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Civeo(CVEO) - 2021 Q3 - Quarterly Report
2021-10-27 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | |------------------------------------------------------------------------------|------------------------------------------| | | | | For the transition period from ________ ...
Civeo (CVEO) Investor Presentation
2021-10-08 18:29
Financial Performance & Valuation - Civeo's Fully Diluted Equity Value is $376 million and Enterprise Value is $598 million[4] - Civeo reported revenues of $154.2 million in 2Q21, a 23% increase from 1Q21[26, 27] - Adjusted EBITDA for 2Q21 was $32.2 million, a 99% increase from 1Q21[26, 27] - Civeo generated $13.7 million of free cash flow in 2Q21[26] - Civeo reduced total debt outstanding by $11.3 million in 2Q21[26] - Civeo decreased leverage ratio to 2.0x at June 30, 2021[7, 26] Business Operations & Market Exposure - North America accounted for 55% and Australia 45% of Civeo's LTM revenue[4, 14] - North America accounted for 51% and Australia 49% of Civeo's Adjusted EBITDA[4] - Less than 40% of Civeo's LTM gross profit is tied to oil activity[6, 13, 38]
Civeo(CVEO) - 2021 Q2 - Earnings Call Transcript
2021-07-30 21:59
Financial Data and Key Metrics Changes - Civeo reported total revenues of $154.2 million in Q2 2021, with a net loss of $0.5 million or $0.03 per diluted share [12] - Adjusted EBITDA for the second quarter was $32.2 million, with free cash flow of $13.7 million [6][12] - The leverage ratio decreased to 2.0x as of June 30, 2021, down from 2.1x at the end of Q1 2021 [7][21] Business Line Data and Key Metrics Changes - Canadian segment revenues increased to $83.3 million in Q2 2021 from $53 million in Q2 2020, with adjusted EBITDA rising to $22.6 million from $15.3 million [14][15] - Australian segment revenues were $64 million, up from $57.1 million in the same period last year, but adjusted EBITDA decreased to $15.4 million from $18.8 million [17] - US segment revenues increased to $6.9 million from $4.6 million year-over-year, with adjusted EBITDA improving to $0.3 million from a loss of $1.4 million [19] Market Data and Key Metrics Changes - Billed rooms in Canadian lodges totaled 723,000, up 76% year-over-year from 410,000 [16] - In Australia, billed rooms were 466,000, down from 502,000 in Q2 2020, impacted by lower customer activity [18] - The average daily rate for Australian villages increased to $81 from $70 in 2020, driven by a strengthened Australian dollar [18] Company Strategy and Development Direction - The company aims to prioritize safety and well-being, manage cost structures, enhance hospitality offerings, and allocate capital prudently to maximize free cash flow while focusing on debt reduction [28] - Civeo expects to maintain revenue and adjusted EBITDA guidance for the full year 2021, with revenues projected between $555 million and $850 million and adjusted EBITDA between $90 million and $100 million [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted that labor supply issues and subdued customer activity in Australia are expected to be resolved by the end of 2021 [7] - The company anticipates continued pressure on performance in Australia due to prolonged travel restrictions and increased labor costs [25] - In Canada, management is optimistic about the recovery of occupancy levels as COVID-19 cases decline and health orders are lifted [24] Other Important Information - Civeo's total debt outstanding as of June 30, 2021, was $226.8 million, reflecting an $11.2 million decrease since March 31, 2021 [20] - Capital expenditures for Q2 2021 were $3.2 million, up from $1.2 million in the same period last year [20] Q&A Session Summary Question: What will drive activity in the met coal markets? - Management indicated that certainty in the market will drive customer spending, and while modest improvements are expected, they do not anticipate reaching pre-pandemic levels soon [30][31] Question: Is turnaround activity expected to improve in Australia? - Management confirmed that turnaround activity in Canada has improved significantly, with expectations for continued improvement in billed rooms [32][34] Question: What are the plans for capital allocation given the reduced leverage? - Management is considering a share repurchase program as leverage approaches a comfortable level [35] Question: What are the key growth drivers for the business in the next one to two years? - Management highlighted recovery in Canada, potential growth projects in Australia, and expansion of integrated services as key growth drivers [36][37] Question: How is the company managing COVID-related personnel issues and cost inflation? - Management reported no positive COVID-19 cases in their villages and noted that while they are managing labor costs, they expect higher costs to persist due to ongoing restrictions [39][41]
Civeo(CVEO) - 2021 Q2 - Quarterly Report
2021-07-29 16:00
