Highlights:

• Reported revenues of $144.0 million, net loss of $9.8 million and Adjusted EBITDA of $12.7 million;
• Returned $6.8 million of capital to shareholders in the quarter through share repurchases and the quarterly dividend;
• Announced updates to its capital allocation framework, including the increase of Civeo’s share repurchase authorization from 10% to 20% of shares outstanding and the suspension of its quarterly cash dividend; and
• Continued progress toward completing the previously announced acquisition of four villages in the Australian Bowen Basin, with the transaction expected to close in the second quarter of 2025.

HOUSTON--(BUSINESS WIRE)--Apr. 30, 2025-- Civeo Corporation (NYSE:CVEO) today reported financial and operating results for the first quarter ended March 31, 2025.

“Our first quarter results were consistent with our expectations; we continued to deliver topline growth in Australia supported by our recent integrated services contract award, and our operations in Canada continued to be impacted by macroeconomic headwinds that intensified in the first quarter,” said Bradley J. Dodson, Civeo's President and Chief Executive Officer. “In Australia, we continue to benefit from strong occupancy levels and customer activity across our owned villages, and we are pleased to be expanding our presence in the region to further capitalize on these favorable market dynamics. In Canada, we are taking decisive action to improve results, including by executing our previously announced plan to streamline Civeo’s cost structure. We will continue to take steps to reduce costs in the second and third quarters and remain focused on strategic initiatives to diversify our exposure from oil sands activity and increase the resilience of our business model.”

Mr. Dodson added, “One of Civeo’s greatest attributes is its ability to generate positive free cash flow in various macroeconomic environments, as demonstrated by the positive free cash flow the Company has generated every year since its spin-off in 2014. Going forward, we are confident in Civeo’s ability to continue generating annual free cash flow through the cycle, driven by the same underlying principles that drove performance in our first decade: strong operational discipline coupled with minimal capital requirements to maintain the business. In addition, approximately two-thirds of our global revenue is generated from Asset Light: Catering and Facility management, as detailed in our supplemental disclosure. We do not believe the Company’s current valuation accurately reflects these attractive characteristics, and as such the Board of Directors has decided to rebalance our capital return mix to prioritize share repurchases as the sole vehicle for returning capital to shareholders. We are confident the updated capital allocation framework announced today will facilitate value creation while maintaining the Company’s strong balance sheet. We remain confident in Civeo’s strong long-term free cash flow profile and look forward to unlocking the Company’s potential and driving value creation for shareholders as we move forward.”

First Quarter 2025 Results

In the first quarter of 2025, Civeo generated revenues of $144.0 million and reported a net loss of $9.8 million, or $0.72 per diluted share. Despite solid growth and performance in Australia, the impact of seasonality, intensifying headwinds and restructuring efforts in Canada resulted in negative operating cash flow of $8.4 million and positive Adjusted EBITDA of $12.7 million.

By comparison, 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 Company's first quarter loss results included $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 and Adjusted EBITDA of $17.8 million.

The year-over-year decrease in Adjusted EBITDA in the first quarter of 2025 was primarily driven by decreased billed rooms at the Canadian lodges due to customer spending reductions in the Canadian oil sands region and the loss of occupancy related to the Fort Hills project as a result of the sale of McClelland Lake Lodge.

Business Segment Results

(Unless otherwise noted, the following discussion compares the quarterly results for the first quarter of 2025 to the results for the first quarter of 2024.)

Australia

During the first quarter of 2025, the Australian segment generated revenues of $103.6 million, operating income of $12.6 million and Adjusted EBITDA of $20.5 million, compared to revenues of $91.7 million, operating income of $7.3 million and Adjusted EBITDA of $20.3 million in the first quarter of 2024. Results for the first quarter of 2025 include the impact of a weakened Australian dollar relative to the U.S. dollar, which decreased revenues and Adjusted EBITDA by $4.9 million and $1.0 million, respectively. Furthermore, free cash flow in the first quarter of 2025 was burdened by Australian cash taxes not incurred in the first quarter of 2024. Operating income for the first quarter of 2024 included asset impairment charges of $5.7 million of the aforementioned total impairment of $7.8 million.

Revenue from the Australian segment increased 13% period-over-period and Adjusted EBITDA was relatively flat. The year-over-year revenue increase was primarily driven by an increase in integrated services activity related to the previously announced six-year A$1.4 billion contract.

On February 19, 2025, Civeo announced that it had entered into an agreement to acquire four villages and associated take-or-pay contracts in the Australian Bowen Basin. The Company continues to expect this acquisition to close in the second quarter of 2025, subject to regulatory approvals and customary closing conditions.

Canada

During the first quarter of 2025, the Canadian segment generated revenues of $40.4 million, an operating loss of $10.0 million and negative Adjusted EBITDA of $0.2 million, compared to revenues of $67.2 million, operating income of $1.7 million and Adjusted EBITDA of $5.7 million in the first quarter of 2024.

Lodge occupancy in the Canadian oil sands region remains challenged as customers continue to reduce capital and operational spending. In the first quarter of 2025, the Canadian segment experienced a 40% period-over-period decrease in revenues driven by lower billed rooms in the Canadian lodges as a result of these customer spending reductions and the loss of occupancy related to the Fort Hills project as a result of the sale of McClelland Lake Lodge. The Company expects customer spending in the region to remain constrained and is taking decisive action to manage these headwinds.

