Civeo Reports Third Quarter 2021 Results

Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the third quarter ended September 30, 2021.

Highlights include:

  • Reported third quarter revenues of $155.1 million, net income of $0.1 million and operating cash flow of $33.9 million;
  • Delivered third quarter Adjusted EBITDA of $26.2 million and free cash flow of $31.0 million;
  • Reduced net leverage ratio to 1.86x as of September 30, 2021 from 1.98x as of June 30, 2021;
  • Completed a replacement and refinancing of its entire credit agreement to, among other things, extend the maturity date of all of the Company's total debt outstanding to September 8, 2025; and
  • Announced recently that its Board of Directors authorized the Company to repurchase up to 5% of its total common shares outstanding, or approximately 715,000 common shares, over the next twelve months.

“In the third quarter of 2021, Civeo made significant progress towards our financial objectives. We replaced and refinanced our entire credit agreement, announced the board authorization of a share repurchase program and generated significant free cash flow in a tough operating environment. During the quarter we reduced our total leverage ratio below 2.0x and reduced our aggregate total debt below $200 million" stated Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson concluded, "While we are encouraged by these significant achievements, the Company remains focused on operating safely, generating free cash flow and reducing our debt balance."

Carolyn Stone, Civeo's Senior Vice President and Chief Financial Officer, added “We were pleased to announce our new bank agreement, which provides the Company with four years of tenor. This longer tenor affords us the flexibility to evaluate other capital allocation priorities, such as our recently announced share repurchase program and potential growth opportunities."

Third Quarter 2021 Results

In the third quarter of 2021, Civeo generated revenues of $155.1 million and reported a 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.

By comparison, in the third quarter of 2020, Civeo generated revenues of $142.9 million and reported net income of $6.5 million, or $0.39 per diluted share. During the third quarter of 2020, Civeo produced operating cash flow of $35.4 million, Adjusted EBITDA of $36.0 million and free cash flow of $34.4 million.

Overall, the increase in revenues in the third quarter of 2021 compared to 2020 was primarily due to an increase in billed rooms in the oil sands lodges and Canadian mobile camp activity. The decrease in Adjusted EBITDA in the third quarter to 2021 compared to 2020 was primarily driven by $3.6 million of other income in the third quarter of 2020 related to proceeds from the Canadian Emergency Wage Subsidy ("CEWS") program and increased labor costs in our Australian business during the third quarter of 2021.

(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 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. 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 third quarter of 2021 to the results for the third quarter of 2020.)

Canada

During the third quarter of 2021, the Canadian segment generated revenues of $84.1 million, operating income of $6.1 million and Adjusted EBITDA of $19.8 million, compared to revenues of $71.8 million, operating income of $1.0 million and Adjusted EBITDA of $21.3 million in the third quarter of 2020. Adjusted EBITDA for the third quarter of 2021 did not include any other income related to proceeds from CEWS. The third quarter of 2020 Adjusted EBITDA included $3.6 million of other income related to proceeds from CEWS. Results from the third quarter of 2021 reflect the impact of a strengthened Canadian dollar relative to the U.S. dollar, which increased revenues and Adjusted EBITDA by $4.4 million and $1.0 million, respectively.

On a constant currency basis, the Canadian segment experienced an 11% period-over-period increase in revenues largely driven by a 21% year-over-year increase in billed rooms, primarily in the oil sands lodges, related to increased customer activity as a result of the recovery of oil prices from the impact of COVID-19. Adjusted EBITDA for the Canadian segment decreased 7% year-over-year primarily due to the lack of other income related to proceeds from CEWS, partially offset by an increase in billed rooms coupled with increased mobile camp activity.

Australia

During the third quarter of 2021, the Australian segment generated revenues of $65.1 million, operating income of $4.4 million and Adjusted EBITDA of $14.8 million, compared to revenues of $64.7 million, operating income of $9.9 million and Adjusted EBITDA of $21.5 million in the third quarter of 2020.

On a constant currency basis, the Australian segment experienced 2% lower period-over-period revenues, driven by a 4% year-over-year decrease in billed rooms due to subdued customer maintenance activity in the Bowen Basin. Adjusted EBITDA from the Australian segment decreased 31% year-over-year due to lower village occupancy in the Bowen Basin, as well as higher labor costs across the village and integrated services businesses.

U.S.

The U.S. segment generated revenues of $5.9 million, operating loss of $2.1 million and negative Adjusted EBITDA of $0.5 million in the third quarter of 2021, compared to revenues of $6.4 million, operating loss of $3.2 million and negative Adjusted EBITDA of $1.5 million in the third quarter of 2020. Revenues and Adjusted EBITDA increased year-over-year primarily due to increased occupancy in the U.S. lodges.

