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Civeo Reports Fourth Quarter and Full Year 2022 Results

Highlights:

  • Fourth quarter revenues of $162.2 million, net loss of $13.0 million and operating cash flow of $29.4 million;
  • Fourth quarter Adjusted EBITDA of $15.1 million and free cash flow of $25.8 million;
  • Full year revenues of $697.1 million, net income of $2.2 million and operating cash flow of $91.8 million;
  • Full year 2022 Adjusted EBITDA of $112.8 million and free cash flow of $82.6 million;
  • Repurchased 40% of its outstanding Class A Series 1 preferred shares in the fourth quarter of 2022, which was the equivalent of approximately 6% of the Company’s fully diluted common shares outstanding at the time of the transaction;
  • Following the aforementioned preferred share repurchase and prior to year-end 2022, the remaining balance of preferred shares was converted into common shares, which are now the only class of shares outstanding; and
  • Recently announced two five-year contract awards in Australia with expected revenues of approximately A$937 million.

Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the fourth quarter and year ended December 31, 2022.

“Despite inflationary headwinds in 2022, Civeo reported strong results. We operated safely while achieving higher revenues and Adjusted EBITDA compared to 2021. We also generated significant free cash flow and substantially reduced our total debt balance as well as our net leverage ratio,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson continued, “We continued to prioritize returning capital to shareholders by repurchasing the equivalent of approximately 1.5 million common shares during 2022. We allocated approximately $45 million of capital, or over 50% of the Company's 2022 free cash flow, to these repurchases. We will continue to evaluate opportunities to return capital to shareholders in 2023 as well as opportunities to deploy capital for both organic and inorganic growth.”

Mr. Dodson added, “Looking forward, we are encouraged by the recent contract awards in Australia with their significant terms and expected occupancy. In both cases, these contract renewals retained Civeo's previous work with the customer and granted us additional locations or additional room commitments, while taking share from competitors.”

Fourth Quarter 2022 Results

In the fourth quarter of 2022, Civeo generated revenues of $162.2 million and reported a net loss of $13.0 million, or $1.31 per diluted share. The loss results in part from $5.7 million in costs associated with impairments on assets in Australia and the U.S. During the fourth quarter of 2022, Civeo produced operating cash flow of $29.4 million, Adjusted EBITDA of $15.1 million and free cash flow of $25.8 million.

By comparison, in the fourth quarter of 2021, Civeo generated revenues of $159.8 million and reported net income of $9.8 million, or $0.58 per diluted share. During the fourth quarter of 2021, Civeo produced operating cash flow of $25.3 million, Adjusted EBITDA of $34.5 million and free cash flow of $26.1 million.

Overall, the decrease in Adjusted EBITDA in the fourth quarter of 2022 compared to 2021 was primarily due to (1) $8.5 million of non-operating items such as the impact of a stronger U.S. dollar relative to the Canadian and Australian dollars, increased stock-based compensation expense due to a higher stock price and larger gains on sales of assets in the fourth quarter of 2021; (2) $3.3 million of customer and insurance settlements which positively impacted the fourth quarter of 2021; (3) a $2.9 million increase in SG&A largely related to higher information technology expenses and professional fees; and (4) approximately $4.7 million of increased operating costs largely driven by inflationary pressures, partially mitigated by increased Australia village occupancy.

Full Year 2022 Results

For the full year 2022, the Company reported revenues of $697.1 million and net income of $2.2 million, or $0.21 loss per share. Adjusted EBITDA for the full year 2022 was $112.8 million. This compared to revenues of $594.5 million and a net loss of $0.6 million, or $0.04 per share, for the full year 2021. Adjusted EBITDA was $109.1 million in 2021. Results for the full year of 2022 reflect the impact of weakened Australian and Canadian dollars relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $38.2 million and $8.1 million, respectively.

The increase in Adjusted EBITDA in 2022 as compared to 2021 was largely driven by Canadian contract camp activity in the first half of 2022, partially offset by the weakened Australian and Canadian dollar.

