Civeo (NYSE: CVEO) reported Q3 EPS of $0.02, $0.04 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $148.2 million versus the consensus estimate of $146.25 million.

Highlights include:

• Reported third quarter revenues of $148.2 million, net income of $4.5 million and operating cash flow of $23.6 million
• Delivered third quarter Adjusted EBITDA of $36.2 million, up 62% year-over-year, and free cash flow of $20.3 million
• Reduced leverage ratio from 4.26x as of June 30, 2019 to 3.52x as of September 30, 2019
• Completed strategic acquisition of Action Industrial Catering (“Action”) on July 1, 2019, expanding the Company’s presence in both the Integrated Services and Western Australian markets
• Completed an amendment and extension to its entire credit agreement to, among other things, extend the maturity date of the revolving commitments and term loan commitments for the majority of lenders by twelve months to November 30, 2021, and preferentially adjust the permitted leverage ratio to provide the Company more financial flexibility through the maturity of the agreement
• Today announced contract extensions from two major customers in Australia with expected contracted revenues of approximately A$37 million

“The third quarter results demonstrated the diverse activity drivers and operating leverage of our lodge and village operations in our Canadian and Australian segments. In Australia, strong customer metallurgical coal margins continue to drive improved performance and growing contract coverage at our villages. We also benefited from the contributions of the recently completed Action acquisition. In British Columbia, our newly expanded Sitka Lodge is benefiting from LNG-related construction activity. Finally, we experienced strong seasonal turnaround and maintenance activity in the Canadian oil sands. The sequentially improved Adjusted EBITDA coupled with lower expansionary capital expenditures allowed us to reduce our aggregate leverage this quarter, as well as significantly reduce our leverage ratio. We were also very pleased to complete the amendment and extension to our credit agreement and appreciate the continued support of our key bank relationships as well as one new lender," stated Bradley J. Dodson, Civeo's President and Chief Executive Officer.

Mr. Dodson added, "We generated improved year-over-year revenue and Adjusted EBITDA, up 23% and 62%, respectively. The significant year-over-year improvement is primarily due to increased Bowen Basin activity in Australia, strong turnaround activity in the Canadian oil sands and the contribution from our newly-expanded Sitka Lodge supporting LNG activity in British Columbia. This improvement was partially offset by lower occupancy and decreased drilling and completion activity in the U.S."

Mr. Dodson concluded, “We are encouraged by the Company's achievements this quarter and we will continue to focus on operational execution, revenue diversification, free cash flow generation, deleveraging our balance sheet and winning new work as opportunities present themselves."

Fourth Quarter and Full Year 2019 Guidance

For the fourth quarter of 2019, Civeo expects Adjusted EBITDA of $19.5 million to $23.5 million and for the full year of 2019, Civeo is increasing Adjusted EBITDA guidance to a range of $98.0 million to $102.0 million. The Company is lowering its full year 2019 capital expenditure guidance to a range of $33 million to $37 million.

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