Black Diamond Group Limited (BDIMF) 6 Aug 222022 Q2 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to Black Diamond’s Second Quarter 2022 Conference Call.

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

results us Thank you. our second XXXX Diamond’s for CEO, attending call. Good morning CFO, and quarter thank Trevor Haynes; results Toby today the call on you and Black conference is With Labrie. for

Solutions, joined CIO, Patrick and today also Space are Ridley; COO, Modular Solutions, Mike Ted We by Redmond; COO, Workforce Melanson.

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

please measures. information Risks the second Analysis on Black Diamond’s Discussion terms, financial XXXX Statements, entitled Forward-Looking more non-GAAP of these quarter and sections Management’s and Uncertainties review and For

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

thank for Good morning, and you, Thank you joining Jason. us.

of quarter, We will Labrie. myself the discuss the results and then Toby

across grown of an of to has several benefits have primary is successful how be for business reflect revenue to years. EBITDA over year, XX% another margin rental by increase Of quarter to to strong of platforms. strong Compared growth $XX.X reporting benefits, data the rental recurring specialty set very operating. and million quarter. rental this million be the last Let adjusted very of pivot these the begin stakeholders our we year-over-year. our last pleased many high that XX% also pleased saying our results important the me with I'm $XX.X the by We the an I'm same been the as quarter revenue currently is believe

our We portion and units MSS XXXX. means, additional deployed through connection with late towards redeemed have that net were an the also fleet shares organic and also and preferred of cash a Vanguard buybacks have of rental dividends, XXX inorganic the by acquisition share issued buildings increased in or combination in

We have anticipate our performance throughout We debt half of of the XXXX. essentially above, believe long-term strong keeping XXXX speaks the all done in platform, rental to of the continued flat second financial building and our year-over-year. this cash and and flow into operating momentum while generation modular

During the market quarter, the we robust The acquisition for positive. to closed up rates. XX%, history currency over of which rental Utilization MSS string has exceptional in be while been Alberta of which business Cambrian rental our the average XX represents Rentals, quarter a continues constant long-standing a that increased rates outlook built average service broader of at basis, the the past was tuck-in of in Trailer increasing years. years XX% has Southern a on

over rental summer base high-margin to utilization core revenue, the We strengthen our expect continued with further a contracts growth existing throughout months place. in likely in of stable

for XX% remain quarter Australia reflective our WFS rental to market that platform, We of on contracts within returns XX to North X, disaster This XX EBITDA also returns effect our and have exited million or efficiency. today's XX% and large the leverage been return scale are Room have of. have current years through our a some rental driving also our and for government seeing within to that American our investors classes from into of our And focused year-over-year. based our average WFS We maturing turn upstream quarters on powerful alternative drive processes certainly have new be most that of remains new a assets are to the operational generate focus within portfolio relative field quarter results on returns. see in years outlook. in buildings on and the from modular strongest in in booked to infrastructure. assets might bright and drove they're remain continuing continuing up rental effect on our with to portfolio, sector. the there between improvement of continue improved opportunities same build The units. in XX% a through activity that never in our prices on as nights continues Recent deployed, prospects These benefit and XXXX personal from assets returns able units and heard several in of to on quarter company positive We rates to a contracts, similarly year to spot costs believe rising that last the on building also in is inventory utilization is place. capital of next XXXX strong compared is asset have $XX utilization customers quarter business, or I view, of diversification company. In Switching pegged our our ago as MSS resulted expect as systems XX are new ago, differentiate unable XX% excellence, We a that being XX% take great to quality bright. were continue was is and returns WFS acquired which To asset operating to the – best energy the our from throughout spot based very WFS is a are business, monthly strength level of assets year. existing investment rental with LodgeLink. XX%, over pride remote typically asset believe over rates old. in will tailwinds to in powerful our in that one our up in revenues on recovery the illustrate, outlook adjusted in commodity mining, the my business benefit

not However, as volumes customers they despite Energy experienced Net margins. or boarding years, as Canadian similar or sequential a higher was nights by QX dipped XX% to anticipate US with of LodgeLink, year-to-date, for growth nights ongoing prior – on just new the companies offset driven an breakup cadence was up in of revenue the We as room provided value in flat on spend we've customers due crew the within room Services larger but to as customers the also is demonstrate that LodgeLink consistent booked offset with customer share our a by significantly organizations in a travel XXXX the are U.S. sequentially by from million growing lower users customers. a new we mostly the proposition $X.X existing year-over-year booked quarter bookings already basis and gaining of our decline by from

