Item 1. Financial Statements
ITEM 1. Financial Statements
CIVEO CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
2025 2024
Revenue $ 144,044 $ 166,120
Costs and expenses:
Service and other costs 114,615 130,445
Selling, general and administrative expenses 18,185 18,640
Depreciation and amortization expense 16,253 16,770
Impairment expense — 7,823
Gain on sale of McClelland Lake Lodge assets, net — ( 6,075 )
Other operating expense 507 298
149,560 167,901
Operating loss ( 5,516 ) ( 1,781 )
Interest expense ( 1,619 ) ( 2,360 )
Interest income 26 43
Other income 347 453
Loss before income taxes ( 6,762 ) ( 3,645 )
Income tax expense ( 3,088 ) ( 1,551 )
Net loss ( 9,850 ) ( 5,196 )
Less: Net income (loss) attributable to noncontrolling interest ( 8 ) ( 63 )
Net loss attributable to Civeo Corporation $ ( 9,842 ) $ ( 5,133 )
Per Share Data (see Note 6)
Basic net loss per share attributable to Civeo Corporation common shareholders $ ( 0.72 ) $ ( 0.35 )
Diluted net loss per share attributable to Civeo Corporation common shareholders $ ( 0.72 ) $ ( 0.35 )
Weighted average number of common shares outstanding:
Basic 13,600 14,655
Diluted 13,600 14,655
Dividends per common share $ 0.25 $ 0.25
The accompanying notes are an integral part of these financial statements.
4
CIVEO CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In Thousands)
Three Months Ended
March 31,
2025 2024
Net loss $ ( 9,850 ) $ ( 5,196 )
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustment, net of zero taxes
1,093 ( 10,231 )
Total other comprehensive income (loss), net of taxes 1,093 ( 10,231 )
Comprehensive loss ( 8,757 ) ( 15,427 )
Less: Comprehensive loss attributable to noncontrolling interest ( 8 ) ( 132 )
Comprehensive loss attributable to Civeo Corporation $ ( 8,749 ) $ ( 15,295 )
The accompanying notes are an integral part of these financial statements.
5
CIVEO CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Excluding Share Amounts)
March 31, 2025 December 31, 2024
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 28,372 $ 5,204
Accounts receivable, net 93,636 89,038
Inventories 5,736 7,537
Prepaid expenses 5,473 7,464
Other current assets 1,222 1,210
Total current assets 134,439 110,453
Property, plant and equipment, net 195,617 204,897
Goodwill 7,051 7,001
Other intangible assets, net 65,288 66,502
Operating lease right-of-use assets 13,296 9,401
Other noncurrent assets 8,061 6,818
Total assets $ 423,752 $ 405,072
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 38,695 $ 39,971
Accrued liabilities 26,076 34,933
Income taxes payable 8,888 10,853
Deferred revenue 2,578 2,501
Other current liabilities 4,909 4,388
Total current liabilities 81,146 92,646
Long-term debt 87,367 43,299
Deferred income taxes 3,071 3,558
Operating lease liabilities 10,035 6,655
Other noncurrent liabilities 21,395 21,916
Total liabilities 203,014 168,074
Shareholders’ Equity:
Common shares ( no par value; 46,000,000 shares authorized, 13,979,419 shares and 14,067,721 shares issued, respectively, and 13,541,424 shares and 13,653,647 shares outstanding, respectively)
— —
Additional paid-in capital 1,632,420 1,631,823
Accumulated deficit ( 997,400 ) ( 980,720 )
Common shares held in treasury at cost, 437,995 and 414,074 shares, respectively
( 10,775 ) ( 10,130 )
Accumulated other comprehensive loss ( 403,507 ) ( 404,600 )
Total Civeo Corporation shareholders’ equity 220,738 236,373
Noncontrolling interest — 625
Total shareholders’ equity 220,738 236,998
Total liabilities and shareholders’ equity $ 423,752 $ 405,072
The accompanying notes are an integral part of these financial statements.
