[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2019 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________________________ to _________________________ |
British Columbia, Canada | 98-1253716 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
Three Allen Center, 333 Clay Street, Suite 4980, | 77002 |
Houston, Texas | (Zip Code) |
(Address of principal executive offices) |
YES [X] | NO [ ] |
YES [X] | NO [ ] |
Large Accelerated Filer [ ] | Accelerated Filer [X] | Emerging Growth Company [ ] |
Non-Accelerated Filer [ ] | Smaller Reporting Company [ ] |
YES [ ] | NO [X ] |
Page No. | |
Part I -- FINANCIAL INFORMATION | |
Item 1. Financial Statements: | |
Consolidated Financial Statements | |
Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018 | |
Unaudited Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2019 and 2018 | |
Consolidated Balance Sheets – as of March 31, 2019 (unaudited) and December 31, 2018 | |
Unaudited Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2019 and 2018 | |
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 | |
Notes to Unaudited Consolidated Financial Statements | |
Cautionary Statement Regarding Forward-Looking Statements | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | |
Item 4. Controls and Procedures | |
Part II -- OTHER INFORMATION | |
Item 1. Legal Proceedings | |
Item 1A. Risk Factors | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 6. Exhibits | |
(a) Index of Exhibits | |
Signature Page |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Revenues: | |||||||
Service and other | $ | 100,079 | $ | 93,083 | |||
Rental | 6,490 | 3,321 | |||||
Product | 1,981 | 5,100 | |||||
108,550 | 101,504 | ||||||
Costs and expenses: | |||||||
Service and other costs | 72,644 | 68,806 | |||||
Rental costs | 5,150 | 4,522 | |||||
Product costs | 1,836 | 4,373 | |||||
Selling, general and administrative expenses | 16,096 | 16,514 | |||||
Depreciation and amortization expense | 30,782 | 30,764 | |||||
Impairment expense | — | 28,661 | |||||
Other operating expense (income) | (65 | ) | 379 | ||||
126,443 | 154,019 | ||||||
Operating loss | (17,893 | ) | (52,515 | ) | |||
Interest expense | (6,635 | ) | (5,822 | ) | |||
Interest income | 27 | 58 | |||||
Other income | 2,978 | 2,259 | |||||
Loss before income taxes | (21,523 | ) | (56,020 | ) | |||
Income tax benefit | 4,484 | 685 | |||||
Net loss | (17,039 | ) | (55,335 | ) | |||
Less: Net income attributable to noncontrolling interest | — | 122 | |||||
Net loss attributable to Civeo Corporation | (17,039 | ) | (55,457 | ) | |||
Less: Dividends attributable to Class A preferred shares | 459 | — | |||||
Net loss attributable to Civeo common shareholders | $ | (17,498 | ) | $ | (55,457 | ) | |
Per Share Data (see Note 9) | |||||||
Basic net loss per share attributable to Civeo Corporation common shareholders | $ | (0.11 | ) | $ | (0.42 | ) | |
Diluted net loss per share attributable to Civeo Corporation common shareholders | $ | (0.11 | ) | $ | (0.42 | ) | |
Weighted average number of common shares outstanding: | |||||||
Basic | 165,330 | 131,631 | |||||
Diluted | 165,330 | 131,631 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net loss | $ | (17,039 | ) | $ | (55,335 | ) | |
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustment, net of taxes of zero | 5,379 | (7,821 | ) | ||||
Total other comprehensive income (loss) | 5,379 | (7,821 | ) | ||||
Comprehensive loss | (11,660 | ) | (63,156 | ) | |||
Less: Comprehensive income attributable to noncontrolling interest | — | 122 | |||||
Comprehensive loss attributable to Civeo Corporation | $ | (11,660 | ) | $ | (63,278 | ) |
March 31, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,992 | $ | 12,372 | |||
Accounts receivable, net | 73,513 | 70,223 | |||||
Inventories | 4,276 | 4,313 | |||||
Prepaid expenses | 5,565 | 7,036 | |||||
Other current assets | 3,702 | 3,556 | |||||
Assets held for sale | 8,058 | 10,297 | |||||
Total current assets | 103,106 | 107,797 | |||||
Property, plant and equipment, net | 650,919 | 658,905 | |||||
Goodwill | 119,158 | 114,207 | |||||
Other intangible assets, net | 111,542 | 119,409 | |||||
Operating lease right-of-use assets | 22,225 | — | |||||
Other noncurrent assets | 1,048 | 1,359 | |||||
Total assets | $ | 1,007,998 | $ | 1,001,677 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 30,053 | $ | 28,334 | |||
Accrued liabilities | 13,371 | 15,956 | |||||
Income taxes | 572 | 310 | |||||
Current portion of long-term debt | 34,068 | 33,329 | |||||
Deferred revenue | 3,598 | 3,035 | |||||
Other current liabilities | 9,407 | 5,719 | |||||
Total current liabilities | 91,069 | 86,683 | |||||
Long-term debt, less current maturities | 346,841 | 342,908 | |||||
Deferred income taxes | 13,838 | 18,442 | |||||
Operating lease liabilities | 18,529 | — | |||||
Other noncurrent liabilities | 16,404 | 18,220 | |||||
Total liabilities | 486,681 | 466,253 | |||||
Commitments and contingencies (Note 12) | |||||||
Shareholders’ Equity: | |||||||
Preferred shares (Class A Series 1, no par value; 50,000,000 shares authorized, 9,042 shares issued and outstanding, respectively; aggregate liquidation preference of $92,236,909 as of March 31, 2019) | 56,739 | 56,280 | |||||
Common shares (no par value; 550,000,000 shares authorized, 171,401,230 shares and 166,392,479 shares issued, respectively, and 169,301,917 shares and 165,932,334 shares outstanding, respectively) | — | — | |||||
Additional paid-in capital | 1,564,667 | 1,562,133 | |||||
Accumulated deficit | (728,748 | ) | (710,551 | ) | |||
Common shares held in treasury at cost, 2,099,313 and 460,145 shares, respectively | (5,471 | ) | (1,189 | ) | |||
Accumulated other comprehensive loss | (365,870 | ) | (371,249 | ) | |||
Total Civeo Corporation shareholders’ equity | 521,317 | 535,424 | |||||
Noncontrolling interest | — | — | |||||
Total shareholders’ equity | 521,317 | 535,424 | |||||
Total liabilities and shareholders’ equity | $ | 1,007,998 | $ | 1,001,677 |
Attributable to Civeo | |||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | ||||||||||||||||||||||||||||||
Amount | Par Value | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total Shareholders’ Equity | ||||||||||||||||||||||||
Balance, December 31, 2017 | $ | — | $ | — | $ | 1,383,934 | $ | (579,113 | ) | $ | (358 | ) | $ | (328,213 | ) | $ | 117 | $ | 476,367 | ||||||||||||
Net income (loss) | — | — | — | (55,457 | ) | — | — | 122 | (55,335 | ) | |||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | (7,821 | ) | — | (7,821 | ) | |||||||||||||||||||||
Dividends paid | — | — | — | — | — | — | (119 | ) | (119 | ) | |||||||||||||||||||||
Cumulative effect of implementation of ASU 2014-09 | — | — | — | 394 | — | — | — | 394 | |||||||||||||||||||||||
Issuance of shares for acquisition | — | — | 4,500 | — | — | — | — | 4,500 | |||||||||||||||||||||||
Share-based compensation | — | — | 2,200 | — | (594 | ) | — | — | 1,606 | ||||||||||||||||||||||
Balance, March 31, 2018 | $ | — | $ | — | $ | 1,390,634 | $ | (634,176 | ) | $ | (952 | ) | $ | (336,034 | ) | $ | 120 | $ | 419,592 | ||||||||||||
Balance, December 31, 2018 | $ | 56,280 | $ | — | $ | 1,562,133 | $ | (710,551 | ) | $ | (1,189 | ) | $ | (371,249 | ) | $ | — | $ | 535,424 | ||||||||||||
Net income (loss) | — | — | — | (17,039 | ) | — | — | — | (17,039 | ) | |||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | 5,379 | — | 5,379 | |||||||||||||||||||||||
Cumulative effect of implementation of ASU 2016-02 | — | — | — | (699 | ) | — | — | — | (699 | ) | |||||||||||||||||||||
Dividends attributable to Class A preferred shares | 459 | — | — | (459 | ) | — | — | — | — | ||||||||||||||||||||||
Share-based compensation | — | — | 2,534 | — | (4,282 | ) | — | — | (1,748 | ) | |||||||||||||||||||||
Balance, March 31, 2019 | $ | 56,739 | $ | — | $ | 1,564,667 | $ | (728,748 | ) | $ | (5,471 | ) | $ | (365,870 | ) | $ | — | $ | 521,317 |
Preferred Shares (in thousands) | Common Shares (in thousands) | ||||
Balance, December 31, 2018 | 9,042 | 165,932 | |||
Stock-based compensation | — | 3,370 | |||
Balance, March 31, 2019 | 9,042 | 169,302 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (17,039 | ) | $ | (55,335 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 30,782 | 30,764 | |||||
Impairment charges | — | 28,661 | |||||
Deferred income tax provision (benefit) | (4,745 | ) | 2 | ||||
Non-cash compensation charge | 2,534 | 2,200 | |||||
Gains on disposals of assets | (1,452 | ) | (2,147 | ) | |||
Provision for loss on receivables, net of recoveries | (32 | ) | (35 | ) | |||
Other, net | (410 | ) | 2,047 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (2,377 | ) | 4,837 | ||||
Inventories | 87 | 2,190 | |||||
Accounts payable and accrued liabilities | (1,417 | ) | (10,352 | ) | |||
Taxes payable | 262 | (1,358 | ) | ||||
Other current assets and liabilities, net | 148 | 1,364 | |||||
Net cash flows provided by operating activities | 6,341 | 2,838 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (9,679 | ) | (2,696 | ) | |||
Payments related to acquisitions, net of cash acquired | — | (23,771 | ) | ||||
Proceeds from disposition of property, plant and equipment | 4,457 | 2,718 | |||||
Other, net | 1,518 | 110 | |||||
Net cash flows used in investing activities | (3,704 | ) | (23,639 | ) | |||
Cash flows from financing activities: | |||||||
Revolving credit borrowings | 80,324 | 47,166 | |||||
Revolving credit repayments | (74,928 | ) | (11,525 | ) | |||
Term loan repayments | (8,608 | ) | (4,079 | ) | |||
Taxes paid on vested shares | (4,282 | ) | (594 | ) | |||
Net cash flows provided by (used in) financing activities | (7,494 | ) | 30,968 | ||||
Effect of exchange rate changes on cash | 477 | (837 | ) | ||||
Net change in cash and cash equivalents | (4,380 | ) | 9,330 | ||||
