Black Diamond Group Limited (BDIMF) 6 Nov 212021 Q3 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to Black Diamond's Third Quarter 2021 Conference Call.

As a reminder, all participants are in a listen-only mode and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. Instructions]. [Operator like Investor conference Relations. now Zhang, to turn of Director to would over the Jason I Please ahead. go

Melanson. Thank as you. With and Ted Good Haynes; today Black Mike call Diamond's by morning Solutions, is COO and and CIO, thank quarter today as Modular We're Ridley; results of you CFO, XXXX COO Toby Workforce conference also CEO, of Redmond; call. our us Patrick Labrie. the third on well Trevor for joined attending Solutions, Space

comments forward-looking these financial future statements net such call number Our include to results. from Management We that EBITDA are debt. adjusted a differ as Diamond's may regarding Black results expectations. uncertainties may today statements to cause in and caution forward-looking of or non-GAAP also measures today's actual materially to may make that risks subject reference

please more entitled and the review sections these of statements, discussion non-GAAP forward-looking on risks and For Diamond's management's analysis quarter uncertainties, measures. information XXXX terms, third Black and

financial turn quarter's Dollar amounts company's as are website. to rounded. otherwise news SEDAR This and unless MD&A, as the dollars, Haynes in the over now on are statements release today's Canadian review at can www.blackdiamondgroup.com expressed I'll quarter. website call discussed on the noted well the call found be in Trevor generally and to

the QX, XXXX Good diverse stable quarter-over-quarter rates a growth base and volumes digit we a undertaken years results and growth. had and with unlock and the triple believe strongest LodgeLink rate LodgeLink years quarter booking revenue. in utilization pleased the traction. showing double of with Jason. The several WFS We're leverage growth results. three more us rental good generated revenue for enticing revenue growth ago WFS performed are posted year-over-year and with revenue, MSS strategies strong And core third These thank results quarter record MSS scale morning steady much and potential. utilization rental working. upside grow is and is digit our asset very in business, you, our to show operating to Thank base diversify that you our for seventh creation discuss joining with consecutive and in and platform record recurring and value several strengthening

As board a and result, reinstate the a the has dividend. Management to confidence quarterly

diversified We revenue will into organic XXXX, expect there's core for we rental on and seeing believe our opportunity to that based markets the the platforms. in strength several in ample recurring rental our are end demand continue in growth continue

generate technology of growth to also increasingly created BXB within being business. scale continue and our are this travel optimistic exponential the We ecosystem around and value

XX% outlook and within across from to see work industry the we In verticals. at to flow to million. already rates, capacity return quarter, for excess MSS remains exited of positive, a put North organic highlights we over comparative of quarter. capital The to $XXX addition of number segment, $XX $XX.X free up rental revenue and generated MSS of the grew to for also borrowing In the mentioned America with cash million attractive growth rates opportunities million the continue

for team, existing presence gave little from The products from in stimulus. the has doubled growth Systems, continued new our is education related of We tailwinds MSS Building very Modular A strong performed a rates, customers better platform which MSS by and within acquisition year-over-year, Bidding additions market. and execution owing continue strong we fleet X% activity robust in every we expect rental ago, a acquired operate. value under were increased government which the which increasing utilization, up demand strong in to driven than initial us Vanguard US scale Vanguard of year our rental ongoing added throughout VAPS. services market the revenues uptake expectations, and or and strong and

these revenue a in revenue view healthy quarter continues management non-rental rental levels strong to normal. rates, sales owing was as and and to revenue to utilization than of derivative streams higher growth VAPS, revenue. regrowth. of growth see Rental But variable continues Third our core

