Civeo(US:CVEO)2020-10-28 20:37Financial 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]