Cash and cash equivalents, beginning of period | 12,372 | 32,647 | |||||
Cash and cash equivalents, end of period | $ | 7,992 | $ | 41,977 | |||
Non-cash investing activities: | |||||||
Value of common shares issued as consideration for acquisitions | $ | — | $ | 4,500 | |||
Non-cash financing activities: | |||||||
Preferred dividends paid-in-kind | $ | 459 | $ | — |
1. | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
2. | RECENT ACCOUNTING PRONOUNCEMENTS |
3. | REVENUE |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Canada | |||||||
Accommodation revenues | $ | 57,652 | $ | 50,647 | |||
Mobile facility rental revenues | 781 | 7,794 | |||||
Food service and other services revenues | 8,337 | 3,739 | |||||
Manufacturing revenues | — | 1,210 | |||||
Total Canada revenues | 66,770 | 63,390 | |||||
Australia | |||||||
Accommodation revenues | $ | 28,421 | $ | 27,698 | |||
Food service and other services revenues | — | 177 | |||||
Total Australia revenues | 28,421 | 27,875 | |||||
United States | |||||||
Accommodation revenues | $ | 4,924 | $ | 3,166 | |||
Mobile facility rental revenues | 6,597 | 3,577 | |||||
Manufacturing revenues | 1,795 | 3,464 | |||||
Food service and other services revenues | 43 | 32 | |||||
Total United States revenues | 13,359 | 10,239 | |||||
Total revenues | $ | 108,550 | $ | 101,504 |
For the years ending December 31, | |||||||||||||||||||
2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||
Revenue expected to be recognized as of March 31, 2019 | $ | 74,823 | $ | 55,613 | $ | 7,764 | $ | 135 | $ | 138,335 |
4. | FAIR VALUE MEASUREMENTS |
5. | DETAILS OF SELECTED BALANCE SHEET ACCOUNTS |
March 31, 2019 | December 31, 2018 | ||||||
Accounts receivable, net: | |||||||
Trade | $ | 48,089 | $ | 48,875 | |||
Unbilled revenue | 25,538 | 21,169 | |||||
Other | 135 | 555 | |||||
Total accounts receivable | 73,762 | 70,599 | |||||
Allowance for doubtful accounts | (249 | ) | (376 | ) | |||
Total accounts receivable, net | $ | 73,513 | $ | 70,223 |
March 31, 2019 | December 31, 2018 | ||||||
Inventories: | |||||||
Finished goods and purchased products | $ | 2,350 | $ | 2,461 | |||
Work in process | 916 | 945 | |||||
Raw materials | 1,010 | 907 | |||||
Total inventories | $ | 4,276 | $ | 4,313 |
Estimated Useful Life (in years) | March 31, 2019 | December 31, 2018 | |||||||||||
Property, plant and equipment, net: | |||||||||||||
Land | $ | 46,846 | $ | 46,805 | |||||||||
Accommodations assets | 3 | — | 15 | 1,675,611 | 1,650,758 | ||||||||
Buildings and leasehold improvements | 7 | — | 20 | 25,496 | 25,168 | ||||||||
Machinery and equipment | 4 | — | 15 | 10,948 | 10,693 | ||||||||
Office furniture and equipment | 3 | — | 7 | 55,081 | 54,459 | ||||||||
Vehicles | 3 | — | 5 | 14,480 | 14,589 | ||||||||
Construction in progress | 14,415 | 7,119 | |||||||||||
Total property, plant and equipment | 1,842,877 | 1,809,591 | |||||||||||
Accumulated depreciation | (1,191,958 | ) | (1,150,686 | ) | |||||||||
Total property, plant and equipment, net | $ | 650,919 | $ | 658,905 |
March 31, 2019 | December 31, 2018 | ||||||
Accrued liabilities: | |||||||
Accrued compensation | $ | 10,040 | $ | 13,545 | |||
Accrued taxes, other than income taxes | 3,098 | 2,177 | |||||
Accrued interest | 16 | 5 | |||||
Other | 217 | 229 | |||||
Total accrued liabilities | $ | 13,371 | $ | 15,956 |
6. | IMPAIRMENT CHARGES |
7. | ACQUISITIONS |
Cash and cash equivalents | $ | 24 | |
Accounts receivable (1) | 21,456 | ||
Inventories | 839 | ||
Other current assets | 4,266 | ||
Property, plant and equipment | 129,424 | ||
Goodwill | 123,569 | ||
Intangible assets | 110,736 | ||
Total assets acquired | 390,314 | ||
Accounts payable and accrued liabilities | 15,023 | ||
Income taxes payable | 1,038 | ||
Other current liabilities | 2,027 | ||
Deferred income taxes | 51,543 | ||
Other noncurrent liabilities | 5,133 | ||
Total liabilities assumed | 74,764 | ||
Net assets acquired | $ | 315,550 |
(1) | The aggregate fair value of the acquired accounts receivable approximated the aggregate gross contractual amount. |
8. | ASSETS HELD FOR SALE |
March 31, 2019 | December 31, 2018 | ||||||
Assets held for sale: | |||||||
Property, plant and equipment, net | $ | 8,058 | $ | 10,297 | |||
Total assets held for sale | $ | 8,058 | $ | 10,297 |
9. | EARNINGS PER SHARE |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Basic Loss per Share | |||||||
Net loss attributable to Civeo common shareholders | $ | (17,498 | ) | $ | (55,457 | ) | |
Less: undistributed net income to participating securities | — | — | |||||
Net loss attributable to Civeo common shareholders - basic | $ | (17,498 | ) | $ | (55,457 | ) | |
Weighted average common shares outstanding - basic | 165,330 | 131,631 | |||||
Basic loss per share | $ | (0.11 | ) | $ | (0.42 | ) | |
Diluted Loss per Share | |||||||
Net loss attributable to Civeo common shareholders - basic | $ | (17,498 | ) | $ | (55,457 | ) | |
Less: undistributed net income to participating securities | — | — | |||||
Net loss attributable to Civeo common shareholders - diluted | $ | (17,498 | ) | $ | (55,457 | ) | |
Weighted average common shares outstanding - basic | 165,330 | 131,631 | |||||
Effect of dilutive securities (1) | — | — | |||||
Weighted average common shares outstanding - diluted | 165,330 | 131,631 | |||||
Diluted loss per share | $ | (0.11 | ) | $ | (0.42 | ) |
(1) | When an entity has a net loss from continuing operations, it is prohibited from including potential common shares in the computation of diluted per share amounts. Accordingly, we have utilized the basic shares outstanding amount to calculate both basic and diluted loss per share for the three months ended March 31, 2019 and 2018. In the three months ended March 31, 2019 and 2018, we excluded from the calculation 3.6 million and 2.8 million share based awards, respectively, since the effect would have been anti-dilutive. In the three months ended March 31, 2019, we excluded from the calculation the impact of converting the Preferred Shares into 28.0 million common shares, since the effect would have been anti-dilutive. |
10. | DEBT |
March 31, 2019 | December 31, 2018 | ||||||
Canadian term loan, which matures on November 30, 2020; 3.125% of aggregate principal repayable per quarter; weighted average interest rate of 5.7% for the three-month period ended March 31, 2019 | $ | 244,477 | $ | 247,910 | |||
U.S. revolving credit facility, which matures on November 30, 2020, weighted average interest rate of 7.0% for the three-month period ended March 31, 2019 | — | — | |||||
Canadian revolving credit facility, which matures on November 30, 2020, weighted average interest rate of 6.4% for the three-month period ended March 31, 2019 | 136,191 | 114,348 | |||||
Australian revolving credit facility, which matures on November 30, 2020, weighted average interest rate of 5.5% for the three-month period ended March 31, 2019 | 2,838 | 16,918 | |||||
383,506 | 379,176 | ||||||
Less: Unamortized debt issuance costs | 2,597 | 2,939 | |||||
Total debt | 380,909 | 376,237 | |||||
Less: Current portion of long-term debt, including unamortized debt issuance costs, net | 34,068 | 33,329 | |||||
Long-term debt, less current maturities | $ | 346,841 | $ | 342,908 |
• | If a qualified offering of indebtedness with gross proceeds in excess of $150 million has been consummated, a Maximum Leverage Ratio not to exceed the ratios set forth in the following table: |
Period Ended | Maximum Leverage Ratio |
March 31, 2019 | 4.75 : 1:00 |
June 30, 2019 | 4.50 : 1:00 |
September 30, 2019 & thereafter | 4.00 : 1:00 |
• | and, if such qualified offering has not been consummated, a maximum leverage ratio not to exceed the ratios set forth in the following table: |
Period Ended | Maximum Leverage Ratio |
March 31, 2019 | 4.75 : 1:00 |
June 30, 2019 | 4.50 : 1:00 |
September 30, 2019 | 4.00 : 1:00 |
December 31, 2019 & thereafter | 3.50 : 1:00 |
11. | INCOME TAXES |
12. | COMMITMENTS AND CONTINGENCIES |
13. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
14. | LEASES |
March 31, 2019 | |||
Operating leases | |||
Operating lease right-of-use assets | $ | 22,225 | |
Other current liabilities | $ | 4,890 | |
Operating lease liabilities | 18,529 | ||
Total operating lease liabilities | $ | 23,419 | |
Weighted average remaining lease term | |||
Operating leases | 6.1 years | ||
Weighted average discount rate | |||
Operating leases | 5.9 | % |
For the years ending December 31, | |||
2019 | $ | 4,643 | |
2020 | 5,558 | ||
2021 | 4,202 | ||
2022 | 3,129 | ||
2023 | 2,461 | ||
Thereafter | 7,546 | ||
Total lease payments | 27,539 | ||
Less imputed interest | 4,120 | ||
Total | $ | 23,419 |
15. | SHARE BASED COMPENSATION |
16. | SEGMENT AND RELATED INFORMATION |
Total Revenues | Depreciation and amortization | Operating income (loss) | Capital expenditures | Total assets | |||||||||||||||
Three months ended March 31, 2019 | |||||||||||||||||||
Canada | $ | 66,770 | $ | 16,228 | $ | (11,595 | ) | $ | 7,064 | $ | 825,100 | ||||||||
Australia | 28,421 | 9,757 | (385 | ) | 935 | 284,574 | |||||||||||||
United States | 13,359 | 3,066 | (961 | ) | 1,520 | 59,193 | |||||||||||||
Corporate and eliminations | — | 1,731 | (4,952 | ) | 160 | (160,869 | ) | ||||||||||||
Total | $ | 108,550 | $ | 30,782 | $ | (17,893 | ) | $ | 9,679 | $ | 1,007,998 | ||||||||
Three months ended March 31, 2018 | |||||||||||||||||||
Canada | $ | 63,390 | $ | 16,511 | $ | (40,303 | ) | $ | 1,072 | $ | 502,998 | ||||||||
Australia | 27,875 | 11,117 | (3,166 | ) | 595 | 338,239 | |||||||||||||
United States | 10,239 | 1,606 | (3,264 | ) | 869 | 57,954 | |||||||||||||
Corporate and eliminations | — | 1,530 | (5,782 | ) | 160 | (92,220 | ) | ||||||||||||
Total | $ | 101,504 | $ | 30,764 | $ | (52,515 | ) | $ | 2,696 | $ | 806,971 |
