CALGARY, Alberta, Nov. 02, 2021 (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, 2021 (the "Quarter") compared with the three and nine months ended September 30, 2020 (the "Comparative Quarter"). All financial figures are expressed in Canadian dollars.
In the third quarter of 2021, Black Diamond reported consolidated revenue of $108.8 million, Adjusted EBITDA of $19.7 million, and core rental revenue of $26.0 million.
Key Highlights from the Third Quarter of 2021
- Generated consolidated revenue of $108.8 million and Adjusted EBITDA of $19.7 million, up 164% and 101% from the Comparative Quarter respectively.
- Generated net income of $5.7 million, or diluted earnings per share of $0.10, compared to a $0.7 million net loss in the Comparative Quarter.
- Consolidated rental revenue of $26.0 million, up 64% from the Comparative Quarter.
- Modular Space Solutions ("MSS") rental fleet utilization improved to 85% and average rental rates increased 9% on a constant-currency basis.
- Contracted Rental Revenue for Assets on Rent in MSS was $53.3 million as at September 30, 2021, an increase of 193% from the end of the Comparative Quarter and up 20% from $44.3 million at the end of Q2 2021.
- Workforce Solutions ("WFS") revenue and EBITDA of $58.6 million and $12.6 million, respectively, increased 239% and 180%, respectively from the Comparative Quarter due to stronger performance from all revenue streams and ongoing improvement in utilization.
- LodgeLink set a quarterly record with 60,398 room nights booked and total gross bookings of $10.1 million in the Quarter, up 87% and 98% from the Comparative Quarter, respectively. On a sequential basis, room nights booked and total gross bookings grew 39% and 29% from Q2 2021.
- Free Cashflow for the Quarter was $17.1 million, compared to $2.8 million in the Comparative Quarter. Net Debt to EBITDA Ratio of 2.7x including trailing twelve-month EBITDA from acquisitions is within the Company’s target range of 2.0x to 3.0x, and available liquidity under the Company’s asset-based credit facility was $115.8 million at the end of the Quarter.
- The Company announced the reinstatement of a quarterly dividend of $0.0125 per share (or $0.05 per share annualized).
Executive Summary
MSS rental revenue set a seventh consecutive quarterly record and grew $5.4 million to $15.3 million, up 55% from the Comparative Quarter. Recurring rental-revenue growth in the MSS segment has been driven by continued fleet growth (both organic and through the acquisition of Vanguard Modular Building Systems ("Vanguard")), robust utilization and continued increases in average rental rates. Adjusted EBITDA of $12.5 million was also a quarterly record for the MSS segment and increased 60% from the Comparative Quarter.
WFS generated Adjusted EBITDA of $12.6 million, a 180% increase versus the Comparative Quarter. WFS revenue of $58.6 million was up 239% from the Comparative Quarter due to increased revenue in rental, lodging and non-rental revenue streams in both North America and Australia.
At the end of the Quarter, net debt of $159.5 million decreased from $172.0 million in Q4 2020. Excess borrowing capacity under the Company’s asset-based credit facility (the "ABL Facility") was approximately $115.8 million (Q4 2020 - $84.4 million) and the appraised liquidation value used to calculate the Company’s borrowing base was $294.8 million Q4 2020 - $291.5 million) at the end of the Quarter.
Outlook
Third quarter results reflect the Company’s multi-year strategy to scale and diversify its platform. Recurring rental revenue growth of 64% across the Company was underpinned by strong utilization levels and rental rates in the MSS business, ongoing strength in WFS within both the Australian and North American markets, as improving fundamentals drive utilization.
The MSS segment set a seventh consecutive quarterly record in rental revenue. The macroeconomic backdrop remains attractive for the Company’s MSS rental fleet, with utilization levels expected to remain strong amidst ongoing increases in average rental rate. Average rental rates in the Quarter across the MSS segment were up 9% year-over-year on a constant currency basis. The Company continues to prioritize capital investment opportunities that provide contracted cash flows at attractive returns. Notwithstanding a modest, seasonal pullback due to the holiday period in the fourth quarter, management expects utilization and rental revenue to remain strong. In the Quarter, the MSS segment generated record quarterly sales revenue driven primarily by operations in the U.S. While fourth quarter sales volumes are expected to remain comparatively strong on a year-over-year basis, the Company views the third quarter to be a high-water mark with respect to sales and non-rental revenue for 2021.
The WFS segment is expected to benefit from the Company's continued focus to diversify by end-market and geography, as well as continued strength in commodity prices as the pandemic abates. Several previously awarded contracts commenced operating during the Quarter, which is expected to result in steady utilization for the workforce accommodations assets throughout the fourth quarter and into 2022. The large increase in WFS non-rental revenue in the Quarter was driven by several projects across North America and Australia. Management expects a more normalized cadence of non-rental revenue for the remainder of the year. However, rental and sales revenues are expected to remain strong.
