Civeo(US:CVEO)2022-04-29 19:47Financial Data and Key Metrics Changes - Civeo Corporation reported a year-over-year revenue growth of 32% and adjusted EBITDA growth of 57% for Q1 2022, driven by increased occupancy in Canadian lodges and Australian villages, along with heightened Canadian mobile camp activity [6][12] - Total revenues for Q1 2022 were $165.7 million, with GAAP net income of $0.9 million or $0.06 per diluted share [12] - Adjusted EBITDA for Q1 2022 was $25.6 million, with operating cash flow of $2 million and free cash flow of $700,000 [12] Business Line Data and Key Metrics Changes - Canadian segment revenues increased to $96 million from $61.9 million year-over-year, with adjusted EBITDA rising to $17.2 million from $10.8 million [13] - Australian segment revenues were $63.5 million, up from $59.6 million, with adjusted EBITDA increasing to $15.4 million from $12.8 million [14] - US segment revenues rose to $6.2 million from $3.9 million, with adjusted EBITDA improving to breakeven from negative $1.2 million [16] Market Data and Key Metrics Changes - Canadian lodges experienced a 32% year-over-year increase in billed rooms, totaling 636,000 [13] - Australian billed rooms increased by 12% year-over-year to 474,000, with average daily rates remaining consistent at $79 [14][15] - The US market benefited from increased drilling and completion activity, contributing to revenue growth [10] Company Strategy and Development Direction - The company is focused on deleveraging its balance sheet while also returning capital to shareholders through a share repurchase program [8] - Civeo aims to enhance its hospitality services, maintain cost structures in line with occupancy outlooks, and seek opportunities for revenue diversification through organic growth and M&A [21] - The company raised its full year 2022 revenue guidance to a range of $660 million to $675 million and adjusted EBITDA guidance to $95 million to $102 million [18] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging customer conversations regarding increased maintenance and turnaround spending, particularly in Canada [6][19] - The company highlighted risks related to labor availability in Canada that could impact turnaround execution [19] - In Australia, management acknowledged ongoing challenges due to COVID-related labor costs and the China-Australia trade dispute, but expressed optimism about gradual improvements [20] Other Important Information - A stock purchase agreement was announced involving one of the largest shareholders, which will limit the availability of common shares for sale until at least April 2023 [7] - The company’s total debt outstanding as of March 31, 2022, was $177.9 million, with a net leverage ratio of 1.4x [16][17] Q&A Session Summary Question: Insights on Australian business occupancy and growth - Management indicated that the increase in occupancy is primarily due to maintenance activities, with some early signs of growth opportunities [24] Question: Average Daily Rate (ADR) evolution - Management confirmed that the mix of non-contracted rooms has influenced ADR, with an upward bias on pricing expected in both Canada and Australia [26] Question: Updates on LNG projects in Western Canada - Management remains cautiously optimistic about potential expansions, particularly the LNG Canada project, but no updates on timing were provided [29] Question: Balance sheet and free cash flow uses - Management reiterated the focus on debt repayment and returning capital to shareholders, with plans to explore growth opportunities as conditions improve [30] Question: Share repurchase program renewal - Management indicated that discussions regarding the renewal of the share repurchase program would occur, with a strong likelihood of continuation [33] Question: Demobilization of Canadian mobile camps - Management confirmed that current guidance assumes demobilization will occur in Q4 2022, based on customer conversations [34] Question: Working capital and capital expenditures - Management acknowledged that higher revenues would likely lead to increased working capital needs, with some capital expenditures already built into guidance [38]