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the fourth quarter of 2022 to the results for the fourth quarter of 2021.)

Canada

During the fourth quarter of 2022, the Canada segment generated revenues of $88.0 million, operating loss of $6.1 million and Adjusted EBITDA of $11.8 million, compared to revenues of $92.2 million, operating income of $6.9 million and Adjusted EBITDA of $23.1 million in the fourth quarter of 2021. Results from the fourth quarter of 2022 reflect the impact of a weakened Canadian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $6.9 million and $1.0 million, respectively.

On a constant currency basis, the Canadian segment experienced a 3% period-over-period increase in revenues driven by a 6% year-over-year increase in billed rooms. Despite the increase in billed rooms, Adjusted EBITDA for the Canadian segment decreased year-over-year primarily due to inflationary pressures and certain non-operating items that benefited the fourth quarter of 2021. Operating loss for the fourth quarter of 2022 includes asset impairment charges of $3.8 million.

Australia

During the fourth quarter of 2022, the Australia segment generated revenues of $73.1 million, operating loss of $2.7 million and Adjusted EBITDA of $13.1 million, compared to revenues of $62.3 million, operating income of $2.2 million and Adjusted EBITDA of $13.6 million in the fourth quarter of 2021. Results from the fourth quarter of 2022 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $8.0 million and $1.5 million, respectively.

On a constant currency basis, the Australian segment experienced a 30% period-over-period increase in revenues driven by increased integrated services activity and a 12% year-over- year increase in billed rooms. Adjusted EBITDA from the Australian segment increased year-over-year due to increased village occupancy and integrated services activity, partially offset by inflationary pressures throughout the business.

U.S.

The U.S. segment generated revenues of $1.1 million, operating loss of $3.7 million and negative Adjusted EBITDA of $0.4 million in the fourth quarter of 2022, compared to revenues of $5.3 million, operating loss of $3.0 million and Adjusted EBITDA of $3.3 million in the fourth quarter of 2021. The revenue and Adjusted EBITDA decrease was primarily due to a $3.8 million gain on sale of assets from the fourth quarter 2021 sale of our West Permian Lodge and the sale of the segment's offshore and wellsite businesses in the second half of 2022. Operating loss for the fourth quarter of 2022 includes asset impairment charges of $1.9 million.

Financial Condition

As of December 31, 2022, Civeo had total liquidity of approximately $104.1 million, consisting of $96.1 million available under its revolving credit facilities and $8.0 million of cash on hand.

Civeo’s total debt outstanding on December 31, 2022 was $132.0 million, a $5.8 million increase from September 30, 2022 and a $43.1 million decrease from December 31, 2021.

Civeo reported a net leverage ratio of 1.1x as of December 31, 2022.

During 2022, Civeo invested $25.4 million in capital expenditures, up from $15.6 million during 2021. This increase is primarily due to increased maintenance spending on the Company's lodges and villages.

Full Year 2023 Guidance

For the full year of 2023, Civeo expects revenues of $630.0 million to $650.0 million, EBITDA of $85.0 million to $95.0 million and capital expenditures of $25.0 million to $30.0 million.

Conference Call

Civeo will host a conference call to discuss its fourth 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 asking for the Civeo call or using the conference ID 13736531#. 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 13736531#.

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 26 lodges and villages in Canada, Australia and the U.S., with an aggregate of approximately 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 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, global health concerns, such as the COVID-19 pandemic, and security threats and changes to government and environmental regulations, including climate change, and other factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Civeo’s most recent annual report on Form 10-K and other reports the company may file from time to time with the U.S. Securities and Exchange Commission. Each forward-looking statement contained herein speaks only as of the date of this release. Except as required by law, Civeo expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Information

EBITDA, Adjusted EBITDA, free cash flow, net debt, bank-adjusted EBITDA and net leverage ratio are non-GAAP financial measures. See “Non-GAAP Reconciliation” below for definitions and additional information concerning non-GAAP financial measures, including a reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. Non-GAAP financial information supplements and should be read together with, and is not an alternative or substitute for, the Company’s financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures.

