CALGARY, Alberta, Nov. 02, 2023 (GLOBE NEWSWIRE) -- Black Diamond Group Limited ("Black Diamond", the "Company" or "we"), (TSX:BDI), a leading provider of space rental and workforce accommodation solutions, today announced its operating and financial results for the three and nine months ended September 30, 2023 (the "Quarter") compared with the three and nine months ended September 30, 2022 (the "Comparative Quarter"). All financial figures are expressed in Canadian dollars.
Key Highlights from the Third Quarter of 2023
- Consolidated rental revenue of $39.5 million and Adjusted EBITDA1 of $36.6 million were up 25% and 41% from the Comparative Quarter, respectively. This represents the Company's highest quarterly rental revenue and Adjusted EBITDA in a decade.
- The Company’s consolidated contracted future rental revenue at the end of the Quarter was $128.6 million, up $43.7 million or 51% from the Comparative Quarter. Modular Space Solutions ("MSS") contracted future rental revenue for units on rent was $99.7 million at the end of the Quarter, up 54% from the Comparative Quarter. Workforce Solutions ("WFS") contracted future rental revenue for contracts in place was $28.9 million at the end of the Quarter, up 42% from the Comparative Quarter.
- MSS rental revenue for the Quarter was a fourteenth consecutive record high at $22.0 million and was up 19% from the Comparative Quarter. Adjusted EBITDA was an all time record high at $22.2 million, and was up 31% from the Comparative Quarter.
- MSS average monthly rental rate per unit (excluding the impact from acquisitions made in 2022) increased 13% from the Comparative Quarter (or 11% on a constant currency basis).
- WFS rental revenue and Adjusted EBITDA for the Quarter were $17.5 million and $21.8 million, up 35% and 49% respectively from the Comparative Quarter. WFS consolidated utilization of 68% continues to trend higher and remains at the highest level observed in over half a decade.
- LodgeLink net revenue grew 50% to a record of $2.7 million from the Comparative Quarter, generating record Net Revenue Margins1 of 12.7%. LodgeLink also reported 109,898 room nights sold in the Quarter, a 16% increase from the Comparative Quarter.
- Return on Assets1 for the Quarter of 27.3% represents a meaningful premium over the Company's cost of capital and was up 340 basis points from the Comparative Quarter.
- Capital investment into organic growth was $18.3 million, while maintenance capital for the Quarter was $1.8 million. Rental asset additions have been primarily deployed on projects with long-term contracts at rental rates that meet or exceed the Company’s hurdle rates.
- Funds from Operations1 of $39.2 million and Free Cashflow1 of $30.6 million were each up 28% from the Comparative Quarter.
- Long-term debt and Net Debt were $206.1 million and $200.8 million respectively at the end of the Quarter. Continued positive Free Cashflow1 decreased long-term debt and Net Debt by $20.8 million and $18.1 million respectively since December 31, 2022. Net Debt to trailing twelve month ("TTM") Adjusted Leverage EBITDA1 of 1.9x is now just below the Company's target range of 2.0x to 3.0x while available liquidity was $126.0 million at the end of the Quarter.
- Profit for the Quarter of $13.6 million increased 51% from the Comparative Quarter.
- Subsequent to the end of the Quarter, the Company increased its quarterly dividend per share payout by 50% from $0.02 to $0.03. The Company declared a fourth quarter dividend of $0.03 payable on or about January 15, 2024 to shareholders of record on December 31, 2023. This is the third dividend increase since dividends were reinstated in the fourth quarter of 2021. Dividends are designated as "eligible dividends" for Canadian income tax purposes.
Outlook
The strong financial and operating results in the Quarter and YTD continue to demonstrate the foundational strength and diversity of the Company’s platform. The business continues to benefit from strong contract coverage, supportive macro tailwinds, and a healthy pipeline of growth opportunities in North America and Australia. Management remains focused on growing the Company’s high margin, recurring rental revenues through disciplined capital allocation and expects continued momentum into 2024.
