Civeo Corporation (NYSE:CVEO) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 11:00 am ET

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Civeo Corporation (NYSE:CVEO) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Civeo Corporation Second Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Regan Nielsen, Senior Director of Corporate Development and Investor Relations. Please go ahead, sir.

Executive
Regan Nielsen

Thank you, and welcome to Civeo's second quarter 2020 earnings conference call. Today, our call will be led by Bradley Dodson, Civeo's President and Chief Executive Officer; and Carolyn Stone, Civeo'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 will now turn the call over to Bradley.

Executive
Bradley J. Dodson

Thank you, Regan, and thank you all for joining us today on our second quarter earnings call. We sincerely hope that you and your loved ones are staying safe and healthy.

The format for today's call will be to briefly review the second quarter performance before updating you on what we see in our business today and providing an outlook for the balance of the year.

Let me start by saying at Civeo, the safety and well-being of our employees, guests and contractors is our top priority. As we continue to monitor the virus in Canada, Australia and the US, we are continuing to adhere to the policies and procedures that are designed to ensure the health and safety of everyone at our locations. We'll remain -- we remain in continuous dialogue with all key stakeholders for the duration of the pandemic, and we extend our profound gratitude to our employees, guests, customers and vendors for their continued vigilance as we work together through this difficult time.

There are two key takeaways from our call today. First is the resiliency and diversification of our business. Our second quarter results demonstrate the resiliency of our business model and the benefits of our diversified exposure to multiple geographies and multiple end markets. Although our second quarter performance benefited from a few one-time items, the Australian and Canadian segments both performed much better than we initially expected and particularly in light of the market environment.

Secondly, our safe operations and our business model delivered differentiated financial results in this market. These differentiated financial results support our financial focus, which has not changed, drive free cash flow and reduce our debt. We generated $25 million of free cash flow in the second quarter and reduced our total debt outstanding by $15 million. We also reduced our leverage ratio to 2.34 times as of June 30, down from 2.54 times at March 31. And importantly, we expect to remain in compliance with our financial covenants for the rest of the year and going into 2021. We