Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Civeo Reports Third Quarter 2022 Results By: Civeo Corporation via Business Wire October 28, 2022 at 06:30 AM EDT Third Quarter Highlights include: Reported third quarter revenues of $184.2 million, net income of $5.2 million and operating cash flow of $38.7 million; Reduced net leverage ratio to 0.9x as of September 30, 2022 from 1.2x as of June 30, 2022; Delivered third quarter Adjusted EBITDA of $35.0 million and free cash flow of $38.6 million; and Announced earlier this quarter that its Board of Directors had renewed its share repurchase authorization for the Company to repurchase up to 5% of its total common shares outstanding over the next twelve months. Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the third quarter ended September 30, 2022. "In the third quarter of 2022, our focus remained on our strategic objectives of operating safely, generating free cash flow, maintaining our strong balance sheet and returning capital to shareholders through our buyback program. We continued to experience a recovery in Canadian lodge billed rooms as our customers increase activity in the oil sands region. We also experienced strong Canadian mobile camp results supporting pipeline construction activity. We now expect our mobile camps to remain active into 2023, moving their demobilization costs out of 2022 Adjusted EBITDA guidance," stated Bradley J. Dodson, Civeo's President and Chief Executive Officer. Mr. Dodson concluded, "We are also proud to report that we achieved the significant milestone of reducing our net leverage ratio below 1.0x. This achievement would not be possible without the efforts of the entire Civeo team over the last few years. Our continued debt reduction provides us the flexibility to both weather the current market volatility and further evaluate other capital allocation opportunities." Third Quarter 2022 Results In the third quarter of 2022, Civeo generated revenues of $184.2 million and reported net income of $5.2 million, or $0.32 per diluted share. During the third quarter of 2022, Civeo produced operating cash flow of $38.7 million, Adjusted EBITDA of $35.0 million and free cash flow of $38.6 million. By comparison, in the third quarter of 2021, Civeo generated revenues of $155.1 million and reported net income of $0.1 million, or $0.00 per diluted share. During the third quarter of 2021, Civeo produced operating cash flow of $33.9 million, Adjusted EBITDA of $26.2 million and free cash flow of $31.0 million. Overall, the increase in revenues and Adjusted EBITDA in the third quarter of 2022 compared to the third quarter of 2021 was primarily driven by improved occupancy in the Canadian lodges and Australian villages as well as increased Canadian mobile camp activity, partially offset by the weaker Canadian and Australian dollars relative to the U.S. dollar. Business Segment Results (Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2022 to the results for the third quarter of 2021.) Canada During the third quarter of 2022, the Canadian segment generated revenues of $103.0 million, operating income of $7.8 million and Adjusted EBITDA of $25.6 million, compared to revenues of $84.1 million, operating income of $6.1 million and Adjusted EBITDA of $19.8 million in the third quarter of 2021. Results from the third quarter of 2022 reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $3.7 million and $0.9 million, respectively. On a constant currency basis, the Canadian segment experienced a 27% period-over-period increase in revenues largely due to increased mobile camp activity and a 19% year-over-year increase in billed rooms, driven by increased customer activity as a result of the recovery of oil prices. Adjusted EBITDA for the Canadian segment increased 29% year-over-year primarily due to the aforementioned dynamics. Australia During the third quarter of 2022, the Australian segment generated revenues of $73.8 million, operating income of $5.9 million and Adjusted EBITDA of $16.9 million, compared to revenues of $65.1 million, operating income of $4.4 million and Adjusted EBITDA of $14.8 million in the third quarter of 2021. Results from the third quarter of 2022 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $5.5 million and $1.3 million, respectively. On a constant currency basis, the Australian segment experienced a 22% period-over-period increase in revenues, and a 14% year-over-year increase in Adjusted EBITDA. These improvements were driven by higher integrated services activity in Western Australia as well as a 7% year-over-year growth in billed rooms due to increased customer maintenance activity in the Bowen Basin. U.S. The U.S. segment generated revenues of $7.4 million, an operating loss of $1.7 million and negative Adjusted EBITDA of less than $0.0 million in the third quarter of 2022, compared to revenues of $5.9 million, an operating loss of $2.1 million and negative Adjusted EBITDA of $0.5 million in the third quarter of 2021. Revenues and Adjusted EBITDA increased year-over-year primarily due to the increased activity in our wellsite services and offshore businesses, partially offset by the sale of the West Permian lodge in the fourth quarter of 2021. Financial Condition As of September 30, 2022, Civeo had total liquidity of approximately $117.3 million, consisting of $108.9 million available under its revolving credit facilities and $8.4 million of cash on hand. Civeo’s total debt outstanding on September 30, 2022 was $126.2 million, a $28.4 million decrease since June 30, 2022. The decrease consisted of $19.5 million in debt payments from cash flow generated by the business and favorable foreign currency translation of $8.9 million. Civeo reduced its net leverage ratio to 0.9x as of September 30, 2022 from 1.2x as of June 30, 2022. During the third quarter of 2022, Civeo invested $8.8 million in capital expenditures compared to $3.4 million invested during the third quarter of 2021. Capital expenditures in both periods were predominantly related to maintenance spending on the Company’s lodges and villages. Full Year 2022 Guidance For the full year of 2022, Civeo is increasing its previously provided revenue and Adjusted EBITDA guidance range to $675 million to $685 million and $110 million to $115 million, respectively. The Company is maintaining its full year 2022 capital expenditure guidance of $24 million to $29 million. Conference Call Civeo will host a conference call to discuss its third quarter 2022 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 13733925#. 