HOUSTON, Oct. 31, 2016 (GLOBE NEWSWIRE) -- Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the third quarter ended September 30, 2016.

Highlights include:

• Financial results for each division and on a consolidated basis exceeded guidance due to the Company’s continued cost control, higher occupancy in Canada after the Ft. McMurray forest fires, and slightly higher than anticipated occupancy and average daily rates in Australia
• The Company generated $13.7 million in operating cash flow and $10.7 million in free cash flow and reduced debt by $15 million

"Our operational execution in the third quarter continued to exceed our expectations despite the persistent macroeconomic headwinds impacting our core end markets. Although the recent stabilization in global crude oil spot prices is encouraging, we remain committed to vigilant cost control, positive free cash flow generation and debt reduction,” said Bradley J. Dodson, President and Chief Executive Officer.

“Additionally, spot met coal prices in Australia have surged in recent weeks in response to domestic coal output reductions in China leading to an increase in Chinese imports. Although the higher prices have yet to noticeably impact mining activity in Australia, improving market fundamentals are an encouraging sign heading into 2017. We continue to believe that the Company remains well positioned in the Australian natural resources market over the long-term.”

THIRD QUARTER 2016 RESULTS

In the third quarter of 2016, the Company generated revenues of $104.2 million and reported a net loss of $42.1 million, or $0.39 per share. The loss included a $39.4 million pre-tax loss ($28.8 million after-tax, or $0.27 per diluted share) resulting from the impairment of fixed assets, a write-down of inventory and severance costs associated with the termination of certain executives. Excluding these charges, adjusted net loss was $13.3 million or $0.12 per diluted share. During the third quarter of 2016, Adjusted EBITDA was $25.4 million and the Company generated operating cash flow of $13.7 million and free cash flow of $10.7 million.

(EBITDA is a non-GAAP financial measure that is defined as net income plus interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA adjusted to exclude impairment charges and certain other costs. Free cash flow is a non-GAAP financial measure that is defined as net cash flows provided by operating activities less capital expenditures plus proceeds from asset sales. Please see reconciliation to GAAP measures at the end of this news release.)

By comparison, in the third quarter of 2015, the Company generated revenues of $106.5 million and a net loss of $107.7 million, or $1.01 per share. The loss included $113.7 million in pre-tax charges ($92.6 million after-tax or $0.86 per diluted share) related to goodwill and fixed asset impairments and costs incurred in connection with the Company’s migration to Canada. Excluding these charges, adjusted net loss was $15.1 million, or $0.15 per diluted share. During the third quarter of 2015, Adjusted EBITDA was $25.3 million, operating cash flow was $80.6 million and free cash flow was $61.5 million.

Revenues decreased $2.3 million, or 2% year over year, in the third quarter of 2016 compared to the third quarter of 2015. The decline was attributable to decreases in the U.S. and Australia due to lower occupancy and activity levels. Selling, general and administrative expense decreased $3.0 million, or 18%, in the third quarter of 2016 compared to the third quarter of 2015. This decrease was primarily due to reduced compensation as a result of workforce reductions, the non-recurrence of 2015 transaction costs related to the Canada migration and lower incentive compensation costs.

BUSINESS SEGMENT RESULTS

(Unless otherwise noted, the following discussion compares the quarterly results for the third quarter of 2016 to the third quarter of 2015. The results discussed below exclude the fixed asset impairment expense and migration charges noted above.)

Canada

The Canadian segment generated revenues of $73.5 million, operating loss of $44.7 million, and Adjusted EBITDA of $19.6 million in the third quarter of 2016 compared to revenues of $71.5 million, operating loss of $70.9 million, and Adjusted EBITDA of $19.5 million in the third quarter of 2015. The average exchange rates for the Canadian dollar relative to the U.S. dollar had a negligible impact on the Company’s results in the third quarter of 2016 compared to the third quarter of 2015.

On a constant currency basis, lodge revenues increased nearly 11% year-on-year due to the expansion of lodging capacity and higher occupancy due primarily to the continued room needs for customers’ recovery efforts from the Fort McMurray fires. However, this was partially offset by a decline in the average daily lodging rate from $112 to $100. Mobile, open camp and manufacturing revenues all declined due to overall lower activity levels.

Australia

The Australian segment generated revenues of $27.7 million, operating loss of $1.9 million, and Adjusted EBITDA of $11.0 million in the third quarter of 2016, compared to revenues of $29.2 million, operating loss of $26.0 million, and Adjusted EBITDA of $11.7 million in the third quarter of 2015. A stronger average exchange rate between the Australian dollar relative to the U.S. dollar in the third quarter of 2016 compared to the third quarter of 2015 increased revenues by $1.2 million. On a constant currency basis, Australian segment revenues declined by 9% year-on-year in the third quarter of 2016 due to lower occupancy levels associated with the continued downturn in the Australian mining industry.

United States

The U.S. segment generated revenues of $3.0 million, operating loss of $3.3 million, and negative Adjusted EBITDA of $1.3 million in the third quarter of 2016, compared to revenues of $5.9 million, operating loss of $24.9 million, and negative Adjusted EBITDA of $1.0 million in the third quarter of 2015. Results reflected lower U.S. drilling activity in the Bakken, Rockies and Texas markets.

IMPAIRMENT CHARGES

During the third quarter of 2016, the Company recorded a pre-tax impairment charge of $37.7 million ($27.5 million after-tax, or $0.26 per diluted share). The non-cash impairment charge resulted from a carrying value assessment of mobile camp assets and certain undeveloped land positions in our Canadian segment. Additional details will be available in our Form 10-Q filing for the third quarter of 2016.

INCOME TAXES

The Company recognized an income tax benefit of $11.7 million, which reflected an effective tax rate of 21.8% in the third quarter of 2016. By comparison, during the third quarter of 2015, the Company recognized an income tax benefit of $22.7 million, which resulted in an effective tax rate of 17.5%.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2016, the Company had total available liquidity of approximately $176.6 million, comprising $174.1 million available under its credit facility and $2.5 million of cash on hand. The Company made $15.4 million in debt reduction payments during the third quarter, for a total of $44 million in debt reduction payments during the first nine months of 2016.

Capital expenditures totaled $5.4 million in the third quarter compared to $19.6 million spent in the same period last year. Year-to-date, capital expenditures totaled $15.2 million, compared with $43.7 million for the first nine months of 2015. Civeo currently expects capital expenditures of approximately $20 million to $25 million for the full year 2016.

FOURTH QUARTER AND FULL YEAR 2016 GUIDANCE

For the fourth quarter of 2016, the Company expects revenues of $88 million to $92 million and Adjusted EBITDA of $15 million to $18 million. For the full year 2016, the Company expects revenues of $394 million to $398 million and Adjusted EBITDA of $84 million to $87 million. (Please see reconciliation to GAAP measures at the end of this news release.)

ABOUT CIVEO

Civeo Corporation is a leading provider of workforce accommodations with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Civeo offers comprehensive solutions for housing hundreds or thousands of workers with its long-term and temporary accommodations solutions and provides catering, facility management, water systems and logistics services. Civeo currently owns a total of 19 lodges and villages in operation in Canada and Australia, with an aggregate of more than 23,000 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.