we our and demonstrate a the and scale platform. recurring within to G&A to which set returns strong digital as believe value remarks, ongoing pleased steady revenues, product path where of yet it as continue my we travel able growth long-term improving results To have enhancements, another invest the legacy believe well We rental of experience customer creation. this and growth and string on highly we summarize growth in and the quarter with for been are tech is assets data utilization quarters is our continued

results. hand call We XXXX. expect these Toby? positive the With of I detail that, the quarterly trends and over well end will to through more Toby into continue to provide the our year on to

a Total $XX.X of rental year. up quarter X% the resulted rental of year-over-year. for in million, last up driven of quarter was which were was on four adjusted the XX% our XXXX XX% million streams second recurring return QX Consolidated Trevor. for XX% core in The Thanks, of revenues percentage CADXX.X assets quarter. improvement primarily from an to million, XXXX. EBITDA increase from the from $XX.X were revenue revenues quarter same This the improving consolidated point by increase in comparative

at invest our compounding continued with on, fleet have drive we invested touched to million rates return. As CADXX to CapEx strong Trevor returns of net in recurring of

fleet rental in million dividend capital of the our of of approximately common back preferred shareholders million into per CADX.X redeeming subsidiary, common base buying of and shares. CADXXX,XXX shares share have by of growing or to we quarter also share approximately through CADX reinvestment returned While cash paying of flows our CADX.XXX assets, a CADXXX,XXX

to times remained last remains has of times. end achieved holding CADXXX which was debt the our year. XX-month near decreased to over net of times range leverage XXXX, of EBITDA compared lower this trailing to fairly million, of three target All approximately QX from X.X static debt our times two adjusted at and the while Net three

software asset-based liquidity Free liquidity cash lending the CADXXX early XX% driven position also quarter one-third attractively growth company's outstanding X.XX%. CADX.XX in million XXXX. up strong share CapEx XXX% million average long-term also quarter from business comparative of quarter headcount of remains licensing rates during at Nearly was incentives of QX our million cost was debt low facility the in of XXXX. hedged XXXX increased CADXX.X quarter in an roughly with The to the diluted seen rate from primarily CADX.XX and our million, interest comparative performance, available costs. robust quarter CADXX.X higher Our and total flow The versus of remains with up before higher debt the administrative due on increased outstanding and the for per $XX.X in earnings from by

we do with adjusted costs quarter $XX.X profit. track on the and quarter are benchmarks percentage same rental million last quarter-to-quarter, Sales While $XX.X also against the impacting gross MSS scale, we our recurring of EBITDA offset to revenue sales we reported predictable of as as year-over-year, of was improving on revenue administrative a growth the inflation second Total realize revenue with the as XX%. can of we efficiencies up be in from base. $XX.X million, our see but MSS year, rental low remains costs, increase internal in rental our XX% our driving very continue asset administrative rental high-margin flat of million, revenue revenue. revenue focus long-lived lower key up in

revenue. based the MSS the in from of same percentage up rental were due comparative also comparative XX% of Return last up year higher total year. EBITDA was the XX% $XX.X strengthening continued million As this business. to as of million $XX.X a two on was seen the quarter was high-margin of WFS, comparative points quarter of ROA up year. quarter In result, comparative strong second total quarter quarter million, EBITDA recurring to QX MSS margins by X% rental revenue XX% on from across revenue from driven of higher adjusted adjusted revenue XX%, the tailwinds of secular while for EBITDA rental contributed this comparative the assets last was proportion being the quarter. percentage to MSS, margins improve WFS quarter, MSS the than Similar to compared we've in consolidated revenue up from a XX% improved in proportion points margins. improvement in XX the high-margin the from quarter. XX% revenue WFS adjusted to $XX.X recurring a XXXX

assets WFS on and also return up levels. a QX XX% result, in was a versus marked points improvement XX was XXXX of percentage As