Average Price (1) | ||||||||||||
Quarter ended | WTI Crude (per bbl) | WCS Crude (per bbl) | Hard Coking Coal (Met Coal) (per tonne) | |||||||||
Second Quarter through 4/22/2019 | $ | 63.85 | $ | 54.61 | $ | 210.00 | ||||||
3/31/2019 | 54.87 | 44.49 | 210.00 | |||||||||
12/31/2018 | 59.32 | 25.66 | 187.00 | |||||||||
9/30/2018 | 69.61 | 41.58 | 196.00 | |||||||||
6/30/2018 | 67.97 | 49.93 | 196.00 | |||||||||
3/31/2018 | 62.89 | 37.09 | 235.00 | |||||||||
12/31/2017 | 55.28 | 38.65 | 192.00 | |||||||||
9/30/2017 | 48.16 | 37.72 | 170.00 | |||||||||
6/30/2017 | 48.11 | 38.20 | 193.50 | |||||||||
3/31/2017 | 51.70 | 38.09 | 285.00 | |||||||||
12/31/2016 | 49.16 | 34.34 | 200.00 | |||||||||
9/30/2016 | 44.88 | 30.67 | 92.50 | |||||||||
6/30/2016 | 45.53 | 32.84 | 84.00 | |||||||||
3/31/2016 | 33.41 | 20.26 | 81.00 |
(1) | Source: WTI crude prices are from U.S. Energy Information Administration (EIA), and WCS crude prices and Seaborne hard coking coal contract prices are from Bloomberg. |
Three Months Ended March 31, | |||||||
2019 | 2018 | Change | Percentage | ||||
Average Canadian dollar to U.S. dollar | $0.752 | $0.791 | (0.039) | (4.9)% | |||
Average Australian dollar to U.S. dollar | $0.712 | $0.786 | (0.074) | (9.4)% |
As of | |||||||
March 31, 2019 | December 31, 2018 | Change | Percentage | ||||
Canadian dollar to U.S. dollar | $0.748 | $0.733 | 0.015 | 2.1% | |||
Australian dollar to U.S. dollar | $0.710 | $0.705 | 0.005 | 0.7% |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Change | |||||||||
($ in thousands) | |||||||||||
Revenues | |||||||||||
Canada | $ | 66,770 | $ | 63,390 | $ | 3,380 | |||||
Australia | 28,421 | 27,875 | 546 | ||||||||
United States and other | 13,359 | 10,239 | 3,120 | ||||||||
Total revenues | 108,550 | 101,504 | 7,046 | ||||||||
Costs and expenses | |||||||||||
Cost of sales and services | |||||||||||
Canada | 54,647 | 51,896 | 2,751 | ||||||||
Australia | 14,999 | 15,333 | (334 | ) | |||||||
United States and other | 9,984 | 10,472 | (488 | ) | |||||||
Total cost of sales and services | 79,630 | 77,701 | 1,929 | ||||||||
Selling, general and administrative expenses | 16,096 | 16,514 | (418 | ) | |||||||
Depreciation and amortization expense | 30,782 | 30,764 | 18 | ||||||||
Impairment expense | — | 28,661 | (28,661 | ) | |||||||
Other operating expense (income) | (65 | ) | 379 | (444 | ) | ||||||
Total costs and expenses | 126,443 | 154,019 | (27,576 | ) | |||||||
Operating loss | (17,893 | ) | (52,515 | ) | 34,622 | ||||||
Interest expense and income, net | (6,608 | ) | (5,764 | ) | (844 | ) | |||||
Other income | 2,978 | 2,259 | 719 | ||||||||
Loss before income taxes | (21,523 | ) | (56,020 | ) | 34,497 | ||||||
Income tax benefit | 4,484 | 685 | 3,799 | ||||||||
Net loss | (17,039 | ) | (55,335 | ) | 38,296 | ||||||
Less: Net income attributable to noncontrolling interest | — | 122 | (122 | ) | |||||||
Net loss attributable to Civeo Corporation | (17,039 | ) | (55,457 | ) | 38,418 | ||||||
Dividends attributable to preferred shares | 459 | — | 459 | ||||||||
Net loss attributable to Civeo common shareholders | $ | (17,498 | ) | $ | (55,457 | ) | $ | 37,959 |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Change | |||||||||
Revenues ($ in thousands) | |||||||||||
Accommodation revenue (1) | $ | 57,652 | $ | 50,647 | $ | 7,005 | |||||
Mobile facility rental revenue (2) | 781 | 7,794 | (7,013 | ) | |||||||
Food service and other services revenue (3) | 8,337 | 3,739 | 4,598 | ||||||||
Manufacturing revenue (4) | — | 1,210 | (1,210 | ) | |||||||
Total revenues | $ | 66,770 | $ | 63,390 | $ | 3,380 | |||||
Cost of sales and services ($ in thousands) | |||||||||||
Accommodation cost | $ | 42,217 | $ | 37,038 | $ | 5,179 | |||||
Mobile facility rental cost | 649 | 7,404 | (6,755 | ) | |||||||
Food service and other services cost | 8,236 | 3,218 | 5,018 | ||||||||
Manufacturing cost | 189 | 1,239 | (1,050 | ) | |||||||
Indirect other cost | 3,356 | 2,997 | 359 | ||||||||
Total cost of sales and services | $ | 54,647 | $ | 51,896 | $ | 2,751 | |||||
Gross margin as a % of revenues | 18.2 | % | 18.1 | % | — | % | |||||
Average daily rate for lodges (5) | $ | 92 | $ | 88 | $ | 4 | |||||
Total billed rooms for lodges (6) | 625,992 | 572,888 | 53,104 | ||||||||
Average Canadian dollar to U.S. dollar | $ | 0.752 | $ | 0.791 | $ | (0.039 | ) |
(1) | Includes revenues related to lodge rooms and hospitality services for owned rooms for the periods presented. |
(2) | Includes revenues related to mobile camps for the periods presented. |
(3) | Includes revenues related to food services, laundry and water and wastewater treatment services for the periods presented. |
(4) | Includes revenues related to modular construction and manufacturing services for the periods presented. |
(5) | Average daily rate is based on billed rooms and accommodation revenue. |
(6) | Billed rooms represents total billed days for the periods presented. |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Change | |||||||||
Revenues ($ in thousands) | |||||||||||
Accommodation revenue (1) | $ | 28,421 | $ | 27,698 | $ | 723 | |||||
Food service and other services revenue (2) | — | $ | 177 | $ | (177 | ) | |||||
Total revenues | $ | 28,421 | $ | 27,875 | $ | 546 | |||||
Cost of sales ($ in thousands) | |||||||||||
Accommodation cost | $ | 14,397 | $ | 14,506 | $ | (109 | ) | ||||
Food service and other services cost | — | 163 | (163 | ) | |||||||
Indirect other cost | 602 | 664 | (62 | ) | |||||||
Total cost of sales and services | $ | 14,999 | $ | 15,333 | $ | (334 | ) | ||||
Gross margin as a % of revenues | 47.2 | % | 45.0 | % | 2.2 | % | |||||
Average daily rate for villages (3) | $ | 74 | $ | 81 | $ | (7 | ) | ||||
Total billed rooms for villages (4) | 382,581 | 341,579 | 41,002 | ||||||||
Australian dollar to U.S. dollar | $ | 0.712 | $ | 0.786 | $ | (0.074 | ) |
(1) | Includes revenues related to village rooms and hospitality services for owned rooms for the periods presented. |
(2) | Includes revenues related to food services and other services, including facilities management for the periods presented. |
(3) | Average daily rate is based on billed rooms and accommodation revenue. |
(4) | Billed rooms represents total billed days for the periods presented. |
Three Months Ended March 31, | |||||||||||
2019 | 2018 | Change | |||||||||
Revenues ($ in thousands) | $ | 13,359 | $ | 10,239 | $ | 3,120 | |||||
Cost of sales ($ in thousands) | $ | 9,984 | $ | 10,472 | $ | (488 | ) | ||||
Gross margin as a % of revenues | 25.3 | % | (2.3 | )% | 27.5 | % |
March 31, 2019 | December 31, 2018 | ||||||
Lender commitments (1) | $ | 239,500 | $ | 239,500 | |||
Reductions in availability (2) | (39,111 | ) | (14,469 | ) | |||
Borrowings against revolving credit capacity | (139,029 | ) | (131,266 | ) | |||
Outstanding letters of credit | (3,374 | ) | (3,445 | ) | |||
Unused availability | 57,986 | 90,320 | |||||
Cash and cash equivalents | 7,992 | 12,372 | |||||
Total available liquidity | $ | 65,978 | $ | 102,692 |
(1) | We also have a A$2.0 million bank guarantee facility. We had bank guarantees of A$0.7 million and A$0.7 million under this facility outstanding as of March 31, 2019 and December 31, 2018, respectively. |
(2) | As of March 31, 2019, $39.1 million of our borrowing capacity under the Amended Credit Agreement could not be utilized in order to maintain compliance with the maximum leverage ratio financial covenant in the Amended Credit Agreement. As of December 31, 2018, $14.5 million of our borrowing capacity under the Amended Credit Agreement could not be utilized in order to maintain compliance with the maximum leverage ratio financial covenant in the Amended Credit Agreement. |
Canada | Australia | U.S. | Total | ||||||||||||
Balance at December 31, 2018 | $ | 362,258 | $ | 16,918 | $ | — | $ | 379,176 | |||||||
Borrowings under revolving credit facilities | 80,324 | — | — | 80,324 | |||||||||||
Repayments of borrowings under revolving credit facilities | (60,724 | ) | (14,204 | ) | — | (74,928 | ) | ||||||||
Repayments of term loans | (8,608 | ) | — | — | (8,608 | ) | |||||||||
Translation | 7,418 | 124 | — | 7,542 | |||||||||||
Balance at March 31, 2019 | $ | 380,668 | $ | 2,838 | $ | — | $ | 383,506 |
• | If a qualified offering of indebtedness with gross proceeds in excess of $150 million has been consummated, a Maximum Leverage Ratio not to exceed the ratios set forth in the following table: |
Period Ended | Maximum Leverage Ratio |
March 31, 2019 | 4.75 : 1:00 |
June 30, 2019 | 4.50 : 1:00 |
September 30, 2019 & thereafter | 4.00 : 1:00 |
• | and, if such qualified offering has not been consummated, a maximum leverage ratio not to exceed the ratios set forth in the following table: |
Period Ended | Maximum Leverage Ratio |
March 31, 2019 | 4.75 : 1:00 |
June 30, 2019 | 4.50 : 1:00 |
September 30, 2019 | 4.00 : 1:00 |
December 31, 2019 & thereafter | 3.50 : 1:00 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total number of shares purchased as part of publicly announced plans or programs (3) | Maximum number of shares that may yet be purchased under the plans or programs (3) | ||||||
January 1, 2019 - January 31, 2019 | 13,474 | (1) | $1.97 | (2) | — | — | ||||
February 1, 2019 - February 28, 2019 | 1,625,694 | (1) | $2.59 | (2) | — | — | ||||
March 1, 2019 - March 31, 2019 | — | — | — | — | ||||||
Total | 1,639,168 | $2.46 | — | — |
(1) | Consists of shares surrendered to us by participants in our 2014 Equity Participation Plan to settle the participants' personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under the plan. |
(2) | The price paid per share was based on the closing price of our common shares on January 8, 2019, January 19, 2019, February 11, 2019, February 20, 2019, February 21, 2019 and February 23, 2019, the respective dates as of which the restrictions lapsed on such shares. |