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 13733925#. 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 27 lodges and villages in Canada, Australia and the U.S., with an aggregate of over 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 include the statements regarding Civeo’s future plans and outlook, including guidance, current trends and liquidity needs, and ability to pay down debt 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 global health concerns and pandemics, including the COVID-19 pandemic, any increases in or severity of COVID-19 cases (including due to existing or new variants) and the risk that room occupancy may decline if our customers are limited or restricted in the availability of personnel who may become ill or be subjected to quarantine, 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 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 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 is a non-GAAP financial measure that is defined as net income (loss) plus interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA adjusted to exclude certain other unusual or non-operating items. 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. See “Non-GAAP Reconciliation” below for 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 September 30, September 30, 2022 2021 2022 2021 Revenues $ 184,227 $ 155,063 $ 534,859 $ 434,669 Costs and expenses: Cost of sales and services 133,496 111,430 389,392 319,242 Selling, general and administrative expenses 17,677 17,320 50,572 46,204 Depreciation and amortization expense 22,608 20,282 65,818 62,928 Impairment expense — — — 7,935 Other operating (income) expense (339 ) 21 (187 ) 122 173,442 149,053 505,595 436,431 Operating income (loss) 10,785 6,010 29,264 (1,762 ) Interest expense (3,001 ) (3,166 ) (8,077 ) (9,929 ) Loss on extinguishment of debt — (416 ) — (416 ) Interest income 13 — 15 2 Other income 2,179 364 4,290 6,066 Income (loss) before income taxes 9,976 2,792 25,492 (6,039 ) Income tax expense (3,713 ) (1,770 ) (7,091 ) (2,354 ) Net income (loss) 6,263 1,022 18,401 (8,393 ) Less: Net income attributable to noncontrolling interest 546 478 1,706 534 Net income (loss) attributable to Civeo Corporation 5,717 544 16,695 (8,927 ) Less: Dividends attributable to Class A preferred shares 492 482 1,469 1,440 Net income (loss) attributable to Civeo common shareholders $ 5,225 $ 62 $ 15,226 $ (10,367 ) Net income (loss) per share attributable to Civeo Corporation common shareholders: Basic $ 0.32 $ — $ 0.92 $ (0.73 ) Diluted $ 0.32 $ — $ 0.91 $ (0.73 ) Weighted average number of common shares outstanding: Basic 13,932 14,277 14,058 14,255 Diluted 14,064 14,361 14,220 14,255 CIVEO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2022 2021 (UNAUDITED) Current assets: Cash and cash equivalents $ 8,361 $ 6,282 Accounts receivable, net 122,280 114,859 Inventories 6,984 6,468 Assets held for sale 13,759 11,762 Prepaid expenses and other current assets 13,337 17,822 Total current assets 164,721 157,193 Property, plant and equipment, net 309,752 389,996 Goodwill, net 7,322 8,204 Other intangible assets, net 81,997 93,642 Operating lease right-of-use assets 14,267 18,327 Other noncurrent assets 5,270 5,372 Total assets $ 583,329 $ 672,734 Current liabilities: Accounts payable $ 46,225 $ 49,321 Accrued liabilities 32,432 33,564 Income taxes 111 171 Current portion of long-term debt 27,964 30,576 Deferred revenue 2,092 18,479 Other current liabilities 8,900 4,807 Total current liabilities 117,724 136,918 Long-term debt 96,727 142,602 Deferred income taxes 7,344 896 Operating lease liabilities 11,669 15,429 Other noncurrent liabilities 13,668 13,778 Total liabilities 247,132 309,623 Shareholders' equity: Preferred shares 63,410 61,941 Common shares — — Additional paid-in capital 1,585,303 1,582,442 Accumulated deficit (911,934 ) (912,951 ) Treasury stock (9,063 ) (8,050 ) Accumulated other comprehensive loss (394,408 ) (361,883 ) Total Civeo Corporation shareholders' equity 333,308 361,499 Noncontrolling interest 2,889 1,612 Total shareholders' equity 336,197 363,111 Total liabilities and shareholders' equity $ 583,329 $ 672,734 CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2022 2021 Cash flows from operating activities: Net income (loss) $ 18,401 $ (8,393 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 65,818 62,928 Impairment charges — 7,935 Loss on extinguishment of debt — 416 Deferred income tax expense 6,930 2,105 Non-cash compensation charge 2,861 2,933 Gains on disposals of assets (4,069 ) (2,305 ) Provision (benefit) for credit losses, net of recoveries (23 ) 155 Other, net 2,397 2,436 Changes in operating assets and liabilities: Accounts receivable (19,138 ) (21,516 ) Inventories (1,557 ) (193 ) Accounts payable and accrued liabilities 3,515 9,836 Taxes payable (62 ) 61 Other current assets and liabilities, net (12,701 ) 6,843 Net cash flows provided by operating activities 62,372 63,241 Cash flows from investing activities: Capital expenditures (17,466 ) (9,645 ) Proceeds from dispositions of property, plant and equipment 11,975 7,545 Other, net 190 — Net cash flows used in investing activities (5,301 ) (2,100 ) Cash flows from financing activities: Term loan repayments (23,059 ) (117,595 ) Revolving credit borrowings (repayments), net (14,824 ) 62,474 Debt issuance costs — (4,407 ) Repurchases of common shares (14,209 ) (445 ) Taxes paid on vested shares (1,013 ) (1,120 ) Net cash flows used in financing activities (53,105 ) (61,093 ) Effect of exchange rate changes on cash (1,887 ) (1,255 ) Net change in cash and cash equivalents 2,079 (1,207 ) Cash and cash equivalents, beginning of period 6,282 6,155 Cash and cash equivalents, end of period $ 8,361 $ 4,948 CIVEO CORPORATION SEGMENT DATA (in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues Canada $ 103,009 $ 84,057 $ 307,984 $ 229,223 Australia 73,805 65,118 205,154 188,774 United States 7,413 5,888 21,721 16,672 Total revenues $ 184,227 $ 155,063 $ 534,859 $ 434,669 EBITDA (1) Canada $ 25,567 $ 19,801 $ 71,445 $ 53,201 Australia 16,858 14,835 47,832 35,157 United States (33 ) (544 ) 197 (1,468 ) Corporate and eliminations (7,366 ) (7,914 ) (21,808 ) (20,192 ) Total EBITDA $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjusted EBITDA (1) Canada $ 25,567 $ 19,801 $ 71,445 $ 53,201 Australia 16,858 14,835 47,832 43,092 United States (33 ) (544 ) 197 (1,468 ) Corporate and eliminations (7,366 ) (7,914 ) (21,808 ) (20,192 ) Total adjusted EBITDA $ 35,026 $ 26,178 $ 97,666 $ 74,633 Operating income (loss) Canada $ 7,846 $ 6,131 $ 23,081 $ 5,924 Australia 5,859 4,422 17,446 5,073 United States (1,690 ) (2,124 ) (4,594 ) (5,831 ) Corporate and eliminations (1,230 ) (2,419 ) (6,669 ) (6,928 ) Total operating income (loss) $ 10,785 $ 6,010 $ 29,264 $ (1,762 ) (1) Please see Non-GAAP Reconciliation Schedule. CIVEO CORPORATION NON-GAAP RECONCILIATIONS (in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 EBITDA (1) $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjusted EBITDA (1) $ 35,026 $ 26,178 $ 97,666 $ 74,633 Free Cash Flow (2) $ 38,595 $ 31,035 $ 56,881 $ 61,141 (1) The term EBITDA is defined as net income (loss) attributable to Civeo Corporation plus interest, taxes, depreciation and amortization. The term Adjusted EBITDA 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net income (loss) attributable to Civeo Corporation $ 5,717 $ 544 $ 16,695 $ (8,927 ) Income tax expense 3,713 1,770 7,091 2,354 Depreciation and amortization 22,608 20,282 65,818 62,928 Interest income (13 ) — (15 ) (2 ) Loss on extinguishment of debt — 416 — 416 Interest expense 3,001 3,166 8,077 9,929 EBITDA $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjustments to EBITDA Impairment of long-lived assets (a) — — — 7,935 EBITDA and Adjusted EBITDA $ 35,026 $ 26,178 $ 97,666 $ 74,633 (a) Relates to asset impairments in the second quarter of 2021. In the second quarter of 2021, we recorded a pre-tax loss related to the impairment of long-lived assets in our Australian segment of $7.9 million, which is included in Impairment expense on the unaudited statements of operations. (2) The term Free Cash Flow is defined as net cash flows provided by operating activities less capital expenditures plus proceeds from asset sales. Free Cash Flow is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, Free Cash Flow may not be comparable to other similarly titled measures of other companies. 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net Cash Flows Provided by Operating Activities $ 38,741 $ 33,891 $ 62,372 $ 63,241 Capital expenditures (8,819 ) (3,389 ) (17,466 ) (9,645 ) Proceeds from dispositions of property, plant and equipment 8,673 533 11,975 7,545 Free Cash Flow $ 38,595 $ 31,035 $ 56,881 $ 61,141 CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) Year Ending December 31, 2022 EBITDA Range (1) $ 110.0 $ 115.0 (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, 2022 (estimated) Net Income $ 3.0 $ 8.0 Income tax expense 9.0 9.0 Depreciation and amortization 88.0 88.0 Interest expense 10.0 10.0 EBITDA $ 110.0 $ 115.0 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 September 30, September 30, 2022 2021 2022 2021 Supplemental Operating Data - Canadian Segment Revenues Accommodation revenue (1) $ 72,724 $ 60,511 $ 219,349 $ 176,800 Mobile facility rental revenue (2) 25,283 19,075 73,359 38,240 Food and other services revenue (3) 5,002 4,471 15,276 14,183 Total Canadian revenues $ 103,009 $ 84,057 $ 307,984 $ 229,223 Costs Accommodation cost $ 50,308 $ 41,470 $ 156,543 $ 124,798 Mobile facility rental cost 15,597 11,144 44,939 23,562 Food and other services cost 4,447 4,007 13,782 12,583 Indirect other cost 2,526 2,593 7,829 7,498 Total Canadian cost of sales and services $ 72,878 $ 59,214 $ 223,093 $ 168,441 Average daily rates (4) $ 99 $ 98 $ 102 $ 97 Billed rooms (5) 730,708 613,017 2,137,530 1,816,407 Canadian dollar to U.S. dollar $ 0.766 $ 0.794 $ 0.779 $ 0.799 Supplemental Operating Data - Australian Segment Revenues Accommodation revenue (1) $ 38,316 $ 38,104 $ 114,967 $ 109,559 Food and other services revenue (3) 35,489 27,014 90,187 79,215 Total Australian revenues $ 73,805 $ 65,118 $ 205,154 $ 188,774 Costs Accommodation cost $ 17,818 $ 18,351 $ 55,065 $ 53,538 Food and other services cost 33,465 26,007 84,836 75,458 Indirect other cost 2,050 2,016 5,638 5,176 Total Australian cost of sales and services $ 53,333 $ 46,374 $ 145,539 $ 134,172 Average daily rates (4) $ 73 $ 78 $ 76 $ 79 Billed rooms (5) 525,359 491,218 1,505,143 1,382,182 Australian dollar to U.S. dollar $ 0.683 $ 0.735 $ 0.707 $ 0.759 (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 service, 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/20221028005066/en/Contacts Carolyn J. Stone Civeo Corporation Senior Vice President & Chief Financial Officer 713-510-2400 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Civeo Reports Third Quarter 2022 Results By: Civeo Corporation via Business Wire October 28, 2022 at 06:30 AM EDT Third Quarter Highlights include: Reported third quarter revenues of $184.2 million, net income of $5.2 million and operating cash flow of $38.7 million; Reduced net leverage ratio to 0.9x as of September 30, 2022 from 1.2x as of June 30, 2022; Delivered third quarter Adjusted EBITDA of $35.0 million and free cash flow of $38.6 million; and Announced earlier this quarter that its Board of Directors had renewed its share repurchase authorization for the Company to repurchase up to 5% of its total common shares outstanding over the next twelve months. Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the third quarter ended September 30, 2022. "In the third quarter of 2022, our focus remained on our strategic objectives of operating safely, generating free cash flow, maintaining our strong balance sheet and returning capital to shareholders through our buyback program. We continued to experience a recovery in Canadian lodge billed rooms as our customers increase activity in the oil sands region. We also experienced strong Canadian mobile camp results supporting pipeline construction activity. We now expect our mobile camps to remain active into 2023, moving their demobilization costs out of 2022 Adjusted EBITDA guidance," stated Bradley J. Dodson, Civeo's President and Chief Executive Officer. Mr. Dodson concluded, "We are also proud to report that we achieved the significant milestone of reducing our net leverage ratio below 1.0x. This achievement would not be possible without the efforts of the entire Civeo team over the last few years. Our continued debt reduction provides us the flexibility to both weather the current market volatility and further evaluate other capital allocation opportunities." Third Quarter 2022 Results In the third quarter of 2022, Civeo generated revenues of $184.2 million and reported net income of $5.2 million, or $0.32 per diluted share. During the third quarter of 2022, Civeo produced operating