Civeo(CVEO) - 2025 Q1 - Quarterly Results

Civeo First Quarter 2025 Results First Quarter 2025 Financial Highlights The company reported a Q1 net loss of $9.8 million, as strong Australian results were offset by Canadian headwinds Q1 2025 vs. Q1 2024 Financial Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $144.0 million | $166.1 million | | Net Loss | $9.8 million | $5.1 million | | Diluted EPS | ($0.72) | ($0.35) | | Adjusted EBITDA | $12.7 million | $17.8 million | | Operating Cash Flow | ($8.4 million) | $6.0 million | - Topline growth in Australia was supported by a recent contract award, while Canadian operations were impacted by intensifying macroeconomic headwinds[3] - Civeo returned $6.8 million to shareholders in Q1 2025 through share repurchases ($3.3M) and dividends ($3.5M)[7][14][29] - The company is rebalancing its capital return mix to prioritize share repurchases as the sole vehicle for returning capital[3] - Progress continues on the acquisition of four Australian villages, with the transaction expected to close in Q2 2025[7][10] Business Segment Results Australia Segment The Australian segment saw a 13% revenue increase to $103.6 million, though a weaker AUD kept Adjusted EBITDA flat Australia Segment Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $103.6 million | $91.7 million | | Operating Income | $12.6 million | $7.3 million | | Adjusted EBITDA | $20.5 million | $20.3 million | - The revenue increase was primarily driven by a new six-year A$1.4 billion integrated services contract[9] - A weakened Australian dollar relative to the U.S. dollar decreased Q1 2025 revenues by $4.9 million and Adjusted EBITDA by $1.0 million[8] - The acquisition of four villages in the Australian Bowen Basin is expected to close in the second quarter of 2025, subject to regulatory approvals[10] Canada Segment The Canadian segment experienced a severe downturn with revenues falling 40% and Adjusted EBITDA turning negative Canada Segment Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $40.4 million | $67.2 million | | Operating Loss/Income | ($10.0 million) | $1.7 million | | Adjusted EBITDA | ($0.2 million) | $5.7 million | - The 40% revenue decrease was driven by lower billed rooms due to customer spending reductions and a lodge sale[12] - The company reduced its Canadian employee headcount by approximately 25% in Q1 2025, incurring a restructuring charge of about $1.0 million[13] - Further cost-cutting actions are planned, including cold shutting two lodges and streamlining the North American cost structure[13] Financial Condition and Capital Allocation Financial Condition The company maintained a solid liquidity position of $162.2 million with a net leverage ratio of 0.8x Financial Position as of March 31, 2025 | Metric | Value | | :--- | :--- | | Total Liquidity | $162.2 million | | Total Debt | $87.4 million | | Net Debt | $59.0 million | | Net Leverage Ratio | 0.8x | - In Q1 2025, Civeo repurchased approximately 153,000 shares for about $3.3 million[14] - Capital expenditures were $5.3 million in Q1 2025, compared to $5.6 million in Q1 2024, primarily for maintenance[14] Updated Capital Allocation Framework Civeo shifted its capital strategy to prioritize share buybacks, increasing authorization and suspending its dividend - The share repurchase program authorization was increased to 20% of the company's total shares[16] - Civeo intends to use 100% of free cash flow to complete the new authorization and at least 75% annually thereafter[16] - In connection with the focus on repurchases, the Board of Directors has suspended the company's quarterly cash dividend[17] Full Year 2025 Guidance Revised 2025 Outlook Civeo lowered its full-year 2025 guidance for revenue, Adjusted EBITDA, and capital expenditures Full Year 2025 Guidance Update | Metric | Previous Guidance | New Guidance | | :--- | :--- | :--- | | Revenues | $630M - $660M | $620M - $650M | | Adjusted EBITDA | $80M - $90M | $75M - $85M | | Capital Expenditures | $25M - $30M | $20M - $25M | - This revised outlook excludes the impact of the Australian asset acquisition, which is anticipated to close by the end of Q2[19] Financial Statements and Reconciliations Unaudited Consolidated Statements of Operations The company reported a Q1 2025 operating loss of $5.5 million and a net loss of $9.8 million on lower revenues Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $144,044 | $166,120 | | Operating loss | $(5,516) | $(1,781) | | Net loss | $(9,850) | $(5,196) | | Net loss per share, diluted | $(0.72) | $(0.35) | Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $423.8 million, while long-term debt increased to $87.4 million Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $134,439 | $110,453 | | Total assets | $423,752 | $405,072 | | Long-term debt | $87,367 | $43,299 | | Total liabilities | $203,014 | $168,074 | | Total shareholders' equity | $220,738 | $236,998 | Unaudited Consolidated Statements of Cash Flows Q1 2025 saw a net cash outflow from operations of $8.4 million, a reversal from a $6.0 million inflow in Q1 2024 Q1 2025 Cash Flow Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash flows (used in) operating activities | $(8,445) | $5,985 | | Net cash flows (used in) investing activities | $(5,104) | $1,165 | | Net cash flows provided by financing activities | $36,625 | $6,614 | | Net change in cash and cash equivalents | $23,168 | $13,429 | Segment Data Segment data highlights the performance divergence, with Australia generating positive EBITDA and Canada reporting a loss Q1 2025 Segment Performance (in thousands) | Segment | Revenues | Adjusted EBITDA | | :--- | :--- | :--- | | Australia | $103,646 | $20,485 | | Canada | $40,398 | $(228) | | Corporate, other and eliminations | — | $(7,602) | | Total | $144,044 | $12,655 | Supplemental Quarterly Segment and Operating Data Australia's billed rooms increased in Q1 2025, while Canada experienced a significant drop from the prior year Q1 2025 vs Q1 2024 Operating Metrics | Metric | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | Billed rooms | Australia | 625,636 | 613,936 | | Average daily rates | Australia | $75 | $77 | | Billed rooms | Canada | 358,697 | 610,032 | | Average daily rates | Canada | $93 | $98 | Supplemental Operations by Service Type Asset-light services generated $102.3 million in revenue, accounting for approximately 71% of the company's total Q1 2025 Revenue by Service Type (in thousands) | Service Type | Australia | Canada | Total | | :--- | :--- | :--- | :--- | | Asset Light: Catering and Facility management | $76,659 | $25,649 | $102,308 | | Asset Intensive: Accommodations and Infrastructure | $26,987 | $14,749 | $41,736 | | Total revenues | $103,646 | $40,398 | $144,044 | Non-GAAP Reconciliations This section reconciles non-GAAP measures like Adjusted EBITDA and Free Cash Flow to their GAAP equivalents Q1 2025 EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net loss attributable to Civeo Corporation | $(9,842) | | Plus: Income tax, D&A, Interest | $20,960 | | EBITDA | $11,092 | | Plus: Restructuring costs | $964 | | Plus: Share-based compensation | $599 | | Adjusted EBITDA | $12,655 | Q1 2025 Free Cash Flow Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net Cash Flows Used in Operating Activities | $(8,445) | | Less: Capital expenditures | $(5,271) | | Plus: Proceeds from dispositions | $167 | | Free Cash Flow | $(13,549) |