Civeo Corporation

Good day and welcome to the CBO Corporation second quarter 2021 earnings call. Today's conference is being recorded. At this time, I'll turn the conference over to Mr. Reagan Nielsen, Senior Director, Corporate Development and Investor Relations. Please go ahead, sir.

Thank you, and welcome to CBO's second quarter 2021 earnings conference call. Today, our call will be led by Bradley Dotson, CBO's President and Chief Executive Officer, and Carolyn Stone, Civio's 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 SEC filings. I'll now turn the call over to Bradley.

Thank you, Reagan, and thank you all for joining us today on our second quarter earnings call. For today's call, I'll provide a brief summary of our performance for the second quarter. Karen will then provide some color on the consolidated and segment-level financials. I'll conclude with some directional and commentary on our expectations for the remainder of the year before we move into the question-and-answer portion of the call. We continue to focus on safety and well-being of our guests and employees. We saw an increase in COVID-19 cases in Canada in the second quarter and an increase in COVID-19 cases in July in Australia. Our operational protocols continue to help stem the spread of the virus effectively. Financially, our focus is to generate free cash flow and reduce leverage. Operationally, our focus is on maintaining our high-level of service standards and capturing market share in a turbulent market environment. The key takeaways from our call today, despite a strong third wave of COVID-19 in Canada and a lingering China-Australia trade dispute, our business continued to generate cash, which we allocated to debt reduction. In the second quarter, Sevilla reported $32.2 million of EBITDA, $13.7 million of free cash flow, and we repaid $14.4 million of debt. We continued to reduce our leverage ratio to 2.0 times at March 31, 2021, from 2.1 times... Sorry. We reduced the leverage ratio to 2 times at June 30, from 2.1 times in March 31. We are increasing our free cash flow guidance for the full year, which I'll describe after Carolyn. And we view labor supply issues and subdued customer activity in Australia as transitory problems, as we expect to have those resolved by the end of 2021. In the second quarter, Sibio delivered $32.2 million of adjusted EBITDA, $13.7 million of free cash flow, and reduced debt by $11 million to $226.8 million. These results reflect sequential improvement in revenues in EBITDA in the second quarter compared to the first quarter, largely due to higher billed rooms in Canada. In line with our continued push to deliver our balance sheet, our leverage ratio declined to 2.0 times at June 30 and 2.1 times at the end of the first quarter. Diving into the segments in Canada, we saw sequential improvement as a result of increased activity in our core oil sands region, as well as sequentially increased occupancy at our Sitka Lodge as the COVID-19 health orders in British Columbia began to be lifted towards the end of the second quarter. Our year-over-year performance in Canada was relatively flat, with the increased oil sands activity offsetting the impact of several one-times items realized in the quarter a year ago, which, as you may remember, included proceeds from the Canadian Emergency Wage Subsidy, as well as a gain on sale of some of our assets at the Henday Lodge. Our performance in Australia improved sequentially, but was down compared to a year ago due to increased labor costs related to the COVID-19 travel restrictions in the country, as well as lower billed rooms in the Bowen Basin, driven by the ongoing China-Australia trade dispute. In the U.S., drilling completion activity continues to be near historic lows. While the activity has improved year over year, it remains a challenging environment For Cibio's business, we saw modest performance improvements, largely due to increased fabrication activity in our offshore division and increased contribution from our West Permian launch. Despite a wide array of challenges, we achieved moderate sequential and yearly improvements. With that brief overview, I'll turn it over to Carolyn for some more detail. Carolyn?