XX,XXX by Our realized XXX,XXX both are related representing robust ever WFS continues was up second and marketplace the listed quarter energy the expect a revenue industry driven as and contribute improvement Australia by quarter. were There number of LodgeLink this bookings activity from efforts sequentially activity Several market quarter increasing associated to ongoing project XX% North active highest areas in mining showing quarter. the utilization, from for XXX projects the servicing sectors. end the our further Australia, third for room and Management market non-rental contributed these year. comparative quarter distinct to corporate fourth previously benefit to items related large into strong business for increases owing education quarter, rental from XXXX, during is in space of and the contracts that XX% particularly room assets customers. also the strength approximately up innovation and And America. over third quarter, WFS, bringing throughout market of utilization quarter diversify workforce in in ongoing continues with roughly government conditions to unit work revenue scale as as contracted crew nights rooms, XXXX in well for XXX% utilization, also the travel including The signs from the sold. to markets, as improved steady properties, quarter we during LodgeLink in experiencing to the segment in accommodation At offerings geography. revenues began announced quarter its projects. to rental that to is which increase digital Within seeing had WFS continue installation delivered the we end in assets. in revenue and year-over-year, and a well non-recurring operations and project rental and the EBITDA is of the

seasonal indicators up performance across a we expect a We quarter business. fourth moderate holiday the key see healthy But and this to season. during slowdown continue ramp

customers, adding properties we we LodgeLink of existing will proposition crew customers travel observe are amidst value travel activity increasing post demonstrate normalizing with volumes. We the as believe pandemic and

cash or basis. of As continued free we our $X.XX mentioned, flow have share platform, per our per a the of generation at quarter, rate given also an dividend on share reinstated per quarterly annualized $X.XX

to cash of is returns last flow we provide several shareholders and stable scale recurring believe base of strategic underlying the rentals Over revenue. diversify to a in be to the The has and of preaching what the resulted stable expected company businesses specialty our years transformation free through growing achievable base organic while for growth, compounding around a with maintaining continued Management details the further Toby to ratios. quarter grows over through on dividend results. as debt long-term to financial well Toby? At is targets call point Labrie, our the believes also third this I'll some that the as platform. turn be to

million related for as well rental the for related to in net comparative -- one quarter. continued $XX.X range capacity and comparative And of costs has XX-months $X.X Trevor. year, administrative project Total EBITDA of resulted Total four $XX.X value $XX.X non-rental net in quarter in the across in a the revenue, XX% levels quarter company's from the ago. to revenue, eligible the falls primarily of non-rental exited quarter, our was business dispute from which debt approximately of announced is was increases MSS long-term quarter XXX% increase XX% the debt company, Adjusted acquisitions. total EBITDA to as QX a times, to than is from quarter. provision up comparative as At the several and trailing same The a were XX% dispute comparative provision Solutions G&A Vanguard higher from last of increase margins leverage attributable borrowing specific year, was ratio and consolidated higher million. following end the base profit of Thanks due year non-rental by the rental the of a than quarter well the projects the of flow America specific a three the to to within revenue approximately debt million as due from increase EBITDA. for inventory from a of net million. were Adjusted quarter, This than due higher Excess an to the Vanguard free of the million incentives usual XXX% QX at facility contracts XX% revenue is net times used quarter the including sales costs of from a revenue growth was a current acquisition somewhat $XXX.X during generation in EBITDA to revenue of strong Company to in for calculate turn was under in North up less to customer percentage of staffing comparative starting and the an in XXX% in the quarter. attributable of from XXXX. mentioned from well platform and proportion two This being rental down XXX% to quarter. performance WFS end than last since for million. decline of up lower million, increase Canada. appraised Australia the customer the lower borrowing an with to for and as Adjusted acquisition leverage of previously strong the previously ratio of cash of was range EBITDA percentage increase was the quarter XX% revenue rental $XX.X was Total up From company's up $XXX in same full was growth the the due asset was revenue million XXXX. million, million XX% of company's margin XX% liquidation million quarter administrative generated target as down adjusted ratio The $XXX with MSS the continued related our up and approximately $XX.X outside EBITDA EBITDA from project. up of credit as revenue XXX% $XXX revenue based a from driven lodging adjusted X.X quarter, in and $XX.X Workforce revenues points an to high across costs of sales