MSS set all-time records in both rental revenue and Adjusted EBITDA1 driven by robust utilization, fleet growth and a supportive rate environment. At the end of the Quarter, the MSS segment reported an average rental duration of 50.4 months and contracted forward rental revenue of approximately $100 million. The Company continues to see particularly strong activity and opportunities in its core education and infrastructure customer segments and expects healthy demand for longer-duration rental assets to drive continued rental revenue growth into 2024 and beyond.
WFS performance has also continued to improve on the back of years of successful efforts to diversify by geography and end-market. Rental revenue and Adjusted EBITDA reached levels not seen since 2014, improving 35% and 49%, respectively versus the Comparative Quarter driven by improving consolidated utilization and overall activity levels across North America and Australia. Management is anticipating a moderation in rental revenue and Adjusted EBITDA on a sequential, quarterly basis into early 2024 as certain assets are redeployed from previous contracts that are expected to result in a relatively flat rental revenue comparison year over year relative to Q1 2023. The bid and sales pipeline remains robust and management anticipates a return to sequential growth in WFS in the latter half of 2024 as assets are redeployed in a higher rental rate environment.
The Company continues to see positive momentum in LodgeLink, with Gross Bookings1 and net revenue growing 27% and 50% from the Comparative Quarter, respectively. Net Revenue Margins1 have also continued to improve and are up 170 basis points from the Comparative Quarter reaching a record rate of 12.7%. Management remains highly optimistic with respect to LodgeLink’s future growth potential in an estimated $70 billion market. The business continues to scale and service our 886 cumulative corporate customers with the support of our supply partners that represent 1.36 million rooms of capacity across North America.
From a financial standpoint, the Company continues to deliver robust Free Cashflow1 that enabled the repayment of $20.8 million of long-term debt in the first nine-months of 2023, while also funding $49.1 million of existing organic growth year to date. Currently, the Company’s $126.0 million of available liquidity through an asset-based lending facility provides ample financial flexibility to continue investing through both organic and inorganic expansion initiatives.
1 Adjusted EBITDA, Net Debt, Funds from Operations, Gross Bookings and Free Cashflow are non-GAAP financial measures. Return on Assets, Net Debt to TTM Adjusted Leverage EBITDA and Net Revenue Margin are non-GAAP ratios. Refer to the Non-GAAP Financial Measures section of this press release for more information on each non-GAAP financial measure and ratios.
Third Quarter 2023 Financial Highlights
| Three months ended September 30, | Nine months ended September 30, | |||||
| ($ millions, except as noted) | 2023 | 2022 | Change | 2023 | 2022 | Change |
| Financial Highlights | $ | $ | % | $ | $ | % |
| Total revenue | 117.5 | 95.9 | 23% | 290.1 | 235.5 | 23% |
| Gross profit | 54.2 | 40.0 | 36% | 130.9 | 101.9 | 28% |
| Administrative expenses | 17.5 | 14.0 | 25% | 50.3 | 39.8 | 26% |
| Adjusted EBITDA(1) | 36.6 | 26.0 | 41% | 80.5 | 62.1 | 30% |
| Adjusted EBIT(1) | 24.0 | 16.8 | 43% | 47.5 | 35.5 | 34% |
| Funds from Operations (1) | 39.2 | 30.7 | 28% | 86.7 | 70.0 | 24% |
| Per share ($) | 0.65 | 0.52 | 25% | 1.44 | 1.18 | 22% |
| Profit before income taxes | 18.7 | 13.5 | 39% | 32.0 | 26.7 | 20% |
| Profit | 13.6 | 9.0 | 51% | 22.5 | 17.0 | 32% |
| Earnings per share - Basic ($) | 0.22 | 0.15 | 47% | 0.37 | 0.29 | 28% |
| Earnings per share - Diluted ($) | 0.22 | 0.15 | 47% | 0.37 | 0.28 | 32% |
| Capital expenditures | 20.1 | 15.1 | 33% | 55.2 | 37.5 | 47% |
| Property & equipment | 510.1 | 423.7 | 20% | 510.1 | 423.7 | 20% |
| Total assets | 669.3 | 566.9 | 18% | 669.3 | 566.9 | 18% |
| Long-term debt | 206.1 | 160.6 | 28% | 206.1 | 160.6 | 28% |
| Cash and cash equivalents | 5.6 | 12.3 | (54)% | 5.6 | 12.3 | (54)% |
| Return on Assets (%)(1) | 27.3% | 23.9% | 340 bps | 20.2% | 19.3% | 90 bps |
| Free Cashflow(1) | 30.6 | 23.9 | 28% | 60.8 | 52.0 | 17% |
| (1) Adjusted EBITDA, Adjusted EBIT, Funds from Operations and Free Cashflow are non-GAAP financial measures. Return on Assets is a non-GAAP ratio. Refer to the Non-GAAP Financial Measures section of this press release for more information on each non-GAAP financial measure and ratio. | ||||||
Additional Information
A copy of the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 and related management's discussion and analysis have been filed with the Canadian securities regulatory authorities and may be accessed through the SEDAR+ website (www.sedarplus.ca) and www.blackdiamondgroup.com.
