Civeo(US:CVEO)2022-02-28 18:46Financial Data and Key Metrics Changes - For the full year 2021, Civeo generated $87 million in free cash flow and reduced total debt by $76 million, ending the year with $175 million in total debt [6] - In Q4 2021, Civeo reported total revenue of $159.8 million, with GAAP net income of $9.8 million or $0.58 per diluted share [15] - Adjusted EBITDA for Q4 2021 was $34.5 million, with free cash flow of $26.1 million [15][6] - The net leverage ratio decreased to 1.49 times at year-end from 1.86 times at the end of Q3 2021 [14] Business Line Data and Key Metrics Changes - Canadian segment revenue increased to $92.2 million in Q4 2021 from $65.5 million in Q4 2020, with adjusted EBITDA rising to $23.1 million from $13.8 million [17][18] - Australian segment revenue decreased to $62.3 million in Q4 2021 from $63.7 million in Q4 2020, with adjusted EBITDA down to $13.6 million from $17.2 million [20] - U.S. segment revenue increased to $5.3 million in Q4 2021 from $4.2 million in Q4 2020, with adjusted EBITDA improving to $3.3 million from a negative $1.4 million [22] Market Data and Key Metrics Changes - Canadian build rooms totaled 588,000 in Q4 2021, up 25% year-over-year from 469,000 [19] - Australian build rooms were 465,000 in Q4 2021, down from 480,000 in Q4 2020 [21] - The average daily rate for Canadian lodges was $106, an 8% year-over-year increase, while the Australian average daily rate remained at $77 [19][21] Company Strategy and Development Direction - Civeo's strategy focuses on diversifying revenue streams to reduce volatility in cash flow generation while prioritizing debt reduction [6][7] - The company aims to return capital to shareholders through a share repurchase program while maintaining a focus on debt paydown [9][38] - Management is optimistic about the potential for increased capital expenditures from customers if commodity prices stabilize [29][32] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are currently focused on capital discipline and returning capital to shareholders, impacting spending on maintenance and production [8] - The outlook for 2022 includes revenue guidance of $600 million to $615 million and EBITDA guidance of $90 million to $95 million [26] - The primary uncertainty in 2022 guidance is the timing and duration of pipeline projects in British Columbia [28] Other Important Information - Total capital expenditures for 2021 were $15.6 million, up from $10.1 million in 2020, with expectations for 2022 to be between $20 million and $25 million [23][26] - The company has total liquidity of approximately $92.8 million as of December 31, 2021 [24] Q&A Session Summary Question: Use of cash and share buyback program - Management indicated that the share buyback program has been progressing well, with about 30% of the authorization completed [39] Question: Canadian mobile camp revenue from pipeline projects - Management confirmed that 95% to 100% of mobile camp revenue is related to the Coastal GasLink and TMX projects [42] Question: Revenue contribution from the West Permian Lodge - The West Permian Lodge generated nearly $2 million in revenue before its sale, and the U.S. business is expected to run at breakeven to a $2 million EBITDA loss in 2022 [44] Question: Capital allocation priorities - Management stated that debt paydown is the top priority, followed by share buybacks, with M&A being the last option [54] Question: Australian labor costs and guidance - Management noted that labor costs are high due to COVID-related restrictions and that improvements are expected to take the full balance of 2022 [50] Question: Canadian turnaround activity expectations - Management expressed a conservative outlook for Canadian occupancy in 2022, dependent on customer capital expenditure alignment [51]