flow has be rental cash rent model current continued we view to our to the strong base of attractive base a an asset provide hedge. free generation and asset in Our environment, inflationary

instances are prices sale realizing selling at We healthy or used in very where continue of to equipment we used market for are sales excess assets, a original see we and MSS XX% in both from on comparative have Year-to-date, our return to utilization higher. levels continued assets division quarter, and MSS costs. as was the move up overall the capital in XX%, rates

the and new are we XX% in seen to but return asset turnover the of these margins attract assets, strength increase assets. rates exceed that existing of rental costs from contract improving have continuing ongoing should to our to hurdle an With manufacturing internal on we rental For utilization rates return yield assets, and environment assets. rising rental respect on our in in XX% contract rate our range, believe to

mentioned, also $X.XX dividend an announced to on our per which the reinstatement Trevor As quarterly annualized we amounts basis. of share

that business, focused flow operator additional questions. our returns to With to for dividend the rental the in reinvestment the leverage we can to over believe shareholders like cash of that, turn remain provide growth, call of time. the our remain in platform grows within form the would ratios stated on back also we we a but business diversified with While profile

Lee ahead. [Operator with Canaccord, Matthew please Instructions] comes go The first question from

seeing and I'd guys. driving elevated. side, rate continue that demand quarter like what of for you're sales be the Can on you walk market Modular great that through run kind Hey, the to you're on expecting maybe start to front XXXX? what's the

Ted have Thanks, call. on can the you volume. Matt. Good to around give the sales you Perhaps color some

want revenue what to. sales We're was, the your across we side, seeing think about on strength if could I platform. was talk you the question later rental while We're yes. which Sure,

holding XXXX increasing, seeing and regions. or And growing All XXXX. we'll and and program and for don't said our driven in, revenue, growth platform continue constant basis. we're as putting rent number the of rental seeing have our CapEx CapEx either getting units, point, fundamentals again, -- Trevor into fleet. at and We're are capital growth are at a a good we being in XXXX, the any fundamentals units the in which put are utilization currency also older those on out some by our on our there. rates regions We all is this rental refurbishing X% in as rent increasing change units, rates operating of to across refurbishing steady at see that's run -- the grow

just mean, that, specifically time, mean, rate I'm has, traditionally sales you're you side, I units at more but MSS selling to the I and sales. fleet. tend just Right, grow run the same the on than thinking

two So I mean, of kind conflict is desires? between there those

we're older -- really up some units. not we're Well, did we clean

a conscious you have made sell them. a some the to decision effort, we of on refurbish older units, or to whether So make them,

units So our -- we of didn't refurbish. wanted I want were think to to lot that a just older sales

Toby didn't the demand to So margins kind so of said, sales sales. very have use strong. fleet of speak. We the the a And rejuvenation on strong as for were

use but we'd to the opportunities than higher good going of. for sales, advantage took forward slightly running probably rate So we that expect

great. but do or that starting dividend priorities dividend, kind see capital maybe then to debt repayment? And your M&A potential the maybe, completely small, of geared here that's Okay, towards and going on allocation you some understand I grow forward, more

As sure the four when how because dividend by in we years compared we that the the confident is of business. ratio make even can underlying flow the it and certainly of for expect, believe payer. are plus we some to the want market the dividend were end diversified by careful fundamentals in that reinstatement took cash And are geography of we consideration, to you we long-term, the scale of sustainable a businesses, ago,

whether dividend the is a the first or so decision we place and And with business can in sustainable. healthy not put confidence. is And

time, business forward we to of go would And is we're other on the we business, back we into back able then with consideration, for and investing dividend so did touched to into to Matt generate compound the attractive over the return, basis. a to to, is, which the lower it's performance have like the the as course, return our nature able on of decide And start our on a seeing with what based flow contracted to ensure be what business. we're of on room And cash cash really of business. to flow, shareholder’s free Toby the increase rates it's

looking so And high growing combination growth of return at we're a that good dividend. organic coupled with

the And our And very get we what consideration then on debt facilities third focused asset wanting debt this is really ratio. that's reminder, based as are in so the case. to And comfortably a within lending.