6
CIVEO CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ EQUITY
(In Thousands)
Attributable to Civeo
Common
Shares
Par Value Additional
Paid-in
Capital Accumulated
Deficit Treasury
Shares Accumulated
Other
Comprehensive
Income (Loss) Noncontrolling
Interest Total
Shareholders’
Equity
Balance, December 31, 2023 $ — $ 1,628,972 $ ( 919,023 ) $ ( 9,063 ) $ ( 380,715 ) $ 2,867 $ 323,038
Net loss — — ( 5,133 ) — — ( 63 ) ( 5,196 )
Currency translation adjustment — — — — ( 10,162 ) ( 69 ) ( 10,231 )
Dividends paid — — ( 3,707 ) — — ( 4 ) ( 3,711 )
Common shares repurchased — — ( 3,208 ) — — — ( 3,208 )
Excise tax on common shares repurchased — — ( 64 ) — — — ( 64 )
Share-based compensation — 549 — ( 1,067 ) — — ( 518 )
Balance, March 31, 2024 $ — $ 1,629,521 $ ( 931,135 ) $ ( 10,130 ) $ ( 390,877 ) $ 2,731 $ 300,110
Balance, December 31, 2024 $ — $ 1,631,823 $ ( 980,720 ) $ ( 10,130 ) $ ( 404,600 ) $ 625 $ 236,998
Net loss — — ( 9,842 ) — — ( 8 ) ( 9,850 )
Currency translation adjustment — — — — 1,093 — 1,093
Dividends paid — — ( 3,437 ) — — ( 617 ) ( 4,054 )
Common shares repurchased — — ( 3,334 ) — — — ( 3,334 )
Excise tax on common shares repurchased — — ( 67 ) — — — ( 67 )
Share-based compensation — 597 — ( 645 ) — — ( 48 )
Balance, March 31, 2025 $ — $ 1,632,420 $ ( 997,400 ) $ ( 10,775 ) $ ( 403,507 ) $ — $ 220,738
Common
Shares (in
thousands)
Balance, December 31, 2024 13,654
Share-based compensation 40
Common shares repurchased ( 153 )
Balance, March 31, 2025 13,541
The accompanying notes are an integral part of these financial statements.
7
CIVEO CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended
March 31,
2025 2024
Cash flows from operating activities:
Net loss $ ( 9,850 ) $ ( 5,196 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 16,253 16,770
Impairment charges — 7,823
Deferred income tax benefit ( 510 ) ( 2,265 )
Non-cash compensation charge 597 549
Gains on disposals of assets ( 155 ) ( 6,065 )
Provision for credit losses, net of recoveries ( 20 ) 4
Other, net ( 29 ) 722
Changes in operating assets and liabilities:
Accounts receivable ( 4,156 ) 7,387
Inventories 1,841 ( 510 )
Accounts payable and accrued liabilities ( 9,835 ) ( 21,205 )
Taxes payable ( 2,059 ) 3,791
Other current and noncurrent assets and liabilities, net ( 522 ) 4,180
Net cash flows provided by (used in) operating activities ( 8,445 ) 5,985
Cash flows from investing activities:
Capital expenditures ( 5,271 ) ( 5,613 )
Proceeds from dispositions of property, plant and equipment 167 6,778
Other, net — —
Net cash flows provided by (used in) investing activities ( 5,104 ) 1,165
Cash flows from financing activities:
Revolving credit borrowings 99,155 81,073
Revolving credit repayments ( 54,989 ) ( 66,477 )
Debt issuance costs ( 125 ) —
Dividends paid ( 3,437 ) ( 3,707 )
Repurchases of common shares ( 3,334 ) ( 3,208 )
Taxes paid on vested shares ( 645 ) ( 1,067 )
Net cash flows provided by financing activities 36,625 6,614
Effect of exchange rate changes on cash 92 ( 335 )
Net change in cash and cash equivalents 23,168 13,429
Cash and cash equivalents, beginning of period 5,204 3,323
Cash and cash equivalents, end of period $ 28,372 $ 16,752
The accompanying notes are an integral part of these financial statements.
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CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of the Business
We provide hospitality services to remote workforces in Australia and Canada, including catering and food service, lodging, housekeeping and maintenance at accommodation facilities that we or our customers own. We provide services that support the day-to-day operations of these facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics. We also manage development activities for workforce accommodation facilities, including site selection, permitting, engineering and design and manufacturing and site construction management, along with providing hospitality services once the facility is constructed. We primarily operate in some of the world’s most active metallurgical (met) coal, oil, liquefied natural gas (LNG) and iron ore producing regions, and our customers include mining companies, major and independent oil companies, engineering companies and oilfield and mining service companies. We operate in two principal reportable business segments – Australia and Canada.
