Civeo Corporation

Greetings and welcome to CVO Corporation third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Reagan Nielsen, Vice President, Corporate Development and Investor Relations. Thank you. You may begin.

Thank you, and welcome to CIVIO's third quarter 2023 earnings conference call. Today, our call will be led by Bradley Dodson, CIVIO'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 anything 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 and uncertainties disclosed in our forms 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 third quarter earnings call. I'll start with the key takeaways for the third quarter and then give a brief summary of our third quarter 2023 performance. Then Carolyn will provide a financial and segment level review. And I'll conclude with our updated full year 2023 guidance with its underlying assumptions. And I'll also provide a preliminary outlook for 2024. Then we'll open up the call for questions. The four key takeaways from our call today are the third quarter 2023 financial results exceeded our expectations, strong operational execution, in both Canada and Australia, with Australia demonstrating strong year-over-year growth. During the quarter, we secured an economically attractive solution for our McClellan Lake assets, which we are optimistic will also lead to additional opportunities. We announced our capital allocation framework, including initiating a 25-cent per share quarterly dividend to provide a consistent form of capital return to our shareholders. and we renewed our share buyback program. The last key point is that we'll provide a qualitative assessment of our initial outlook for 2020. Let me now take a moment to discuss the third quarter and our segments. Our revenue in the third quarter reflected a diverse customer base, from traditional oil and gas production, LNG, project construction, and wildfire response in Canada, to met coal and iron ore production in Australia. Our Australian segment performed exceptionally well during the quarter as we experienced sequential and year-over-year growth in both our own villages business and our integrated services business. During the quarter, we experienced a sequential increase in Australian-owned village occupancy, setting a second consecutive quarterly record for Australian build rooms. On a constant currency basis, the Australian village revenues were up 25% year-over-year, led by increased occupancy in both our Bowen Basin and Gunnedah Basin villages. Assuming a constant currency, revenue from our Australian integrated services business grew both sequentially 12% and year-over-year 23% as recent contract awards began to contribute. During the quarter, we also saw tangible results from our inflation mitigation plan for the integrated services business. we should see the benefit from our team's efforts more fully in the fourth quarter of this year and into next year. However, it is important to note that while we've made strides in mitigating inflationary pressures in both our Canadian and Australian businesses, we expect inflation to remain a focus of ours for the foreseeable future. Our Canadian segment delivered strong quarterly results in the third quarter from turnaround and wildfire activity. This was partially offset by lower LNG-related activity in British Columbia, Canada, as pipeline construction activity continues to wind down, as is expected, resulting in reduced Canadian mobile camp activity for us compared to the third quarter of 2022. We also began demobilizing our mobile camps in this third quarter of 2023. Regarding the sale of our Mofon Lake Lodge in Canada, we have secured, in addition to the sale, the transportation contract for the assets, and the demobilization and transportation work is underway. During the third quarter of 2023, we incurred approximately $4.9 million of demobilization expense related to the McClellan Lake Lodge assets. The majority of the net proceeds from the McClellan sale will be recognized in the fourth quarter of 2023 and into the first quarter of 2024. In regards to the financial impact of this sale, the entirety of the sales proceeds and associated costs will be accounted for in the other income line item on the income statement, and they are excluded from our adjusted EBITDA calculation. As a result, this transaction does not impact our full year 2023 adjusted EBITDA guidance. Lastly, We announced a new capital allocation framework simultaneously with the initiation of a 25 cent per share quarterly dividend policy. This provides flexibility to use our strong cash flow generation for our existing operations, fund growth opportunities, and return capital to shareholders. We also continue to execute on our share repurchase plan in the third quarter and will opportunistically buy back shares moving forward. With that, I'll turn the call over to Carol.