charge

 

1,158

 

 

 

2,044

 

Gain on disposals of assets

 

(6,104

)

 

 

(2,445

)

Provision (benefit) for credit losses, net of recoveries

 

34

 

 

 

(65

)

Other, net

 

1,257

 

 

 

1,242

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

15,229

 

 

 

(19,669

)

Inventories

 

(1,525

)

 

 

(297

)

Accounts payable and accrued liabilities

 

(17,166

)

 

 

(14,713

)

Taxes payable

 

5,836

 

 

 

(78

)

Other current and noncurrent assets and liabilities, net

 

25

 

 

 

9,538

 

Net cash flows provided by operating activities

 

38,343

 

 

 

19,761

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(10,929

)

 

 

(11,717

)

Proceeds from dispositions of property, plant and equipment

 

10,617

 

 

 

2,719

 

Other, net

 

183

 

 

 

—

 

Net cash flows used in investing activities

 

(129

)

 

 

(8,998

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Term loan repayments

 

—

 

 

 

(14,942

)

Revolving credit borrowings (repayments), net

 

(15,825

)

 

 

15,993

 

Dividends paid

 

(7,368

)

 

 

—

 

Repurchases of common shares

 

(9,852

)

 

 

(7,970

)

Taxes paid on vested shares

 

(1,067

)

 

 

—

 

Net cash flows used in financing activities

 

(34,112

)

 

 

(6,919

)

 

 

 

 

Effect of exchange rate changes on cash

 

10

 

 

 

(377

)

Net change in cash and cash equivalents

 

4,112

 

 

 

3,467

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

3,323

 

 

 

7,954

 

Cash and cash equivalents, end of period

$

7,435

 

 

$

11,421

 

CIVEO CORPORATION

SEGMENT DATA

(in thousands)

(unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

 

 

 

 

 

 

Canada

$

79,527

 

 

$

95,470

 

 

$

146,687

 

 

$

184,923

 

Australia

 

108,608

 

 

 

82,544

 

 

 

200,345

 

 

 

159,533

 

Other

 

578

 

 

 

829

 

 

 

7,801

 

 

 

1,978

 

Total revenues

$

188,713

 

 

$

178,843

 

 

$

354,833

 

 

$

346,434

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

 

 

 

 

 

 

Canada

$

17,154

 

 

$

19,818

 

 

$

28,773

 

 

$

31,829

 

Australia

 

21,551

 

 

 

19,606

 

 

 

36,073

 

 

 

33,815

 

Corporate, other and eliminations

 

(7,484

)

 

 

(7,828

)

 

 

(18,120

)

 

 

(13,882

)

Total EBITDA

$

31,221

 

 

$

31,596

 

 

$

46,726

 

 

$

51,762

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (1)

 

 

 

 

 

 

 

Canada

$

17,241

 

 

$

19,818

 

 

$

22,785

 

 

$

31,829

 

Australia

 

21,551

 

 

 

19,606

 

 

 

41,823

 

 

 

33,815

 

Corporate, other and eliminations

 

(7,484

)

 

 

(7,828

)

 

 

(16,047

)

 

 

(13,882

)

Total adjusted EBITDA

$

31,308

 

 

$

31,596

 

 

$

48,561

 

 

$

51,762

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

Canada

$

4,927

 

 

$

3,177

 

 

$

5,481

 

 

$

(1,325

)

Australia

 

11,717

 

 

 

9,176

 

 

 

17,684

 

 

 

14,073

 

Corporate, other and eliminations

 

(3,532

)

 

 

(2,181

)

 

 

(11,834

)

 

 

(6,480

)

Total operating income (loss)

$

13,112

 

 

$

10,172

 

 

$

11,331

 

 

$

6,268

 

 

 

 

 

 

 

 

 

(1) Please see Non-GAAP Reconciliation Schedule.

 

 

 

 

 

 

 

 

 

 

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS

(in thousands)

(unaudited)

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

Twelve Months Ended June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

2024

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

$

31,221

 

$

31,596

 

$

46,726

 

$

51,762

 

$

123,901

Adjusted EBITDA (1)

$

31,308

 

$

31,596

 

$

48,561

 

$

51,762

 

$

98,833

Free Cash Flow (2)

$

30,881

 

$

12,912

 

$

38,031

 

$

10,763

 

 

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. 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

June 30,

 

Six Months Ended

June 30,

 

Twelve Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Civeo Corporation

$

8,227

 

 

$

4,463

 

 

$

3,094

 

 

$

(1,890

)

 

$

35,141

 

Income tax expense

 

3,786

 

 

 

2,878

 

 

 

5,337

 

 

 

4,111

 

 

 

11,859

 

Depreciation and amortization

 

17,059

 

 

 

20,701

 

 

 

33,829

 

 

 

42,363

 

 

 

66,608

 

Interest income

 

(54

)

 

 

(50

)

 

 

(97

)

 

 

(82

)

 

 

(187

)

Interest expense

 

2,203

 

 

 

3,604

 

 

 

4,563

 

 

 

7,260

 

 

 

10,480

 

EBITDA

$

31,221

 

 

$

31,596

 

 

$

46,726

 

 

$

51,762

 

 

$

123,901

 

Adjustments to EBITDA

 

 

 

 

 

 

 

 

 

Impairment of long-lived assets (a)

 

—

 

 

 

—

 

 

 

7,823

 

 

 

—

 

 

 

9,218

 

Net (gain) loss on disposition of McClelland Lake Lodge assets (b)

 

87

 

 

 

—

 

 

 

(5,988

)

 

 

—

 

 

 

(34,286

)

Adjusted EBITDA

$

31,308

 

 

$

31,596

 

 

$

48,561

 

 

$

51,762

 

 

$

98,833

 

 

 

 

 

 

 

 

 

 

 

(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 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 (Gain) loss on sale of McClelland Lake Lodge assets, net on the unaudited statements of operations.