cash flow of $38.7 million, Adjusted EBITDA of $35.0 million and free cash flow of $38.6 million. By comparison, in the third quarter of 2021, Civeo generated revenues of $155.1 million and reported net income of $0.1 million, or $0.00 per diluted share. During the third quarter of 2021, Civeo produced operating cash flow of $33.9 million, Adjusted EBITDA of $26.2 million and free cash flow of $31.0 million. Overall, the increase in revenues and Adjusted EBITDA in the third quarter of 2022 compared to the third quarter of 2021 was primarily driven by improved occupancy in the Canadian lodges and Australian villages as well as increased Canadian mobile camp activity, partially offset by the weaker Canadian and Australian dollars relative to the U.S. dollar. Business Segment Results (Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2022 to the results for the third quarter of 2021.) Canada During the third quarter of 2022, the Canadian segment generated revenues of $103.0 million, operating income of $7.8 million and Adjusted EBITDA of $25.6 million, compared to revenues of $84.1 million, operating income of $6.1 million and Adjusted EBITDA of $19.8 million in the third quarter of 2021. Results from the third quarter of 2022 reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $3.7 million and $0.9 million, respectively. On a constant currency basis, the Canadian segment experienced a 27% period-over-period increase in revenues largely due to increased mobile camp activity and a 19% year-over-year increase in billed rooms, driven by increased customer activity as a result of the recovery of oil prices. Adjusted EBITDA for the Canadian segment increased 29% year-over-year primarily due to the aforementioned dynamics. Australia During the third quarter of 2022, the Australian segment generated revenues of $73.8 million, operating income of $5.9 million and Adjusted EBITDA of $16.9 million, compared to revenues of $65.1 million, operating income of $4.4 million and Adjusted EBITDA of $14.8 million in the third quarter of 2021. Results from the third quarter of 2022 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $5.5 million and $1.3 million, respectively. On a constant currency basis, the Australian segment experienced a 22% period-over-period increase in revenues, and a 14% year-over-year increase in Adjusted EBITDA. These improvements were driven by higher integrated services activity in Western Australia as well as a 7% year-over-year growth in billed rooms due to increased customer maintenance activity in the Bowen Basin. U.S. The U.S. segment generated revenues of $7.4 million, an operating loss of $1.7 million and negative Adjusted EBITDA of less than $0.0 million in the third quarter of 2022, compared to revenues of $5.9 million, an operating loss of $2.1 million and negative Adjusted EBITDA of $0.5 million in the third quarter of 2021. Revenues and Adjusted EBITDA increased year-over-year primarily due to the increased activity in our wellsite services and offshore businesses, partially offset by the sale of the West Permian lodge in the fourth quarter of 2021. Financial Condition As of September 30, 2022, Civeo had total liquidity of approximately $117.3 million, consisting of $108.9 million available under its revolving credit facilities and $8.4 million of cash on hand. Civeo’s total debt outstanding on September 30, 2022 was $126.2 million, a $28.4 million decrease since June 30, 2022. The decrease consisted of $19.5 million in debt payments from cash flow generated by the business and favorable foreign currency translation of $8.9 million. Civeo reduced its net leverage ratio to 0.9x as of September 30, 2022 from 1.2x as of June 30, 2022. During the third quarter of 2022, Civeo invested $8.8 million in capital expenditures compared to $3.4 million invested during the third quarter of 2021. Capital expenditures in both periods were predominantly related to maintenance spending on the Company’s lodges and villages. Full Year 2022 Guidance For the full year of 2022, Civeo is increasing its previously provided revenue and Adjusted EBITDA guidance range to $675 million to $685 million and $110 million to $115 million, respectively. The Company is maintaining its full year 2022 capital expenditure guidance of $24 million to $29 million. Conference Call Civeo will host a conference call to discuss its third quarter 2022 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 13733925#. 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 13733925#. 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 27 lodges and villages in Canada, Australia and the U.S., with an aggregate of over 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 include the statements regarding Civeo’s future plans and outlook, including guidance, current trends and liquidity needs, and ability to pay down debt 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 global health concerns and pandemics, including the COVID-19 pandemic, any increases in or severity of COVID-19 cases (including due to existing or new variants) and the risk that room occupancy may decline if our customers are limited or restricted in the availability of personnel who may become ill or be subjected to quarantine, 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 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 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 is a non-GAAP financial measure that is defined as net income (loss) plus interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA adjusted to exclude certain other unusual or non-operating items. 