Financial Performance - Revenues for the three months ended June 30, 2021, were $154.176 million, a 34.7% increase from $114.702 million for the same period in 2020[11] - Operating income for the three months ended June 30, 2021, was $2.129 million, compared to a loss of $1.841 million for the same period in 2020[11] - Net income attributable to Civeo Corporation for the three months ended June 30, 2021, was $13, compared to $6.607 million for the same period in 2020[11] - For the six months ended June 30, 2021, total revenues were $279.6 million, compared to $253.5 million for the same period in 2020, reflecting a 10.3% increase[92] - Total revenues for the three months ended June 30, 2021, were $154.2 million, a 34.4% increase from $114.7 million for the same period in 2020[92] - Total revenues for the six months ended June 30, 2021, increased by $26.1 million, or 10%, to $279.6 million compared to $253.5 million for the same period in 2020[153] Assets and Liabilities - Total current assets increased to $143.277 million as of June 30, 2021, from $119.213 million as of December 31, 2020[18] - Total liabilities decreased to $354.282 million as of June 30, 2021, from $365.496 million as of December 31, 2020[18] - Total shareholders' equity decreased to $363.405 million as of June 30, 2021, from $375.357 million as of December 31, 2020[18] - Total assets as of June 30, 2021, were $717.7 million, compared to $734.6 million at December 31, 2020[92] - Cash and cash equivalents decreased to $4.414 million as of June 30, 2021, from $6.155 million as of December 31, 2020[18] Income and Expenses - The company reported a comprehensive loss of $1.552 million for the three months ended June 30, 2021, compared to a comprehensive income of $35.911 million for the same period in 2020[15] - The company incurred impairment expense of $7.935 million for the six months ended June 30, 2021, compared to $144.120 million for the same period in 2020[11] - The company reported depreciation and amortization of $42,646 thousand for the six months ended June 30, 2021, down from $47,707 thousand in 2020[27] - Consolidated cost of sales and services increased by $24.9 million, or 30%, in Q2 2021 compared to Q2 2020, totaling $108.0 million[132] - Selling, general and administrative expenses increased by $3.2 million, or 28%, in Q2 2021 compared to Q2 2020, totaling $14.7 million[133] Net Loss and Earnings Per Share - Basic net loss per share attributable to Civeo Corporation common shareholders was $(0.03) for the three months ended June 30, 2021, compared to $0.37 for the same period in 2020[11] - Net loss for the six months ended June 30, 2021, was $9,415 thousand, compared to a net loss of $138,983 thousand for the same period in 2020[27] - For the three months ended June 30, 2021, Civeo reported a net loss attributable to common shareholders of $467,000 compared to a net income of $6.1 million in the same period in 2020[66] - Net loss attributable to Civeo Corporation for the six months ended June 30, 2021, was $10.4 million, or $0.73 per diluted share, significantly improved from a net loss of $140.4 million, or $9.96 per diluted share, in the same period of 2020[153] Cash Flow and Capital Expenditures - Cash flows provided by operating activities for the six months ended June 30, 2021, were $29,350 thousand, down from $45,318 thousand in 2020[27] - Total capital expenditures for the six months ended June 30, 2021, were $6,530 thousand, compared to $3,847 thousand in 2020[27] - Capital expenditures for 2021 are expected to total approximately $20 million, up from $10.1 million in 2020[127] Taxation - Civeo's effective tax rate for the three months ended June 30, 2021 was 102.1% of pretax loss, compared to a tax expense of 1.8% of pretax income in the same period of 2020[77] - The income tax expense for the six months ended June 30, 2021, totaled $0.6 million, or (6.6)% of pretax loss, compared to a benefit of $8.7 million, or 5.9% of pretax loss for the same period in 2020[78] Segment Performance - Accommodation revenues in Canada for the three months ended June 30, 2021, were $69.759 million, up 73.5% from $40.204 million in the same period of 2020[42] - The Canadian segment reported revenues that were $12.8 million, or 10%, higher than the six months ended June 30, 2020, primarily due to a 9% strengthening of the Canadian dollar against the U.S. dollar[167] - The Australian segment's revenues increased by $17.5 million, or 17%, for the six months ended June 30, 2021, largely due to a 17% strengthening of the Australian dollar against the U.S. dollar, which contributed $18.3 million to revenue growth[172] - The U.S. segment reported revenues of $10.8 million for the six months ended June 30, 2021, a decrease of $4.2 million, or 28%, compared to $14.9 million in the same period of 2020, due to reduced drilling activity[176] Market Conditions and Risks - The ongoing trade dispute between China and Australia has led to a trade embargo on Australian coal, impacting approximately 22% of Australia's met coal exports[117] - The company is exposed to market risks related to interest rates and foreign currency exchange rates, which could impact financial performance[197] - The company believes that any ultimate liability from pending legal proceedings will not have a material adverse effect on its consolidated financial position[204]
Civeo(CVEO) - 2021 Q1 - Earnings Call Transcript
2021-04-30 19:22