 

(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. It is also used as a benchmark for the award of incentive compensation under its annual incentive compensation plan.

 

The following table sets forth a reconciliation of Free Cash Flow to Net Cash Flows Provided by Operating Activities, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles (in thousands) (unaudited):

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

Net Cash Flows Provided by Operating Activities

$

32,358

 

 

$

19,403

 

 

$

38,343

 

 

$

19,761

 

Capital expenditures

 

(5,316

)

 

 

(6,945

)

 

 

(10,929

)

 

 

(11,717

)

Proceeds from dispositions of property, plant and equipment

 

3,839

 

 

 

454

 

 

 

10,617

 

 

 

2,719

 

Free Cash Flow

$

30,881

 

 

$

12,912

 

 

$

38,031

 

 

$

10,763

 

(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,

 

 

 

2024

 

 

 

Total debt

 

$

47,489

Less: Cash and cash equivalents

 

 

7,435

Net debt

 

$

40,054

 

 

 

Adjusted EBITDA for the twelve months ended June 30, 2024 (a)

 

$

98,833

Adjustments to Adjusted EBITDA

 

 

Stock-based compensation

 

 

3,573

Interest income

 

 

187

Incremental adjustments for McClelland Lake Lodge disposition (b)

 

 

13,041

Bank-adjusted EBITDA

 

$

115,634

 

 

 

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 December 31, 2024

 

 

 

 

EBITDA Range (1)

$

78.2

 

$

88.2

Adjusted EBITDA Range (1)

$

80.0

 

$

90.0

(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 December 31, 2024

 

(estimated)

 

 

 

 

Net loss

$

(11.8

)

 

$

(3.8

)

Income tax expense

 

12.0

 

 

 

14.0

 

Depreciation and amortization

 

70.0

 

 

 

70.0

 

Interest expense

 

8.0

 

 

 

8.0

 

EBITDA

$

78.2

 

 

$

88.2

 

 

 

 

 

Adjustments to EBITDA

 

 

 

Impairment expense

 

7.8

 

 

 

7.8

 

Net gain on disposition of McClelland Lake Lodge assets

 

(6.0

)

 

 

(6.0

)

Adjusted EBITDA

$

80.0

 

 

$

90.0

 

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

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Supplemental Operating Data - Canadian Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Accommodation revenue (1)

$

72,259

 

$

72,355

 

$

132,046

 

$

136,583

Mobile facility rental revenue (2)

 

356

 

 

17,407

 

 

1,350

 

 

37,438

Food and other services revenue (3)

 

6,912

 

 

5,708

 

 

13,291

 

 

10,902

Total Canadian revenues

$

79,527

 

$

95,470

 

$

146,687

 

$

184,923

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

Accommodation cost

$

48,197

 

$

52,431

 

$

93,917

 

$

104,529

Mobile facility rental cost

 

1,401

 

 

11,598

 

 

4,052

 

 

26,100

Food and other services cost

 

6,314

 

 

5,060

 

 

12,454

 

 

9,834

Indirect other cost

 

2,937

 

 

2,756

 

 

5,683

 

 

5,287

Total Canadian cost of sales and services

$

58,849

 

$

71,845

 

$

116,106

 

$

145,750

 

 

 

 

 

 

 

 

Average daily rates (4)

$

96

 

$

100

 

$

97

 

$

98

 

 

 

 

 

 

 

 

Billed rooms (5)

 

752,364

 

 

724,299

 

 

1,362,396

 

 

1,367,095

 

 

 

 

 

 

 

 

Canadian dollar to U.S. dollar

$

0.731

 

$

0.745

 

$

0.736

 

$

0.742

 

 

 

 

 

 

 

 

Supplemental Operating Data - Australian Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Accommodation revenue (1)

$

48,914

 

$

44,342

 

$

96,021

 

$

84,941

Food and other services revenue (3)

 

59,694

 

 

38,202

 

 

104,324

 

 

74,592

Total Australian revenues

$

108,608

 

$

82,544

 

$

200,345

 

$

159,533

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

Accommodation cost

$

23,613

 

$

20,948

 

$

46,207

 

$

41,266

Food and other services cost

 

54,527

 

 

35,372

 

 

95,431

 

 

71,234

Indirect other cost

 

2,897

 

 

2,225

 

 

5,512

 

 

4,353

Total Australian cost of sales and services

$

81,037

 

$

58,545

 

$

147,150

 

$

116,853

 

 

 

 

 

 

 

 

Average daily rates (4)

$

78

 

$

75

 

$

77

 

$

76

 

 

 

 

 

 

 

 

Billed rooms (5)

 

625,353

 

 

587,855

 

 

1,239,289

 

 

1,110,568

 

 

 

 

 

 

 

 

Australian dollar to U.S. dollar

$

0.659

 

$

0.668

 

$

0.658

 

$

0.676

 

 

 

 

 

 

 

 

(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/20240730401166/en/

Regan Nielsen Civeo Corporation Vice President, Corporate Development & Investor Relations 713-510-2400