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. See “Non-GAAP Reconciliation” below for 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 September 30, September 30, 2022 2021 2022 2021 Revenues $ 184,227 $ 155,063 $ 534,859 $ 434,669 Costs and expenses: Cost of sales and services 133,496 111,430 389,392 319,242 Selling, general and administrative expenses 17,677 17,320 50,572 46,204 Depreciation and amortization expense 22,608 20,282 65,818 62,928 Impairment expense — — — 7,935 Other operating (income) expense (339 ) 21 (187 ) 122 173,442 149,053 505,595 436,431 Operating income (loss) 10,785 6,010 29,264 (1,762 ) Interest expense (3,001 ) (3,166 ) (8,077 ) (9,929 ) Loss on extinguishment of debt — (416 ) — (416 ) Interest income 13 — 15 2 Other income 2,179 364 4,290 6,066 Income (loss) before income taxes 9,976 2,792 25,492 (6,039 ) Income tax expense (3,713 ) (1,770 ) (7,091 ) (2,354 ) Net income (loss) 6,263 1,022 18,401 (8,393 ) Less: Net income attributable to noncontrolling interest 546 478 1,706 534 Net income (loss) attributable to Civeo Corporation 5,717 544 16,695 (8,927 ) Less: Dividends attributable to Class A preferred shares 492 482 1,469 1,440 Net income (loss) attributable to Civeo common shareholders $ 5,225 $ 62 $ 15,226 $ (10,367 ) Net income (loss) per share attributable to Civeo Corporation common shareholders: Basic $ 0.32 $ — $ 0.92 $ (0.73 ) Diluted $ 0.32 $ — $ 0.91 $ (0.73 ) Weighted average number of common shares outstanding: Basic 13,932 14,277 14,058 14,255 Diluted 14,064 14,361 14,220 14,255 CIVEO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2022 2021 (UNAUDITED) Current assets: Cash and cash equivalents $ 8,361 $ 6,282 Accounts receivable, net 122,280 114,859 Inventories 6,984 6,468 Assets held for sale 13,759 11,762 Prepaid expenses and other current assets 13,337 17,822 Total current assets 164,721 157,193 Property, plant and equipment, net 309,752 389,996 Goodwill, net 7,322 8,204 Other intangible assets, net 81,997 93,642 Operating lease right-of-use assets 14,267 18,327 Other noncurrent assets 5,270 5,372 Total assets $ 583,329 $ 672,734 Current liabilities: Accounts payable $ 46,225 $ 49,321 Accrued liabilities 32,432 33,564 Income taxes 111 171 Current portion of long-term debt 27,964 30,576 Deferred revenue 2,092 18,479 Other current liabilities 8,900 4,807 Total current liabilities 117,724 136,918 Long-term debt 96,727 142,602 Deferred income taxes 7,344 896 Operating lease liabilities 11,669 15,429 Other noncurrent liabilities 13,668 13,778 Total liabilities 247,132 309,623 Shareholders' equity: Preferred shares 63,410 61,941 Common shares — — Additional paid-in capital 1,585,303 1,582,442 Accumulated deficit (911,934 ) (912,951 ) Treasury stock (9,063 ) (8,050 ) Accumulated other comprehensive loss (394,408 ) (361,883 ) Total Civeo Corporation shareholders' equity 333,308 361,499 Noncontrolling interest 2,889 1,612 Total shareholders' equity 336,197 363,111 Total liabilities and shareholders' equity $ 583,329 $ 672,734 CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2022 2021 Cash flows from operating activities: Net income (loss) $ 18,401 $ (8,393 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 65,818 62,928 Impairment charges — 7,935 Loss on extinguishment of debt — 416 Deferred income tax expense 6,930 2,105 Non-cash compensation charge 2,861 2,933 Gains on disposals of assets (4,069 ) (2,305 ) Provision (benefit) for credit losses, net of recoveries (23 ) 155 Other, net 2,397 2,436 Changes in operating assets and liabilities: Accounts receivable (19,138 ) (21,516 ) Inventories (1,557 ) (193 ) Accounts payable and accrued liabilities 3,515 9,836 Taxes payable (62 ) 61 Other current assets and liabilities, net (12,701 ) 6,843 Net cash flows provided by operating activities 62,372 63,241 Cash flows from investing activities: Capital expenditures (17,466 ) (9,645 ) Proceeds from dispositions of property, plant and equipment 11,975 7,545 Other, net 190 — Net cash flows used in investing activities (5,301 ) (2,100 ) Cash flows from financing activities: Term loan repayments (23,059 ) (117,595 ) Revolving credit borrowings (repayments), net (14,824 ) 62,474 Debt issuance costs — (4,407 ) Repurchases of common shares (14,209 ) (445 ) Taxes paid on vested shares (1,013 ) (1,120 ) Net cash flows used in financing activities (53,105 ) (61,093 ) Effect of exchange rate changes on cash (1,887 ) (1,255 ) Net change in cash and cash equivalents 2,079 (1,207 ) Cash and cash equivalents, beginning of period 6,282 6,155 Cash and cash equivalents, end of period $ 8,361 $ 4,948 CIVEO CORPORATION SEGMENT DATA (in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues Canada $ 103,009 $ 84,057 $ 307,984 $ 229,223 Australia 73,805 65,118 205,154 188,774 United States 7,413 5,888 21,721 16,672 Total revenues $ 184,227 $ 155,063 $ 534,859 $ 434,669 EBITDA (1) Canada $ 25,567 $ 19,801 $ 71,445 $ 53,201 Australia 16,858 14,835 47,832 35,157 United States (33 ) (544 ) 197 (1,468 ) Corporate and eliminations (7,366 ) (7,914 ) (21,808 ) (20,192 ) Total EBITDA $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjusted EBITDA (1) Canada $ 25,567 $ 19,801 $ 71,445 $ 53,201 Australia 16,858 14,835 47,832 43,092 United States (33 ) (544 ) 197 (1,468 ) Corporate and eliminations (7,366 ) (7,914 ) (21,808 ) (20,192 ) Total adjusted EBITDA $ 35,026 $ 26,178 $ 97,666 $ 74,633 Operating income (loss) Canada $ 7,846 $ 6,131 $ 23,081 $ 5,924 Australia 5,859 4,422 17,446 5,073 United States (1,690 ) (2,124 ) (4,594 ) (5,831 ) Corporate and eliminations (1,230 ) (2,419 ) (6,669 ) (6,928 ) Total operating income (loss) $ 10,785 $ 6,010 $ 29,264 $ (1,762 ) (1) Please see Non-GAAP Reconciliation Schedule. CIVEO CORPORATION NON-GAAP RECONCILIATIONS (in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 EBITDA (1) $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjusted EBITDA (1) $ 35,026 $ 26,178 $ 97,666 $ 74,633 Free Cash Flow (2) $ 38,595 $ 31,035 $ 56,881 $ 61,141 (1) The term EBITDA is defined as net income (loss) attributable to Civeo Corporation plus interest, taxes, depreciation and amortization. The term Adjusted EBITDA 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net income (loss) attributable to Civeo Corporation $ 5,717 $ 544 $ 16,695 $ (8,927 ) Income tax expense 3,713 1,770 7,091 2,354 Depreciation and amortization 22,608 20,282 65,818 62,928 Interest income (13 ) — (15 ) (2 ) Loss on extinguishment of debt — 416 — 416 Interest expense 3,001 3,166 8,077 9,929 EBITDA $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjustments to EBITDA Impairment of long-lived assets (a) — — — 7,935 EBITDA and Adjusted EBITDA $ 35,026 $ 26,178 $ 97,666 $ 74,633 (a) Relates to asset impairments in the second quarter of 2021. In the second quarter of 2021, we recorded a pre-tax loss related to the impairment of long-lived assets in our Australian segment of $7.9 million, which is included in Impairment expense on the unaudited statements of operations. (2) The term Free Cash Flow is defined as net cash flows provided by operating activities less capital expenditures plus proceeds from asset sales. Free Cash Flow is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, Free Cash Flow may not be comparable to other similarly titled measures of other companies. 