About Black Diamond Group
Black Diamond is a specialty rentals and industrial services Company with two operating business units - Modular Space Solutions (MSS) and Workforce Solutions (WFS). We operate in Canada, the United States, and Australia.
MSS through its principal brands, BOXX Modular, Britco, MPA, Schiavi and CL Martin, owns a large rental fleet of modular buildings of various types and sizes. Its network of local branches rent, sell, service, and provide ancillary products and services to a diverse customer base in the construction, industrial, education, financial, and government sectors.
WFS, through its principal brands, Black Diamond Camps and Black Diamond Energy Services, owns a large rental fleet of modular accommodation assets of all types and sizes. Its regional operating terminals rent, sell, service, and provide ancillary products and services including turn-key operated camps to a wide array of customers in the resource, infrastructure, construction, disaster recovery, and education sectors.
The WFS business unit also includes the Company’s wholly owned subsidiary, LodgeLink, which operates a digital marketplace for business-to-business crew accommodation, travel, and logistics in North America. The LodgeLink proprietary digital platform enables customers to efficiently find, book, and manage their crew travel and accommodation needs through a rapidly growing network of hotel, remote lodge, and travel partners. LodgeLink exists to solve the unique challenges associated with crew travel and applies technology to eliminate inefficiencies at every step of the crew travel process from booking, to management, to payments, to cost reporting.
Learn more at www.blackdiamondgroup.com.
For investor inquiries please contact Jason Zhang at 403-206-4739 or investor@blackdiamondgroup.com.
Conference Call
Black Diamond will hold a conference call and webcast at 9:00 a.m. MT (11:00 a.m. ET) on Friday, November 3, 2023. CEO Trevor Haynes and CFO Toby LaBrie will discuss Black Diamond’s financial results for the Quarter and then take questions from investors and analysts.
To access the conference call by telephone dial toll free 1-800-319-4610. International callers should use 1-604-638-5340. Please connect approximately 10 minutes prior to the beginning of the call.
To access the call via webcast, please log into the webcast link 10 minutes before the start time at:
https://www.gowebcasting.com/12921
Following the conference call, a replay will be available on the Investor Centre section of the Company’s website at www.blackdiamondgroup.com, under Presentations & Events.