Financial Data and Key Metrics Changes - Civeo reported total revenues of $125.4 million in Q1 2021, with a net loss of $10 million or $0.70 per diluted share [12] - Adjusted EBITDA was $16.2 million, with free cash flow of $16.1 million, and a leverage ratio of 2.1x, remaining flat sequentially [6][17] - The company repaid $14.6 million of debt during the quarter, reducing total debt outstanding to $238.1 million [6][17] Business Line Data and Key Metrics Changes - Canadian segment revenue was $61.9 million, down from $79.3 million in Q1 2020, with adjusted EBITDA of $10.8 million, a decrease from $11.4 million [13] - Australian segment revenue increased to $59.6 million from $49.1 million in Q1 2020, but adjusted EBITDA decreased to $12.8 million from $16.2 million [15] - U.S. segment revenue fell to $3.9 million from $10.3 million in Q1 2020, with negative adjusted EBITDA of $1.2 million [16] Market Data and Key Metrics Changes - Canadian segment occupancy improved sequentially despite public health orders, while Australian segment faced declines due to customer downtime and labor supply issues [9][10] - The U.S. segment is beginning to see signs of recovery with oil and gas operators selectively adding rigs in response to higher commodity prices [22] Company Strategy and Development Direction - The company aims to prioritize employee and guest safety, maximize free cash flow, reduce debt, and manage costs without compromising service quality [11][23] - Full year 2021 revenue guidance was adjusted to between $555 million to $580 million, with adjusted EBITDA expected to range from $90 million to $100 million [18] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of 2021, highlighting potential improvements in Canadian and Australian segments due to favorable commodity prices and operational activities [20][21] - The company remains focused on resolving labor shortages in Australia and anticipates a stronger second half of the year [31] Other Important Information - Capital expenditures for Q1 2021 were $3.4 million, primarily for maintenance needs [17] - Total liquidity as of March 31, 2021, was approximately $112.4 million [17] Q&A Session Summary Question: Thoughts on capital allocation and potential stock buybacks - Management indicated that discussions on capital allocation are ongoing, with a focus on seeing second quarter results and continued debt reduction before considering stock buybacks [26][27] Question: Historical patterns of EBITDA allocation across quarters - Management confirmed that historical patterns remain consistent, with 60% to 70% of EBITDA typically generated in the second and third quarters [28] Question: Update on Action acquisition and outlook for Australia - Management reported challenges in the Action business due to labor availability but remains cautiously optimistic for resolution in the second quarter [30] - The outlook for met coal activity in Australia is cautiously optimistic, with no significant impact from the Chinese trade dispute observed so far [32]
Civeo(CVEO) - 2021 Q1 - Quarterly Report
2021-04-29 16:00
Financial Performance - Revenues for the three months ended March 31, 2021, were $125,430,000, a decrease of 9.5% compared to $138,792,000 for the same period in 2020[9] - Net loss attributable to Civeo Corporation for the three months ended March 31, 2021, was $9,484,000, compared to a net loss of $146,070,000 for the same period in 2020[9] - Basic and diluted net loss per share attributable to Civeo Corporation common shareholders was $(0.70) for the three months ended March 31, 2021, compared to $(10.43) for the same period in 2020[9] - Comprehensive loss attributable to Civeo Corporation for the three months ended March 31, 2021, was $11,101,000, compared to $194,516,000 for the same period in 2020[13] - Net loss for the three months ended March 31, 2021, was $9,425 thousand, a significant improvement compared to a net loss of $145,812 thousand for the same period in 2020[28] - Operating cash flows for the three months ended March 31, 2021, were $12,817 thousand, down from $20,837 thousand in the prior year[28] - Total revenues for the first quarter of 2021 were $125,430,000, a decrease of 9.4% compared to $138,792,000 in the same period of 2020[42] - Operating loss for the total company was $(9,901,000) for Q1 2021, compared to an operating loss of $(149,069,000) in Q1 2020, indicating an improvement in operational performance[88] Assets and Liabilities - Total current assets decreased to $108,660,000 as of March 31, 2021, from $119,213,000 as of December 31, 2020[17] - Total liabilities decreased to $346,039,000 as of March 31, 2021, from $365,496,000 as of December 31, 2020[17] - Long-term debt, less current maturities, decreased to $200,756,000 as of March 31, 2021, from $214,000,000 as of December 31, 2020[17] - Total assets as of March 31, 2021, were $710,178,000, slightly down from $719,523,000 at the end of Q1 2020[88] - The company had a total debt of $235.803 million as of March 31, 2021, compared to $248.585 million at the end of 2020[68] Revenue Segments - Canada segment revenues decreased to $61,885,000 in Q1 2021 from $79,348,000 in Q1 2020, representing a decline of 22.0%[42] - Australia segment revenues increased to $59,637,000 in Q1 2021 from $49,113,000 in Q1 2020, reflecting a growth of 21.0%[42] - U.S. segment revenues fell to $3,908,000 in Q1 2021 from $10,331,000 in Q1 2020, a decrease of 62.1%[42] - Canadian segment revenues decreased by $17.5 million, or 22%, in Q1 2021 compared to Q1 2020, with a 26% decrease excluding currency effects[140] - Australian segment revenues increased by $10.5 million, or 21%, in Q1 2021 compared to Q1 2020, with a 3% increase excluding currency effects[144] - U.S. segment revenues decreased by $6.4 million, or 62%, in Q1 2021 compared to Q1 2020, due to reduced occupancy and drilling activity[146] Cash Flow and Expenditures - Cash and cash equivalents as of March 31, 2021, were $5,455,000, down from $6,155,000 as of December 