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. Certain reclassifications have been made to the prior year financial statements for them to conform with the 2025 presentation.
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 U.S. Generally Accepted Accounting Principles (GAAP) has been condensed or omitted pursuant to those rules and regulations. The unaudited consolidated 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.
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 unaudited consolidated financial statements included in this report should be read in conjunction with our audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.
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CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
2. REVENUE
The following table disaggregates our revenue by our two reportable segments (Australia and Canada) into major categories for the periods indicated (in thousands):
Three Months Ended
March 31,
2025 2024
Australia
Accommodation revenues $ 46,823 $ 47,107
Food service and other services revenues 56,823 44,630
Total Australia revenues 103,646 91,737
Canada
Accommodation revenues $ 33,436 $ 59,787
Mobile facility rental revenues 219 994
Food service and other services revenues 6,743 6,379
Total Canada revenues 40,398 67,160
Other
Other revenues $ — $ 7,223
Total other revenues — 7,223
Total revenues $ 144,044 $ 166,120
Our payment terms vary by the type and location of our customer and the services offered. The time between invoicing and when our performance obligations are satisfied is not significant. Payment terms are generally within 30 days and in most cases do not extend beyond 60 days. We do not have significant financing components or significant payment terms.
As of March 31, 2025, 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. The table only includes revenue expected to be recognized from contracts where the quantity of service is certain (in thousands):
For the years ending December 31,
2025 2026 2027 Thereafter Total
Revenue expected to be recognized as of March 31, 2025 $ 110,268 $ 115,427 $ 86,891 $ 206,481 $ 519,066
We applied the practical expedient and do not disclose consideration for remaining performance obligations with an original expected duration of one year or less. In addition, we do not estimate revenues expected to be recognized related to unsatisfied performance obligations for contracts without minimum room commitments. The table above represents only a portion of our expected future consolidated revenues and it is not necessarily indicative of the expected trend in total revenues.
3. IMPAIRMENT CHARGES
No impairment expense was recorded during the first quarter of 2025.
The following summarizes pre-tax impairment charges recorded during 2024, which are included in Impairment expense in our consolidated statements of operations (in thousands):
10
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Australia U.S. Total
Quarter ended March 31, 2024
Long-lived assets $ 5,749 $ 2,074 $ 7,823
Total $ 5,749 $ 2,074 $ 7,823
Quarter ended March 31, 2024 . During the first quarter of 2024, we recorded impairment expense of $ 5.7 million related to various undeveloped land positions and related permitting costs in Australia. At March 31, 2024, we identified an impairment trigger related to certain of these properties due to the denial of development permit applications in Australia. Accordingly, the assets were written down to their estimated fair value of $ 0.6 million.
In addition, during the first quarter of 2024, we recorded impairment expense of $ 2.1 million, related to land located in the U.S. The land was written down to its estimated fair value (less costs to sell) of $ 3.8 million.
4. 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, 2025 and December 31, 2024, we believe the carrying value of our floating-rate debt outstanding under our 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 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 2024, we wrote down certain long-lived assets to fair value. Our estimate of the fair value of undeveloped land positions in Australia that were impaired was based on appraisals from third parties.