Reader Advisory
Forward-Looking Statements
Certain information set forth in this news release contains forward-looking statements including, but not limited to, the amount of funds that will be expended on the 2023 capital plan, how such capital will be expended, expectations for asset sales, timing, payment and increase of the Company's quarterly dividend, management's assessment of Black Diamond's future operations and what may have an impact on them, opportunities and effect of deploying investment capital, financial performance, business prospects and opportunities, changing operating environment including changing activity levels, effects on demand and performance based on the changing operating environment, amount of revenue anticipated to be derived from current contracts, anticipated debt levels, liquidity sources and needs, economic life of the Company's assets, future growth and profitability of the Company, future revenue and realization of the anticipated benefits of acquisitions and sales. With respect to the forward-looking statements in this news release, Black Diamond has made assumptions regarding, among other things: future commodity prices, that Black Diamond will continue to raise sufficient capital to fund its business plans in a manner consistent with past operations, that counterparties to contracts will perform the contracts as written and that there will be no unforeseen material delays in contracted projects. Although Black Diamond believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurances that such expectations or assumptions will prove to be correct. Readers are cautioned that assumptions used in the preparation of such statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of Black Diamond. These risks include, but are not limited to: volatility of industry conditions, dependence on agreements and contracts, competition, credit risk, information technology systems and cyber security, vulnerability to market changes, operating risks and insurance, weakness in industrial construction and infrastructure developments, weakness in natural resource industries, access to additional financing, dependence on suppliers and manufacturers, reliance on key personnel, and workforce availability. The risks outlined above should not be construed as exhaustive. Additional information on these and other factors that could affect Black Diamond's operations and financial results are included in Black Diamond's annual information form for the year ended December 31, 2022 and other reports on file with the Canadian securities regulatory authorities which can be accessed on SEDAR+. Readers are cautioned not to place undue reliance on these forward-looking statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Black Diamond does not undertake any obligation to update or revise any of the forward-looking statements, except as may be required by applicable securities laws.
Non-GAAP Measures
In this news release, the following specified financial measures and ratios have been disclosed: Adjusted EBITDA, Adjusted EBIT, Funds from Operations, Net Debt, Net Debt to TTM Adjusted Leverage EBITDA, Return on Assets, Net Revenue Margin, Adjusted EBITDA as % of Revenue, Gross Bookings and Free Cashflow. These non-GAAP and other financial measures do not have any standardized meaning prescribed under International Financial Reporting Standards ("IFRS") and therefore may not be comparable to similar measures presented by other entities. Readers are cautioned that these non-GAAP measures are not alternatives to measures under IFRS and should not, on their own, be construed as an indicator of the Company's performance or cash flows, a measure of liquidity or as a measure of actual return on the common shares of the Company. These non-GAAP measures should only be used in conjunction with the consolidated financial statements of the Company.
Adjusted EBITDA is not a measure recognized under IFRS and does not have standardized meanings prescribed by IFRS. Adjusted EBITDA refers to consolidated earnings before finance costs, tax expense, depreciation, amortization, accretion, foreign exchange, share-based compensation, acquisition costs, non-controlling interests, share of gains or losses of an associate, write-down of property and equipment, impairment, restructuring costs, and gains or losses on the sale of non-fleet assets in the normal course of business.
Black Diamond uses Adjusted EBITDA primarily as a measure of operating performance. Management believes that operating performance, as determined by Adjusted EBITDA, is meaningful because it presents the performance of the Company's operations on a basis which excludes the impact of certain non-cash items as well as how the operations have been financed. In addition, management presents Adjusted EBITDA because it considers it to be an important supplemental measure of the Company's performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures.
Adjusted EBITDA has limitations as an analytical tool, and readers should not consider this item in isolation, or as a substitute for an analysis of the Company's results as reported under IFRS. Some of the limitations of Adjusted EBITDA are:
- Adjusted EBITDA excludes certain income tax payments and recoveries that may represent a reduction or increase in cash available to the Company;
- Adjusted EBITDA does not reflect the Company's cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company's working capital needs;
- Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest payments on the Company's debt;
- depreciation and amortization are non-cash charges, thus the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
- other companies in the industry may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to invest in the growth of the Company's business. The Company compensates for these limitations by relying primarily on the Company's IFRS results and using Adjusted EBITDA only on a supplementary basis. A reconciliation to profit, the most comparable GAAP measure, is provided below.