(3) | We did not have at any time during the quarter ended March 31, 2019, and currently do not have, a share repurchase program in place. |
(a) | INDEX OF EXHIBITS |
Exhibit No. | Description | |
31.1* | — | |
31.2* | — | |
32.1** | — | |
32.2** | — | |
101.INS* | — | XBRL Instance Document |
101.SCH* | — | XBRL Taxonomy Extension Schema Document |
101.CAL* | — | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | — | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | — | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | — | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Filed herewith. |
** | Furnished herewith. |
Date: April 26, 2019 | By /s/ Frank C. Steininger |
Frank C. Steininger | |
Executive Vice President, Chief Financial Officer and | |
Treasurer (Duly Authorized Officer and Principal | |
Financial Officer) |
1 | I have reviewed this Quarterly Report on Form 10-Q of Civeo Corporation (Registrant); | |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; | |
4 | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: | |
a | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and | |
5 | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions): | |
a | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
b | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ Bradley J. Dodson | |
Bradley J. Dodson | |
President and Chief Executive Officer |
1 | I have reviewed this Quarterly Report on Form 10-Q of Civeo Corporation (Registrant); | |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; | |
4 | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: | |
a | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and | |
5 | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions): | |
a | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
b | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ Frank C. Steininger | |
Frank C. Steininger | |
Executive Vice President, Chief Financial Officer and Treasurer |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Bradley J. Dodson | |||
Name: | Bradley J. Dodson | ||
Date: | April 26, 2019 |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Frank C. Steininger | |||
Name: | Frank C. Steininger | ||
Date: | April 26, 2019 |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 22, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Civeo Corp | |
Entity Central Index Key | 0001590584 | |
Trading Symbol | cveo | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 169,301,917 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Unaudited Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (17,039) | $ (55,335) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment, net of taxes of zero | 5,379 | (7,821) |
Total other comprehensive income (loss) | 5,379 | (7,821) |
Comprehensive loss | (11,660) | (63,156) |
Less: Comprehensive income attributable to noncontrolling interest | 0 | 122 |
Comprehensive loss attributable to Civeo Corporation | $ (11,660) | $ (63,278) |
Unaudited Consolidated Statements of Comprehensive Loss (Parentheticals) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, taxes | $ 0 | $ 0 |
Consolidated Balance Sheets (Parentheticals) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred shares, par value (in dollars per share) | $ 0 | |
Preferred shares, authorized (in shares) | 50,000,000 | |
Preferred shares, issued (in shares) | 9,042 | |
Preferred shares, outstanding (in shares) | 0 | |
Preferred shares, liquidation preference | $ 92,236,909 | |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 550,000,000 | 550,000,000 |
Common stock, shares issued (in shares) | 171,401,230 | 169,301,917 |
Common stock, shares outstanding (in shares) | 166,392,479 | 165,932,334 |
Treasury shares (in shares) | 2,099,313 | 460,145 |
Description of Business and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of the Business We are a hospitality company servicing the natural resources industry in Canada, Australia and the U.S. We provide a full suite of hospitality services for our guests, including lodging, food service, housekeeping and maintenance at accommodation facilities that we or our customers own. We also, in many cases, provide services that support the day-to-day operations of accommodation facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and group logistics. We also offer development activities for workforce accommodation facilities, including site selection, permitting, engineering and design, manufacturing management and site construction, along with providing hospitality services once the facility is constructed. We operate in some of the world’s most active oil, coal and iron ore producing regions, and our customers include major and independent oil companies, mining companies and oilfield and mining service companies. We operate in three principal reportable business segments – Canada, Australia and U.S. Basis of Presentation Unless otherwise stated or the context otherwise indicates: (i) all references in these consolidated financial statements to “Civeo,” “us,” “our” or “we” refer to Civeo Corporation and its consolidated subsidiaries; and (ii) all references in this report to “dollars” or “$” are to U.S. dollars. The accompanying unaudited consolidated financial statements of Civeo have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) has been condensed or omitted pursuant to those rules and regulations. The unaudited financial statements included in this report reflect all the adjustments, consisting of normal recurring adjustments, which Civeo considers necessary for a fair presentation of the results of operations for the interim periods covered and for the financial condition of Civeo at the date of the interim balance sheet. Results for the interim periods are not necessarily indicative of results for the full year. Certain reclassifications have been made to the consolidated statements of operations for the three months ended March 31, 2018 to conform to current year presentation. The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, actual amounts may differ from those included in the accompanying consolidated financial statements. The financial statements included in this report should be read in conjunction with our audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. |
Recent Accounting Pronouncements |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB), which are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards or other guidance updates, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update (ASU) 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The standard simplifies the accounting for goodwill impairment by requiring a goodwill impairment to be measured using a single step impairment model, whereby the impairment equals the difference between the carrying amount and the fair value of the specified reporting units in their entirety. This eliminates the second step of the current impairment model that requires companies to first estimate the fair value of all assets in a reporting unit and measure impairments based on those fair values and a residual measurement approach. It also specifies that any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective prospectively for public business entities for annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We will adopt this new standard no later than January 1, 2020. The impact of the new standard will be dependent on the specific facts and circumstances of future individual goodwill impairments, if any. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” (ASU 2016-13). This new standard changes how companies will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 is effective for financial statements issued for reporting periods beginning after December 15, 2019 and interim periods within the reporting periods. We anticipate adopting ASU 2016-13 as of January 1, 2020. We are currently evaluating the impact of this new standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), which replaces the existing guidance for lease accounting. The guidance is effective for financial statements issued for reporting periods beginning after December 15, 2018 and interim periods within the reporting periods. Effective with this quarterly report on Form 10-Q for the quarter ended March 31, 2019, we have adopted this standard effective January 1, 2019 using the optional transition method, which allows us upon adoption to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit for the application of the standard to our existing leases. Upon adoption of this standard, we recognized a cumulative effect adjustment of $0.7 million (net of $0.2 million of taxes) to increase accumulated deficit in the accompanying unaudited consolidated balance sheet as of March 31, 2019. ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for certain leases. We elected the package of practical expedients, which among other things, allowed us to carry forward the historical lease identification and classification. In addition, we have elected the short-term lease recognition exemption for all leases that qualify. Accordingly, we did not recognize right-of-use assets or lease liabilities for leases with terms shorter than 12 months. Our evaluation process included reviewing all forms of leases, performing a completeness assessment over the lease population and analyzing the available practical expedients in order to determine the best implementation strategy. We determined that certain of our accommodation contracts with customers contain both a lease and non-lease or service component and in those instances concluded the service component was the predominant component. As a result, we elected the practical expedient under ASU 2018-11, which allows us to combine the lease and non-lease components of revenues for presentation purposes in accordance with Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers” (ASC 606). We also have identified certain arrangements with customers whereby we are a lessor for the rental of mobile camp assets primarily in our U.S segment. For arrangements where we are the lessor, the adoption of the new lease standard did not have a material impact on our financial statements as all of our leases are operating leases, which will result in straight-line recognition of rental revenue. Adoption of the new standard resulted in $21.3 million of operating lease right-of-use assets and $22.4 million of operating lease liabilities as of January 1, 2019. Please see Note 14 – Leases for further information. |