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net Cash Flows Provided by Operating Activities $ 38,741 $ 33,891 $ 62,372 $ 63,241 Capital expenditures (8,819 ) (3,389 ) (17,466 ) (9,645 ) Proceeds from dispositions of property, plant and equipment 8,673 533 11,975 7,545 Free Cash Flow $ 38,595 $ 31,035 $ 56,881 $ 61,141 CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) Year Ending December 31, 2022 EBITDA Range (1) $ 110.0 $ 115.0 (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, 2022 (estimated) Net Income $ 3.0 $ 8.0 Income tax expense 9.0 9.0 Depreciation and amortization 88.0 88.0 Interest expense 10.0 10.0 EBITDA $ 110.0 $ 115.0 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 September 30, September 30, 2022 2021 2022 2021 Supplemental Operating Data - Canadian Segment Revenues Accommodation revenue (1) $ 72,724 $ 60,511 $ 219,349 $ 176,800 Mobile facility rental revenue (2) 25,283 19,075 73,359 38,240 Food and other services revenue (3) 5,002 4,471 15,276 14,183 Total Canadian revenues $ 103,009 $ 84,057 $ 307,984 $ 229,223 Costs Accommodation cost $ 50,308 $ 41,470 $ 156,543 $ 124,798 Mobile facility rental cost 15,597 11,144 44,939 23,562 Food and other services cost 4,447 4,007 13,782 12,583 Indirect other cost 2,526 2,593 7,829 7,498 Total Canadian cost of sales and services $ 72,878 $ 59,214 $ 223,093 $ 168,441 Average daily rates (4) $ 99 $ 98 $ 102 $ 97 Billed rooms (5) 730,708 613,017 2,137,530 1,816,407 Canadian dollar to U.S. dollar $ 0.766 $ 0.794 $ 0.779 $ 0.799 Supplemental Operating Data - Australian Segment Revenues Accommodation revenue (1) $ 38,316 $ 38,104 $ 114,967 $ 109,559 Food and other services revenue (3) 35,489 27,014 90,187 79,215 Total Australian revenues $ 73,805 $ 65,118 $ 205,154 $ 188,774 Costs Accommodation cost $ 17,818 $ 18,351 $ 55,065 $ 53,538 Food and other services cost 33,465 26,007 84,836 75,458 Indirect other cost 2,050 2,016 5,638 5,176 Total Australian cost of sales and services $ 53,333 $ 46,374 $ 145,539 $ 134,172 Average daily rates (4) $ 73 $ 78 $ 76 $ 79 Billed rooms (5) 525,359 491,218 1,505,143 1,382,182 Australian dollar to U.S. dollar $ 0.683 $ 0.735 $ 0.707 $ 0.759 (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 service, 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/20221028005066/en/Contacts Carolyn J. Stone Civeo Corporation Senior Vice President & Chief Financial Officer 713-510-2400
Third Quarter Highlights include: Reported third quarter revenues of $184.2 million, net income of $5.2 million and operating cash flow of $38.7 million; Reduced net leverage ratio to 0.9x as of September 30, 2022 from 1.2x as of June 30, 2022; Delivered third quarter Adjusted EBITDA of $35.0 million and free cash flow of $38.6 million; and Announced earlier this quarter that its Board of Directors had renewed its share repurchase authorization for the Company to repurchase up to 5% of its total common shares outstanding over the next twelve months.
Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the third quarter ended September 30, 2022. "In the third quarter of 2022, our focus remained on our strategic objectives of operating safely, generating free cash flow, maintaining our strong balance sheet and returning capital to shareholders through our buyback program. We continued to experience a recovery in Canadian lodge billed rooms as our customers increase activity in the oil sands region. We also experienced strong Canadian mobile camp results supporting pipeline construction activity. We now expect our mobile camps to remain active into 2023, moving their demobilization costs out of 2022 Adjusted EBITDA guidance," stated Bradley J. Dodson, Civeo's President and Chief Executive Officer. Mr. Dodson concluded, "We are also proud to report that we achieved the significant milestone of reducing our net leverage ratio below 1.0x. This achievement would not be possible without the efforts of the entire Civeo team over the last few years. Our continued debt reduction provides us the flexibility to both weather the current market volatility and further evaluate other capital allocation opportunities." Third Quarter 2022 Results In the third quarter of 2022, Civeo generated revenues of $184.2 million and reported net income of $5.2 million, or $0.32 per diluted share. During the third quarter of 2022, Civeo produced operating cash flow of $38.7 million, Adjusted EBITDA of $35.0 million and free cash flow of $38.6 million. By comparison, in the third quarter of 2021, Civeo generated revenues of $155.1 million and reported net income of $0.1 million, or $0.00 per diluted share. During the third quarter of 2021, Civeo produced operating cash flow of $33.9 million, Adjusted EBITDA of $26.2 million and free cash flow of $31.0 million. Overall, the increase in revenues and Adjusted EBITDA in the third quarter of 2022 compared to the third quarter of 2021 was primarily driven by improved occupancy in the Canadian lodges and Australian villages as well as increased Canadian mobile camp activity, partially offset by the weaker Canadian and Australian dollars relative to the U.S. dollar. Business Segment Results (Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2022 to the results for the third quarter of 2021.) Canada During the third quarter of 2022, the Canadian segment generated revenues of $103.0 million, operating income of $7.8 million and Adjusted EBITDA of $25.6 million, compared to revenues of $84.1 million, operating income of $6.1 million and Adjusted EBITDA of $19.8 million in the third quarter of 2021. Results from the third quarter of 2022 reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $3.7 million and $0.9 million, respectively. On a constant currency basis, the Canadian segment experienced a 27% period-over-period increase in revenues largely due to increased mobile camp activity and a 19% year-over-year increase in billed rooms, driven by increased customer activity as a result of the recovery of oil prices. Adjusted EBITDA for the Canadian segment increased 29% year-over-year primarily due to the aforementioned dynamics. Australia During the third quarter of 2022, the Australian segment generated revenues of $73.8 million, operating income of $5.9 million and Adjusted EBITDA of $16.9 million, compared to revenues of $65.1 million, operating income of $4.4 million and Adjusted EBITDA of $14.8 million in the third quarter of 2021. Results from the third quarter of 2022 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $5.5 million and $1.3 million, respectively. On a constant currency basis, the Australian segment experienced a 22% period-over-period