- Financial Schedules Follow -

CIVEO CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

THREE MONTHS ENDED

 

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Revenues

 

$

162,193

 

 

$

159,794

 

 

$

697,052

 

 

$

594,463

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

Cost of sales and services

 

 

127,671

 

 

 

117,220

 

 

 

517,063

 

 

 

436,462

 

Selling, general and administrative expenses

 

 

19,390

 

 

 

14,396

 

 

 

69,962

 

 

 

60,600

 

Depreciation and amortization expense

 

 

21,396

 

 

 

20,173

 

 

 

87,214

 

 

 

83,101

 

Impairment expense

 

 

5,721

 

 

 

 

 

 

5,721

 

 

 

7,935

 

Other operating expense (income)

 

 

261

 

 

 

191

 

 

 

74

 

 

 

313

 

 

 

 

174,439

 

 

 

151,980

 

 

 

680,034

 

 

 

588,411

 

Operating income (loss)

 

 

(12,246

)

 

 

7,814

 

 

 

17,018

 

 

 

6,052

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,397

)

 

 

(3,035

)

 

 

(11,474

)

 

 

(12,964

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

(416

)

Interest income

 

 

24

 

 

 

 

 

 

39

 

 

 

2

 

Other income

 

 

859

 

 

 

7,133

 

 

 

5,149

 

 

 

13,199

 

Income (loss) before income taxes

 

 

(14,760

)

 

 

11,912

 

 

 

10,732

 

 

 

5,873

 

Income tax benefit (provision)

 

 

2,689

 

 

 

(1,022

)

 

 

(4,402

)

 

 

(3,376

)

Net income (loss)

 

 

(12,071

)

 

 

10,890

 

 

 

6,330

 

 

 

2,497

 

Less: Net income attributable to noncontrolling interest

 

 

627

 

 

 

613

 

 

 

2,333

 

 

 

1,147

 

Net income (loss) attributable to Civeo Corporation

 

 

(12,698

)

 

 

10,277

 

 

 

3,997

 

 

 

1,350

 

Less: Dividends attributable to Class A preferred shares

 

 

302

 

 

 

485

 

 

 

1,771

 

 

 

1,925

 

Net income (loss) attributable to Civeo Corporation common shareholders

 

$

(13,000

)

 

$

9,792

 

 

$

2,226

 

 

$

(575

)

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Basic

 

$

(1.31

)

 

$

0.59

 

 

$

(0.21

)

 

$

(0.04

)

Diluted

 

$

(1.31

)

 

$

0.58

 

 

$

(0.21

)

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

13,835

 

 

 

14,165

 

 

 

14,002

 

 

 

14,232

 

Diluted

 

 

13,835

 

 

 

14,289

 

 

 

14,002

 

 

 

14,232

 

CIVEO CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

December 31,

 

December 31,

2022

2021

 

 

(UNAUDITED)

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

7,954

 

 

$

6,282

 

Accounts receivable, net

 

 

119,755

 

 

 

114,859

 

Inventories

 

 

6,907

 

 

 

6,468

 

Assets held for sale

 

 

8,653

 

 

 

11,762

 

Prepaid expenses and other current assets

 

 

10,280

 

 

 

17,822

 

Total current assets

 

 

153,549

 

 

 

157,193

 

 

 

 

 

 

Property, plant and equipment, net

 

 

301,890

 

 

 

389,996

 

Goodwill, net

 

 

7,672

 

 

 

8,204

 

Other intangible assets, net

 

 

81,747

 

 

 

93,642

 

Operating lease right-of-use assets

 

 

15,722

 

 

 

18,327

 

Other noncurrent assets

 

 

5,604

 

 

 

5,372

 

Total assets

 

$

566,184

 

 

$

672,734

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

51,087

 

 

$

49,321

 

Accrued liabilities

 

 

39,211

 

 

 

33,564

 

Income taxes

 

 

178

 

 

 

171

 

Current portion of long-term debt

 

 

28,448

 

 

 

30,576

 