31, 2020[17] - Capital expenditures for the three months ended March 31, 2021, were $3,372 thousand, compared to $2,651 thousand for the same period in 2020[28] - Cash provided by operations for the three months ended March 31, 2021, was $12.8 million, down 38.5% from $20.8 million in the same period of 2020[150] - Cash used in investing activities increased to $3.3 million in Q1 2021, compared to cash used of $2.6 million in Q1 2020, primarily due to proceeds from asset sales[152] - Net cash used in financing activities was $16.7 million in Q1 2021, compared to $15.6 million in Q1 2020, mainly due to repayments under revolving credit facilities[154] Impairments and Expenses - The company recorded impairment expenses of $93.6 million related to goodwill in Q1 2020 due to a decline in oil prices and market conditions[56] - The carrying values of certain asset groups were written down to estimated fair values of $43.5 million, resulting in an impairment expense of $38.1 million in the Canadian segment[59] - The company reported depreciation and amortization expenses of $21,269 thousand for the three months ended March 31, 2021, compared to $25,502 thousand in the same period of 2020[28] - Depreciation and amortization expense decreased by $4.2 million, or 17%, in Q1 2021 compared to Q1 2020, mainly due to prior impairments and asset life extensions[131] - Net interest expense decreased by $2.2 million, or 40%, in Q1 2021 compared to Q1 2020, attributed to lower average debt levels and interest rates[135] Taxation - Civeo's income tax expense for the three months ended March 31, 2021, was $1.1 million, or (12.9%) of pretax loss, compared to a tax benefit of $8.8 million, or 5.7% of pretax loss, for the same period in 2020[74] - Civeo's effective tax rate for the three months ended March 31, 2021, was impacted by the removal of Canada and the U.S. from the annual effective tax rate computation due to loss jurisdictions[74] Market Conditions and Future Outlook - The average price of Western Canadian Select (WCS) crude in Q1 2021 was $46.28 per barrel, compared to a low of $19.73 in Q2 2020, showing recovery in oil prices[108] - The WCS Differential decreased from $15.35 per barrel at the end of Q4 2020 to $10.26 at the end of Q1 2021, indicating improved pricing conditions for Canadian oil[108] - The ongoing trade dispute between China and Australia has led to volatility in Australian met coal pricing, impacting demand and occupancy at Australian villages[114] - Increased global infrastructure spending is expected to support long-term demand for met coal and iron ore, particularly in developing economies[113] - The company plans to enhance the quality of operations and maintain financial discipline as market conditions evolve[118] Shareholder Information - A reverse share split was executed on November 19, 2020, converting every twelve common shares into one common share, affecting the conversion price of preferred shares[31] - Future dividends will depend on financial condition, results of operations, and other factors, with no assurance of payment[161] - A total of 56,889 shares were purchased in February 2021 at an average price of $19.57 per share[177] - The shares purchased in February consisted of those surrendered by participants in the 2014 Equity Participation Plan to settle personal tax liabilities[177] - There was no share repurchase program in place during the quarter ended March 31, 2021[177]
Civeo (CVEO) Investor Presentation - Slideshow
2021-04-01 20:01
//s civeo Stay Well. Work Well. Investor Presentation March 2021 Forward Looking Statements This presentation 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 guidanc ...
Civeo(CVEO) - 2020 Q4 - Annual Report
2021-02-25 16:00
Part I [Cautionary Statement Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section provides a safe harbor statement for forward-looking statements and lists key risk factors - On November 19, 2020, the company executed a **1-for-12 reverse share split**, with all data retroactively adjusted[15](index=15&type=chunk) - Key risk factors that could cause actual results to differ from forward-looking statements include supply and demand for commodities, activity levels in Canadian oil sands, demand from China, and the **impact of the COVID-19 pandemic**[18](index=18&type=chunk)[19](index=19&type=chunk) [Business](index=7&type=section&id=Item%201.%20Business) The company provides hospitality services to the natural resources industry with operations in Canada, Australia, and the U.S Key Financial and Operational Metrics (2018-2020) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $529.7M | $527.6M | $466.7M | | **Operating Loss** | ($147.2M) | ($49.1M) | ($88.1M) | | **Canada Billed Rooms** | 2,095,784 | 3,078,727 | 3,007,229 | | **Australia Billed Rooms** | 1,968,284 | 1,717,186 | 1,512,030 | Revenue by Type and Geography (2020) | Revenue Type | Canada | Australia | U.S. | Total | | :--- | :--- | :--- | :--- | :--- | | **Accommodation** | $202.5M | $144.1M | $2.5M | $349.1M | | **Mobile Facility Rental** | $33.2M | - | $16.8M | $50.0M | | **Food Service & Other** | $33.9M | $90.5M | $0.1M | $124.4M | | **Manufacturing** | - | - | $6.2M | $6.2M | | **Total Revenue** | **$269.6M** | **$234.5M** | **$25.5M** | **$529.7M** | - The company's largest customers in 2020 were **Fortescue Metals Group Ltd** and **Imperial Oil Limited**, each accounting for more than 10% of total revenues[105](index=105&type=chunk) [Operations by Geography](index=13&type=section&id=Item%201.