Adjusted EBIT is Adjusted EBITDA less depreciation and amortization. Black Diamond uses Adjusted EBIT primarily as a measure of operating performance. Management believes that Adjusted EBIT is a useful measure for investors when analyzing ongoing operating trends. There can be no assurances that additional special items will not occur in future periods, nor that the Company's definition of Adjusted EBIT is consistent with that of other companies. As such, management believes that it is appropriate to consider both profit determined on a GAAP basis as well as Adjusted EBIT. A reconciliation to profit, the most comparable GAAP measure, is provided below.
Adjusted EBITDA as a % of Revenue is calculated by dividing Adjusted EBITDA by total revenue for the period. Black Diamond uses Adjusted EBITDA as a % of Revenue primarily as a measure of operating performance. Management believes this ratio is an important supplemental measure of the Company's performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures.
Return on Assets is calculated as annualized Adjusted EBITDA divided by average net book value of property and equipment. Annualized Adjusted EBITDA is calculated by multiplying Adjusted EBITDA for the Quarter and Comparative Quarter by an annualized multiplier. Management believes that Return on Assets is a useful financial measure for investors in evaluating operating performance for the periods presented. When read in conjunction with our profit and property and equipment, two GAAP measures, this non-GAAP ratio provides investors with a useful tool to evaluate Black Diamond's ongoing operations and management of assets from period-to-period.
Reconciliation of Consolidated Profit to Adjusted EBITDA, Adjusted EBIT, Adjusted EBITDA as a % of Revenue and Return on Assets:
| Three months ended September 30, | Nine months ended September 30, | |||||
| ($ millions, except as noted) | 2023 | 2022 | Change % | 2023 | 2022 | Change % |
| Profit (1) | 13.6 | 9.0 | 51% | 22.5 | 17.0 | 32% |
| Add: | ||||||
| Depreciation and amortization (1) | 12.6 | 9.2 | 37% | 33.0 | 26.6 | 24% |
| Finance costs (1) | 3.7 | 2.1 | 76% | 10.4 | 5.3 | 96% |
| Share-based compensation (1) | 1.6 | 1.3 | 23% | 5.1 | 3.6 | 42% |
| Non-controlling interests (1) | 0.3 | 0.5 | (40)% | 0.9 | 1.5 | (40)% |
| Current income taxes (1) | — | — | —% | 0.1 | 0.4 | (75)% |
| Deferred income taxes (1) | 4.8 | 3.9 | 23% | 8.5 | 7.7 | 10% |
| Adjusted EBITDA (1) | 36.6 | 26.0 | 41% | 80.5 | 62.1 | 30% |
| Less: | ||||||
| Depreciation and amortization | 12.6 | 9.2 | 37% | 33.0 | 26.6 | 24% |
| Adjusted EBIT | 24.0 | 16.8 | 43% | 47.5 | 35.5 | 34% |
| Total revenue | 117.5 | 95.9 | 23% | 290.1 | 235.5 | 23% |
| Adjusted EBITDA as a % of Revenue | 31.1% | 27.1% | 400 bps | 27.7% | 26.4% | 130 bps |
| Annualized multiplier | 4 | 4 | 1.3 | 1.3 | ||
| Annualized adjusted EBITDA | 146.4 | 104.0 | 41% | 104.7 | 80.7 | 30% |
| Average net book value of property and equipment | 535.9 | 431.3 | 24% | 531.6 | 426.3 | 25% |
| Return on Assets | 27.3% | 23.9% | 340 bps | 20.2% | 19.3% | 90 bps |
| (1) Sourced from the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022. | ||||||
Net Debt to TTM Adjusted Leverage EBITDA is a non-GAAP financial ratio which is calculated as Net Debt divided by trailing twelve months Adjusted Leverage EBITDA. Net Debt, a non-GAAP financial measure, is calculated as long-term debt minus cash and cash equivalents. A reconciliation to long-term debt, the most comparable GAAP measure, is provided below. Net Debt and Net Debt to TTM Adjusted Leverage EBITDA removes cash and cash equivalents from the Company's debt balance. Black Diamond uses this ratio primarily as a measure of operating performance. Management believes this ratio is an important supplemental measure of the Company's performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures. In the quarter ended June 30, 2022, Net Debt to TTM Adjusted EBITDA was renamed Net Debt to TTM Adjusted Leverage EBITDA, to provide further clarity on the composition of the denominator to include pre-acquisition estimates of EBITDA from business combinations. Management believes including the additional information in this calculation helps provide information on the impact of trailing operations from business combinations on the Company's leverage position.