Deferred revenue

 

 

991

 

 

 

18,479

 

Other current liabilities

 

 

8,342

 

 

 

4,807

 

Total current liabilities

 

 

128,257

 

 

 

136,918

 

 

 

 

 

 

Long-term debt

 

 

102,505

 

 

 

142,602

 

Deferred income taxes

 

 

4,778

 

 

 

896

 

Operating lease liabilities

 

 

12,771

 

 

 

15,429

 

Other noncurrent liabilities

 

 

14,172

 

 

 

13,778

 

Total liabilities

 

 

262,483

 

 

 

309,623

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

Preferred shares

 

 

 

 

 

61,941

 

Common shares

 

 

 

 

 

 

Additional paid-in capital

 

 

1,624,512

 

 

 

1,582,442

 

Accumulated deficit

 

 

(930,123

)

 

 

(912,951

)

Treasury stock

 

 

(9,063

)

 

 

(8,050

)

Accumulated other comprehensive loss

 

 

(385,187

)

 

 

(361,883

)

Total Civeo Corporation shareholders' equity

 

 

300,139

 

 

 

361,499

 

Noncontrolling interest

 

 

3,562

 

 

 

1,612

 

Total shareholders' equity

 

 

303,701

 

 

 

363,111

 

Total liabilities and shareholders' equity

 

$

566,184

 

 

$

672,734

 

CIVEO CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

TWELVE MONTHS ENDED

DECEMBER 31,

 

 

2022

 

2021

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$

6,330

 

 

$

2,497

 

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

 

 

 

 

Depreciation and amortization

 

 

87,214

 

 

 

83,101

 

Impairment charges

 

 

5,721

 

 

 

7,935

 

Loss on extinguishment of debt

 

 

 

 

 

416

 

Deferred income tax expense

 

 

4,177

 

 

 

3,070

 

Non-cash compensation charge

 

 

3,787

 

 

 

4,127

 

Gain on disposals of assets

 

 

(4,917

)

 

 

(6,188

)

Provision for loss on receivables, net of recoveries

 

 

162

 

 

 

141

 

Other, net

 

 

3,223

 

 

 

2,200

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(14,447

)

 

 

(28,131

)

Inventories

 

 

(1,845

)

 

 

(526

)

Accounts payable and accrued liabilities

 

 

12,323

 

 

 

15,435

 

Taxes payable

 

 

5

 

 

 

(28

)

Other current assets and liabilities, net

 

 

(9,960

)

 

 

4,485

 

Net cash flows provided by operating activities

 

 

91,773

 

 

 

88,534

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

 

(25,421

)

 

 

(15,571

)

Proceeds from disposition of property, plant and equipment

 

 

16,286

 

 

 

14,306

 

Other, net

 

 

190

 

 

 

559

 

Net cash flows used in investing activities

 

 

(8,945

)

 

 

(706

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Term loan repayments

 

 

(30,442

)

 

 

(125,483

)

Revolving credit borrowings (repayments), net

 

 

(3,374

)

 

 

49,157

 

Debt issuance costs

 

 

 

 

 

(4,412

)

Repurchases of common shares

 

 

(14,209

)

 

 

(4,649

)

Repurchases of preferred shares

 

 

(30,553

)

 

 

 

Other, net

 

 

(1,078

)

 

 

(1,120

)

Net cash flows used in financing activities

 

 

(79,656

)

 

 

(86,507

)

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

(1,500

)

 

 

(1,194

)

Net change in cash and cash equivalents

 

 

1,672

 

 

 

127

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

 

6,282

 

 

 

6,155

 

Cash and cash equivalents, end of period

 

$

7,954

 

 

$

6,282

 

CIVEO CORPORATION

SEGMENT DATA

(in thousands)

(unaudited)

 

 

 

THREE MONTHS ENDED

 

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

 

 

2022

 

2021

 

2022

 

2021

Revenues

 

 

 

 

 

 

 

 

Canada

 

$

88,013

 

 

$

92,155

 

 

$

395,997

 

 