LodgeLink delivered its highest ever quarterly gross revenue and volume of room nights booked. Total gross bookings grew 98% to $10.1 million from the Comparative Quarter as customers across most end markets are increasing travel volumes amid abating COVID-19 related restrictions. Total room bookings for the quarter grew 87% to 60,398 from the Comparative Quarter, which represents greater than 60% of total room nights booked in 2020. At the end of the Quarter, LodgeLink had 605 unique active corporate customers signed onto the platform with approximately 6,200 properties or 599,000 rooms listed. The Company remains highly optimistic on the future growth potential of LodgeLink as the digital platform continues to scale.
The Company expects continued strength in its recurring, consolidated rental revenue driven by previously awarded WFS contracts, an improving outlook for WFS given stronger supply and demand fundamentals, and the steady cadence of investment in the MSS rental fleet which continues to see an attractive backdrop of steady utilization and improving rental rates due to favorable end market conditions.
Third Quarter 2021 Financial Highlights
| Three months ended September 30, | Nine months ended September 30, | |||||
| (in millions, except where noted) | 2021 | 2020 | Change | 2021 | 2020 | Change |
| $ | $ | $ | $ | |||
| Revenue | ||||||
| Modular Space Solutions | 50.2 | 23.9 | 110% | 122.6 | 62.3 | 97% |
| Workforce Solutions | 58.6 | 17.3 | 239% | 120.8 | 61.2 | 97% |
| Total Revenue | 108.8 | 41.2 | 164% | 243.4 | 123.5 | 97% |
| Total Adjusted EBITDA | 19.7 | 9.8 | 101% | 46.5 | 29.5 | 58% |
| Funds from Operations | 23.4 | 8.6 | 172% | 55.0 | 30.4 | 81% |
| Per share ($) | 0.40 | 0.16 | 150% | 0.96 | 0.55 | 75% |
| Profit (loss) | 5.7 | (0.7) | 914% | 9.7 | (1.3) | 846% |
| Profit (loss) per share - Basic | 0.10 | (0.01) | 1,100% | 0.17 | (0.02) | 950% |
| - Diluted | 0.10 | (0.01) | 1,100% | 0.16 | (0.02) | 900% |
| Capital expenditures | 12.0 | 8.7 | 38% | 25.8 | 30.9 | (17)% |
| Business acquisitions | — | — | —% | — | 6.6 | (100)% |
| Property & equipment (NBV) | 404.6 | 347.4 | 16% | 404.6 | 347.4 | 16% |
| Total assets | 548.6 | 425.9 | 29% | 548.6 | 425.9 | 29% |
| Long-term debt | 164.6 | 113.8 | 45% | 164.6 | 113.8 | 45% |
| Cash and cash equivalents | 5.1 | 2.5 | 104% | 5.1 | 2.5 | 104% |
| Free Cashflow | 17.1 | 2.8 | 511% | 38.8 | 15.0 | 159% |
Additional Information
A copy of the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 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.sedar.com) 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, Vanguard, Schiavi, and MPA, 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 and a fleet of liquid and solid containment assets. Its regional operating terminals rent, sell, service, and provide ancillary products and services including turnkey 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.
Learn more at www.blackdiamondgroup.com.
For investor inquiries please contact Jason Zhang at 403-206-4739 or investor@blackdiamondgroup.com.
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 2021 capital plan, how such capital will be expended, expectations for asset sales, management's assessment of Black Diamond's future operations and what may have an impact on them, financial performance, business prospects and opportunities, changing operating environment including the impact of COVID-19, amount of revenue anticipated to be derived from current contracts, anticipated debt levels, economic life of the Company's assets, future growth and profitability of the Company and realization of the anticipated benefits of acquisitions and sales. With respect to the forward-looking statements in the news release, Black Diamond has made assumptions regarding, among other things: future commodity prices, that Black Diamond will continue to conduct its operations in a manner consistent with past operations, that counter-parties 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: the impact of general economic conditions, industry conditions, fluctuation of commodity prices, the impact of the COVID-19 pandemic, the Company's ability to attract new customers, failure of counterparties to perform on contracts, industry competition, availability of qualified personnel and management, timely and cost effective access to sufficient capital from internal and external sources, political conditions, dependence on suppliers and stock market volatility. 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, 2020 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 terms have been referenced: Adjusted EBITDA, Funds from Operations, Net Debt, Contracted Rental Revenue For Assets On Rent, Contracted Rental Revenue For Contracts In Place and Free Cashflow. Readers are cautioned that these measures are not defined under International Financial Reporting Standards ("IFRS"). 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. A reconciliation between these measures and measures defined under IFRS is included in management's discussion and analysis for the three and nine months ended September 30, 2021 filed on SEDAR.