from XX% also is bookings total revenue up million value creation this in room platform. we up remain and comparative significant was of million LodgeLink XX%, to and Finally, continuing nights Gross in quarter year-over-year. $X.X the unique booked of the and rooms respectively, quarter. scale, confident Net $XX.X XX% XX,XXX were the of of

by for listed continue cash customers and geography with returns the we'd with generation strong strength that, X,XXX corporate flexibility, are properties. unique potential questions. together degree to summary, the of to asset back company across the the turn nearly growing and see we to high as With like growth capacity seeing for flow quarter on well In XXX,XXX and inorganic across and sides of platform, both growth stability end diversification over market provide of exited and which shareholders. We and accelerated balance continued operator the a organic platform of optionality free XXX rental to rooms for call sheet and the the as

Canaccord with Thank [Operator ahead. Lee Please Instructions] question Matthew go you. Our first from is Genuity.

my morning, Thanks for again gents. Good taking question.

for like in side, So to year should of another year-over-year. XX% rental just half rates to the of terms expecting rental about on the with acceleration maybe MSS talk what the you of in Can seems wanted I quarter second we be growth? rate rates start the

for for rates Yeah. pass Thanks, on it to Redmond question. Matt. we're Thanks across seeing the to what MSS. comment Ted over I'll

raise rates cost to We've successfully more than Yes, been that more our than you're offset correct. able -- much increases.

the for QX as a and rate back higher we that it Rate, -- rates for takes expect sign the them say later did rate contracts, quarter to while continue increases QX We rent and increase increases off put in the on in show rates. like QX, in continued units and come forward year. up at going we rent we

just to that go So -- to ahead. add yes,

year-over-year rate of that revenue is was actual of the are I just contracted through that turnover the work Ted add the time is rates just to and increase the of we have referencing, that. It than platform takes size the average the higher going stream. spot considerably up rental reflective our to nature

Right.

than rates XXX reason no there's So anything why you lower rental the in QX? forward should reported be going

the -- never in are just -- showing of I up reasons. definitely We in keep the later going don't we've but to done year we've predict but that, the already expect any future, lot see we increases a earlier year. the don't we can

-- And rental expect an in increase so, steady we rates. increase a

Yes. rates increasing think few We over haven't the our worked platform. way their years through last the

So still rate would couple average the think. increases we of were see our I of over to current flat would note next years, rates even in spot, if terms rental to

locked one traditionally follow-up. XX customer Great. maybe term customer the new signs resigned are And you just in for? a months with a rates then you On full that on; the for new or

been would rare the Yes, contract are successfully term the up, contract. of contract. rates we've might would escalation been for for beginning it's would a duration contract one then increasing when comes that. pretty our cost sign the the we that be of when new escalation that typically, have And because that an typically, sort But various the the and There odd the fixed doing we've rates we the the an It's have the of cost at of asset contract. of clause. then

that, our And XX that Matt, from here. Toby would I committed that is the add carryover include would contract. also length, to contract months original just the average

the so And necessarily isn't full months that first average XX contracts.

be we that rates increase would the some see period. there So, or renewal where opportunities over month-to-month would to periods

Congrats it. on Got quarter. the good Very helpful.

James. Bastien Raymond Please is question Frederic next The ahead. from with go

to wanted little into good Hi, a made. few dig you morning, last guys. just I maybe the comments further

estimate the of mean, hikes are will system? -- you Trevor, how take visibility. a of those across couple reflected think, long I do mentioned you fully before of and years rate I kind implemented it fully

fleet XX If at we I to current using we of spot were math. average rates, are just which before current stabilizing up year-over-year, think entirely repriced would the months rates, require contract, was simple the

to variable is utilization. have the remember other You

Yeah.

how with the also seeing term pipeline high-utilization based on significantly note, customers. we're longer in contracted and you'll our So assets we revenue for our competition we're contract as with to behind year-over-year through lock anticipating, what and the funnel us our gives increased are, that at opportunity

quite that current utilization stable but the economic other so, is factors market there's And may is we terms about impact. in levels, our view think that utilization, also as of

it XXXX. still to I right quarter through of XXXX, increases you're going like sounds and fourth But potentially the mean, end see the into Okay.