$

321,378

 

Australia

 

 

73,098

 

 

 

62,300

 

 

 

278,252

 

 

 

251,074

 

United States

 

 

1,082

 

 

 

5,339

 

 

 

22,803

 

 

 

22,011

 

Total revenues

 

$

162,193

 

 

$

159,794

 

 

$

697,052

 

 

$

594,463

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

 

 

 

 

 

 

 

Canada

 

$

11,803

 

 

$

23,125

 

 

$

83,248

 

 

$

76,326

 

Australia

 

 

9,286

 

 

 

13,570

 

 

 

57,118

 

 

 

48,727

 

United States

 

 

(2,351

)

 

 

3,283

 

 

 

(1,957

)

 

 

1,815

 

Corporate and eliminations

 

 

(9,356

)

 

 

(5,471

)

 

 

(31,361

)

 

 

(25,663

)

Total EBITDA

 

$

9,382

 

 

$

34,507

 

 

$

107,048

 

 

$

101,205

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (1)

 

 

 

 

 

 

 

 

Canada

 

$

11,803

 

 

$

23,125

 

 

$

83,248

 

 

$

76,326

 

Australia

 

 

13,094

 

 

 

13,570

 

 

 

60,926

 

 

 

56,662

 

United States

 

 

(438

)

 

 

3,283

 

 

 

(44

)

 

 

1,815

 

Corporate and eliminations

 

 

(9,356

)

 

 

(5,471

)

 

 

(31,361

)

 

 

(25,663

)

Total adjusted EBITDA

 

$

15,103

 

 

$

34,507

 

 

$

112,769

 

 

$

109,140

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

Canada

 

$

(6,058

)

 

$

6,892

 

 

$

17,023

 

 

$

12,816

 

Australia

 

 

(2,715

)

 

 

2,230

 

 

 

14,731

 

 

 

7,303

 

United States

 

 

(3,736

)

 

 

(3,038

)

 

 

(8,330

)

 

 

(8,869

)

Corporate and eliminations

 

 

263

 

 

 

1,730

 

 

 

(6,406

)

 

 

(5,198

)

Total operating income (loss)

 

$

(12,246

)

 

$

7,814

 

 

$

17,018

 

 

$

6,052

 

 

 

 

 

 

 

 

 

 

(1) Please see Non-GAAP Reconciliation Schedule.

 

 

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS

(in thousands)

(unaudited)

 

 

 

THREE MONTHS ENDED

 

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

$

9,382

 

$

34,507

 

$

107,048

 

$

101,205

Adjusted EBITDA (1)

 

$

15,103

 

$

34,507

 

$

112,769

 

$

109,140

Free Cash Flow (2)

 

$

25,757

 

$

26,128

 

$

82,638

 

$

87,269

Net Leverage Ratio (3)

 

 

 

 

 

1.1x

 

 

(1)

The term EBITDA is a non-GAAP financial measure that is defined as net income (loss) attributable to Civeo Corporation plus interest, taxes, depreciation and amortization. The term Adjusted EBITDA is a non-GAAP financial measure that is defined as EBITDA adjusted to exclude certain other unusual or non-operating items. EBITDA and Adjusted EBITDA are not measures of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Civeo has included EBITDA and Adjusted EBITDA as supplemental disclosures because its management believes that EBITDA and Adjusted EBITDA provide useful information regarding its ability to service debt and to fund capital expenditures and provide investors a helpful measure for comparing Civeo's operating performance with the performance of other companies that have different financing and capital structures or tax rates. Civeo uses EBITDA and Adjusted EBITDA to compare and to monitor the performance of its business segments to other comparable public companies and as a benchmark for the award of incentive compensation under its annual incentive compensation plan.