the we And so borrow against liquidation value of assets. the

we carrying debt-to-EBITDA. comfortable And higher EBITDA have slightly we're we around comfortably so and a said And debt be three to like two to we between covenants ratio. that times. would But any don't before,

growth, deciding longer business play. some at that explanation, raise our before into to And our its pay we we've as to looking ensure think of dividend able ratios, into the that dividend. a can compound perspectives three bit spent And be we time. then but shareholders come time want over A we that's the comes range, so that the the stay to and within debt

it Thanks. for That’s the Appreciate me. insights.

Instructions]. Frederic James. Please [Operator from go Bastien next ahead. question comes from Raymond The

guys. morning, Good

be increasing with the Just might what's a and with free pressures deployment question you are on from to flow, inflationary to also now assets in cost are you'd respect dividend, the on, planning term, then looking are the that the respect purchasing? how short benefiting the given to that here, active of be cash you left capital at

our commodities seeing components the assets their supply of a even of the also it’s and chain lumber steel. our constraints Yes, and for from in we certain are new And and basic escalation seeing question. great manufacturers, in manufacturers where we're cost

with able his Toby allowing mentioned is And we’re rate in mentioned, program, assets, to pricing, don't condition, at investment rental interesting market X,XXX that's capital. into dynamic, the a rate. good -- rates. of to and sell how it already with use comments, against you the can new it's an it's them our older on that if to generate on utilizations growth, for refurbishment get to unused those And compounding high to market a of a certainly units invest sense MSS effects sales efficient on then strong market business. in powerful them own And make cost very benchmark them as the much very we asset, has assets as the bring So which in of Ted we

replace to reasonable So will the then we mitigate and our tight to the go we asset enough recycle we those controls opportunities and a fleets try need next a continue of in very add able involved. to mechanisms replace. costs recover to new to And good, have chain selling. that using with year around do asset sale be market. we Which essentially very we supply the Yes, ahead. we're to various our assets, expect and through we the buy to But pace increasing at receiving

one a of and our that Just would because for of asset bid projects other purchases XX we for rentals lot to done projects months those specific XX have a point on term. are lot

out contracting of a revenue time. we're significant period So that for

we're So make good to initial on going we a rental that know over period. return investment the

through so new of the rental We we're cost system, cost our use passing set to escalation to the rate, asset. the asset and of that which

on was impact did the revenue What in to for the how it at was attributed increase big Thanks of cool. and it significant explanation. Okay, EBITDA? non-rental and what say WFS have an

want Ted, do to. you

Sure I'll how Hi, Frederic, take. are you.

good. I'm

years around and those gas several of diversifying. good projects North most are outside other lot our terms thing type wraparound Australia. of for about executed. in really we've the commenced in of projects it And kind sort in hard numerous installation, of quarter oil work, in that the worked where services of a of strategy is and And had we last sort America non-rental WFS, of that the had of we've transportation

the We Canada, in US have the Canada, very work tied traction, sector. we're executing had in last then years. terms success In the around we've on and over with Eastern in government. some of hard in in particular, of the in mining strategy terms Australia, into our And good few

So of will we've good Western that that's diversification also bulk that projects we of mining some It's is good as contracts, but the of government, sort XXXX rental piece in both really it rental it. well. And through in of to to long-term the tied ongoing, see the these been tied Canada it. through

straight a the -- the provide say is or, Toby you of at results maybe on what we contribution Thanks, because bit third granularity use and about quarter you in there Trevor, can number the can't into quarters. a a the that answering line won't obviously quarter obviously that there future of of the a be you and was things repeated in from in benefited bit but necessary

typically, X% X% range. Frederic, are our revenue the on margins Yes, in to non-rental

And of of it quarter type depends of kind where range so we're side on that of in on revenue given higher the the mix revenue.

sorry Okay, go ahead.

