First Quarter Highlights include:
- Revenue in the first quarter was up 32% from the first quarter
of 2021. With our improving outlook, Civeo is raising its full year
2022 guidance;
- Reported first quarter revenues of $165.7 million and net
income of $0.9 million; and
- Delivered first quarter Adjusted EBITDA of $25.6 million.
Civeo Corporation (NYSE:CVEO) today reported financial and
operating results for the first quarter ended March 31, 2022.
“In the first quarter of 2022, Civeo capitalized on the
continued recovery across all three regions, and especially in our
Canadian business. We experienced a substantial year-over-year
increase in our Canadian lodge billed rooms, coupled with increased
Canadian mobile camp activity," stated Bradley J. Dodson, Civeo's
President and Chief Executive Officer.
Mr. Dodson continued, "We are experiencing increased
accommodation needs in Canada for the turnaround season along with
continued mobile camp activity in British Columbia, both of which
should benefit the second and third quarters of 2022. In Australia,
activity is also improving in our Bowen Basin villages as met coal
prices remain constructive and we are starting to see expansionary
spending by the miners there. We continue to manage inflationary
pressures globally, including both labor and food costs. Labor
inflation is most acute in Western Australia; however, we are
beginning to see improving margins in our integrated services
business. As a result of the overall improvement in our outlook, we
are raising our full year guidance.”
Mr. Dodson concluded, "Over the past two years, the resiliency
of our teams and our commitment to deleveraging and serving our
customers have created the financial and operational flexibility we
need to succeed in a range of operating environments and deliver
returns for our shareholders."
First Quarter 2022 Results
In the first quarter of 2022, Civeo generated revenues of $165.7
million and reported net income of $0.9 million, or $0.06 per
diluted share. During the first quarter of 2022, Civeo produced
operating cash flow of $2.0 million, Adjusted EBITDA of $25.6
million and free cash flow of $0.7 million.
By comparison, in the first quarter of 2021, Civeo generated
revenues of $125.4 million and reported a net loss of $10.0
million, or $0.70 per diluted share. During the first quarter of
2021, Civeo produced operating cash flow of $12.8 million, Adjusted
EBITDA of $16.2 million and free cash flow of $16.1 million.
Overall, the increase in revenues and Adjusted EBITDA in the
first quarter of 2022 compared to the first quarter of 2021 was
primarily driven by a significant increase in Canadian lodge billed
rooms and increased Canadian mobile camp activity, as well as an
increase in Australian village billed rooms. The year-over-year
decrease in operating cash flow and free cash flow was primarily a
result of working capital increases in 2022 that resulted in a
decrease in operating cash flow and free cash flow of $10.9 million
and $15.4 million, respectively, year-over-year. The increase in
working capital in the first quarter of 2022 was largely due to
timing of payments and receipts that is expected to unwind in the
second and third quarters of 2022.
Business Segment Results
(Unless otherwise noted, the following discussion compares the
quarterly results for the first quarter of 2022 to the results for
the first quarter of 2021.)
Canada
During the first quarter of 2022, the Canadian segment generated
revenues of $96.0 million, operating income of $4.0 million and
Adjusted EBITDA of $17.2 million, compared to revenues of $61.9
million, an operating loss of $7.7 million and Adjusted EBITDA of
$10.8 million in the first quarter of 2021. The first quarter of
2021 operating loss and Adjusted EBITDA included $2.8 million of
other income related to proceeds from the Canadian Emergency Wage
Subsidy program (CEWS), compared to zero in the first quarter of
2022, and a $0.9 million gain on sale of a Canadian manufacturing
facility.
On a constant currency basis, the Canadian segment experienced a
55% period-over-period increase in revenues largely due to a 32%
year-over-year increase in billed rooms, driven by increased
customer activity as a result of the recovery of oil prices and a
reduced impact from COVID-19. Adjusted EBITDA for the Canadian
segment increased 59% year-over-year primarily due to the
aforementioned dynamics.
Australia
During the first quarter of 2022, the Australian segment
generated revenues of $63.5 million, operating income of $6.1
million and Adjusted EBITDA of $15.4 million, compared to revenues
of $59.6 million, operating income of $3.3 million and Adjusted
EBITDA of $12.8 million in the first quarter of 2021. Results from
the first quarter of 2022 reflect the impact of a weakened
Australian dollar relative to the U.S. dollar, which decreased
revenues and Adjusted EBITDA by $4.2 million and $1.0 million,
respectively.
On a constant currency basis, the Australian segment experienced
a 14% period-over-period increase in revenues, driven by a 12%
year-over-year increase in billed rooms due to increased customer
maintenance activity in the Bowen Basin. Adjusted EBITDA from the
Australian segment increased 21% year-over-year due to higher
village occupancy in the Bowen Basin, partially offset by higher
labor costs across the village and integrated services
businesses.
U.S.