 

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

 

 

THREE MONTHS ENDED

 

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Civeo Corporation

 

$

(12,698

)

 

$

10,277

 

$

3,997

 

 

$

1,350

 

Income tax provision (benefit)

 

 

(2,689

)

 

 

1,022

 

 

4,402

 

 

 

3,376

 

Depreciation and amortization

 

 

21,396

 

 

 

20,173

 

 

87,214

 

 

 

83,101

 

Interest income

 

 

(24

)

 

 

 

 

(39

)

 

 

(2

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

416

 

Interest expense

 

 

3,397

 

 

 

3,035

 

 

11,474

 

 

 

12,964

 

EBITDA

 

$

9,382

 

 

$

34,507

 

$

107,048

 

 

$

101,205

 

Adjustments to EBITDA

 

 

 

 

 

 

 

 

Impairment of long-lived assets (a)

 

 

5,721

 

 

 

 

 

5,721

 

 

 

7,935

 

Adjusted EBITDA

 

$

15,103

 

 

$

34,507

 

$

112,769

 

 

$

109,140

 

(a)

Relates to asset impairments in the fourth quarter of 2022 and the second quarter of 2021. In the fourth quarter of 2022, we recorded a pre-tax loss related to the impairment of long-lived assets in our Australian segment of $3.8 million and a pre-tax loss related to the impairment of long-lived assets in our U.S. segment of $1.9 million, which is included in Impairment expense on the unaudited statements of operations.

 

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 a non-GAAP financial measure that is defined as net cash flows provided by operating activities less capital expenditures plus proceeds from asset sales. Free Cash Flow is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, Free Cash Flow may not be comparable to other similarly titled measures of other companies. Civeo has included Free Cash Flow as a supplemental disclosure because its management believes that Free Cash Flow provides useful information regarding the cash flow generating ability of its business relative to its capital expenditure and debt service obligations. Civeo uses Free Cash Flow to compare and to understand, manage, make operating decisions and evaluate Civeo's business. It is also used as a benchmark for the award of incentive compensation under its annual incentive compensation plan.

 

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

 

 

THREE MONTHS ENDED

 

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Net Cash Flows Provided by Operating Activities

 

$

29,401

 

 

$

25,293

 

 

$

91,773

 

 

$

88,534

 

Capital expenditures

 

 

(7,955

)

 

 

(5,926

)

 

 

(25,421

)

 

 

(15,571

)

Proceeds from disposition of property, plant and equipment

 

 

4,311

 

 

 

6,761

 

 

 

16,286

 

 

 

14,306

 

Free Cash Flow

 

$

25,757

 

 

$

26,128

 

 

$

82,638

 

 

$

87,269

 

(3)

The term net leverage ratio is a non-GAAP financial measure that is defined as net debt divided by bank-adjusted EBITDA. Net debt, bank-adjusted EBITDA and net leverage ratio are not financial measures under GAAP and should not be considered in isolation from or as a substitute for total debt, net income (loss) or cash flow measures prepared in accordance with GAAP or as a measure of profitability or liquidity. Additionally, net debt, bank-adjusted EBITDA and net leverage ratio may not be comparable to other similarly titled measures of other companies. Civeo has included net debt, bank-adjusted EBITDA and net leverage ratio as a supplemental disclosure because its management believes that this data provides useful information regarding the level of the Company’s indebtedness and its ability to service debt. Additionally, per Civeo’s credit agreement, the Company is required to maintain a net leverage ratio below 3.0x every quarter to remain in compliance with the credit agreement.

 

The following table sets forth a reconciliation of net debt, bank-adjusted EBITDA and net leverage ratio to the most directly comparable measures of financial performance calculated under GAAP (in thousands) (unaudited):

 

 

AS OF

DECEMBER 31,

 

 

2022

 

 

 

Total debt

 

$

132,037

Less: Cash and cash equivalents

 

 

7,954

Net debt

 

$

124,083

 

 

 

Adjusted EBITDA for the twelve months ended December 31, 2022 (a)

 

$

112,769

Adjustments to Adjusted EBITDA

 

 

Stock-based compensation

 

 

3,787

Interest income

 

 

39

Bank-adjusted EBITDA

 

$

116,595

 

 

 

Net leverage ratio (b)

 

1.1x

 

 

 

(a) See footnote 1 above for reconciliation of Adjusted EBITDA to net income (loss) attributable to Civeo Corporation