increase in revenues, and a 14% year-over-year increase in Adjusted EBITDA. These improvements were driven by higher integrated services activity in Western Australia as well as a 7% year-over-year growth in billed rooms due to increased customer maintenance activity in the Bowen Basin. U.S. The U.S. segment generated revenues of $7.4 million, an operating loss of $1.7 million and negative Adjusted EBITDA of less than $0.0 million in the third quarter of 2022, compared to revenues of $5.9 million, an operating loss of $2.1 million and negative Adjusted EBITDA of $0.5 million in the third quarter of 2021. Revenues and Adjusted EBITDA increased year-over-year primarily due to the increased activity in our wellsite services and offshore businesses, partially offset by the sale of the West Permian lodge in the fourth quarter of 2021. Financial Condition As of September 30, 2022, Civeo had total liquidity of approximately $117.3 million, consisting of $108.9 million available under its revolving credit facilities and $8.4 million of cash on hand. Civeo’s total debt outstanding on September 30, 2022 was $126.2 million, a $28.4 million decrease since June 30, 2022. The decrease consisted of $19.5 million in debt payments from cash flow generated by the business and favorable foreign currency translation of $8.9 million. Civeo reduced its net leverage ratio to 0.9x as of September 30, 2022 from 1.2x as of June 30, 2022. During the third quarter of 2022, Civeo invested $8.8 million in capital expenditures compared to $3.4 million invested during the third quarter of 2021. Capital expenditures in both periods were predominantly related to maintenance spending on the Company’s lodges and villages. Full Year 2022 Guidance For the full year of 2022, Civeo is increasing its previously provided revenue and Adjusted EBITDA guidance range to $675 million to $685 million and $110 million to $115 million, respectively. The Company is maintaining its full year 2022 capital expenditure guidance of $24 million to $29 million. Conference Call Civeo will host a conference call to discuss its third quarter 2022 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 13733925#. 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 13733925#. 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 27 lodges and villages in Canada, Australia and the U.S., with an aggregate of over 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 include the statements regarding Civeo’s future plans and outlook, including guidance, current trends and liquidity needs, and ability to pay down debt 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 global health concerns and pandemics, including the COVID-19 pandemic, any increases in or severity of COVID-19 cases (including due to existing or new variants) and the risk that room occupancy may decline if our customers are limited or restricted in the availability of personnel who may become ill or be subjected to quarantine, 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 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 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 is a non-GAAP financial measure that is defined as net income (loss) plus interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA adjusted to exclude certain other unusual or non-operating items. 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. See “Non-GAAP Reconciliation” below for 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 September 30, September 30, 2022 2021 2022 2021 Revenues $ 184,227 $ 155,063 $ 534,859 $ 434,669 Costs and expenses: Cost of sales and services 133,496 111,430 389,392 319,242 Selling, general and administrative expenses 17,677 17,320 50,572 46,204 Depreciation and amortization expense 22,608 20,282 65,818 62,928 Impairment expense — — — 7,935 Other operating (income) expense (339 ) 21 (187 ) 122 173,442 149,053 505,595 436,431 Operating income (loss) 10,785 6,010 29,264 (1,762 ) Interest expense (3,001 ) (3,166 ) (8,077 ) (9,929 ) Loss on extinguishment of debt — (416 ) — (416 ) Interest income 13 — 15 2 Other income 2,179 364 4,290 6,066 Income (loss) before income taxes 9,976 2,792 25,492 (6,039 ) Income tax expense (3,713 ) (1,770 ) (7,091 ) (2,354 ) Net income (loss) 6,263 1,022 18,401 (8,393 ) Less: Net income attributable to noncontrolling interest 546 478 1,706 534 Net income (loss) attributable to Civeo Corporation 5,717 544 16,695 (8,927 ) Less: Dividends attributable to Class A preferred shares 492 482 1,469 1,440 Net income (loss) attributable to Civeo common shareholders $ 5,225 $ 62 $ 15,226 $ (10,367 ) Net income (loss) per share attributable to Civeo Corporation common shareholders: Basic $ 0.32 $ — $ 0.92 $ (0.73 ) Diluted $ 0.32 $ — $ 0.91 $ (0.73 ) Weighted average number of common shares outstanding: Basic 13,932 14,277 14,058 14,255 Diluted 14,064 14,361 14,220 14,255 CIVEO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2022 2021 (UNAUDITED) Current assets: Cash and cash equivalents $ 8,361 $ 6,282 Accounts receivable, net 122,280 114,859 Inventories 6,984 6,468 Assets held for sale 13,759 11,762 Prepaid expenses and other current assets 13,337 17,822 Total current assets 164,721 157,193 Property, plant and equipment, net 309,752 389,996 Goodwill, net 7,322 8,204 Other intangible assets, net 81,997 93,642 Operating lease right-of-use assets 14,267 18,327 Other noncurrent assets 5,270 5,372 Total assets $ 583,329 $ 672,734 Current liabilities: Accounts payable $ 46,225 $ 49,321 Accrued liabilities 32,432 33,564 Income taxes 111 171 Current portion of long-term debt 27,964 30,576 Deferred revenue 2,092 18,479 Other current liabilities 8,900 4,807 Total current liabilities 117,724 136,918 Long-term debt 96,727 142,602 Deferred income taxes 7,344 896 Operating lease liabilities 11,669 15,429 Other noncurrent liabilities 13,668 13,778 Total liabilities 247,132 309,623 Shareholders' equity: Preferred shares 63,410 61,941 Common shares — — Additional paid-in capital 1,585,303 1,582,442 Accumulated deficit (911,934 ) (912,951 ) Treasury stock (9,063 ) (8,050 ) Accumulated other comprehensive loss (394,408 ) (361,883 ) Total Civeo Corporation shareholders' equity 333,308 361,499 Noncontrolling interest 2,889 1,612 Total shareholders' equity 336,197 363,111 Total liabilities and shareholders' equity $ 583,329 $ 672,734 CIVEO CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2022 2021 Cash flows from operating activities: Net income (loss) $ 18,401 $ (8,393 