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Revenue | REVENUE The following table disaggregates our revenue by our three reportable segments: Canada, Australia and U.S., and major categories for the periods indicated (in thousands):
As of March 31, 2019, for contracts that are greater than one year, the table below discloses the estimated revenues related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue (in thousands):
|
Fair Value Measurements |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Our financial instruments consist of cash and cash equivalents, receivables, payables and debt instruments. We believe that the carrying values of these instruments on the accompanying consolidated balance sheets approximate their fair values. As of March 31, 2019 and December 31, 2018, we believe the carrying value of our floating-rate debt outstanding under our term loans and revolving credit facilities approximates fair value because the terms include short-term interest rates and exclude penalties for prepayment. We estimated the fair value of our floating-rate term loan and revolving credit facilities using significant other observable inputs, representative of a Level 2 fair value measurement, including terms and credit spreads for these loans. During the first quarter of 2018, we wrote down certain long-lived assets to fair value. Our estimates of fair value required us to use significant unobservable inputs, representative of Level 3 fair value measurements, including numerous assumptions with respect to future circumstances that might directly impact each of the relevant asset groups’ operations in the future and are therefore uncertain. These assumptions with respect to future circumstances included future oil, coal and natural gas prices, anticipated spending by our customers, the cost of capital, and industry and/or local market conditions. Please see Note 6 – Impairment Charges for further information. During the first and second quarter of 2018, we acquired certain assets and businesses and recorded them at fair value. Determining the fair value of assets acquired and liabilities assumed requires the exercise of significant judgment, including the amount and timing of expected future cash flows, long-term growth rates and discount rates. The cash flows employed in the valuation are based on our best estimates of future sales, earnings and cash flows after considering factors such as general market conditions, expected future customer orders, contracts with suppliers, labor costs, changes in working capital, long term business plans and recent operating performance. Please see Note 7 – Acquisitions for further information. |
Details of Selected Balance Sheet Accounts |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Selected Balance Sheet Accounts | DETAILS OF SELECTED BALANCE SHEET ACCOUNTS Additional information regarding selected balance sheet accounts at March 31, 2019 and December 31, 2018 is presented below (in thousands):
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Impairment Charges |
3 Months Ended |
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Mar. 31, 2019 | |
Asset Impairment Charges [Abstract] | |
Impairment Charges | IMPAIRMENT CHARGES Quarter ended March 31, 2018. During the first quarter of 2018, we identified an indicator that certain long-lived assets used in the Canadian oil sands may be impaired due to market developments, including expected customer commitments, occurring in the first quarter of 2018. For purposes of our impairment assessment, we separated two lodges that were previously treated as a single asset group due to the lodges no longer being used together to generate joint cash flows. We assessed the carrying value of the asset group to determine if it continued to be recoverable based on estimated future cash flows. Based on the assessment, the carrying value was determined to not be fully recoverable, and we proceeded to compare the estimated fair value of the asset group to its respective carrying value. Accordingly, the value of a Canadian lodge was written down to its estimated fair value of zero. As a result of the analysis described above, we recorded an impairment expense of $28.7 million. |
Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS Noralta Description of Transaction. On April 2, 2018, we acquired the equity of Noralta Lodge Ltd. (Noralta), located in Alberta, Canada. The total consideration, which is subject to adjustment in accordance with the terms of the definitive agreement, included (i) C$207.7 million (or approximately US$161.2 million) in cash, subject to customary post-closing adjustments for working capital, indebtedness and transactions expenses, (ii) 32.8 million of our common shares, and (iii) 9,679 Class A Series 1 Preferred Shares (the Preferred Shares) with an initial liquidation preference of $96.8 million and initially convertible into 29.3 million of our common shares. As a result of the Noralta acquisition, we expanded our existing accommodations business in the Canadian oil sands market. We funded the cash consideration with cash on hand and borrowings under the Amended Credit Agreement (as defined in Note 10 - Debt). During the first quarter of 2019, $2.1 million in cash was released to us from escrow to cover certain agreed upon indemnification claims. The Noralta acquisition was accounted for in accordance with the acquisition method of accounting for business combinations and, accordingly, the results of operations of Noralta were reported in our financial statements as part of our Canadian reportable business segment beginning on April 2, 2018, the date of acquisition. Purchase Price Allocation. The application of purchase accounting under ASC 805 requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at April 2, 2018, with amounts exceeding the fair values being recorded as goodwill. The allocation process requires an analysis of acquired fixed assets, contracts, and contingencies to identify and record the fair value of all assets acquired and liabilities assumed. During the three months ended March 31, 2019, we recorded insignificant measurement period adjustments related to amortizable intangible assets, goodwill and deferred taxes. Our allocation of the purchase price, which we finalized in the first quarter of 2019, to specific assets and liabilities is based, in part, upon outside appraisals using customary valuation procedures and techniques. The following table summarizes the fair values of the assets acquired and liabilities assumed at April 2, 2018 (in thousands):
Transaction Costs. During the three months ended March 31, 2018, we recognized $1.0 million of costs in connection with the Noralta acquisition that are included in SG&A expenses. Acadian Acres On February 28, 2018, we acquired the assets of Lakeland, L.L.C. (Lakeland), located near Lake Charles, Louisiana, for total consideration of $28.0 million, composed of $23.5 million in cash and $4.5 million of our common shares. The asset purchase agreement also includes potential future earn-out payments through December 2020 of up to 1.2 million Civeo common shares, based upon satisfaction of certain future revenue targets. The acquisition included a 400 room lodge, 40 acres of land and related assets. We funded the cash consideration with cash on hand. Lakeland’s operations are reported as a new lodge location, Acadian Acres, in our U.S. reportable business segment. This acquisition was accounted for as an asset acquisition based on the principles described in ASC 805, which provides a screen to determine when a set of transferred assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similarly identifiable assets, the set of transferred assets is not a business. Accordingly, we allocated the excess consideration over the fair value of the assets acquired to the acquired assets, pro rata, on the basis of relative fair values to increase the related assets acquired. |
Assets Held for Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Assets Held for Sale | ASSETS HELD FOR SALE During the fourth quarter of 2017, we made the decision to dispose of our modular construction and manufacturing plant near Edmonton, Alberta, Canada due to changing geographic and market needs. Accordingly, the facility met the criteria of held for sale. Its estimated fair value less the cost to sell exceeded its carrying value. Additionally, we have discontinued depreciation of the facility. The facility is part of our Canadian reportable business segment. Certain undeveloped land positions in the British Columbia LNG market in our Canadian segment previously met the criteria of held for sale. During the first quarter of 2019, we received $4.0 million in proceeds from the sale of four different land positions. The remaining assets are recorded at the estimated fair value less costs to sell of approximately $1.6 million. In addition, as a result of the Noralta acquisition, Noralta’s corporate offices located on two adjacent property titles in Nisku, Alberta, Canada were closed. During the fourth quarter of 2018, we sold one property. The remaining property is recorded at the estimated fair value less costs to sell of approximately $1.8 million and was the same value used in the purchase price allocation. The following table summarizes the carrying amount as of March 31, 2019 and December 31, 2018 of the major classes of assets from the modular construction and manufacturing plant, undeveloped land positions and Noralta’s corporate offices we classified as held for sale (in thousands):