%20Business%20-%20Operations%20by%20Geography) Operations are geographically diversified, with performance tied to regional commodity markets like oil sands, LNG, and met coal - **Canada (51% of 2020 Revenue):** Operations were negatively impacted by low oil prices and COVID-19, partially offset by LNG-related activity[54](index=54&type=chunk)[59](index=59&type=chunk)[64](index=64&type=chunk) - **Australia (44% of 2020 Revenue):** Performance was strong, driven by a 2019 acquisition and robust mining activity, despite trade dispute risks[75](index=75&type=chunk)[79](index=79&type=chunk)[45](index=45&type=chunk) - **U.S. (5% of 2020 Revenue):** The segment saw a significant downturn due to the collapse in oil prices and drilling activity[91](index=91&type=chunk)[96](index=96&type=chunk) [Contracts and Human Capital](index=23&type=section&id=Item%201.%20Business%20-%20Contracts%20and%20Human%20Capital) Revenues are supported by multi-year contracts, and the company manages a workforce of approximately 2,000 employees - Lodge and village revenues are typically secured under take-or-pay or exclusivity contracts ranging from several months to three years[111](index=111&type=chunk) Contracted Room Expiration Schedule (as of Dec 31, 2020) | Year | Contracted Rooms Expiring | | :--- | :--- | | 2021 | 1,983 | | 2022 | 2,492 | | 2023 | 1,000 | | Thereafter | 3,473 | | **Total** | **8,948** | - As of December 31, 2020, Civeo had approximately **1,000 full-time and 1,000 hourly employees**[115](index=115&type=chunk) [Government Regulation](index=24&type=section&id=Item%201.%20Business%20-%20Government%20Regulation) The business is significantly affected by environmental laws and climate change regulations across its operating geographies - The company's business is affected by environmental laws, with potential cost increases from climate-related regulations[122](index=122&type=chunk)[123](index=123&type=chunk) - **Canada:** Increasing federal carbon prices, set to reach **$170 per tonne by 2030**, may raise operating costs for oil sands customers[127](index=127&type=chunk)[137](index=137&type=chunk) - **Australia:** Operations are regulated by federal and state environmental controls, with potential reforms to the EPBC Act[154](index=154&type=chunk)[155](index=155&type=chunk) - **U.S.:** The Biden administration's reentry into the Paris Agreement signals potential for stricter future climate regulations[164](index=164&type=chunk)[170](index=170&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from commodity price volatility, the COVID-19 pandemic, customer concentration, and debt covenants - **Macroeconomic Risk:** Demand for services is highly sensitive to volatile commodity prices and has been adversely impacted by the COVID-19 pandemic[187](index=187&type=chunk)[193](index=193&type=chunk) - **Customer Risk:** The company depends on a few significant customers, and the loss of any major customer could materially harm the business[197](index=197&type=chunk)[204](index=204&type=chunk) - **Operational Risk:** The majority of major Canadian lodges are on land subject to provincial leases expiring between 2022 and 2028[217](index=217&type=chunk)[218](index=218&type=chunk) - **Financial Risk:** Substantial indebtedness with restrictive covenants poses a risk of default and debt acceleration[231](index=231&type=chunk)[233](index=233&type=chunk) [Unresolved Staff Comments](index=49&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[285](index=285&type=chunk) [Properties](index=49&type=section&id=Item%202.%20Properties) The company's principal properties consist of owned and leased land for its lodges, villages, and operational facilities - The company's principal properties include large-acreage sites for its lodges, with many major Canadian properties on leased government land[286](index=286&type=chunk)[288](index=288&type=chunk) - Leases for the Canadian lodge properties generally have initial ten-year terms and are scheduled to expire between 2021 and 2028[291](index=291&type=chunk) [Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) The company does not expect pending legal proceedings to have a material adverse effect on its financial position - Civeo is involved in various legal proceedings but does not expect the outcomes to have a material adverse effect on its financial condition[292](index=292&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[293](index=293&type=chunk) Part II [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common shares trade on the NYSE, and it currently does not pay cash dividends on common stock - The company's common shares are traded on the NYSE under the symbol **CVEO**[296](index=296&type=chunk) - Civeo does not pay cash dividends on its common shares; dividends on preferred shares are paid in-kind[298](index=298&type=chunk)[299](index=299&type=chunk) [Selected Financial Data](index=53&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not applicable - Not applicable[308](index=308&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of COVID-19 and commodity prices, leading to a widened operating loss from impairments - The economic disruption from COVID-19 led to **decreased demand and cost containment initiatives**, including a 33% headcount reduction in North America[321](index=321&type=chunk) - In Australia, a trade dispute with China led to an unofficial embargo on Australian coal, causing met coal price volatility[334](index=334&type=chunk)[336](index=336&type=chunk) - The company expects 2021 capital expenditures to be approximately **$20.0 million to $25.0 million**, an increase from $10.1 million in 2020[343](index=343&type=chunk)[377](index=377&type=chunk) [Results of Operations (2020 vs. 2019)](index=59&type=section&id=Item%207.