Financial Condition

As of September 30, 2021, Civeo had total liquidity of approximately $78.2 million, consisting of $73.3 million available under its revolving credit facilities and $4.9 million of cash on hand.

Civeo’s total debt outstanding on September 30, 2021 was $195.2 million, a $31.6 million decrease since June 30, 2021. The decrease consisted of $25.1 million in debt payments from cash flow generated by the business and favorable foreign currency translation of $6.5 million.

Civeo reduced its net leverage ratio to 1.86x as of September 30, 2021 from 1.98x as of June 30, 2021.

During the third quarter of 2021, Civeo invested $3.4 million in capital expenditures, up from $2.4 million during the third quarter of 2020.

Full Year 2021 Guidance

For the full year of 2021, Civeo is raising the lower end of its previously provided revenue and Adjusted EBITDA guidance range to $570 million to $580 million and $95 million to $100 million, respectively. This guidance is based on our expectations as of today and assumes no material changes to the current macro environment, or conditions related to the COVID-19 pandemic. The Company is maintaining its full year 2021 capital expenditure guidance to $15 million to $20 million.

Conference Call

Civeo will host a conference call to discuss its third quarter 2021 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 13724492#. 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 13724492#.

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 approximately 29,000 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, 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 annual report on Form 10-K for the year ended December 31, 2020 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.

- Financial Schedules Follow -

CIVEO CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

Revenues

$

155,063

 

 

 

$

142,857

 

 

 

$

434,669

 

 

 

$

396,351

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of sales and services

111,430

 

 

 

97,434

 

 

 

319,242

 

 

 

283,880

 

 

Selling, general and administrative expenses

17,320

 

 

 

13,462

 

 

 

46,204

 

 

 

38,889

 

 

Depreciation and amortization expense

20,282

 

 

 

24,820

 

 

 

62,928

 

 

 

72,527

 

 

Impairment expense

 

 

 

 

 

 

7,935

 

 

 

144,120

 

 

Other operating expense

21

 

 

 

51

 

 

 

122

 

 

 

755

 

 

 

149,053

 

 

 

135,767

 

 

 

436,431

 

 

 

540,171

 

 

Operating income (loss)

6,010

 

 

 

7,090

 

 

 

(1,762

)

 

 

(143,820

)

 

 

 

 

 

 

 

 

 

Interest expense

(3,166

)

 

 

(3,646

)

 

 

(9,929

)

 

 

(13,095

)

 

Loss on extinguishment of debt

(416

)

 

 

(383

)

 

 

(416

)

 

 

(383

)

 

Interest income

 

 

 

 

 

 

2

 

 

 

20

 

 

Other (expense) income

364

 

 

 

4,542

 

 

 

6,066

 

 

 

17,209

 

 

Income (loss) before income taxes

2,792

 

 

 

7,603

 

 

 

(6,039

)

 

 

(140,069

)

 

Income tax (expense) benefit

(1,770

)

 

 

(180

)

 

 

(2,354

)

 

 

8,509

 

 

Net income (loss)

1,022

 

 

 

7,423

 

 

 

(8,393

)

 

 

(131,560

)

 

Less: Net income attributable to noncontrolling interest

478

 

 

 

434

 

 

 

534

 

 

 

914

 

 

Net income (loss) attributable to Civeo Corporation

544

 

 

 

6,989

 

 

 

(8,927

)

 

 

(132,474

)

 

Less: Dividends attributable to Class A preferred shares

482

 

 

 

472

 

 

 

1,440

 

 

 

1,411

 

 

Net income (loss) attributable to Civeo common shareholders

$

62

 

 

 

$

6,517

 

 

 

$

(10,367

)

 

 

$

(133,885

)

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Basic

$

 

 

 

$

0.39

 

 

 

$

(0.73

)

 

 

$

(9.48

)

 

Diluted

$

 

 

 

$

0.39

 

 

 

$

(0.73

)

 

 

$

(9.48

)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

14,277

 

 

 

14,160

 

 

 

14,255

 

 

 

14,118

 

 

Diluted

14,361

 

 

 

14,212

 

 

 

14,255

 

 

 

14,118

 

 

 

 

 

 

 

 

 

 

CIVEO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

 

 

September 30,

2021

 

December 31,

2020

 

(UNAUDITED)

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

4,948

 

 

 

$

6,155

 

 

Accounts receivable, net

108,058

 

 

 

89,782

 

 

Inventories

6,089

 

 

 

6,181

 

 

Assets held for sale

15,530

 

 

 

3,910

 

 