5. DETAILS OF SELECTED BALANCE SHEET ACCOUNTS
Additional information regarding selected balance sheet accounts at March 31, 2025 and December 31, 2024 is presented below (in thousands):
March 31, 2025 December 31, 2024
Accounts receivable, net:
Trade $ 74,181 $ 72,819
Unbilled revenue 16,520 12,883
Other 3,124 3,544
Total accounts receivable 93,825 89,246
Allowance for credit losses ( 189 ) ( 208 )
Total accounts receivable, net $ 93,636 $ 89,038
March 31, 2025 December 31, 2024
Inventories:
Finished goods, including purchased food, housekeeping and retail inventory $ 4,336 $ 6,134
Raw materials 1,400 1,403
Total inventories $ 5,736 $ 7,537
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CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Estimated
Useful Life
(in years) March 31, 2025 December 31, 2024
Property, plant and equipment, net:
Land $ 24,157 $ 24,052
Accommodations assets 3 — 15 1,277,802 1,272,515
Buildings and leasehold improvements 7 — 20 12,891 12,386
Machinery and equipment 4 — 7 13,768 13,624
Office furniture and equipment 3 — 7 66,451 65,830
Vehicles 3 — 5 8,266 8,775
Construction in progress 8,411 6,835
Total property, plant and equipment 1,411,746 1,404,017
Accumulated depreciation ( 1,216,129 ) ( 1,199,120 )
Total property, plant and equipment, net $ 195,617 $ 204,897
March 31, 2025 December 31, 2024
Accrued liabilities:
Accrued compensation $ 20,430 $ 29,209
Accrued taxes, other than income taxes 3,768 3,327
Other 1,878 2,397
Total accrued liabilities $ 26,076 $ 34,933
March 31, 2025 December 31, 2024
Contract liabilities (Deferred revenue):
Current contract liabilities (1)
$ 2,578 $ 2,501
Noncurrent contract liabilities (1)
4,538 5,098
Total contract liabilities (Deferred revenue) $ 7,116 $ 7,599
(1) Current contract liabilities and Noncurrent contract liabilities are included in "Deferred revenue" and "Other noncurrent liabilities," respectively, in our unaudited consolidated balance sheets.
Deferred revenue typically consists of upfront payments received before we satisfy the associated performance obligation. The decrease in deferred revenue from December 31, 2024 to March 31, 2025 was due to revenue recognized over the contracted terms related to advance payments received from a customer for village enhancements in Australia.
6. EARNINGS PER SHARE
We calculate our basic earnings per share by dividing net income (loss) attributable to Civeo Corporation by the weighted average number of common shares outstanding. For diluted earnings per share, the basic shares outstanding are adjusted by adding all potentially dilutive securities.
12
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
The calculation of basic and diluted earnings per share attributable to Civeo common shareholders is presented below for the periods indicated (in thousands, except per share amounts):
Three Months Ended March 31,
2025 2024
Numerator:
Basic net loss attributable to Civeo Corporation $ ( 9,842 ) $ ( 5,133 )
Diluted net loss attributable to Civeo Corporation $ ( 9,842 ) $ ( 5,133 )
Denominator:
Weighted average shares outstanding - basic 13,600 14,655
Dilutive shares - share-based awards — —
Weighted average shares outstanding - diluted 13,600 14,655
Basic net loss per share attributable to Civeo Corporation common shareholders (1)
$ ( 0.72 ) $ ( 0.35 )
Diluted net loss per share attributable to Civeo Corporation common shareholders (1)
$ ( 0.72 ) $ ( 0.35 )
(1) Computations may reflect rounding adjustments.
Share-based awards excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive totaled 0.1 million shares and 0.1 million shares, respectively, for the three months ended March 31, 2025 and 2024.
13
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
7. DEBT
As of March 31, 2025 and December 31, 2024, long-term debt consisted of the following (in thousands):
March 31, 2025 December 31, 2024
U.S. revolving credit facility; weighted average interest rate of 9.0 % for the three month period ended March 31, 2025
$ — $ —
Canadian revolving credit facility; weighted average interest rate of 6.0 % for the three month period ended March 31, 2025
87,367 43,299
Australian revolving credit facility; weighted average interest rate of 6.8 % for the three month period ended March 31, 2025
— —
Total debt $ 87,367 $ 43,299
Credit Agreement
On March 24, 2025, we amended our Syndicated Facility Agreement (as amended to date, the Amended Credit Agreement), to increase the Australian revolving commitments by $ 20.0 million to an aggregate amount of $ 55.0 million.
As of March 31, 2025, the Amended Credit Agreement provided for a $ 265.0 million revolving credit facility scheduled to mature on August 8, 2028, allocated as follows: (A) a $ 10.0 million senior secured revolving credit facility in favor of certain of our U.S. subsidiaries, as borrowers (the U.S. Facility); (B) a $ 200.0 million senior secured revolving credit facility in favor of Civeo and certain of our U.S. subsidiaries, as borrowers (the Canadian Facility); and (C) a $ 55.0 million senior secured revolving credit facility in favor of one of our Australian subsidiaries, as borrower.