Yes.

of new has customer If an on a renewed fixed contract repositioned be off been you or contract a that and a will rate think three-year customer that onto on either coming that with being requirement. being asset

been have contract locked rates. years a substantial that to three today's ago spot step-up into at from rates would looking the You're that

we and meaningful inflation structured, of fairly the operating platform. type outsource on operating vendors. on on components And asset it's we're therefore, the upside the you of labor the when on offset upside of our more rental So at how then other pressures as rates, through costs class. think most than wage And of our this of on inflation platform look we where the

some going We're So where We've is we're respects, advantage. got there's asset of yeah And looking back closely. this at great very many a facets is to data-driven. of one this very great those visibility. in And class. this

Yeah.

your One half want the year. Guys, to us of. like you class have I happened over alternative as last coming pretty of both rental big set to predictable. asset second fairly of up guys MSS Solutions Side, like and on activities side the on from which kind the year-over-year mean, revenue But fairly go had revenue basis. sales what comp difficult and a the Workforce in of on is I heard of non-rental you investors never best remind a

some of about commented So if and could that? on had combined of non-rental your had start for each you sales revenues mean further expand $XX and prepared you good I in know with we you MSS, remarks into visibility I last mean, QX year. in sales, that I both you QX but million

just point at then MSS Mike, the Ted over platform, business. quick the We make and business give and comments can cetera. some rental or which a look look I'll way WFS. When it, this whole an management couple et an for as investors, they of is asset is platform we that asset color additional and at it

who And rental in revenue project to of other revenue we like so do when important we the manufacture assets our we sell that assets the like asset. sales, close fleet, modular normal to sale. asset we're look from view return where then the then we the opportunities a cost the of when rental most a deliver opportunity that at where so but rental we'll many as is looking And there's of of us number and out ancillary at in and ancillary work VAS, include cetera, a Those terms a in margins core the to operating renting and -- we management look we asset also perspective, And and as in furniture, stream gives manage items to acquire refer on do new we healthy trade return et business. with are fairly where revenue. building required components our assets, customers

be meaningful revenue very on -- they're those top variable. can So quite streams the two Yes, they're line.

so They're for And do year-over-year. hard it's lines what very to profitable volumes quarter-over-quarter, from will us. predict,

Maybe in said, and color But With on So how a year side, sales is give our that top had up what's comps trade. and in some it. that's Ted, the putting business looking we last operating very year, reason engage strong that important our line. the past is is. we're that why understanding against most on now we business

Sure. Yes.

trend positive. the in So in sales is long-term

years, sort more you quarters, a over like of were whereas a back it are increase you year, it's four five When really little sales this sales typical. say, I'd last or good year. there's bit If it look The steady a quarter-to-quarter, last go lumpy. year quarters of when average maybe at the you

As in sales see based are outlook, to on in backlog revenues anticipating our you custom in sequential improvement current place. we saw our

a going have we year. into So good backlog the

that than is mind significantly in keep rental are margins to sales margins. thing other The lower

less, So impact, a higher while line line the rental the be impact top margins. there may bottom given is much

we EBITDA, revenue. So in our in XX% growth was our primarily the rental that which year-over-year driven had by growth XX% fact

less on it the half. a line, has second impact bottom So to much looking and the we're forward

There's nothing a right there's the read there. that through perspective our just in variability markets. terms in a It's the of as from our weakening opportunities

Yes.

Yes.

do new assets, sales to and times revenue. we addition have In one sales of new

we position instance. when a workforce in think remote for when our large So camp business, we

the the the site, of moving which for us preparing upfront. provide assets, assets, the will customer the We installing pays services

create year-over-year, some meaningful quite Mike, that's be to comparison part can projects for those the I as of lumpiness the color of on want top some line there? so give but the and explanation And think well.