%20MD%26A%20-%20Results%20of%20Operations) The operating loss widened significantly due to $144.1 million in impairment expenses, despite flat revenues Consolidated Results of Operations (in thousands) | Line Item | 2020 | 2019 | | :--- | :--- | :--- | | **Total Revenues** | $529,729 | $527,555 | | **Total Costs and Expenses** | $676,917 | $576,606 | | **Operating Loss** | ($147,188) | ($49,051) | | **Net Loss Attributable to Civeo** | ($134,250) | ($58,491) | | **Net Loss per Share** | ($9.64) | ($4.33) | - The significant increase in operating and net loss in 2020 was primarily due to **impairment expenses of $144.1 million**[346](index=346&type=chunk)[353](index=353&type=chunk) - Depreciation and amortization expense **decreased by $27.2 million (22%)** in 2020, mainly due to asset impairments[352](index=352&type=chunk) - Other income increased, primarily due to receiving **$13.0 million from the Canada Emergency Wage Subsidy (CEWS)**[358](index=358&type=chunk) [Segment Results](index=62&type=section&id=Item%207.%20MD%26A%20-%20Segment%20Results) Strong Australian revenue growth offset sharp declines in the Canadian and U.S. segments Canadian Segment Results | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Revenues** | $269.6M | $325.7M | | **Gross Margin %** | 22.4% | 26.4% | | **Billed Rooms** | 2,095,784 | 3,078,727 | | **Average Daily Rate** | $95 | $91 | Australian Segment Results | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Revenues** | $234.5M | $156.1M | | **Gross Margin %** | 38.3% | 42.9% | | **Billed Rooms** | 1,968,284 | 1,717,186 | | **Average Daily Rate** | $73 | $73 | U.S. Segment Results | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Revenues** | $25.5M | $45.8M | | **Gross Margin %** | (10.0)% | 16.8% | [Liquidity and Capital Resources](index=64&type=section&id=Item%207.%20MD%26A%20-%20Liquidity%20and%20Capital%20Resources) The company maintained total available liquidity of $105.4 million and extended its credit agreement maturity to 2023 Available Liquidity (in thousands) | Component | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Unused Availability | $99,257 | $120,761 | | Cash and Equivalents | $6,155 | $3,331 | | **Total Available Liquidity** | **$105,412** | **$124,092** | - Cash from operations **increased to $117.4 million** in 2020 from $74.5 million in 2019, driven by working capital management and CEWS proceeds[375](index=375&type=chunk) - In September 2020, the company **amended its Credit Agreement, extending the maturity date to May 30, 2023**[388](index=388&type=chunk)[389](index=389&type=chunk) [Critical Accounting Policies](index=68&type=section&id=Item%207.%20MD%26A%20-%20Critical%20Accounting%20Policies) Key policies include the impairment testing of goodwill and long-lived assets, which involves significant management assumptions - The company identifies **impairment of goodwill and long-lived assets** as a critical accounting policy, requiring significant assumptions[405](index=405&type=chunk)[411](index=411&type=chunk)[414](index=414&type=chunk) - For the annual goodwill impairment test on November 30, 2020, a qualitative assessment concluded the fair value of the Australia unit exceeded its carrying value[409](index=409&type=chunk) - Revenue is generally recognized over time as customers receive and consume benefits[429](index=429&type=chunk)[430](index=430&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are exposure to changes in interest rates and foreign currency exchange rates - The company is exposed to interest rate risk through **$251.1 million of floating-rate debt**; a 100 basis point increase would raise annual interest expense by $2.5 million[444](index=444&type=chunk)[446](index=446&type=chunk) - A hypothetical 10% adverse change in the CAD and AUD exchange rates would result in translation adjustments of approximately **$16 million and $30 million**, respectively[447](index=447&type=chunk) [Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's Consolidated Financial Statements and supplementary data - The Consolidated Financial Statements are included from page 71 to 109 of the report[448](index=448&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=74&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its independent auditors - There were no changes in or disagreements with accountants on accounting and financial disclosure[449](index=449&type=chunk) [Controls and Procedures](index=75&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[451](index=451&type=chunk) - Management assessed internal control over financial reporting using the COSO framework and concluded it was effective as of December 31, 2020[454](index=454&type=chunk) - No material changes were made to the company's internal control over financial reporting during the fourth quarter of 2020[456](index=456&type=chunk) [Other Information](index=75&type=section&id=Item%209B.%20Other%20Information) This section is not applicable - Not applicable[457](index=457&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=76&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the company's 2021 Definitive Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2021 Proxy Statement[460](index=460&type=chunk) [Executive Compensation](index=76&type=section&id=Item%2011.