The U.S. segment generated revenues of $6.2 million, an
operating loss of $1.6 million and Adjusted EBITDA of $0.0 million
in the first quarter of 2022, compared to revenues of $3.9 million,
an operating loss of $2.6 million and negative Adjusted EBITDA of
$1.2 million in the first quarter of 2021. Revenues and Adjusted
EBITDA increased year-over-year primarily due to the increase in
the U.S. oil and gas rig count, which led to an improvement in
Civeo's wellsite services and offshore businesses.
Financial Condition
As of March 31, 2022, Civeo had total liquidity of approximately
$83.1 million, consisting of $76.7 million available under its
revolving credit facilities and $6.4 million of cash on hand.
Civeo’s total debt outstanding on March 31, 2022 was $177.9
million, a $2.8 million increase since December 31, 2021. The
increase consisted of unfavorable foreign currency translation of
$3.1 million, partially offset by $0.3 million in debt payments
from cash flow generated by the business.
Civeo reduced its net leverage ratio to 1.40x as of March 31,
2022 from 1.49x as of December 31, 2021.
During the first quarter of 2022, Civeo invested $3.6 million in
capital expenditures, which was relatively consistent with the $3.4
million invested during the first 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 raising its previously
provided revenue and Adjusted EBITDA guidance range to $660 million
to $675 million and $95 million to $102 million, respectively. The
Company is maintaining its full year 2022 capital expenditure
guidance of $20 million to $25 million.
Conference Call
Civeo will host a conference call to discuss its first 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 13729407#. 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 13729407#.
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, 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
March 31,
2022
2021
Revenues
$
165,678
$
125,430
Costs and expenses:
Cost of sales and services
125,843
99,810
Selling, general and administrative
expenses
15,213
14,181
Depreciation and amortization expense
20,127
21,269
Other operating expense
258
71
161,441
135,331
Operating income (loss)
4,237
(9,901
)
Interest expense
(2,468
)
(3,362
)
Other income
1,696
4,914
Income (loss) before income taxes
3,465
(8,349
)
Income tax expense
(1,557
)
(1,076
)
Net income (loss)
1,908
(9,425
)
Less: Net income attributable to
noncontrolling interest
498
59
Net income (loss) attributable to Civeo
Corporation
1,410
(9,484
)
Less: Dividends attributable to Class A
preferred shares
487
478
Net income (loss) attributable to Civeo
common shareholders
$
923
$
(9,962
)
Net income (loss) per share attributable
to Civeo Corporation common shareholders:
Basic
$
0.06
$
(0.70
)
Diluted
$
0.06
$
(0.70
)
Weighted average number of common shares
outstanding:
Basic
14,096
14,211
Diluted
14,219
14,211
CIVEO CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
March 31, 2022
December 31, 2021
(UNAUDITED)
Current assets:
Cash and cash equivalents
$
6,423
$
6,282
Accounts receivable, net
124,484
114,859
Inventories
7,271
6,468
Assets held for sale
10,800
11,762
Prepaid expenses and other current
assets
12,869
17,822
Total current assets
161,847
157,193
Property, plant and equipment, net
386,022
389,996
Goodwill, net
8,468
8,204
Other intangible assets, net
93,542
93,642
Operating lease right-of-use assets
17,879
18,327
Other noncurrent assets
5,336
5,372
Total assets
$
673,094
$
672,734
Current liabilities:
Accounts payable
$
47,204
$
49,321
Accrued liabilities
22,797
33,564
Income taxes
232
171
Current portion of long-term debt
30,868
30,576
Deferred revenue
13,608
18,479
Other current liabilities
4,441
4,807
Total current liabilities
119,150
136,918
Long-term debt
145,037
142,602
Deferred income taxes
2,494
896
Operating lease liabilities
14,911
15,429
Other noncurrent liabilities
18,531
13,778
Total liabilities
300,123
309,623
Shareholders' equity:
Preferred shares
62,428
61,941
Common shares
—
—
Additional paid-in capital
1,583,474
1,582,442
Accumulated deficit
(912,037
)
(912,951
)
Treasury stock
(9,063
)
(8,050
)
Accumulated other comprehensive loss
(353,911
)
(361,883
)
Total Civeo Corporation shareholders'
equity
370,891
361,499
Noncontrolling interest
2,080
1,612
Total shareholders' equity
372,971
363,111
Total liabilities and shareholders'
equity
$
673,094
$
672,734
CIVEO CORPORATION
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2022
2021
Cash flows from operating activities:
Net income (loss)
$
1,908
$
(9,425
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
20,127
21,269
Deferred income tax expense
1,491
1,041
Non-cash compensation charge
1,032
1,027
Gains on disposals of assets
(1,489
)
(1,902
)
Provision (benefit) for credit losses, net