Reconciliation of Consolidated Profit to Adjusted EBITDA, Net Debt and Net Debt to TTM Adjusted Leverage EBITDA:
| ($ millions, except as noted) | 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | 2022 | 2021 | Change |
| Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | ||
| Profit | 13.6 | 4.6 | 4.4 | 9.4 | 9.0 | 4.0 | 4.0 | 10.7 | |
| Add: | |||||||||
| Depreciation and amortization | 12.6 | 10.6 | 9.8 | 8.6 | 9.2 | 8.8 | 8.6 | 8.9 | |
| Acquisition costs | — | — | — | 1.2 | — | — | — | — | |
| Finance costs | 3.7 | 3.7 | 2.9 | 3.6 | 2.1 | 1.7 | 1.5 | 1.7 | |
| Share-based compensation | 1.6 | 1.3 | 2.2 | 1.3 | 1.3 | 1.1 | 1.2 | 1.0 | |
| Non-controlling interests | 0.3 | 0.3 | 0.3 | 0.4 | 0.5 | 0.5 | 0.5 | 0.4 | |
| Current income taxes | — | 0.1 | — | 0.1 | — | 0.4 | — | 0.1 | |
| Gain on sale of real estate assets | — | — | — | — | — | — | — | (0.7) | |
| Deferred income taxes | 4.8 | 1.9 | 1.8 | 3.7 | 3.9 | 1.7 | 2.1 | (4.6) | |
| Impairment reversal | — | — | — | (6.3) | — | — | — | — | |
| Adjusted EBITDA | 36.6 | 22.5 | 21.4 | 22.0 | 26.0 | 18.2 | 17.9 | 17.5 | |
| Acquisition pro-forma adjustments(1) | — | — | — | 0.5 | 2.3 | 2.2 | 1.5 | — | |
| Adjusted Leverage EBITDA | 36.6 | 22.5 | 21.4 | 22.5 | 28.3 | 20.4 | 19.4 | 17.5 | |
| TTM Adjusted Leverage EBITDA | 103.0 | 85.6 | 20% | ||||||
| Long-term debt | 206.1 | 160.6 | 28% | ||||||
| Cash and cash equivalents | 5.6 | 12.3 | (54)% | ||||||
| Current portion of long term debt (2) | 0.3 | — | 100% | ||||||
| Net Debt | 200.8 | 148.3 | 35% | ||||||
| Net Debt to TTM Adjusted Leverage EBITDA | 1.9 | 1.7 | 12% | ||||||
| (1) Includes pro-forma pre-acquisition EBITDA estimates as if the acquisition that occurred in the fourth quarter 2022, occurred on January 1, 2022. | |||||||||
| (2) Current portion of long-term debt relating to the payments due within one year on the bank term loans assumed as part of the acquisition in the fourth quarter of 2022. | |||||||||
Funds from Operations is calculated as the cash flow from operating activities, the most comparable GAAP measure, excluding the changes in non-cash working capital. Management believes that Funds from Operations is a useful measure as it provides an indication of the funds generated by the operations before working capital adjustments. Changes in long-term accounts receivables and non-cash working capital items have been excluded as such changes are financed using the operating line of Black Diamond's credit facilities. A reconciliation to cash flow from operating activities, the most comparable GAAP measure, is provided below.
Free Cashflow is calculated as Funds from Operations minus maintenance capital, net interest paid (including lease interest), payment of lease liabilities, net current income tax expense (recovery), distributions declared to non-controlling interest, dividends paid on common shares and dividends paid on Preferred Shares plus net current income taxes received (paid). Management believes that Free Cashflow is a useful measure as it provides an indication of the funds generated by the operations before working capital adjustments and other items noted above. Management believes this metric is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures. A reconciliation to cash flow from operating activities, the most comparable GAAP measure, is provided below.
