Civeo Reports First Quarter 2019 Results

HOUSTON and CALGARY, Alberta, April 26, 2019 — Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the first quarter ended March 31, 2019.

Highlights include:

• Delivered first quarter revenues of $108.6 million
• Reported first quarter net loss of $17.5 million and Adjusted EBITDA of $15.9 million
• Generated $6.3 million in operating cash flow during the quarter
• Significantly improved year-over-year results from the U.S. segment
• Expanded our Sitka Lodge in British Columbia to 754 rooms during the quarter with 1,100 total rooms expected to be on site by June 2019

“Despite recent macroeconomic headwinds and winter seasonality, we are pleased to deliver first quarter revenue and Adjusted EBITDA in-line with our expectations. Our U.S. business generated significantly improved year-over-year results as our efforts to relocate well site assets into the Permian and Mid-Con regions over the past eighteen months produced materially improved utilization of those assets. Our Australia business also produced improved year-over-year revenues and Adjusted EBITDA as Bowen Basin activity increased with conducive metallurgical coal prices. Our first quarter Canadian Adjusted EBITDA was up year-over-year, primarily due to proceeds from an insurance claim, a full quarter of contribution from the Noralta acquisition and the impact of British Columbia LNG activity, partially offset by lower activity in our core oil sands lodges. We will continue to remain vigilant in adapting to dynamic market conditions in a way that maximizes the value of our company for our shareholders,” stated Bradley J. Dodson, Civeo’s President and Chief Executive Officer.

Mr. Dodson added, “We expect a sequentially improved second quarter as increased turnaround and maintenance activity in Canada and Australia start up for the year coupled with growing contributions from LNG-related work at our Sitka Lodge in British Columbia. Looking forward, we seek to continue delivering on our strategic priorities: generating free cash flow, managing our balance sheet, investing in attractive growth opportunities in key end markets and continuing our best-in-class service offerings to customers.”

First Quarter 2019 Results

In the first quarter of 2019, Civeo generated revenues of $108.6 million and reported a net loss of $17.5 million, or $0.11 per share. During the first quarter of 2019, Civeo produced operating cash flow of $6.3 million and Adjusted EBITDA of $15.9 million.

The first quarter of 2019 was in-line with the Company’s expectations as a result of solid operational execution in the U.S. and Australia.

By comparison, in the first quarter of 2018, Civeo generated revenues of $101.5 million and reported a net loss of $55.5 million, or $0.42 per share. The net loss included a pre-tax $28.7 million impairment charge and $1.0 million in costs associated with Civeo’s acquisition of Noralta. During the first quarter of 2018, Civeo generated operating cash flow of $2.8 million and Adjusted EBITDA of $10.0 million.

(EBITDA is a non-GAAP financial measure that is defined as net income plus interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA adjusted to exclude impairment charges and certain costs associated with Civeo’s acquisition of Noralta. Please see the reconciliations to GAAP measures at the end of this news release.)

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the first quarter of 2019 to the results for the first quarter of 2018. The Adjusted EBITDA amounts discussed below exclude the fixed asset impairment and Noralta-related expenses in the first quarter of 2018 noted above.)

Canada

During the first quarter of 2019, the Canadian segment generated revenues of $66.8 million, operating loss of $11.6 million and Adjusted EBITDA of $10.2 million, compared to revenues of $63.4 million, operating loss of $40.3 million and Adjusted EBITDA of $8.9 million in the first quarter of 2018. The first quarter of 2019 results reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues by $3.4 million. Included in first quarter 2019 Adjusted EBITDA for the Canadian segment is $1.5 million of other income for proceeds from an insurance claim related to the closure of a lodge in 2018 for maintenance-related operational issues.

The Canadian segment saw softening room demand from major customers in the core oil sands lodges related to extended holiday downtime and the continued impact of provincially imposed oil production curtailments. These headwinds were partially offset by the inclusion of the Noralta assets, improving contribution of LNG-related occupancy in British Columbia and a recently announced food service contract.

Australia

During the first quarter of 2019, the Australian segment generated revenues of $28.4 million, operating loss of $0.4 million and Adjusted EBITDA of $9.9 million, compared to revenues of $27.9 million, operating loss of $3.2 million and Adjusted EBITDA of $9.1 million in the first quarter of 2018.

The first quarter of 2019 results reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues by $2.9 million. On a constant currency basis, the Australian segment experienced a 2% period-over-period increase in revenues driven by strong occupancy with billed rooms up 12% year-over-year primarily due to continued improvement in metallurgical coal activity across our Bowen Basin villages.

U.S.

The U.S. segment generated revenues of $13.4 million, operating loss of $1.0 million and Adjusted EBITDA of $2.8 million in the first quarter of 2019, compared to revenues of $10.2 million, operating loss of $3.3 million and an Adjusted EBITDA loss of $0.7 million in the first quarter of 2018. The year-over-year revenue improvement was primarily driven by increased drilling and completion activity in the Permian Basin and Mid-Con regions. The significant year-over-year Adjusted EBITDA improvement in the first quarter of 2019 is also due to lower year-over-year relocation expenses for the well site business, which was spent most of 2018 moving well site assets out of legacy northern markets into the Permian and Mid-Con regions.

Income Taxes

Civeo recognized an income tax benefit of $4.5 million, which resulted in an effective tax rate of 20.8%, in the first quarter of 2019. During the first quarter of 2018, Civeo recognized an income tax benefit of $0.7 million, which resulted in an effective tax rate of 1%.

Financial Condition

As of March 31, 2019, Civeo had total liquidity of approximately $66.0 million, consisting of $58.0 million available under its revolving credit facilities and $8.0 million of cash on hand.

Civeo’s total debt outstanding on March 31, 2019 was $383.5 million, a $4.3 million increase since December 31, 2018. The increase resulted primarily from a negative foreign currency translation impact of $7.5 million, partially offset by debt repayments of $3.2 million made during the quarter.

During the first quarter of 2019, Civeo invested $9.7 million in capital expenditures, up from $2.7 million during first quarter of 2018. The increase was primarily related to the expansion of its Sitka lodge in Canada to support LNG Canada related contracts, as well as selected room reactivations in Australia in anticipation of increased customer demand in the second half of 2019 going into 2020.

Second Quarter and Full Year 2019 Guidance

For the second quarter of 2019, Civeo expects revenues of $113.0 million to $118.0 million and Adjusted EBITDA of $21.0 million to $23.5 million. For the full year of 2019, Civeo expects revenues of $475.0 million to $485.0 million and Adjusted EBITDA of $95.0 million to $101.0 million.

Conference Call

Civeo will host a conference call to discuss its first quarter 2019 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 (800)-289-0438 in the United States or (323)-794-2423 internationally and using the conference ID 9872605#. 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 9872605#.

Read More: http://ir.civeo.com/news-releases/news-release-details/civeo-reports-first-quarter-2019-results

IBF4