%20Executive%20Compensation) Required information is incorporated by reference from the company's 2021 Definitive Proxy Statement - Information regarding executive compensation is incorporated by reference from the 2021 Proxy Statement[462](index=462&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=76&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Required information is incorporated by reference from the company's 2021 Definitive Proxy Statement - Information regarding security ownership is incorporated by reference from the 2021 Proxy Statement[463](index=463&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=76&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Required information is incorporated by reference from the company's 2021 Definitive Proxy Statement - Information regarding related transactions and director independence is incorporated by reference from the 2021 Proxy Statement[464](index=464&type=chunk) [Principal Accounting Fees and Services](index=76&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Required information is incorporated by reference from the company's 2021 Definitive Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the 2021 Proxy Statement[465](index=465&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=77&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides an index to the financial statements and lists all exhibits filed with the Form 10-K - This section contains the index to financial statements and a list of all exhibits filed with the report[468](index=468&type=chunk)[469](index=469&type=chunk) [Form 10-K Summary](index=80&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section is not applicable - None[475](index=475&type=chunk) Financial Statements [Consolidated Statements of Operations](index=86&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a net loss of $134.3 million in 2020, driven by a significant $144.1 million impairment expense Consolidated Statements of Operations Highlights (in thousands) | Line Item | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Revenues** | $529,729 | $527,555 | $466,692 | | **Impairment expense** | $144,120 | $26,148 | $28,661 | | **Operating loss** | ($147,188) | ($49,051) | ($88,055) | | **Net loss attributable to Civeo** | ($134,250) | ($58,491) | ($82,243) | | **Diluted net loss per share** | ($9.64) | ($4.33) | ($10.06) | [Consolidated Balance Sheets](index=88&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $740.9 million due to impairments, while total liabilities declined from debt repayments Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $119,213 | $131,441 | | **Property, plant and equipment, net** | $486,930 | $590,309 | | **Goodwill** | $8,729 | $110,173 | | **Total assets** | **$740,853** | **$969,912** | | **Total current liabilities** | $116,765 | $110,040 | | **Total long-term debt** | $214,000 | $321,792 | | **Total liabilities** | **$365,496** | **$479,107** | | **Total shareholders' equity** | **$375,357** | **$490,805** | [Consolidated Statements of Cash Flows](index=90&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased significantly to $117.4 million, while investing cash flow decreased sharply Consolidated Cash Flow Summary (in thousands) | Cash Flow Activity | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $117,361 | $74,481 | $54,391 | | **Net cash used in investing activities** | ($1,774) | ($38,578) | ($181,947) | | **Net cash provided by (used in) financing activities** | ($114,206) | ($44,631) | $109,523 | | **Net change in cash** | $2,824 | ($9,041) | ($20,275) | | **Cash at end of period** | $6,155 | $3,331 | $12,372 | [Notes to Consolidated Financial Statements](index=91&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key disclosures include details on impairment charges, acquisitions, debt amendments, and the 2020 reverse stock split - **Note 4 - Impairment Charges:** In Q1 2020, the company recorded a **$93.6 million goodwill impairment** for its Canadian reporting unit and **$50.5 million in long-lived asset impairments**[587](index=587&type=chunk) - **Note 7 - Acquisitions:** Details the 2019 Action acquisition for $16.9 million and the 2018 Noralta acquisition for $315.6 million[607](index=607&type=chunk)[610](index=610&type=chunk)[615](index=615&type=chunk) - **Note 11 - Debt:** As of Dec 31, 2020, total debt was **$251.1 million** under an amended credit agreement maturing in May 2023[627](index=627&type=chunk)[630](index=630&type=chunk)[631](index=631&type=chunk) - **Note 19 - Preferred Shares:** A beneficial conversion feature on preferred shares issued in the Noralta acquisition resulted in a **one-time deemed dividend of $47.8 million** in 2018[682](index=682&type=chunk)[684](index=684&type=chunk)
Civeo(CVEO) - 2020 Q3 - Earnings Call Transcript
2020-10-29 06:57
Civeo Corp (NYSE:CVEO) Q3 2020 Earnings Conference Call October 28, 2020 11:00 AM ET Company Participants Regan Nielsen - Director, Corporate Development & IR Bradley Dodson - CEO, President & Director Carolyn Stone - SVP, CFO & Treasurer Conference Call Participants Stephen Gengaro - Stifel, Nicolaus & Company Kurt Hallead - RBC Capital Markets Operator Good day, and welcome to the Civeo Corporation Third Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn t ...