U.S. dollar amounts outstanding under the facilities provided by the Amended Credit Agreement bear interest at a variable rate equal to Adjusted Term Secured Overnight Financing Rate (SOFR), which is equal to Term SOFR plus a 10 basis point adjustment, plus a margin of 2.50 % to 3.75 %, or a base rate plus a margin of 1.50 % to 2.75 %, in each case based on a ratio of our total net debt to Consolidated EBITDA (as defined in the Amended Credit Agreement). Canadian dollar amounts outstanding bear interest at a variable rate equal to Adjusted Term Canadian Overnight Repo Rate Average (CORRA), which is equal to the Term CORRA plus a 29.547 basis point adjustment for one month terms or a 32.138 basis point adjustment for three month terms, plus a margin of 2.50 % to 3.75 %, or a Canadian Prime rate plus a margin of 1.50 % to 2.75 %, in each case based on a ratio of our total net debt to Consolidated EBITDA (as defined in the Amended Credit Agreement). 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 2.50 % to 3.75 %, based on a ratio of our total net debt to Consolidated EBITDA (as defined in the Amended Credit Agreement).
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) specified acquisitions; (iv) certain restrictive agreements; (v) transactions with affiliates; and (vi) investments and other restricted payments, including dividends and other distributions. In addition, we must maintain a minimum interest coverage ratio, defined as the ratio of consolidated EBITDA to consolidated interest expense, of at least 3.00 to 1.00 and a maximum net leverage ratio, defined as the ratio of total net debt to Consolidated EBITDA, of no greater than 3.00 to 1.00. Following a qualified offering of indebtedness, we will be required to maintain a maximum leverage ratio of no greater than 3.50 to 1.00 and a maximum senior secured ratio no greater than 2.00 to 1.00. 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, 2025.
Borrowings under the Amended Credit Agreement are secured by a pledge of substantially all of our assets and the assets of our subsidiaries subject to customary exceptions. The obligations under the Amended Credit Agreement are guaranteed by our significant subsidiaries. As of March 31, 2025, we had six lenders that were parties to the Amended Credit Agreement, with total revolving commitments ranging from $ 35.0 million to $ 60.0 million. As of March 31, 2025, we had outstanding letters of credit of zero under the U.S. facility, zero under the Australian facility and $ 0.8 million under the Canadian facility. We also had outstanding bank guarantees of A$ 2.1 million under the Australian facility.
14
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
8. 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 in three jurisdictions, Australia, Canada and the U.S., where statutory tax rates range from 15 % to 30 %. Our effective tax rate will vary from period to period based on changes in earnings mix between these different jurisdictions. On January 1, 2024, the Organization for Economic Cooperation and Development Pillar Two rules became effective and established a minimum 15% tax rate on certain multinational enterprises. The Pillar Two rules have been implemented in Australia and Canada, with the U.S. still uncertain to date. The applicable tax law changes with respect to Pillar Two have been considered for the jurisdictions in which we operate, and we do not anticipate the Pillar Two rules to have a materially adverse impact on our financial results.
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, 2025 and 2024, Canada and the U.S. were considered loss jurisdictions for tax accounting purposes and were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.
Our income tax expense for the three months ended March 31, 2025 totaled $ 3.1 million, or ( 45.7 )% of pretax loss, compared to income tax expense of $ 1.6 million, or ( 42.6 )% of pretax loss, for the three months ended March 31, 2024. Our effective tax rate for the three months ended March 31, 2025 and 2024 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.
9. 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.
10. ACCUMULATED OTHER COMPREHENSIVE LOSS
Our accumulated other comprehensive loss decreased $ 1.1 million from $ 404.6 million at December 31, 2024 to $ 403.5 million at March 31, 2025, as a result of foreign currency exchange rate fluctuations. Changes in other comprehensive loss during the three months of 2025 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$ 106 million and A$ 228 million, respectively, at March 31, 2025.