Prepaid expenses and other current assets

23,398

 

 

 

13,185

 

 

Total current assets

158,023

 

 

 

119,213

 

 

 

 

 

 

Property, plant and equipment, net

399,962

 

 

 

486,930

 

 

Goodwill, net

8,125

 

 

 

8,729

 

 

Other intangible assets, net

94,680

 

 

 

99,749

 

 

Operating lease right-of-use assets

19,265

 

 

 

22,606

 

 

Other noncurrent assets

3,987

 

 

 

3,626

 

 

Total assets

$

684,042

 

 

 

$

740,853

 

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

45,193

 

 

 

$

42,056

 

 

Accrued liabilities

31,084

 

 

 

27,349

 

 

Income taxes

261

 

 

 

203

 

 

Current portion of long-term debt

30,473

 

 

 

34,585

 

 

Deferred revenue

24,219

 

 

 

6,812

 

 

Other current liabilities

5,718

 

 

 

5,760

 

 

Total current liabilities

136,948

 

 

 

116,765

 

 

 

 

 

 

Long-term debt

162,689

 

 

 

214,000

 

 

Operating lease liabilities

16,382

 

 

 

19,834

 

 

Other noncurrent liabilities

15,238

 

 

 

14,897

 

 

Total liabilities

331,257

 

 

 

365,496

 

 

 

 

 

 

Shareholders' equity:

 

 

 

Preferred shares

61,456

 

 

 

60,016

 

 

Common shares

 

 

 

 

 

Additional paid-in capital

1,581,248

 

 

 

1,578,315

 

 

Accumulated deficit

(918,539

)

 

 

(907,727

)

 

Treasury stock

(8,050

)

 

 

(6,930

)

 

Accumulated other comprehensive loss

(364,360

)

 

 

(348,989

)

 

Total Civeo Corporation shareholders' equity

351,755

 

 

 

374,685

 

 

Noncontrolling interest

1,030

 

 

 

672

 

 

Total shareholders' equity

352,785

 

 

 

375,357

 

 

Total liabilities and shareholders' equity

$

684,042

 

 

 

$

740,853

 

 

CIVEO CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Nine Months Ended

September 30,

 

2021

 

 

2020

 

 

 

 

 

Cash flows from operating activities:

 

 

 

Net loss

$

(8,393

)

 

 

$

(131,560

)

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

62,928

 

 

 

72,527

 

 

Impairment charges

7,935

 

 

 

144,120

 

 

Loss on extinguishment of debt

416

 

 

 

383

 

 

Deferred income tax expense (benefit)

2,105

 

 

 

(8,941

)

 

Non-cash compensation charge

2,933

 

 

 

4,804

 

 

Gains on disposals of assets

(2,305

)

 

 

(2,581

)

 

Provision for credit losses, net of recoveries

155

 

 

 

45

 

 

Other, net

2,436

 

 

 

(2,730

)

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(21,516

)

 

 

5,355

 

 

Inventories

(193

)

 

 

194

 

 

Accounts payable and accrued liabilities

9,836

 

 

 

1,247

 

 

Taxes payable

61

 

 

 

51

 

 

Other current assets and liabilities, net

6,843

 

 

 

(2,239

)

 

Net cash flows provided by operating activities

63,241

 

 

 

80,675

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

(9,645

)

 

 

(6,244

)

 

Proceeds from disposition of property, plant and equipment

7,545

 

 

 

3,336

 

 

Other, net

 

 

 

4,619

 

 

Net cash flows provided by (used in) investing activities

(2,100

)

 

 

1,711

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

Term loan repayments

(117,595

)

 

 

(31,092

)

 

Revolving credit borrowings (repayments), net

62,474

 

 

 

(44,511

)

 

Debt issuance costs

(4,407

)

 

 

(2,583

)

 

Repurchases of common shares

(445

)

 

 

 

 

Taxes paid on vested shares

(1,120

)

 

 

(1,458

)

 

Net cash flows used in financing activities

(61,093

)

 

 

(79,644

)

 

 

 

 

 

Effect of exchange rate changes on cash

(1,255

)

 

 

865

 

 

Net change in cash and cash equivalents

(1,207

)

 

 

3,607

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

6,155

 

 

 

3,331

 

 

Cash and cash equivalents, end of period

$

4,948

 

 

 

$

6,938

 

 

CIVEO CORPORATION

SEGMENT DATA

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

 

 

 

 

 

 

Canada

$

84,057

 

 

 

$

71,785

 

 

 

$

229,223

 

 

 

$

204,119

 

 

Australia

65,118

 

 

 

64,685

 

 

 

188,774

 