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Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE The calculation of earnings per share attributable to Civeo is presented below for the periods indicated (in thousands, except per share amounts):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT As of March 31, 2019 and December 31, 2018, long-term debt consisted of the following (in thousands):
We did not have any capitalized interest to net against interest expense for the three months ended March 31, 2019 or 2018. Amended Credit Agreement As of March 31, 2019, our Credit Agreement, as then amended to date (the Amended Credit Agreement), provided for: (i) a $239.5 million revolving credit facility scheduled to mature on November 30, 2020, allocated as follows: (A) a $20.0 million senior secured revolving credit facility in favor of certain of our U.S. subsidiaries, as borrowers; (B) a $159.5 million senior secured revolving credit facility in favor of Civeo and certain of our Canadian subsidiaries, as borrowers; and (C) a $60.0 million senior secured revolving credit facility in favor of one of our Australian subsidiaries, as borrower; and (ii) a $325.0 million term loan facility scheduled to mature on November 30, 2020 in favor of Civeo. The maximum leverage ratio financial covenant is set forth in the tables below.
U.S. dollar amounts outstanding under the facilities provided by the Amended Credit Agreement bear interest at a variable rate equal to LIBOR plus a margin of 2.25% to 4.00%, or a base rate plus 1.25% to 3.00%, in each case based on a ratio of our total debt to consolidated EBITDA (as defined in the Amended Credit Agreement). Canadian dollar amounts outstanding bear interest at a variable rate equal to a B/A Discount Rate based on the Canadian Dollar Offered Rate plus a margin of 2.25% to 4.00%, or a Canadian Prime rate plus a margin of 1.25% to 3.00%, in each case based on a ratio of our total debt to consolidated EBITDA. Australian dollar amounts outstanding under the Amended Credit Agreement bear interest at a variable rate equal to the Bank Bill Swap Bid Rate plus a margin of 2.25% to 4.00%, based on a ratio of our total debt to consolidated EBITDA. The Amended Credit Agreement contains customary affirmative and negative covenants that, among other things, limit or restrict: (i) indebtedness, liens and fundamental changes; (ii) asset sales; (iii) acquisitions of margin stock; (iv) specified acquisitions; (v) certain restrictive agreements; (vi) transactions with affiliates; and (vii) investments and other restricted payments, including dividends and other distributions. In addition, we must maintain an interest coverage ratio, defined as the ratio of consolidated EBITDA to consolidated interest expense, of at least 3.0 to 1.0 and our maximum leverage ratio, defined as the ratio of total debt to consolidated EBITDA, of no greater than 4.75 to 1.0 (as of March 31, 2019). As noted above, the permitted maximum leverage ratio changes over time. Following a qualified offering of indebtedness with gross proceeds in excess of $150 million, we will be required to maintain a maximum senior secured ratio less than 2.50 to 1.0. Each of the factors considered in the calculations of these ratios are defined in the Amended Credit Agreement. EBITDA and consolidated interest, as defined, exclude goodwill and asset impairments, debt discount amortization, amortization of intangibles and other non-cash charges. We were in compliance with our covenants as of March 31, 2019. Borrowings under the Amended Credit Agreement are secured by a pledge of substantially all of our assets and the assets of our subsidiaries. The obligations under the Amended Credit Agreement are guaranteed by our significant subsidiaries. As of March 31, 2019, we have nine lenders that were parties to the Amended Credit Agreement, with total commitments (including both revolving commitments and term commitments) ranging from $24.9 million to $110.6 million. |
Income Taxes |
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Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our operations are conducted through various subsidiaries in a number of countries throughout the world. We have provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned. We operate primarily in three jurisdictions, Canada, Australia and the U.S., where statutory tax rates range from 21% to 30%. Our effective tax rate will vary from period to period based on changes in earnings mix between these different jurisdictions. We compute our quarterly taxes under the effective tax rate method by applying an anticipated annual effective rate to our year-to-date income, except for significant unusual or extraordinary transactions. Income taxes for any significant and unusual or extraordinary transactions are computed and recorded in the period in which the specific transaction occurs. As of March 31, 2019, Australia was considered a loss jurisdictions for tax accounting purposes and has been removed from the annual effective tax rate computation for purposes of computing the interim tax provision. Our income tax benefit for the three months ended March 31, 2019 totaled $4.5 million, or 20.8% of pretax loss, compared to a benefit of $0.7 million, or 1.2% of pretax loss, for the three months ended March 31, 2018. The difference between the effective rate in 2019 and 2018 is due to the change in jurisdictions which are considered loss jurisdictions for tax accounting purposes. For the three months ended March 31, 2018, Canada, Australia and the U.S. were considered loss jurisdictions, while for the three months ended March 31, 2019, only Australia was considered a loss jurisdiction. Additionally, the effective tax rate in 2018 was impacted by discrete items totaling $1.0 million. |
Commitments and Contingencies |
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Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We are a party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, products, employees and other matters, including warranty and product liability claims as a result of our products or operations. Although we can give no assurance about the outcome of pending legal and administrative proceedings and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. |
Accumulated Other Comprehensive Loss |
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Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS Our accumulated other comprehensive loss decreased $5.4 million from $371.2 million at December 31, 2018 to $365.9 million at March 31, 2019, as a result of foreign currency exchange rate fluctuations. Changes in other comprehensive loss during the first three months of 2019 were primarily driven by the Australian dollar and Canadian dollar increasing in value compared to the U.S. dollar. Excluding intercompany balances, our Canadian dollar and Australian dollar functional currency net assets totaled approximately C$0.3 billion and A$0.4 billion, respectively, at March 31, 2019. |
Leases Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES We have operating leases covering certain land locations and various office facilities and equipment in our three reportable business segments. Our leases have remaining lease terms of one year to nine years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 90 days. The components of lease expense were $1.8 million and $1.3 million under operating leases during the three month periods ended March 31, 2019 and 2018, respectively. Included in the measurement of lease liabilities, we paid $1.7 million in cash related to operating leases during the three month periods ended March 31, 2019. Right-of-use assets obtained in exchange for new lease obligations related to operating leases during the three months ended March 31, 2019 were $1.7 million. Supplemental balance sheet information related to leases were as follows (in thousands):
Maturities of operating lease liabilities at March 31, 2019, were as follows (in thousands):
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Share Based Compensation |
