HOUSTON, April 27, 2018 (GLOBE NEWSWIRE) -- Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the first quarter ended March 31, 2018.

Highlights since year-end include:

• Delivered first quarter revenues of $101.5 million
• Completed acquisition of Noralta Lodge, a premier accommodations provider in the Canadian Oil Sands region, on April 2, 2018
• Completed acquisition of a 400 room accommodation facility near Lake Charles, Louisiana
• Amended and restated the credit facility, extending the maturity date by 18 months to November 2020, on April 2, 2018

“We had a strategically successful start to 2018 highlighted by the close of two important acquisitions for our Company, strengthening our respective positions in the Canadian Oil Sands and U.S. Gulf Coast markets. Our teams are diligently advancing integration efforts as we continue to focus on providing best-in-class service levels for our customers and delivering value for all of our stakeholders. These acquisitions will deliver increased cash flows and further delever our balance sheet. The completion of an amendment to our credit facility was another important milestone for Civeo as we take steps to optimize our capital structure for growth in an increasingly healthy commodity price environment,” said Bradley J. Dodson, President and Chief Executive Officer.

Mr. Dodson continued, “In Canada, the first quarter of 2018 was softer than anticipated with lower average daily rates related to the new McClelland Lake Ft. Hills contract and lower margins from our mobile camp business. However, our Canadian occupancy in March and outlook for April and May is optimistic due to strong turnaround activity. In Australia, we also experienced some extended holiday downtime to start the year followed by progressively stronger performance each month. And finally, the results for our U.S. segment continue to strengthen, driven by robust drilling activity in the Permian Basin and the addition of our new location on the U.S. Gulf Coast. We believe that the U.S. segment will achieve positive EBITDA in the second quarter. Against this encouraging fundamental backdrop, we will continue to focus on our strategic mandates of generating free cash flow, managing capital, and pursuing growth opportunities across our core markets.”

First Quarter 2018 Results

In the first quarter of 2018, Civeo generated revenues of $101.5 million and reported a net loss of $55.5 million, or $0.42 per share. The loss represents a $56.0 million pre-tax loss resulting in part from a $28.7 million impairment charge as well as roughly $1.0 million in costs associated with the Noralta acquisition. During the first quarter of 2018, Civeo produced operating cash flow of $2.8 million, Adjusted EBITDA of $10.0 million and free cash flow of $2.9 million.

(EBITDA is a non-GAAP financial measure that is defined as net income (loss) 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 the reconciliations to GAAP measures at the end of this news release.)

By comparison, in the first quarter of 2017, Civeo generated revenues of $91.4 million and reported a net loss of $21.0 million, or $0.17 per share. During the first quarter of 2017, Civeo generated operating cash flow of $9.8 million, Adjusted EBITDA of $15.2 million and free cash flow of $6.5 million.

The decline in Adjusted EBITDA was the result of lower EBITDA margins in Canada from reduced daily rates and a shift in revenue mix towards catering, mobile and open camp revenues and increased selling, general, and administrative expenses primarily associated with higher incentive compensation costs. The increase in net loss in the first quarter of 2018 compared to 2017 was primarily due to the aforementioned items, a $28.7 million pre-tax impairment charge and $1 million in costs associated with the Noralta acquisition.

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the first quarter of 2018 to the results for the first quarter of 2017. The Adjusted EBITDA amounts discussed below exclude the fixed asset impairment and Noralta-related expenses noted above.)

Canada

During the first quarter of 2018, the Canadian segment generated revenues of $63.4 million, operating loss, including the impairment discussed above, of $39.9 million and Adjusted EBITDA of $9.3 million, compared to revenues of $60.5 million, operating loss of $5.0 million and Adjusted EBITDA of $13.2 million in the first quarter of 2017. The first quarter of 2018 results reflect the impact of a strengthened Canadian dollar relative to the U.S. dollar, which increased revenues by $2.8 million. On a constant currency basis, revenues were roughly flat due to a decrease in average daily rates, which was partially offset by an increase in catering, mobile and open camp revenues. The shift in revenue mix towards catering, mobile and open camp revenues resulted in compressed margins in the first quarter of 2018 compared to the first quarter 2017. Adjusted EBITDA for 2018 was also positively impacted by a $2.1 million gain on sale of assets related to unused units.

Australia

Revenue for the Australian segment was $27.9 million, operating loss was $3.2 million and Adjusted EBITDA was $9.1 million in the first quarter of 2018, compared to revenues of $27.0 million, operating loss of $1.2 million and Adjusted EBITDA of $10.6 million in the first quarter of 2017, respectively.

The first quarter results reflect the impact of a strengthened Australian dollar relative to the U.S. dollar, which increased revenues by $1.0 million. On a constant currency basis, revenue for the Australian segment was roughly flat with a slower than usual start to 2018, which was offset by a strong March. Additionally, reduced take-or-pay contract termination revenue compared to the first quarter of 2017 was largely offset by increased occupancy.

U.S.

The U.S. segment generated revenues of $10.2 million, operating loss of $3.3 million and an Adjusted EBITDA loss of $0.7 million in the first quarter of 2018, compared to revenues of $3.9 million, operating loss of $2.8 million and an Adjusted EBITDA loss of $1.3 million in the first quarter of 2017. The revenue increase was primarily due to higher activity in the U.S. unconventional plays, and the addition of one month of revenues at our new location near Lake Charles, Louisiana.

Income Taxes

Civeo recognized an income tax benefit of $0.7 million, which resulted in an effective tax rate of 1.2% in the first quarter of 2018. During the first quarter of 2017, Civeo recognized an income tax benefit of $2.9 million, which resulted in an effective tax rate of 12.4%.

Financial Condition

As of March 31, 2018, Civeo had total liquidity of approximately $243.7 million, consisting of $201.7 million available under its revolving credit facilities and $42.0 million of cash on hand, including $30 million of cash from credit facility borrowings in late March to fund a portion of the cash consideration in the Noralta acquisition.

Civeo’s total debt outstanding on March 31, 2018 was $320.8 million, a $23.2 million increase since December 31, 2017. The increase resulted from borrowings in anticipation of the April 2, 2018 funding of the Noralta acquisition.

On April 2, 2018 we amended our credit agreement to extend the facility for 18 months to November 2020. Further, our aggregate revolving loan commitments were reduced $35.5 million to a maximum principal amount of $239.5 million.

During the first quarter of 2018, Civeo invested $2.7 million in maintenance related capital expenditures, down from $3.9 million during the first quarter of 2017, which included investments in an enterprise information system. Civeo also invested $23.5 million of cash in the Louisiana accommodation facility acquisition during the first quarter of 2018.

Second Quarter and Full Year 2018 Guidance

For the second quarter of 2018, Civeo expects revenues of $136 million to $144 million and EBITDA of $28 million to $30 million. For the full year of 2018, Civeo expects revenues of $490 million to $512 million and EBITDA of $93 million to $100 million, inclusive of the operations acquired in the Noralta and Louisiana acquisitions. Civeo expects capital expenditures of approximately $20 to $25 million for the full year 2018.

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 and provides catering, facility management, water systems and logistics services. Civeo currently operates a total of 30 lodges and villages in operation in Canada and Australia, with an aggregate of approximately 32,000 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.