Yeah.

be that's come is we Catering Frederic. And sometimes will dismantle, to installation, asset. time, with it transportation, a everything power Core transport. and services it, forth. revolves exactly involves around the that, which to construction some think with return element generation it, so that do there'll I –

at rate run that lumpy at as our – would than But to rental times. So be can rate. be margin run our those are lower Ted alluded what on much

the – bit. a course just it's of it the a But it year. So goes with little of over bit little bouncy kind the business

revenues Mike go rent. last year, one-time have on in quarter, And volume we QX the same I did as of we this amount to rent year, we the larger have assets operations operations, comparative positioned this correct? don't enjoying of We're think, quarter some but

construction in sure. a Yes. US level it. the services That's fairly were to projects that some tied had the for case There fairly have would significant high of

extra awesome, I'll helpful. the color. over. pass I guys. appreciate That's it Thanks. That's

is Watson question next from go ahead. The with Brent Please Securities. Cormark

sense bookings can guys. on for US normalized between Hi, split year-to-date Maybe of basis, you rough QX? Canada LodgeLink, of on a give us a maybe and sort the

Yeah. those, have Do you Toby?

them don't my at I – fingertips. The have

Brent. can We up follow with you,

interesting Okay. all note Anything about to point? at travel this air bookings at

platform specifically is, we're across macro, rates there's in trends a or average space. One pretty travel From North US couple seeing around on a the much of increase the side. an room America, across but

in So find up for I a top Global of Business are well, room that room what of as the rates. head. rates off information the order average. with mean cetera. believe, about But revenues XX% does those to percentage is my I on This LodgeLink, think driven easy our et Association, they're Travel And

as corresponds also we that. there, escalation net see with revenue escalation so see our And in we

there us air many well. As as read, been an increase travel has in of

travel. as the a portion of travel there's to crew So air a sector, there's read-through

cases, most crews ground. in are by traveling However,

is for LodgeLink our accommodation big piece the the so and And platform. value offering proposition

that the bookings. to little question was breakup bookings. the And US sorry, split is Canada, of year, Brent, with a previous the US a But approximately Canadian split, going in in our for bit your QX, back higher our resulting for on in third fewer

bit and quite a about it trending that's a So the but higher, a year. year, little up last third, for bit from was

to Yes, QX. I think XX% over closer in little a

a Okay. Awesome. Thanks lot.

Thank you.

Trevor is Reynolds question Please with next go Acumen Our Capital. [Operator ahead. Instructions] from

Good guys. morning,

morning. Good

properties US up rooms the you in able of and between LodgeLink. or to listed Canada the a Canada? breakdown Are following US, split on Just provide

properties, of how our In number are of rooms terms and/or US? listed total many

That's correct, yes.

have you. fingertips that We number can certainly rate that don't our get right We now. for at

the mobile that there. see app, rollout out And guys then problem. got Yes, you good just of on the that to no

increased before. Just the usage and if you're been by has seeing adoption wondering know that was issue what I employees. an like

question. excited give about Yes. bit Thanks We're bit for stage color. a ramp-up. a for maybe just We quite you early Patrick, can the mobile It's launched. of app us.

quite a stage the mobile Yes. It's Patrick, us. for of just early color. We're question. bit ramp-up. bit about Thank excited for you give you maybe We can launched. app a

Thank Yes. question. you the for

So viable the basically version which development with right, key a first software of was app, dedicated minimum with the us. with mobile typical to were customers product, is that work piloted out these cycle, customers. five It's been rolled

sure We inform Since it are our next made wide transacting with far mobile them, the collecting information. And make as course, the we for for information, as base, mobile LodgeLink customer yield of app the the put we've are we of we'll the benefits, future. iteration which comes will both that into app then, the and, investments to will customer collecting for progress. available back, and

excited are app about sure. for this We

Great. me. Thanks That’s for it guys.

Thanks, Trev.

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

growth. how that faster pleased we platform our but MSS we've and fleet the really increasing is you. compound on the accelerating terms fleet EBITDA been operating. in of showing expanding growth we're Thank the In also size business, of the can also summary, but than our that of with the even growth focusing believe by our geography, We

into growth, there. seeing cetera, As the with investment as our another our well And very well, benefits We're Australian strength mining, other end up getting year-over-year we're markets we quarter business. of can of then as where disaster as on strong our we showing really LodgeLink, asset leverage scale modest workforce this the out as you business. capital recovery, spread business, et high-quality which, like see, at operating this as

with from what year these and And the through see next looking into the So year. we're pleased end trends is business the we very now, this of running. we're right at way continuing

the for interest you the you. of enjoy Thank joining thank hope you and us day. today, in So rest your

concludes This conference today's call.

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