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Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Based Compensation | SHARE BASED COMPENSATION Certain key employees and non-employee directors participate in the Amended and Restated 2014 Equity Participation Plan of Civeo Corporation (the Civeo Plan). The Civeo Plan authorizes our Board of Directors and the Compensation Committee of our Board of Directors to approve grants of options, awards of restricted shares, performance awards and dividend equivalents, awards of deferred shares, and share payments to our employees and non-employee directors. No more than 18.7 million Civeo common shares may be awarded under the Civeo Plan. Outstanding Awards Options. Compensation expense associated with options recognized in the three months ended March 31, 2019 and 2018 totaled zero and less than $0.1 million, respectively. There was no unrecognized compensation cost related to options. Restricted Share / Deferred Share Awards. On February 25, 2019, we granted 1,334,189 restricted share awards and deferred share awards under the Civeo Plan, which vest in three equal annual installments beginning on February 25, 2020. Compensation expense associated with restricted share awards and deferred share awards recognized in the three months ended March 31, 2019 and 2018 totaled $1.4 million and $1.2 million, respectively. The total fair value of restricted share awards and deferred share awards that vested during the three months ended March 31, 2019 and 2018 was $3.5 million and $2.4 million, respectively. At March 31, 2019, unrecognized compensation cost related to restricted share awards and deferred share awards was $9.3 million, which is expected to be recognized over a weighted average period of 2.1 years. Phantom Share Awards. On February 25, 2019, we granted 1,144,407 phantom share awards under the Civeo Plan, which vest in three equal annual installments beginning on February 25, 2020. We also granted 301,683 phantom share awards under the Canadian Long-Term Incentive Plan, which vest in three equal annual installments beginning on February 25, 2020. During the three months ended March 31, 2019 and 2018, we recognized compensation expense associated with phantom shares totaling $3.1 million and $3.4 million, respectively. At March 31, 2019, unrecognized compensation cost related to phantom shares was $3.3 million, as remeasured at March 31, 2019, which is expected to be recognized over a weighted average period of 2.7 years. Performance Awards. On February 25, 2019, we granted 1,194,210 performance awards under the Civeo Plan, which cliff vest in three years on February 25, 2022. These awards will be earned in amounts between 0% and 200% of the participant’s target performance share award, based on the payout percentage associated with Civeo’s relative total shareholder return rank among a peer group that includes 17 other companies. During the three months ended March 31, 2019 and 2018, we recognized compensation expense associated with performance awards totaling $1.1 million and $1.0 million, respectively. The total fair value of performance share awards that vested during the three months ended March 31, 2019 was $10.1 million. At March 31, 2019, unrecognized compensation cost related to performance shares was $8.3 million, which is expected to be recognized over a weighted average period of 2.3 years. |
Segment and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Related Information | SEGMENT AND RELATED INFORMATION In accordance with current accounting standards regarding disclosures about segments of an enterprise and related information, we have identified the following reportable segments: Canada, Australia and U.S., which represent our strategic focus on hospitality services. Financial information by business segment for each of the three months ended March 31, 2019 and 2018 is summarized in the following table (in thousands):
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Recent Accounting Pronouncements (Policies) |
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Mar. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Reclassification | Certain reclassifications have been made to the consolidated statements of operations for the three months ended March 31, 2018 to conform to current year presentation. |
Recent accounting pronouncements | From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB), which are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards or other guidance updates, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption. In January 2017, the FASB issued Accounting Standards Update (ASU) 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The standard simplifies the accounting for goodwill impairment by requiring a goodwill impairment to be measured using a single step impairment model, whereby the impairment equals the difference between the carrying amount and the fair value of the specified reporting units in their entirety. This eliminates the second step of the current impairment model that requires companies to first estimate the fair value of all assets in a reporting unit and measure impairments based on those fair values and a residual measurement approach. It also specifies that any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective prospectively for public business entities for annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We will adopt this new standard no later than January 1, 2020. The impact of the new standard will be dependent on the specific facts and circumstances of future individual goodwill impairments, if any. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” (ASU 2016-13). This new standard changes how companies will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 is effective for financial statements issued for reporting periods beginning after December 15, 2019 and interim periods within the reporting periods. We anticipate adopting ASU 2016-13 as of January 1, 2020. We are currently evaluating the impact of this new standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), which replaces the existing guidance for lease accounting. The guidance is effective for financial statements issued for reporting periods beginning after December 15, 2018 and interim periods within the reporting periods. Effective with this quarterly report on Form 10-Q for the quarter ended March 31, 2019, we have adopted this standard effective January 1, 2019 using the optional transition method, which allows us upon adoption to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit for the application of the standard to our existing leases. Upon adoption of this standard, we recognized a cumulative effect adjustment of $0.7 million (net of $0.2 million of taxes) to increase accumulated deficit in the accompanying unaudited consolidated balance sheet as of March 31, 2019. ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset for certain leases. We elected the package of practical expedients, which among other things, allowed us to carry forward the historical lease identification and classification. In addition, we have elected the short-term lease recognition exemption for all leases that qualify. Accordingly, we did not recognize right-of-use assets or lease liabilities for leases with terms shorter than 12 months. Our evaluation process included reviewing all forms of leases, performing a completeness assessment over the lease population and analyzing the available practical expedients in order to determine the best implementation strategy. We determined that certain of our accommodation contracts with customers contain both a lease and non-lease or service component and in those instances concluded the service component was the predominant component. As a result, we elected the practical expedient under ASU 2018-11, which allows us to combine the lease and non-lease components of revenues for presentation purposes in accordance with Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers” (ASC 606). We also have identified certain arrangements with customers whereby we are a lessor for the rental of mobile camp assets primarily in our U.S segment. For arrangements where we are the lessor, the adoption of the new lease standard did not have a material impact on our financial statements as all of our leases are operating leases, which will result in straight-line recognition of rental revenue. Adoption of the new standard resulted in $21.3 million of operating lease right-of-use assets and $22.4 million of operating lease liabilities as of January 1, 2019. Please see Note 14 – Leases for further information. |
Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table disaggregates our revenue by our three reportable segments: Canada, Australia and U.S., and major categories for the periods indicated (in thousands):
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | As of March 31, 2019, for contracts that are greater than one year, the table below discloses the estimated revenues related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue (in thousands):
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Details of Selected Balance Sheet Accounts (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Additional information regarding selected balance sheet accounts at March 31, 2019 and December 31, 2018 is presented below (in thousands):
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Schedule of Inventories |
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Property, Plant and Equipment |
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Schedule of Accrued Liabilities |
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Acquisitions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at April 2, 2018 (in thousands):
|
Assets Held for Sale (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The following table summarizes the carrying amount as of March 31, 2019 and December 31, 2018 of the major classes of assets from the modular construction and manufacturing plant, undeveloped land positions and Noralta’s corporate offices we classified as held for sale (in thousands):
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The calculation of earnings per share attributable to Civeo is presented below for the periods indicated (in thousands, except per share amounts):
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | As of March 31, 2019 and December 31, 2018, long-term debt consisted of the following (in thousands):
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Schedule Of Changes In Maximum Leverage Ratio | If a qualified offering of indebtedness with gross proceeds in excess of $150 million has been consummated, a Maximum Leverage Ratio not to exceed the ratios set forth in the following table:
and, if such qualified offering has not been consummated, a maximum leverage ratio not to exceed the ratios set forth in the following table:
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental balance sheet information | Supplemental balance sheet information related to leases were as follows (in thousands):
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Operating lease maturity schedule | Maturities of operating lease liabilities at March 31, 2019, were as follows (in thousands):
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Segment and Related Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Financial information by business segment for each of the three months ended March 31, 2019 and 2018 is summarized in the following table (in thousands):
|
Description of Business and Basis of Presentation - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Recent Accounting Pronouncements - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for new accounting standard | $ 699 | $ (394) | ||
Operating lease right-of-use assets | $ 22,225 | $ 21,300 | 0 | |
Total operating lease liabilities | $ 23,419 | 22,400 | ||
Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for new accounting standard | $ 699 | $ (394) | ||
Accumulated Deficit | Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for new accounting standard | 700 | |||
Taxes on cumulative effect adjustment | $ 200 |
Revenue - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019
segment
| |
Revenues [Abstract] | |
Number of reportable segments | 3 |
Details of Selected Balance Sheet Accounts - Accounts Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 73,762 | $ 70,599 |
Allowance for doubtful accounts | (249) | (376) |
Total accounts receivable, net | 73,513 | 70,223 |
Trade | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 48,089 | 48,875 |
Unbilled revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 25,538 | 21,169 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 135 | $ 555 |
Details of Selected Balance Sheet Accounts - Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventories: | ||
Finished goods and purchased products | $ 2,350 | $ 2,461 |
Work in process | 916 | 945 |
Raw materials | 1,010 | 907 |
Total inventories | $ 4,276 | $ 4,313 |
Details of Selected Balance Sheet Accounts - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Accrued liabilities: | ||
Accrued compensation | $ 10,040 | $ 13,545 |
Accrued taxes, other than income taxes | 3,098 | 2,177 |
Accrued interest | 16 | 5 |
Other | 217 | 229 |
Total accrued liabilities | $ 13,371 | $ 15,956 |
Impairment Charges (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | |||
Estimated fair value of Canadian lodge | $ 650,919,000 | $ 658,905,000 | |
Canadian | Two Lodges in Southern Alberta | |||
Property, Plant and Equipment [Line Items] | |||
Estimated fair value of Canadian lodge | $ 0 | ||
Impairment expense of long-lived assets held-for-use | $ 28,700,000 |
Acquisitions - Narrative (Details) $ in Millions, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Apr. 02, 2018
USD ($)
shares
|
Apr. 02, 2018
CAD ($)
shares
|
Feb. 28, 2018
USD ($)
a
Room
shares
|
Mar. 31, 2019
USD ($)
|
|
Business Acquisition [Line Items] | ||||
Acquisition related transaction costs | $ 1.0 | |||
Noralta | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 161.2 | $ 207.7 | ||
Shares issued (in shares) | shares | 32,791,000 | 32,791,000 | ||
Escrow deposit disbursements | $ 2.1 | |||
Noralta | Preferred shares | Class A Series 1 Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Shares issued (in shares) | shares | 9,679 | 9,679 | ||
Liquidation preference amount, Preferred shares | $ 96.8 | |||
Lakeland | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 23.5 | |||
Shares issued (in shares) | shares | 1,200,000 | |||
Business acquisitions, consideration transferred, total | $ 28.0 | |||
Common share consideration | $ 4.5 | |||
Number of rooms | Room | 400 | |||
Area of land | a | 40 |
Acquisitions - Purchase consideration and estimated fair value (Details) - Noralta - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 02, 2018 |
Mar. 31, 2019 |
|
Business Acquisition [Line Items] | ||
Common shares issued | 32,791,000 | |
Escrow deposit disbursements | $ 2.1 |
Acquisitions - Estimated fair values of assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Apr. 02, 2018 |
---|---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 119,158 | $ 114,207 | |
Noralta | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cash and cash equivalents | $ 24 | ||
Accounts receivable | 21,456 | ||
Inventories | 839 | ||
Other current assets | 4,266 | ||
Property, plant and equipment | 129,424 | ||
Goodwill | 123,569 | ||
Intangible assets | 110,736 | ||
Total assets acquired | 390,314 | ||
Accounts payable and accrued liabilities | 15,023 | ||
Income taxes payable | 1,038 | ||
Other current liabilities | 2,027 | ||
Deferred income taxes | 51,543 | ||
Other noncurrent liabilities | 5,133 | ||
Total liabilities assumed | 74,764 | ||
Net assets acquired | $ 315,550 |
Assets Held for Sale - Carrying Amount of Assets Held for Sale (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Discontinued Operations and Disposal Groups [Abstract] | ||
Property, plant and equipment, net | $ 8,058 | $ 10,297 |
Total assets held for sale | $ 8,058 | $ 10,297 |
Earnings Per Share - Narrative (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Employee stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 3.6 | 2.8 |
Preferred Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 28.0 |
Earnings Per Share - Calculation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Earnings Per Share [Abstract] | ||
Net loss attributable to Civeo common shareholders | $ (17,498) | $ (55,457) |
Less: undistributed net income to participating securities | 0 | 0 |
Net loss attributable to Civeo common shareholders - basic | $ (17,498) | $ (55,457) |
Weighted average common shares outstanding - basic (in shares) | 165,330 | 131,631 |
Basic loss per share (USD per share) | $ (0.11) | $ (0.42) |
Net loss attributable to Civeo common shareholders - basic | $ (17,498) | $ (55,457) |
Net loss attributable to Civeo common shareholders - diluted | $ (17,498) | $ (55,457) |
Effect of dilutive securities (in shares) | 0 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 165,330 | 131,631 |
Diluted loss per share (USD per share) | $ (0.11) | $ (0.42) |
Debt - Changes to Maximum Leverage Ratio (Details) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Maximum leverage ratio | 4.75 | ||||
Amended And Restated Syndicated Facility Agreement | Maximum Leverage Ratio | Revolving credit facility, Australian subsidiaries | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from qualified offering of indebtedness | $ 150 | $ 150 | |||
Amended credit facility | |||||
Debt Instrument [Line Items] | |||||
Maximum leverage ratio | 4.75 | ||||
Amended credit facility | Offering of Indebtedness | |||||
Debt Instrument [Line Items] | |||||
Maximum leverage ratio | 4.75 | ||||
Amended credit facility | Scenario, Forecast | |||||
Debt Instrument [Line Items] | |||||
Maximum leverage ratio | 3.50 | 4.00 | 4.50 | ||
Amended credit facility | Scenario, Forecast | Offering of Indebtedness | |||||
Debt Instrument [Line Items] | |||||
Maximum leverage ratio | 4.00 | 4.50 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Schedule of Income Taxes [Line Items] | ||
Income tax expense (benefit), Total | $ 4,484 | $ 685 |
Income tax benefit, percent of pretax loss | 20.80% | 1.20% |
Income Tax Expense (Benefit), Other Discrete Tax Benefits | $ 1,000 | |
Minimum | ||
Schedule of Income Taxes [Line Items] | ||
Statutory tax rate, Canada, Australia and the U.S. | 21.00% | |
Maximum | ||
Schedule of Income Taxes [Line Items] | ||
Statutory tax rate, Canada, Australia and the U.S. | 30.00% |
Accumulated Other Comprehensive Loss - Narrative (Details) $ in Thousands, $ in Billions, $ in Billions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019
USD ($)
|
Mar. 31, 2019
AUD ($)
|
Mar. 31, 2019
CAD ($)
|
Dec. 31, 2018
USD ($)
|
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Increase in other comprehensive loss, foreign currency exchange rate fluctuations during the period | $ (5,400) | |||
Accumulated other comprehensive loss | $ (365,870) | $ (371,249) | ||
International functional currency net assets | $ 0.4 | $ 0.3 |
Leases - Narrative (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
segment
|
Mar. 31, 2018
USD ($)
|
|
Lessee, Lease, Description [Line Items] | ||
Number of reportable segments | segment | 3 | |
Options to extend operating leases | 10 years | |
Options to terminate leases | 90 days | |
Operating lease expense | $ 1.8 | $ 1.3 |
Cash payments for leases | 1.7 | |
Right-of-use asset obtained in exchange for new lease obligation | $ 1.7 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 9 years |
Leases - Operating Leases Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Operating leases | |||
Operating lease right-of-use assets | $ 22,225 | $ 21,300 | $ 0 |
Liabilities [Abstract] | |||
Other current liabilities | 4,890 | ||
Operating lease liabilities | 18,529 | $ 0 | |
Total operating lease liabilities | $ 23,419 | $ 22,400 | |
Weighted average remaining lease term, operating leases | 6 years 30 days | ||
Weighted average discount rate, operating leases | 5.90% |
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jan. 01, 2019 |
---|---|---|
Leases [Abstract] | ||
2019 | $ 4,643 | |
2020 | 5,558 | |
2021 | 4,202 | |
2022 | 3,129 | |
2023 | 2,461 | |
Thereafter | 7,546 | |
Total lease payments | 27,539 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 4,120 | |
Operating Lease, Liability | $ 23,419 | $ 22,400 |
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