During the first quarter of 2025, the Company reduced its Canadian employee headcount by approximately 25% and recorded a restructuring charge of approximately $1.0 million, which has been added back to Adjusted EBITDA. In light of the deteriorating macroeconomic factors influencing the global oil market, the Company is implementing further cost cutting actions throughout 2025 including cold shutting two lodges. The Company currently expects to record approximately $1.0 million in restructuring charges in the second quarter of 2025. In addition, the Company has engaged a third-party consultant to assist in its efforts to streamline its North American cost structure.

Financial Condition

As of March 31, 2025, Civeo had total liquidity of approximately $162.2 million. Civeo's total debt on March 31, 2025 was $87.4 million, a $44.1 million increase from December 31, 2024. Civeo's net debt on March 31, 2025 was $59.0 million, a $20.9 million increase since December 31, 2024.

Civeo reported a net leverage ratio of 0.8x as of March 31, 2025.

In the first quarter of 2025, Civeo repurchased approximately 153,000 shares for approximately $3.3 million.

During the first quarter of 2025, Civeo invested $5.3 million in capital expenditures compared to $5.6 million invested during the first quarter of 2024. Capital expenditures in both periods were primarily related to maintenance spending on the Company’s lodges and villages.

Updated Capital Allocation Framework

Civeo also announced changes to its capital allocation strategy to accelerate the return of capital to investors and drive long-term shareholder value, while preserving financial flexibility given current macroeconomic and geopolitical uncertainties. The updated capital allocation framework reflects a thorough review conducted by the Company’s Board and management team as well as extensive shareholder engagement.

The Board has authorized an increase to the Company’s previously announced share repurchase program, increasing the authorization to allow for the repurchase of up to 20% of the Company’s total shares (up from 10%). Civeo intends to use 100% of free cash flow to complete this authorization as soon as practicable. After the newly increased authorization is complete, the Company intends to utilize at least 75% of its free cash flow on an annual basis to continue repurchasing shares. The Company expects to primarily utilize open market purchases to execute its current share repurchase authorization; however, the Company continues to evaluate expedited methods of repurchasing shares, including but not limited to a tender offer, to augment its open market purchases.

In connection with these updates, the Board of Directors is also suspending the Company’s cash dividend previously paid to shareholders on a quarterly basis.

Full Year 2025 Guidance

For the full year of 2025, Civeo is lowering its revenue and Adjusted EBITDA guidance ranges to $620 million to $650 million and $75 million to $85 million, respectively. The Company’s previous 2025 revenue and Adjusted EBITDA guidance ranges were $630 million to $660 million of revenues and $80 million to $90 million of Adjusted EBITDA.

The Company is lowering its full year 2025 capital expenditure guidance to a range of $20 million to $25 million. The Company’s previous 2025 capital expenditure guidance range was $25 million to $30 million.

This outlook excludes the impact of the Australian asset acquisition, which is expected to close by the end of the second quarter subject to regulatory approvals and customary closing conditions.

Conference Call

Civeo will host a conference call to discuss its first quarter 2025 financial results today at 8:30 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 (877) 423-9813 in the United States or (201) 689-8573 internationally and asking for the Civeo call or using the conference ID 13753431#. A replay will be available after the call by dialing (844) 512-2921 in the United States or (412) 317-6671 internationally and using the conference ID 13753431#.

About Civeo

Civeo Corporation is a leading provider of hospitality services with prominent market positions in the Australian natural resource and Canadian oil sands 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 owns and operates a total of 24 lodges and villages in Australia and North America with an aggregate of approximately 26,000 rooms. In addition, Civeo operates and provides hospitality services at 22 customer-owned locations with more than 18,000 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 Adjusted EBITDA, capital expenditures, future revenues, share repurchases, free cash flow generation, cost reductions, closing of the Australian asset acquisition 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, including wildfires, 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.

- Financial Schedules Follow -

CIVEO CORPORATION
SUPPLEMENTAL OPERATIONS BY SERVICE TYPE BY REGION DATA
(U.S. dollars in thousands)
(unaudited)

The following table sets forth certain supplemental data for our Australia and Canada segment revenues attributable to the asset-light (“Catering and Facility Management”) portion of the Company’s business and the asset-intensive (“Accommodations and Infrastructure”) portion of the Company’s business. We provide Catering and Facility Management services to both customer-owned assets and Company-owned villages and lodges. When we provide Catering and Facility Management services to customer-owned assets, it is reflected in “Food and other services” in our Supplemental Quarterly Segment and Operating Data. However, when we provide those same services to customers at our owned villages and lodges, it is reflected in “Accommodation and other services”, which also includes the Accommodations and Infrastructure component of our owned villages and lodges. This is because we bill our customers in one combined rate for both Accommodations and Infrastructure services and Catering and Facility Management services at Company-owned villages and lodges.

The purpose of the disclosure below is to disaggregate the embedded Catering and Facility Management revenues from the “Accommodation and other services” revenues associated with our owned villages and lodges that is included in our Supplemental Quarterly Segment and Operating Data. To do so, we apply a margin that is equal to Civeo’s margin in similar services we provide to customer-owned assets to the cost of sales that are associated with Catering and Facility Management services within “Accommodation and other services” for our owned villages and lodges. This table provides investors a supplemental view of the services provided by the Company which could assist with their valuation analysis.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250430264899/en/

Regan Nielsen
Civeo Corporation
Vice President, Corporate Development & Investor Relations
713-510-2400

Source: Civeo Corporation