Civeo Corporation

Ladies and gentlemen, good morning and welcome to the CBO Corporation second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Regan Nielsen, Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, and welcome to Cibio's second quarter 2024 earnings conference call. Today, our call will be led by Bradley Dawson, Cibio's President and Chief Executive Officer, and Barclay Brewer, Cibio's Interim 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. Thank you all for joining us today on our second quarter earnings call. I'll start with some key takeaways from the second quarter, and then give a brief summary of our second quarter 2024 performance. Then Bargley will provide a financial and segment level review, and I'll conclude our prepared comments with updated comments on our full year 2024 guidance and the underlying regional assumptions. Then we'll open the call for questions. Key takeaways from our call today are, Our second quarter results demonstrate the initiatives that we have undertaken to position the company for growth. That can be seen in our Australian results. Our second quarter 2024 revenues and free cash flow improved year over year with adjusted EBITDA relatively flat despite the expected headwind that we experienced from Canadian LNG mobile camp activity, which decreased our adjusted EBITDA by $6.9 million year over year. Australian adjusted EBITDA increased by 10% compared to the second quarter of 2023 due to continued strength in our build rooms at our own villages and increased activity in our integrated services business as we expand existing customer relationships. Our Canadian segment performance was stronger than we expected for the quarter due to the pull forward of some customer turnaround of 2024. We also return $10.3 million of capital to shareholders through our quarterly dividend and share repurchases during the second quarter of 2024. Lastly, we will maintain our revenue and adjusted EBITDA and CapEx guidance for the full year 2024. I'll discuss that later in our prepared comments. We take a brief moment to provide a business update across our two segments. Australian segments performed well during the quarter and the team continues to execute on our previously stated goal to grow Australian integrated services revenues to $500 million Australian by 2027. We experienced year-over-year growth in both our own villages business and the integrated services business. Our integrated services business growth was particularly strong due to the impact of recent competitive wins as well as expansion the expansion of an existing customer relationship. In Canada, as expected, our Canadian segment revenues have adjusted to a decreased year-over-year due to the wind-down of LNG-related activities, specifically the mobile camp activity, in the second quarter of 2024. Our second quarter of Canadian results were actually stronger than we expected initially due to the shift, again, of the timing of turnaround activity and the oil sands rate. And with that, I'll turn it over to Barclay for some financial review and second-level comments.

Thank you, Bradley, and thank you all for joining us this morning. Today, we reported total revenues in the second quarter of $188.7 billion with net income of $8.2 billion, or $0.56 per diluted share. During the second quarter, we generated adjusted EBITDA of $31.3 billion, operating cash flow of $32.4 million, and free cash flow of $30.9 million. Second quarter adjusted EBITDA increased year over year due to increased activity at our Canadian lodges, Australian-owned villages, and Australian integrated services business, partially offset by the expected wind down of LNG-related Canadian mobile camp activity, which decreased adjusted EBITDA by $6.9 million year over year including $1.4 million in mobile camp demobilization costs. Let's now turn to the second quarter results for our two segments. I'll begin with a review of the Australian segment performance compared to its performance a year ago in the second quarter of 2023. Second quarter revenues from our Australian segment were $108.6 million, up from $82.5 million in the second quarter of 2023. Adjusted EBITDA was $21.6 million, up 10% from $19.6 million last year. The increase to revenues in adjusted EBITDA was due to increased building rooms at our own villages and increased integrated services activities related to recent competitive winds as well as the expansion of existing client activity. This shows our continued and steady growth in the segment. Australians filled rooms in the quarter for 625,000 rooms, up 6% from 588,000 in the second quarter of 2023. This is due to increased customer demand at our own villages, as demonstrated by our recent contract awards. The daily room rate for our Australian-owned villages in U.S. dollars was $78, which increased from $75 in the second quarter of 2023 due to CPI escalation in the recent contract. Turning to Canada, we recorded revenues of $79.5 million as compared to revenues of $95.5 million in the second quarter of 2023. Adjusted EBITDA in Canada was $17.2 billion, a decrease from $19.8 billion in the second quarter of 2023. The year-over-year revenue and adjusted EBITDA decrease was primarily driven by the expected wind-down of LNG-related mobile camp activity. During the second quarter, billed rooms in our Canadian lodges totaled $752,000, of the Cullen Lake Lodge. This increase was primarily driven by stronger turnaround activity during the quarter related to a shift of customer activity from the third quarter of 2024 into the second quarter of 2024. The daily room rate for the Canadian segment in U.S. dollars was $96, which decreased from $100 in the second quarter of 2023 due to the mix of occupancy between lodges and contracted rate incentives for increased occupancy at select lodges. On a consolidated basis, capital expenditures for the second quarter of 2024 were $5.3 million compared to $6.9 million during the same period in 2023. Capital expenditures in both periods were predominantly related to maintenance spending on our lodges and villages. $40.1 million, a $21.8 million decrease since March 31, 2024. Our net leverage ratio for the quarter decreased to 0.3 times as of June 30, 2024. As of June 30, 2024, we had a total liquidity of approximately $159 million consisting of $151.5 million available under our revolving credit facilities and $7.4 million of cash on hand, giving us the strength and flexibility to opportunistically pursue growth vectors in 2024 and beyond while maintaining prudent leverage ratios. Turning to capital allocation. In line with our previously stated goals for 2024 and the second quarter of 2024, we've repurchased approximately 274,000 shares through our share repurchase program for a total of approximately $6.6 million. As Bradley mentioned, we returned $10.3 million of capital to shareholders through quarterly dividends and share repurchases in the quarter, bringing our total year-to-date return of capital to shareholders to $17.2 million. This morning, we announced that our Board of Directors has declared a quarterly dividend payment. Shareholders of record as of August 26 will receive a $0.25 per share cash dividend payable on September 16, 2024. With that, I'll turn it over to Bradley to discuss guidance for the full year 2024. Bradley? Thank you, Barclay.