11. SHARE REPURCHASE PROGRAMS AND DIVIDENDS
Share Repurchase Programs
In March 2025 and September 2024, our Board of Directors (Board) authorized the repurchase of up to 10.0 % and 5.0 % of our total common shares which were issued and outstanding, or approximately 1,351,000 and 711,000 common shares, respectively, over a twelve month period.
The repurchase authorization allows repurchases from time to time through a variety of methods, including but not limited to open market repurchases, pursuant to a Rule 10b5-1 compliant plan, or privately negotiated transactions. We have funded, and intend to continue to fund, repurchases through cash on hand, cash from debt incurrences and cash generated from operations. Any common shares repurchased are cancelled in the periods they are acquired and the payment is accounted for as an increase to accumulated deficit in our Unaudited Consolidated Statements of Changes in Shareholders’ Equity in the period the payment is made.
15
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
The following table summarizes our common share repurchases for the periods presented (in thousands, except per share data):
Three Months Ended March 31,
2025 2024
Dollar-value of shares repurchased $ 3,334 $ 3,208
Shares repurchased 153.1 133.1
Average price paid per share $ 21.75 $ 24.08
Dividends
Our Board declared the following quarterly dividends for the three months ended March 31, 2025 and 2024. The dividends are eligible dividends pursuant to the Income Tax Act (Canada).
Date Declared Record Date Payment Date Per Share Amount
January 31, 2025 February 24, 2025 March 17, 2025 $ 0.25
February 2, 2024 February 26, 2024 March 18, 2024 $ 0.25
12. 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 and the Compensation Committee of our Board to approve and grant awards of options, awards of restricted shares, performance share awards, phantom share units and dividend equivalents, awards of deferred shares, and share payments to our employees and non-employee directors. Approximately 3.0 million Civeo common shares are authorized to be issued under the Civeo Plan.
Outstanding Awards
Phantom Share Units. On March 3, 2025, we granted 171,723 phantom share units under the Civeo Plan, which vest in three equal annual installments beginning on March 3, 2026. We also granted 57,432 phantom share units under the Canadian Long-Term Incentive Plan, which vest in three equal annual installments beginning on March 3, 2026. Phantom share units are settled in cash upon vesting.
During the three months ended March 31, 2025 and 2024, we recognized compensation expense associated with phantom share units totaling $ 1.8 million and $ 1.3 million, respectively. At March 31, 2025, unrecognized compensation cost related to phantom share units was $ 10.8 million, as remeasured at March 31, 2025, which is expected to be recognized over a weighted average period of 2.3 years.
Performance Share Awards. On March 3, 2025, we granted 189,124 performance share awards under the Civeo Plan, which cliff vest after three years subject to attainment of applicable performance criteria. 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 of other companies and the payout percentage associated with Civeo's three-year growth in EBITDA over the performance period relative to a preset 2027 EBITDA target. The portion of the performance share awards tied to the 2027 EBITDA target includes a performance-based vesting requirement. We evaluate the probability of achieving the performance criteria throughout the performance period and will adjust share-based compensation expense based on the number of shares expected to vest based on our estimate of the most probable performance outcome. No share-based compensation expense is recognized if the performance criteria are not probable of being achieved.
During the three months ended March 31, 2025 and 2024, we recognized compensation expense associated with performance share awards totaling $ 0.3 million and $ 0.3 million, respectively. The total fair value of performance share awards that vested during the three months ended March 31, 2025 and 2024 was $ 1.7 million and $ 2.8 million, respectively. At March 31, 2025, unrecognized compensation cost related to performance share awards was $ 2.7 million, which is expected to be recognized over a weighted average period of 2.1 years.
16
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Restricted Share Awards / Restricted Share Units / Deferred Share Awards. Compensation expense associated with restricted share awards, restricted share units and deferred share awards recognized in the three months ended March 31, 2025 and 2024 totaled $ 0.3 million and $ 0.3 million, respectively. The total fair value of restricted share awards, restricted share units and deferred share awards that vested during the three months ended March 31, 2025 and 2024 was zero .
At March 31, 2025, unrecognized compensation cost related to restricted share awards, restricted share units and deferred share awards was $ 0.1 million, which is expected to be recognized over a weighted average period of 0.1 years.
