Civeo Reports First Quarter 2024 Results

HOUSTON & CALGARY, Canada - Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the first quarter ended March 31, 2024.

'Through continued safe and effective operations, our first quarter 2024 results were in line with expectations. The first quarter results were highlighted by the significant year-over-year improvement in our Australian segment with revenues up 19%, operating income up 22% and Adjusted EBITDA up 43% as a result of increased activity related to new contract awards as well as improved margins, up 360 basis points year-over-year. The year-over-year improvements in Australian results were largely offset by declines in revenues and Adjusted EBITDA in Canada with the sale of McClelland Lake Lodge and reduced LNG-related mobile camp activity.' said Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson concluded, 'Our focus remains on enhancing our existing operations while we evaluate growth opportunities across our portfolio and return cash flow to shareholders through our quarterly dividend and opportunistic share repurchases.'

First Quarter 2024 Results

In the first quarter of 2024, Civeo generated revenues of $166.1 million and reported a net loss of $5.1 million, or $0.35 per diluted share. The loss results in part from $7.8 million in costs associated with impairments on assets in Australia and the U.S. During the first quarter of 2024, Civeo produced operating cash flow of $6.0 million, Adjusted EBITDA of $17.3 million and free cash flow of $7.2 million.

By comparison, in the first quarter of 2023, Civeo generated revenues of $167.6 million and reported a net loss of $6.4 million, or $0.42 per diluted share. During the first quarter of 2023, Civeo produced operating cash flow of $0.4 million, Adjusted EBITDA of $20.2 million and negative free cash flow of $2.1 million.

The year-over-year decrease in Adjusted EBITDA in the first quarter of 2024 was primarily driven by the expected wind-down of LNG-related Canadian mobile camp activity, including $1.8 million in mobile camp demobilization costs, partially offset by increased billed rooms at the Australian owned-villages and improved margins in both the owned-villages and the Australian integrated services business.

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the first quarter of 2024 to the results for the first quarter of 2023.)

Canada

During the first quarter of 2024, the Canadian segment generated revenues of $67.2 million, operating income of $0.6 million and Adjusted EBITDA of $5.5 million, compared to revenues of $89.5 million, operating loss of $4.5 million and Adjusted EBITDA of $12.0 million in the first quarter of 2023.

The Canadian segment experienced a 25% period-over-period decrease in revenues and a 54% decrease in Adjusted EBITDA driven by the wind-down of LNG-related mobile camp activity, including $1.8 million of mobile camp demobilization costs.

Australia

During the first quarter of 2024, the Australian segment generated revenues of $91.7 million, operating income of $6.0 million and Adjusted EBITDA of $20.3 million, compared to revenues of $77.0 million, operating income of $4.9 million and Adjusted EBITDA of $14.2 million in the first quarter of 2023. Results for the first quarter of 2024 reflect the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $3.7 million and $0.8 million, respectively. Operating income for the first quarter of 2024 includes asset impairment charges of $5.7 million.

Revenue from the Australian segment increased 19% period-over-period and Adjusted EBITDA was up 43% driven by a 17% year-over-year increase in billed rooms, increased integrated services activity and improved margins for both Civeo's owned-villages and its integrated services business.

Financial Condition and Capital Allocation

As of March 31, 2024, Civeo had total liquidity of approximately $136.9 million, consisting of $120.1 million available under its revolving credit facilities and $16.8 million of cash on hand.

Civeo's total debt outstanding on March 31, 2024 was $78.6 million, a $13.0 million increase since December 31, 2023. Civeo's net debt on March 31, 2024 was $61.8 million, a $0.4 million decrease since December 31, 2023.

Civeo reported a net leverage ratio of 0.6x as of March 31, 2024, flat with the net leverage ratio at December 31, 2023.

During the first quarter of 2024, Civeo invested $5.6 million in capital expenditures compared to $4.8 million invested during the first quarter of 2023. Capital expenditures in both periods were primarily related to maintenance spending on the Company's lodges and villages. Capital expenditures in the first quarter of 2024 also included $2.4 million related to customer-funded infrastructure upgrades at three Australian villages.

The Company announced today that its board of directors has declared a quarterly cash dividend of $0.25 per common share, payable on June 17, 2024 to shareholders of record as of close of business on May 27, 2024. For purposes of the Income Tax Act (Canada), the Company has designated this dividend to be an 'eligible dividend'.

In the first quarter of 2024, Civeo repurchased approximately 133,000 shares through its share repurchase program for approximately $3.2 million.

Full Year 2024 Guidance

For the full year of 2024, Civeo is maintaining its previously provided revenue and Adjusted EBITDA guidance ranges of $625 million to $700 million and $80 million to $90 million, respectively. The Company is also maintaining its full year 2024 capital expenditure guidance of $30 million to $35 million.

Conference Call

Civeo will host a conference call to discuss its first quarter 2024 financial results today at 11:00 a.m. Eastern time. This call is being webcast and can be accessed at Civeo's website at www.civeo.com. Participants may also join the conference call by dialing [phone] in the United States or [phone] internationally and asking for the Civeo call or using the conference ID 13746099#. A replay will be available after the call by dialing [phone] in the United States or [phone] internationally and using the conference ID 13746099#.

About Civeo

Civeo Corporation is a leading provider of hospitality services with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for lodging hundreds or thousands of workers with its long-term and temporary accommodations and provides food services, housekeeping, facility management, laundry, water and wastewater treatment, power generation, communications systems, security and logistics services. Civeo currently operates a total of 24 lodges and villages in Canada, Australia and the U.S., with an aggregate of approximately 26,000 rooms. Civeo is publicly traded under the symbol CVEO on the New York Stock Exchange. For more information, please visit Civeo's website at www.civeo.com.

Forward Looking Statements

This news release 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, including the statements regarding Civeo's future plans and outlook, strategic priorities, guidance, current trends, expectations with respect to share repurchases and dividends, and liquidity needs, are based on then current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the accommodations industry, risks associated with the level of supply and demand for oil, coal, iron ore and other minerals, including the level of activity, spending and developments in the Canadian oil sands, the level of demand for coal and other natural resources from, and investments and opportunities in, Australia, and fluctuations or sharp declines in the current and future prices of oil, natural gas, coal, iron ore and other minerals, risks associated with failure by our customers to reach positive final investment decisions on, or otherwise not complete, projects with respect to which we have been awarded contracts, which may cause those customers to terminate or postpone contracts, risks associated with currency exchange rates, risks associated with inflation and volatility in the banking sector, risks associated with the company's ability to integrate any future acquisitions, risks associated with labor shortages, risks associated with the development of new projects, including whether such projects will continue in the future, risks associated with the trading price of the company's common shares, availability and cost of capital, risks associated with general global economic conditions, geopolitical events, inflation, global weather conditions, natural disasters, global health concerns, and security threats and changes to government and environmental regulations, including climate change, and other factors discussed in the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' and 'Risk Factors' sections of Civeo's most recent annual report on Form 10-K and other reports the company may file from time to time with the U.S. Securities and Exchange Commission. Each forward-looking statement contained herein speaks only as of the date of this release. Except as required by law, Civeo expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Information

EBITDA, Adjusted EBITDA, free cash flow, net debt, bank-adjusted EBITDA and net leverage ratio are non-GAAP financial measures. See 'Non-GAAP Reconciliation' below for definitions and additional information concerning non-GAAP financial measures, including a reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. Non-GAAP financial information supplements and should be read together with, and is not an alternative or substitute for, the Company's financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures.

Contact:

Regan Nielsen

Civeo Corporation

Vice President, Corporate Development & Investors

713-510-2400

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