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 65,818 62,928 Impairment charges — 7,935 Loss on extinguishment of debt — 416 Deferred income tax expense 6,930 2,105 Non-cash compensation charge 2,861 2,933 Gains on disposals of assets (4,069 ) (2,305 ) Provision (benefit) for credit losses, net of recoveries (23 ) 155 Other, net 2,397 2,436 Changes in operating assets and liabilities: Accounts receivable (19,138 ) (21,516 ) Inventories (1,557 ) (193 ) Accounts payable and accrued liabilities 3,515 9,836 Taxes payable (62 ) 61 Other current assets and liabilities, net (12,701 ) 6,843 Net cash flows provided by operating activities 62,372 63,241 Cash flows from investing activities: Capital expenditures (17,466 ) (9,645 ) Proceeds from dispositions of property, plant and equipment 11,975 7,545 Other, net 190 — Net cash flows used in investing activities (5,301 ) (2,100 ) Cash flows from financing activities: Term loan repayments (23,059 ) (117,595 ) Revolving credit borrowings (repayments), net (14,824 ) 62,474 Debt issuance costs — (4,407 ) Repurchases of common shares (14,209 ) (445 ) Taxes paid on vested shares (1,013 ) (1,120 ) Net cash flows used in financing activities (53,105 ) (61,093 ) Effect of exchange rate changes on cash (1,887 ) (1,255 ) Net change in cash and cash equivalents 2,079 (1,207 ) Cash and cash equivalents, beginning of period 6,282 6,155 Cash and cash equivalents, end of period $ 8,361 $ 4,948 CIVEO CORPORATION SEGMENT DATA (in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenues Canada $ 103,009 $ 84,057 $ 307,984 $ 229,223 Australia 73,805 65,118 205,154 188,774 United States 7,413 5,888 21,721 16,672 Total revenues $ 184,227 $ 155,063 $ 534,859 $ 434,669 EBITDA (1) Canada $ 25,567 $ 19,801 $ 71,445 $ 53,201 Australia 16,858 14,835 47,832 35,157 United States (33 ) (544 ) 197 (1,468 ) Corporate and eliminations (7,366 ) (7,914 ) (21,808 ) (20,192 ) Total EBITDA $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjusted EBITDA (1) Canada $ 25,567 $ 19,801 $ 71,445 $ 53,201 Australia 16,858 14,835 47,832 43,092 United States (33 ) (544 ) 197 (1,468 ) Corporate and eliminations (7,366 ) (7,914 ) (21,808 ) (20,192 ) Total adjusted EBITDA $ 35,026 $ 26,178 $ 97,666 $ 74,633 Operating income (loss) Canada $ 7,846 $ 6,131 $ 23,081 $ 5,924 Australia 5,859 4,422 17,446 5,073 United States (1,690 ) (2,124 ) (4,594 ) (5,831 ) Corporate and eliminations (1,230 ) (2,419 ) (6,669 ) (6,928 ) Total operating income (loss) $ 10,785 $ 6,010 $ 29,264 $ (1,762 ) (1) Please see Non-GAAP Reconciliation Schedule. CIVEO CORPORATION NON-GAAP RECONCILIATIONS (in thousands) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 EBITDA (1) $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjusted EBITDA (1) $ 35,026 $ 26,178 $ 97,666 $ 74,633 Free Cash Flow (2) $ 38,595 $ 31,035 $ 56,881 $ 61,141 (1) The term EBITDA is defined as net income (loss) attributable to Civeo Corporation plus interest, taxes, depreciation and amortization. The term Adjusted EBITDA 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net income (loss) attributable to Civeo Corporation $ 5,717 $ 544 $ 16,695 $ (8,927 ) Income tax expense 3,713 1,770 7,091 2,354 Depreciation and amortization 22,608 20,282 65,818 62,928 Interest income (13 ) — (15 ) (2 ) Loss on extinguishment of debt — 416 — 416 Interest expense 3,001 3,166 8,077 9,929 EBITDA $ 35,026 $ 26,178 $ 97,666 $ 66,698 Adjustments to EBITDA Impairment of long-lived assets (a) — — — 7,935 EBITDA and Adjusted EBITDA $ 35,026 $ 26,178 $ 97,666 $ 74,633 (a) Relates to asset impairments in the second quarter of 2021. In the second quarter of 2021, we recorded a pre-tax loss related to the impairment of long-lived assets in our Australian segment of $7.9 million, which is included in Impairment expense on the unaudited statements of operations. (2) The term Free Cash Flow is defined as net cash flows provided by operating activities less capital expenditures plus proceeds from asset sales. Free Cash Flow is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, Free Cash Flow may not be comparable to other similarly titled measures of other companies. 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 Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Net Cash Flows Provided by Operating Activities $ 38,741 $ 33,891 $ 62,372 $ 63,241 Capital expenditures (8,819 ) (3,389 ) (17,466 ) (9,645 ) Proceeds from dispositions of property, plant and equipment 8,673 533 11,975 7,545 Free Cash Flow $ 38,595 $ 31,035 $ 56,881 $ 61,141 CIVEO CORPORATION NON-GAAP RECONCILIATIONS - GUIDANCE (in millions) (unaudited) Year Ending December 31, 2022 EBITDA Range (1) $ 110.0 $ 115.0 (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, 2022 (estimated) Net Income $ 3.0 $ 8.0 Income tax expense 9.0 9.0 Depreciation and amortization 88.0 88.0 Interest expense 10.0 10.0 EBITDA $ 110.0 $ 115.0 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 September 30, September 30, 2022 2021 2022 2021 Supplemental Operating Data - Canadian Segment Revenues Accommodation revenue (1) $ 72,724 $ 60,511 $ 219,349 $ 176,800 Mobile facility rental revenue (2) 25,283 19,075 73,359 38,240 Food and other services revenue (3) 5,002 4,471 15,276 14,183 Total Canadian revenues $ 103,009 $ 84,057 $ 307,984 $ 229,223 Costs Accommodation cost $ 50,308 $ 41,470 $ 156,543 $ 124,798 Mobile facility rental cost 15,597 11,144 44,939 23,562 Food and other services cost 4,447 4,007 13,782 12,583 Indirect other cost 2,526 2,593 7,829 7,498 Total Canadian cost of sales and services $ 72,878 $ 59,214 $ 223,093 $ 168,441 Average daily rates (4) $ 99 $ 98 $ 102 $ 97 Billed rooms (5) 730,708 613,017 2,137,530 1,816,407 Canadian dollar to U.S. dollar $ 0.766 $ 0.794 $ 0.779 $ 0.799 Supplemental Operating Data - Australian Segment Revenues Accommodation revenue (1) $ 38,316 $ 38,104 $ 114,967 $ 109,559 Food and other services revenue (3) 35,489 27,014 90,187 79,215 Total Australian revenues $ 73,805 $ 65,118 $ 205,154 $ 188,774 Costs Accommodation cost $ 17,818 $ 18,351 $ 55,065 $ 53,538 Food and other services cost 33,465 26,007 84,836 75,458 Indirect other cost 2,050 2,016 5,638 5,176 Total Australian cost of sales and services $ 53,333 $ 46,374 $ 145,539 $ 134,172 Average daily rates (4) $ 73 $ 78 $ 76 $ 79 Billed rooms (5) 525,359 491,218 1,505,143 1,382,182 Australian dollar to U.S. dollar $ 0.683 $ 0.735 $ 0.707 $ 0.759 (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 service, 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/20221028005066/en/