 

 

170,869

 

 

United States

5,888

 

 

 

6,387

 

 

 

16,672

 

 

 

21,363

 

 

Total revenues

$

155,063

 

 

 

$

142,857

 

 

 

$

434,669

 

 

 

$

396,351

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

 

 

 

 

 

 

Canada

$

19,801

 

 

 

$

21,289

 

 

 

$

53,201

 

 

 

$

(78,976

)

 

Australia

14,835

 

 

 

21,517

 

 

 

35,157

 

 

 

56,476

 

 

United States

(544

)

 

 

(1,478

)

 

 

(1,468

)

 

 

(14,920

)

 

Corporate and eliminations

(7,914

)

 

 

(5,310

)

 

 

(20,192

)

 

 

(17,578

)

 

Total EBITDA

$

26,178

 

 

 

$

36,018

 

 

 

$

66,698

 

 

 

$

(54,998

)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (1)

 

 

 

 

 

 

 

Canada

$

19,801

 

 

 

$

21,289

 

 

 

$

53,201

 

 

 

$

48,015

 

 

Australia

14,835

 

 

 

21,517

 

 

 

43,092

 

 

 

56,476

 

 

United States

(544

)

 

 

(1,478

)

 

 

(1,468

)

 

 

(2,481

)

 

Corporate and eliminations

(7,914

)

 

 

(5,310

)

 

 

(20,192

)

 

 

(17,578

)

 

Total adjusted EBITDA

$

26,178

 

 

 

$

36,018

 

 

 

$

74,633

 

 

 

$

84,432

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

Canada

$

6,131

 

 

 

$

1,007

 

 

 

$

5,924

 

 

 

$

(142,343

)

 

Australia

4,422

 

 

 

9,890

 

 

 

5,073

 

 

 

24,245

 

 

United States

(2,124

)

 

 

(3,197

)

 

 

(5,831

)

 

 

(19,954

)

 

Corporate and eliminations

(2,419

)

 

 

(610

)

 

 

(6,928

)

 

 

(5,768

)

 

Total operating income (loss)

$

6,010

 

 

 

$

7,090

 

 

 

$

(1,762

)

 

 

$

(143,820

)

 

 

 

 

 

 

 

 

 

(1) Please see Non-GAAP Reconciliation Schedule.

 

 

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

EBITDA (1)

$

26,178

 

 

$

36,018

 

 

$

66,698

 

 

$

(54,998

)

 

Adjusted EBITDA (1)

$

26,178

 

 

$

36,018

 

 

$

74,633

 

 

$

84,432

 

 

Free Cash Flow (2)

$

31,035

 

 

$

34,399

 

 

$

61,141

 

 

$

77,767

 

 

(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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Civeo Corporation

$

544

 

 

$

6,989

 

 

$

(8,927

)

 

 

$

(132,474

)

 

Income tax expense (benefit)

1,770

 

 

180

 

 

2,354

 

 

 

(8,509

)

 

Depreciation and amortization

20,282

 

 

24,820

 

 

62,928

 

 

 

72,527

 

 

Interest income

 

 

 

 

(2

)

 

 

(20

)

 

Loss on extinguishment of debt

416

 

 

383

 

 

416

 

 

 

383

 

 

Interest expense

3,166

 

 

3,646

 

 

9,929

 

 

 

13,095

 

 

EBITDA

$

26,178

 

 

$

36,018

 

 

$

66,698

 

 

 

$

(54,998

)

 

Adjustments to EBITDA

 

 

 

 

 

 

 

Impairment of long-lived assets (a)

 

 

 

 

7,935

 

 

 

50,514

 

 

Impairment of goodwill (b)

 

 

 

 

 

 

 

93,606

 

 

Representations and warranties settlement (c)

 

 

 

 

 

 

 

(4,690

)

 

Adjusted EBITDA

$

26,178

 

 

$

36,018

 

 

$

74,633

 

 

 

$

84,432

 

 

(a)

Relates to asset impairments in the second quarter of 2021 and the first quarter of 2020. 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.

 

 

 

In the first quarter of 2020, we recorded a pre-tax loss related to the impairment of long-lived assets in our Canadian segment of $38.1 million and a pre-tax loss related to the impairment of long-lived assets in our U.S. segment of $12.4 million, which is included in Impairment expense on the unaudited statements of operations.

 

 

(b)

Relates to the impairment of goodwill in the first quarter of 2020. The $93.6 million impairment is related to our Canada reporting unit and is included in Impairment expense on the statements of operations.