Reconciliation of Cash Flow from Operating Activities to Funds from Operations and Free Cashflow:
| Three months ended September 30, | Nine months ended September 30, | |||||
| ($ millions, except as noted) | 2023 | 2022 | Change | 2023 | 2022 | Change |
| Cash Flow from Operating Activities (1) | 33.5 | 27.3 | 23% | 97.9 | 64.4 | 52% |
| Add/(Deduct): | ||||||
| Change in other long term assets (1) | 0.5 | (2.5) | 120% | 0.1 | (0.7) | 114% |
| Changes in non-cash operating working capital (1) | 5.2 | 5.9 | (12)% | (11.3) | 6.3 | (279)% |
| Funds from Operations | 39.2 | 30.7 | 28% | 86.7 | 70.0 | 24% |
| Add/(deduct): | ||||||
| Maintenance capital | (1.8) | (1.9) | 5% | (6.1) | (5.0) | (22)% |
| Payment for lease liabilities | (2.0) | (1.7) | (18)% | (5.7) | (4.9) | (16)% |
| Interest paid (including lease interest) | (3.6) | (2.1) | (71)% | (10.0) | (5.1) | (96)% |
| Net current income tax expense | — | — | —% | 0.1 | 0.4 | (75)% |
| Dividends paid on common shares | (1.2) | (0.9) | (33)% | (3.6) | (2.5) | (44)% |
| Distributions paid to non-controlling interests | — | (0.1) | 100% | (0.6) | (0.5) | (20)% |
| Dividends paid on Preferred Shares | — | (0.1) | 100% | — | (0.4) | 100% |
| Free Cashflow | 30.6 | 23.9 | 28% | 60.8 | 52.0 | 17% |
| (1) Sourced from the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022. | ||||||
Gross Bookings, a non-GAAP measure, is total revenue billed to the customer which includes all fees and charges. Net revenue, a GAAP measure, is Gross Bookings less costs paid to suppliers. Revenue from bookings at third party lodges and hotels through LodgeLink are recognized on a net revenue basis. LodgeLink is an agent in the transaction as it is not responsible for providing the service to the customer and does not control the service provided by a supplier. Management believes this ratio is an important supplemental measure of LodgeLink's performance and cash generation and believes this ratio is frequently used by interested parties in the evaluation of companies in industries with similar forms of revenue generation.
Net Revenue Margin is calculated by dividing net revenue by Gross Bookings for the period. Management believes this ratio is an important supplemental measure of LodgeLink's performance and profitability and believes this ratio is frequently used by interested parties in the evaluation of companies in industries with similar forms revenue generation where companies act as agents in transactions.
Reconciliation of Net Revenue to Gross Bookings and Net Revenue Margin:
| Three months ended September 30, | Nine months ended September 30, | |||||
| ($ millions, except as noted) | 2023 | 2022 | Change | 2023 | 2022 | Change |
| Net revenue(1) | 2.7 | 1.8 | 50% | 7.2 | 4.3 | 67% |
| Costs paid to suppliers(1) | 18.1 | 14.6 | 24% | 51.6 | 34.9 | 48% |
| Gross Bookings(1) | 20.8 | 16.4 | 27% | 58.8 | 39.2 | 50% |
| Net Revenue Margin | 12.7% | 11.0% | 170 bps | 12.2% | 11.0% | 120 bps |
| (1) Includes intercompany transactions. | ||||||
Readers are cautioned that the non-GAAP measures are not alternatives to measures under IFRS and should not, on their own, be construed as an indicator of Black Diamond's performance or cash flows, a measure of liquidity or as a measure of actual return on the shares of Black Diamond. These non-GAAP measures should only be used in conjunction with the consolidated financial statements of Black Diamond.