(b) Calculated as net debt divided by bank-adjusted EBITDA

CIVEO CORPORATION

NON-GAAP RECONCILIATIONS - GUIDANCE

(in millions)

(unaudited)

 

 

 

YEAR ENDING

DECEMBER 31, 2023

EBITDA Range (1)

 

$

85.0

 

$

95.0

(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, 2023

 

 

(estimated)

 

 

 

 

 

Net loss

 

$

(19.5

)

 

$

(9.5

)

Income tax provision

 

 

12.5

 

 

 

12.5

 

Depreciation and amortization

 

 

80.0

 

 

 

80.0

 

Interest expense

 

 

12.0

 

 

 

12.0

 

EBITDA

 

$

85.0

 

 

$

95.0

 

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

 

TWELVE MONTHS ENDED

DECEMBER 31,

DECEMBER 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Supplemental Operating Data - Canadian Segment

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

Accommodation revenue (1)

 

$

60,106

 

$

62,726

 

$

279,455

 

$

239,526

Mobile facility rental revenue (2)

 

 

23,041

 

 

24,616

 

 

96,400

 

 

62,856

Food and other services revenue (3)

 

 

4,866

 

 

4,813

 

 

20,142

 

 

18,996

Total Canadian revenues

 

$

88,013

 

$

92,155

 

$

395,997

 

$

321,378

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

Accommodation cost

 

$

48,049

 

$

45,273

 

$

204,592

 

$

170,071

Mobile facility rental cost

 

 

15,116

 

 

15,009

 

 

60,055

 

 

38,571

Food and other services cost

 

 

4,590

 

 

4,167

 

 

18,372

 

 

16,750

Indirect other cost

 

 

2,728

 

 

2,529

 

 

10,557

 

 

10,027

Total Canadian cost of sales and services

 

$

70,483

 

$

66,978

 

$

293,576

 

$

235,419

 

 

 

 

 

 

 

 

 

Average daily rates (4)

 

$

93

 

$

106

 

$

100

 

$

99

 

 

 

 

 

 

 

 

 

Billed rooms (5)

 

 

621,991

 

 

588,473

 

 

2,759,521

 

 

2,404,880

 

 

 

 

 

 

 

 

 

Canadian dollar to U.S. dollar

 

$

0.736

 

$

0.794

 

$

0.769

 

$

0.798

 

 

 

 

 

 

 

 

 

Supplemental Operating Data - Australian Segment

 

 

 

 

 

 

 

 

Accommodation revenue (1)

 

$

37,747

 

$

35,776

 

$

152,714

 

$

145,335

Food and other services revenue (3)

 

 

35,351

 

 

26,524

 

 

125,538

 

 

105,739

Total Australian revenues

 

$

73,098

 

$

62,300

 

$

278,252

 

$

251,074

 

 

 

 

 

 

 

 

 

Costs

 

 

 

 

 

 

 

 

Accommodation cost

 

$

18,260

 

$

18,012

 

$

73,325

 

$

71,550

Food and other services cost

 

 

35,121

 

 

25,011

 

 

119,957

 

 

100,469

Indirect other cost

 

 

2,024

 

 

1,947

 

 

7,662

 

 

7,123

Total Australian cost of sales and services

 

$

55,405

 

$

44,970

 

$

200,944

 

$

179,142

 

 

 

 

 

 

 

 

 

Average daily rates (4)

 

$

73

 

$

77

 

$

75

 

$

79

 

 

 

 

 

 

 

 

 

Billed rooms (5)

 

 

518,925

 

 

464,700

 

 

2,024,068

 

 

1,846,882

 

 

 

 

 

 

 

 

 

Australian dollar to U.S. dollar

 

$

0.657

 

$

0.729

 

$

0.695

 

$

0.752

(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 Civeo owned Canadian lodges and Australian villages for the periods presented.

 

Contacts

Carolyn J. Stone

Civeo Corporation

Senior Vice President & Chief Financial Officer

713-510-2400

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