13. SEGMENT AND RELATED INFORMATION
We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments. We have identified two reportable segments, Australia and Canada, which represent our strategic focus on hospitality services and workforce accommodations.
Prior to the fourth quarter of 2024, we presented segment operating income (loss) to include an allocation of corporate overhead expenses. To better align segment operating income (loss) to the profitability measure used by our chief operating decision maker, we have excluded this allocation. Prior periods have been updated to be consistent with the presentation for the three months ended March 31, 2025.
Financial information by business segment for each of the three months ended March 31, 2025 and 2024 is summarized in the following table (in thousands):
Three months ended March 31, 2025 Australia Canada Corporate, other and eliminations Total
Revenues $ 103,646 $ 40,398 $ — $ 144,044
Cost of sales and services 76,720 37,645 250 114,615
Revenues less cost of sales and services 26,926 2,753 ( 250 ) 29,429
Selling, general and administrative expenses 6,408 4,301 7,476 18,185
Depreciation and amortization expense 7,804 8,420 29 16,253
Other operating expense (income) (1)
75 61 371 507
Operating income (loss) 12,639 ( 10,029 ) ( 8,126 ) ( 5,516 )
Reconciliation to income (loss) before income taxes
Other income (loss) (2)
( 1,246 )
Income (loss) before income taxes $ ( 6,762 )
Capital expenditures $ 1,945 $ 3,326 $ — $ 5,271
Total assets $ 206,804 $ 651,072 $ ( 434,124 ) $ 423,752
17
CIVEO CORPORATION
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Three months ended March 31, 2024 Australia Canada Corporate, other and eliminations Total
Revenues $ 91,737 $ 67,160 $ 7,223 $ 166,120
Cost of sales and services 66,113 57,257 7,075 130,445
Revenues less cost of sales and services 25,624 9,903 148 35,675
Selling, general and administrative expenses 5,312 4,869 8,459 18,640
Depreciation and amortization expense 7,237 9,396 137 16,770
Other operating expense (income) (1)
5,787 ( 6,067 ) 2,326 2,046
Operating income (loss) 7,288 1,705 ( 10,774 ) ( 1,781 )
Reconciliation to income (loss) before income taxes
Other income (loss) (2)
( 1,864 )
Income (loss) before income taxes $ ( 3,645 )
Capital expenditures $ 4,518 $ 1,095 $ — $ 5,613
Total assets $ 199,430 $ 744,639 $ ( 430,999 ) $ 513,070
(1) Other operating expense (income) for each reportable segment primarily includes other operating expenses for the three months ended March 31, 2025 and 2024. In addition, for the three months ended March 31, 2024, other operating expense (income) includes impairment expense in Canada and the U.S. and Canada includes gain on sale of McClelland Lake Lodge assets, net.
(2) Other income (loss) is primarily related to interest expense, interest income and other income.
18
Cautionary Statement Regarding Forward-Looking Statements
This quarterly report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the Exchange Act). The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. The forward-looking statements can be identified by the use of forward-looking terminology including “may,” “expect,” “anticipate,” “estimate,” “continue,” “believe” or other similar words. The forward-looking statements in this report include, but are not limited to, the statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” relating to our expectations about the macroeconomic environment and industry conditions, including the volatility in the price of and demand for commodities, as well as our expectations about capital expenditures in 2025, beliefs with respect to liquidity needs and expectations with respect to growth strategies and opportunities, share repurchases and dividends and anticipated benefits of our pending acquisition of four villages in Australia's Bowen Basin. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of important factors. For a discussion of known material factors that could affect our results, refer to “Risk Factors” in this quarterly report and "Risk Factors", “Cautionary Statement Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024 and our subsequent SEC filings. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Our management believes these forward-looking statements are reasonable. However, you should not place undue reliance on these forward-looking statements, which are based only on our current expectations and are not guarantees of future performance. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any of them in light of new information, future events or otherwise, except to the extent required by applicable law.
In addition, in certain places in this quarterly report, we may refer to reports published by third parties that purport to describe trends or developments in the natural resources industry. We do so for the convenience of our shareholders and in an effort to provide information available in the market that will assist our investors in a better understanding of the market environment in which we operate. However, we specifically disclaim any responsibility for the accuracy and completeness of such information and undertake no obligation to update such information.