of assets up we several those the non-rental you're because projects, at same were we enjoy place, related is and against being once on have next what deployed mix, did in rental elevated the the they're recurring revenue install What revenue operations, running, higher for as generated so is stream touching assets, putting time. from we transportation a and projects

to we what in in lodging expect will the rent, and do facilities associated contribution being would operations normalize you projects place. rental being deployed putting camps said, in So going workforce return on and as of That QX. into normalize and assets the currently non-rental that we you're generating our have recurring higher are revenue is more we stream, but with see

rate. seeing go it we're But But rental doesn't operating non-rental away. So, correct, suggest would revenue I we utilization you're think normalizes. improved and run that that behind stream

between two, So to adjustment on the need go you'd forward model an a basis,

workforce non-rental goalposts Frederick our $X and is $XX put around on maybe sort that some typical to anywhere from of of non-rental. million to more quarter million

this, so into come we'll But bumps we we normal of that's given number of where sort would quarter, a projects see range. And any and your have expect can coalesce of that the sort on like more quarter. certainly

-- definitely Thanks. significantly to potential update back have on friendly. this Or will project you about is Do add you to on actually this count wondering an this? add there this to revenues, hopes Or project have down road? that that? shelf the And do come was can't just for you Goldboro

the The assessing. close where it. announcements that it's made or tracking project still staying to we project are the forward still owner not whether formal still about There had the carrying owner. is any to hasn't and of We're been talking been about

short term pretty will of it is helpful. I terms the In generate revenue think in

to it's say. Beyond that, hard

Okay, thanks it. guys. Appreciate

Frederick. Thanks,

The next Trevor with Acumen from ahead. go Reynolds question Please Capital. comes

guys. morning Good

Just things do in we curious side utilization with in business, services QX see saw you commodity year-over-year of drop strength back energy basis little to there? a bit the on beginning price, on the the a bounce

Yes, Toby if you can.

in of tied we to Canada. seeing We're the accommodations activity And our and sector, sector to in also some improvement some contracted with going have we in forward revenue as that, with the US, decent the that of anticipate That non-energy even winter season seeing piece sort disaster pickup We’re improve. type QX, so but and Canadian to tied the down beyond we're have market. government strong seeing relief pretty projects well. whatsoever And there. energy a in

for pretty So performing assets with those all in how all, us. pleased are

referring the to to And surface, equipment, think you're add I which… Trevor, surface the maybe just

Yes. correct. that's Yes,

component of The overall small the pretty business. workforce

our ago, I the assets quarters of workforce utilization So a accommodation actually we wellsite into couple number. think lumped

basis, customers that And But active. business. did good we going rentals, a small is the comparative quarter-over-quarter again, a surface very strong had in see a workforce. few in were think probably Ridley of bit so normal seeing to record On what than very the quarter, to component in it's sort that's we decline improvement. speaking a of the I of of a a Mike of some terms bit of part here And

side on of pipeline then seen like? number of the acquisition recently. And know things, We it. we've M&A what's look Got in the space transactions the the

like to you looks wondering it Just guys? what

them, But into first, level plan openly them a we uncertainty. well our we about a businesses, Yes, opportunities. of talk and track we don't of to there's don't number continue

platforms, I quite time in And industry. trading we're these broader consolidation. than some higher seeing perspective, of our think, multiples at bit from I've quite a in a seen there's been

there's fewer so out And size. any targets there terms of in of platforms

we various our achieved, acquisitions, accretive at believe, operating parts However, smaller be rates footprint. tuck-in of can

interest we're these businesses. the certainly what on. that's seen elevated announcements a multiples, of So the focused as type very And you've in of long-term a quite But level few robust average. from are of from recent

So we're watching it closely.

Got me. good it. for Thanks,

This turn over concludes the and answer like question any the Haynes conference for I'd Trevor back to session. to closing remarks.

Thank you. Thank and interest great you, Black a hope have Thank today everybody for in you day. joining you. we your and Diamond,

today's conference This concludes call.

disconnect for you You and pleasant Thank participating may a your line. have day.