Civeo(CVEO) - 2020 Q3 - Quarterly Report
2020-10-28 20:37
Financial Performance - Revenues for the three months ended September 30, 2020, were $142,857 thousand, a decrease of 3.5% compared to $148,163 thousand for the same period in 2019[13] - Operating income for the three months ended September 30, 2020, was $7,090 thousand, compared to an operating loss of $2,876 thousand for the same period in 2019[13] - Net income attributable to Civeo Corporation for the three months ended September 30, 2020, was $6,989 thousand, an increase from $4,996 thousand in the same period of 2019[13] - Comprehensive income attributable to Civeo Corporation for the three months ended September 30, 2020, was $18,092 thousand, compared to a loss of $7,100 thousand in the same period of 2019[16] - For the nine months ended September 30, 2020, total revenues were $396.351 million, a 4.6% increase from $378.866 million in the same period of 2019[15] - Net loss for the nine months ended September 30, 2020, was $131,560 thousand, compared to a loss of $26,832 thousand for the same period in 2019[30] - Net income attributable to Civeo for Q3 2020 was $6.5 million, or $0.03 per diluted share, compared to $4.5 million, or $0.02 per diluted share in Q3 2019[125] Assets and Liabilities - Total assets as of September 30, 2020, were $732,936 thousand, down from $969,912 thousand as of December 31, 2019[21] - Total liabilities as of September 30, 2020, were $379,324 thousand, a decrease from $479,107 thousand as of December 31, 2019[21] - Cash and cash equivalents increased to $6,938 thousand as of September 30, 2020, from $3,331 thousand as of December 31, 2019[21] - As of September 30, 2020, total long-term debt was $269.9 million, down from $356.9 million as of December 31, 2019[68] - Outstanding debt decreased from $359.1 million at December 31, 2019, to $272.5 million at September 30, 2020, after repayments and borrowings[192] Expenses and Cost Management - The company reported a decrease in rental costs to $3,131 thousand for the three months ended September 30, 2020, from $5,072 thousand in the same period of 2019[13] - Selling, general and administrative expenses decreased to $13,462 thousand for the three months ended September 30, 2020, from $14,334 thousand in the same period of 2019[13] - Depreciation and amortization expenses were $72,527 thousand for the nine months ended September 30, 2020, down from $92,974 thousand in 2019[30] - Capital expenditures for the nine months ended September 30, 2020, were $6,244 thousand, a decrease from $25,517 thousand in 2019[30] - The company implemented cost containment initiatives, including a 20% salary reduction for the Board and CEO and a 25% headcount reduction in North America[104] Segment Performance - Accommodation revenues in Canada for the three months ended September 30, 2020, were $49.798 million, down 37.7% from $79.939 million in 2019[41] - Total Australia revenues increased by 35.4% to $64.685 million for the three months ended September 30, 2020, compared to $47.743 million in 2019[41] - U.S. total revenues decreased by 31.5% to $6.387 million for the three months ended September 30, 2020, from $9.349 million in 2019[41] - The Canadian segment reported revenues of $71.8 million in Q3 2020, a decrease of $19.3 million, or 21%, compared to Q3 2019, driven by lower occupancy at oil sands lodges[139] - The Australian segment reported revenues of $64.7 million in Q3 2020, an increase of $16.9 million, or 35%, compared to Q3 2019, largely due to increased activity at Action villages[145] - The U.S. segment reported revenues of $3.0 million in Q3 2020, a decrease of 32% compared to Q3 2019, primarily due to reduced occupancy and drilling activity[149] Impairments and Write-downs - Impairment charges increased to $144,120 thousand in 2020 from $5,546 thousand in 2019, indicating a substantial rise in asset write-downs[30] - In Q1 2020, Civeo recorded a goodwill impairment expense of $93.6 million due to a significant decline in oil prices and market capitalization[55] - The company reported a total goodwill impairment of $93.6 million, resulting in a net goodwill of $8.1 million as of September 30, 2020[83] Cash Flow and Liquidity - Operating cash flows provided were $80,675 thousand for the nine months ended September 30, 2020, significantly up from $33,526 thousand in 2019[30] - The company reported a net cash flow used in financing activities of $79,644 thousand for the nine months ended September 30, 2020, compared to $2,770 thousand in 2019[30] - Total available liquidity as of September 30, 2020, was $85.6 million, down from $124.1 million as of December 31, 2019[186] - The company believes cash on hand and cash flow from operations will be sufficient to meet liquidity needs for the next 12 months, but may need to raise additional capital if plans change[193] Market Conditions and Future Outlook - The company expects continued uncertainty in the market due to the impact of COVID-19 and commodity price volatility, which may delay expansionary and maintenance spending by customers[110] - Capital expenditures for 2020 are expected to be cut by approximately 25% due to the economic disruption caused by COVID-19[104] - The occupancy rate at Canadian oil sands lodges has decreased due to lower oil prices and the economic disruption caused by COVID-19, negatively impacting business[104] Taxation - The company had an outstanding income tax expense of $0.2 million for the three months ended September 30, 2020, representing 2.4% of pretax loss, compared to a tax benefit of $6.6 million for the same period in 2019[77] - For the nine months ended September 30, 2020, the company recorded an income tax benefit of $8.5 million, or 6.1% of pretax loss, compared to a benefit of $14.0 million, or 34.2% of pretax loss, for the same period in 2019[78] Corporate Governance and Controls - The company conducted an evaluation of its disclosure controls and procedures, concluding they were effective as of September 30, 2020[210] - There were no changes in the internal control over financial reporting during the three months ended September 30, 2020, that materially affected the internal control[211]