 

 

(c)

In the second quarter of 2020, we recorded $4.7 million of income associated with the settlement of a representations and warranties claim related to the Noralta acquisition, which is included in Other income 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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

Net Cash Flows Provided by Operating Activities

$

33,891

 

 

 

$

35,357

 

 

 

$

63,241

 

 

 

$

80,675

 

 

Capital expenditures

(3,389

)

 

 

(2,397

)

 

 

(9,645

)

 

 

(6,244

)

 

Proceeds from disposition of property, plant and equipment

533

 

 

 

1,439

 

 

 

7,545

 

 

 

3,336

 

 

Free Cash Flow

$

31,035

 

 

 

$

34,399

 

 

 

$

61,141

 

 

 

$

77,767

 

 

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS - GUIDANCE

(in millions)

(unaudited)

 

 

Year Ending December 31, 2021

 

 

 

 

EBITDA Range (1)

$

87.1

 

 

$

92.1

 

Adjusted EBITDA Range (1)

$

95.0

 

 

$

100.0

 

(1)

The following table sets forth a reconciliation of estimated Adjusted EBITDA to estimated net loss, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles (in millions) (unaudited):

 

Year Ending December 31, 2021

 

(estimated)

 

 

 

 

Net loss

$

(13.9

)

 

 

$

(9.4

)

 

Income tax expense

3.0

 

 

 

3.5

 

 

Depreciation and amortization

83.0

 

 

 

83.0

 

 

Interest expense

15.0

 

 

 

15.0

 

 

EBITDA

$

87.1

 

 

 

$

92.1

 

 

 

 

 

 

Adjustments to EBITDA

 

 

 

Impairment expense

7.9

 

 

 

7.9

 

 

Adjusted EBITDA

$

95.0

 

 

 

$

100.0

 

 

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

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Supplemental Operating Data - Canadian Segment

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Accommodation revenue (1)

$

60,511

 

 

$

49,798

 

 

$

176,800

 

 

$

156,068

 

Mobile facility rental revenue (2)

19,075

 

 

13,135

 

 

38,240

 

 

21,715

 

Food and other services revenue (3)

4,471

 

 

8,852

 

 

14,183

 

 

26,336

 

Total Canadian revenues

$

84,057

 

 

$

71,785

 

 

$

229,223

 

 

$

204,119

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

Accommodation cost

$

41,470

 

 

$

32,490

 

 

$

124,798

 

 

$

109,143

 

Mobile facility rental cost

11,144

 

 

8,557

 

 

23,562

 

 

17,099

 

Food and other services cost

4,007

 

 

7,595

 

 

12,583

 

 

23,773

 

Indirect other cost

2,593

 

 

2,751

 

 

7,498

 

 

8,115

 

Total Canadian cost of sales and services

$

59,214

 

 

$

51,393

 

 

$

168,441

 

 

$

158,130

 

 

 

 

 

 

 

 

 

Average daily rates (4)

$

98

 

 

$

96

 

 

$

97

 

 

$

95

 

 

 

 

 

 

 

 

 

Billed rooms (5)

613,017

 

 

508,449

 

 

1,816,407

 

 

1,626,668

 

 

 

 

 

 

 

 

 

Canadian dollar to U.S. dollar

$

0.794

 

 

$

0.751

 

 

$

0.799

 

 

$

0.739

 

 

 

 

 

 

 

 

 

Supplemental Operating Data - Australian Segment

 

 

 

 

 

 

 

Accommodation revenue (1)

$

38,104

 

 

$

39,470

 

 

$

109,559

 

 

$

106,988

 

Food and other services revenue (3)

27,014

 

 

25,215

 

 

79,215

 

 

63,881

 

Total Australian revenues

$

65,118

 

 

$

64,685

 

 

$

188,774

 

 

$

170,869

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

Accommodation cost

$

18,351

 

 

$

16,401

 

 

$

53,538

 

 

$

46,665

 

Food and other services cost

26,007

 

 

21,161

 

 

75,458

 

 

53,627

 

Indirect other cost

2,016

 

 

967

 

 

5,176

 

 

2,703

 

Total Australian cost of sales and services

$

46,374

 

 

$

38,529

 

 

$

134,172

 

 

$

102,995

 

 

 

 

 

 

 

 

 

Average daily rates (4)

$

78

 

 

$

77

 

 

$

79

 

 

$

72

 

 

 

 

 

 

 

 

 

Billed rooms (5)

491,218

 

 

513,587

 

 

1,382,182

 

 

1,487,819

 

 

 

 

 

 

 

 

 

Australian dollar to U.S. dollar

$

0.735

 

 

$

0.716

 

 

$

0.759

 

 

$

0.677

 

 

 

 

 

 

 

 

 

(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.