of recoveries
(20
)
193
Other, net
686
716
Changes in operating assets and
liabilities:
Accounts receivable
(7,142
)
1,806
Inventories
(623
)
(526
)
Accounts payable and accrued
liabilities
(13,697
)
(5,287
)
Taxes payable
59
51
Other current assets and liabilities,
net
(379
)
3,854
Net cash flows provided by operating
activities
1,953
12,817
Cash flows from investing activities:
Capital expenditures
(3,592
)
(3,372
)
Proceeds from disposition of property,
plant and equipment
2,364
6,651
Other, net
190
—
Net cash flows provided by (used in)
investing activities
(1,038
)
3,279
Cash flows from financing activities:
Term loan repayments
(8,003
)
(8,872
)
Revolving credit borrowings (repayments),
net
7,680
(6,691
)
Repurchases of common shares
(9
)
—
Taxes paid on vested shares
(1,013
)
(1,120
)
Net cash flows used in financing
activities
(1,345
)
(16,683
)
Effect of exchange rate changes on
cash
571
(113
)
Net change in cash and cash
equivalents
141
(700
)
Cash and cash equivalents, beginning of
period
6,282
6,155
Cash and cash equivalents, end of
period
$
6,423
$
5,455
CIVEO CORPORATION
SEGMENT DATA
(in thousands)
(unaudited)
Three Months Ended
March 31,
2022
2021
Revenues
Canada
$
95,952
$
61,885
Australia
63,529
59,637
United States
6,197
3,908
Total revenues
$
165,678
$
125,430
EBITDA (1)
Canada
$
17,219
$
10,796
Australia
15,437
12,809
United States
9
(1,221
)
Corporate and eliminations
(7,103
)
(6,161
)
Total EBITDA
$
25,562
$
16,223
Adjusted EBITDA (1)
Canada
$
17,219
$
10,796
Australia
15,437
12,809
United States
9
(1,221
)
Corporate and eliminations
(7,103
)
(6,161
)
Total adjusted EBITDA
$
25,562
$
16,223
Operating income (loss)
Canada
$
4,038
$
(7,659
)
Australia
6,135
3,307
United States
(1,609
)
(2,598
)
Corporate and eliminations
(4,327
)
(2,951
)
Total operating income (loss)
$
4,237
$
(9,901
)
(1) Please see Non-GAAP Reconciliation
Schedule.
CIVEO CORPORATION
NON-GAAP
RECONCILIATIONS
(in thousands)
(unaudited)
Three Months Ended
March 31,
2022
2021
EBITDA (1)
$
25,562
$
16,223
Adjusted EBITDA (1)
$
25,562
$
16,223
Free Cash Flow (2)
$
725
$
16,096
(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
March 31,
2022
2021
Net income (loss) attributable to Civeo
Corporation
$
1,410
$
(9,484
)
Income tax expense
1,557
1,076
Depreciation and amortization
20,127
21,269
Interest expense
2,468
3,362
EBITDA and Adjusted EBITDA
$
25,562
$
16,223
(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
March 31,
2022
2021
Net Cash Flows Provided by Operating
Activities
$
1,953
$
12,817
Capital expenditures
(3,592
)
(3,372
)
Proceeds from disposition of property,
plant and equipment
2,364
6,651
Free Cash Flow
$
725
$
16,096
CIVEO CORPORATION
NON-GAAP RECONCILIATIONS -
GUIDANCE
(in millions)
(unaudited)
Year Ending December 31,
2022
EBITDA Range (1)
$
95.0
$
102.0
(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 loss
$
(13.0
)
$
(6.0
)
Income tax expense
9.0
9.0
Depreciation and amortization
89.0
89.0
Interest expense
10.0
10.0
EBITDA
$
95.0
$
102.0
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
March 31,
2022
2021
Supplemental Operating Data - Canadian
Segment
Revenues
Accommodation revenue (1)
$
67,194
$
46,530
Mobile facility rental revenue (2)
24,018
10,499
Food and other services revenue (3)
4,740
4,856
Total Canadian revenues
$
95,952
$
61,885
Costs
Accommodation cost
$
53,127
$
38,336
Mobile facility rental cost
14,884
6,774
Food and other services cost
4,359
4,121
Indirect other cost
2,836
2,654
Total Canadian cost of sales and
services
$
75,206
$
51,885
Average daily rates (4)
$
106
$
97
Billed rooms (5)
635,555
480,066
Canadian dollar to U.S. dollar
$
0.790
$
0.790
Supplemental Operating Data -
Australian Segment
Accommodation revenue (1)
$
37,599
$
33,675
Food and other services revenue (3)
25,930
25,962
Total Australian revenues
$
63,529
$
59,637
Costs
Accommodation cost
$
18,407
$
17,105
Food and other services cost
24,363
24,297
Indirect other cost
1,744
1,501
Total Australian cost of sales and
services
$
44,514
$
42,903
Average daily rates (4)
$
79
$
79
Billed rooms (5)
474,474
424,666
Australian dollar to U.S. dollar
$
0.724
$
0.773
(1)
Includes revenues related to
lodge and village rooms and hospitality services for owned rooms
for the periods presented.
(2)
Includes revenues related to
mobile camps for the periods presented.
(3)
Includes revenues related to food
service, laundry and water and wastewater treatment services, 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 the periods presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220429005040/en/
Carolyn J. Stone Civeo Corporation Senior Vice President &
Chief Financial Officer 713-510-2400
Civeo (NYSE:CVEO)
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