Civeo Corporation

and welcome to the CBO Corporation Third Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Regan Nielsen, Director of Corporate Development and Investor Relations. Please go ahead.

Thank you, and welcome to CBO's Third Quarter 2020 Earnings Conference Call. Today, our call will be led by Bradley Dodson, CBO's President and Chief Executive Officer, and Carolyn Stones. to be a Senior Vice President, Chief Financial Officer, and Treasurer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain information other than historical information, please note that we're relying on the safe harbor protections afforded by federal law. Any such remarks should be read in the context of the many factors that affect our business, including risks disclosed in our Form 10-K, 10-Q, and other FTC filings. I will now turn the call over to Bradley.

Thank you, Reagan, and thank you all for joining us today on our third quarter earnings call. We hope that you and your loved ones are staying healthy and safe. The format for today's call is that I'll provide a brief summary of our performance for the third quarter and a business update as we navigate the lingering uncertainties associated with the COVID-19 pandemic and commodity price volatility. Carolyn will then provide a financial statement and a financial and segment level review, and I'll conclude with some directional commentary on our expectations for the fourth quarter and guidance before we move into the question and answer portion of the call. I'll start by emphasizing that at CIVIO, the safety and well-being of our employees, guests, and contractors is always our top priority. Our team continues to be vigilant and following our safety protocols, which aim to mitigate the risk of the virus spreading. Let's start off with some key takeaways for the call today. The business continued to consistently generate cash, which is facilitating an accelerated debt reduction for Civia. In the third quarter, Civia delivered $36 million of adjusted EBITDA, $34.4 million of free cash flow, and we reduced total debt by $27 million to $272.5 million. These results reflect sequential improvements in revenues in EBITDA in the third quarter of 2020 compared to the second quarter of 2020, primarily due to sequentially higher billed room nights in both Canada and Australia. Our leverage ratio declined to 2.16 times as of September 30, 2020, from 2.34 times at the end of the second quarter, Delivering the balance sheet remains our top financial priority. We had a successful quarter commercially. Today, we announced that we had secured four contract renewals in Australia with total expected revenues under the contracts of $135 million Australian over their two-year terms to provide hospitality services through our Action Catering business in Western Australia. Also during the quarter, our team successfully completed the amendment and 18-month extension to our credit agreement. The revised agreement, which governs all the company's outstanding debt, affords the company additional time to pursue our financial objectives of focusing on free cash flow generation and debt reduction while we explore longer-term debt capital solutions. Let me take a moment to provide an update across our three segments. In Canada, We delivered sequentially improved results despite continuing oil price volatility, disruptions related to the pandemic, and customer budgetary constraints. Turnaround activity and build rooms recovered from second quarter lows, and our mobile camp business benefited from a termination payment related to a camp on the CGL pipeline, although occupancy and revenues remained significantly lower on a year-over-year basis. We also received $3.6 million of other income related to proceeds from the Canada Emergency Wage Subsidy Program, or CEWS. Our team's execution, commitment to safety, and vigilant cost management produced adjusted EBITDA in Canada of $21.3 million, which was meaningfully up in the second quarter on a recurring basis. Our Australian business has improved throughout 2020, and that continued in the third quarter. Adjusted EBITDA grew both on a year-over-year and sequential basis due to steady customer activity and higher occupancy, with only modest disruption from the pandemic. We are encouraged by the action and performance in the third quarter, as well as the aforementioned contract renewals. Turning to the U.S., conditions in our U.S. business continue to be extraordinarily challenging. E&P drilling and completion activities remain very subdued in the wake of the COVID-19 pandemic. pandemic and the oil market dislocations. Our focus remains on cost control and operational efficiency, absent signs of a sustained recovery. As we have discussed on earlier calls this year, we're in the process of closing our northern well site services branches and selling or transporting underutilized assets to more attractive southern basins. We are continuing to address the impact of both Hurricane Laura and Hurricane Delta on to our Acadian Acres Lodge in Lake Charles, Louisiana, but we expect the financial impact to be minimal. At CIVIO, we rely on a consistent strategy to navigate the market volatility that is beyond our control. Our priorities are to keep our employees and guests as safe as possible, maximize free cash flow generation, continue to reduce debt to enhance our financial flexibility, and reduce costs without compromising service quality. With that, I'll turn it over to Carolyn.