BDIMF - Earnings call transcript Q2 2021 | Black Diamond Group Limited

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Operator

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

As a reminder, all participants are in listen-only mode and the conference call is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Relations. Investor Director, Zhang, Jason Please go sir. ahead,

Jason Zhang

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

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

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

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

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

Trevor Haynes

XXXX of thank Thank BXB the ecosystem. momentum key the year we discuss rental quarter We in you, was rental which record believe platform, This building comparative we XXX% XX% continued businesses most with the to to the quarter this build and on revenue the is is LodgeLink modular grow $XX.X on record. progress Good growth Contributing half second revenue In technology million is coming over well of has profitable rental WFS of our penetration projects rental and comparative to and also continue stemming company MSS recovery cap in a where you The A feel and million, stream. strong MSS a $XX.X a sixth revenue versus the into morning, our scale from grew robust a that rental quarter, another in of quarter diversify our larger have grew the number segment, the XXXX core for continued and quarter. beyond and so LodgeLink Jason. significant increase quarterly stream. joining in showed by consolidated we as progress the second to throughout a highlight and quarter. our division for travel consecutive second revenue gross U.S. positioned or comparative to the scaling in us everyone our in XX% quarter, results. the market, heading from revenue far company seen

positive utilization capacity. are fleet Our the MSS activity backlog regions. remains Ontario rental outlook Columbia, strength for our and recurring stream, British for and as MSS expanding rental very remains revenue increasing view additions Eastern organic strong markets, particular and are with in which sales, diversified U.S. end we rates is a high, throughout Bidding as

Integration on deal approximately has we track operating in then, our – the per expectations Southeastern been seeing aware, those active Modular as initial November we in XXXX. a on exit is of announced the time Since Vanguard are as are XXXX. of and market we at realized very to of Vanguard of most are Eastern As ahead performance and be closed and in education U.S. the continued $XXX,XXX likely synergies trending Vanguard’s listening of year acquisition strong has

which are quarter $X.X in has the levels from signs previously of is Canada, and on pre-pandemic showing mining-related unit recovery as efforts support the projects. million XX% rental recovered of diversify contracts utilization our and business in benefiting geography. of comparative to announced further WFS from WFS of by back and Our end-market revenue grew infrastructure Australia and to

As a revenue. WFS rental the into utilization result half for improvement of we and continued second expect contracts, these

October the turnkey to Goldboro solution of of project, Black Mi’kmaq letter of X,XXX LNG with As received provide announced up XXXX, accommodation Nova in the workers. for Scotia, Diamond a to partnership award Limited a

the grew on We pertaining remain GasLink are the and on of LNG bookings offering from bringing review. optimistic LodgeLink’s XXXX. rental project showing Larger is aware a it we pipeline industry. is the evaluated, XX,XXX will camps each platform, as to for project Coastal that Goldboro any QX and meet crew room stream We which fully increased now growth re are that accommodation LodgeLink to continue. digital being travel total occupancy, expect innovation further the marketplace XXX% well-positioned needs remain TMX continued but to the to undergoes

the listed comparative X,XXX or While up corporate had revenue second U.S. gross roughly certain the XXX,XXX end quarter. was grew gross from booking XXX% servicing as rooms, of At the sector within approximately XXX resource sectors LodgeLink our properties, expected revenue and helped year-over-year volumes XXX% offset quarter, distinct the customers. quarter, Canadian mentioned representing customers lower from

our by and our the based as generated the place, of customer, in we stability scale. flow pandemic-related geography. flow Canada, several ever, long-term of cash restrictions million continue believe we which $XX fleets. years customer as our strong by should is the The is and a is over our our believe the operating and year-to-date We poised creation on by contracts this positive cash returns of financial expand last as quarter. we the stream industry compound platform inform continue to the makeup we as ease to in company value And strategies for believe rental to and Assuming performance company result U.S. travel the quarterly diversify in of over and ongoing growth

we our Toby? of businesses. the objectives, for the financial on balance to will show expect call We over diversifying strategic our turn Toby the some will strengthening further quarter results as year growing I and now progress the first details results. on

Toby Labrie

to same basis the our year. same Workforce COVID-XX contribution affected and quarter eligible This Emergency an Total percentage the the capacity Adjusted down in was to under adversely million personnel. WFS up Canadian borrowing in million, Vanguard was EBITDA the was markets from year. a adjusted for expectations debt CEWS the X.Xx the exited revenue QX from This costs net company’s increase the asset-based Wage to up inventory Vanguard down quarter in quarter. rental number comparative Excess Xx, is months calculate was the ratio a attributable million, XXXX. $XXX acquisition. in quarter. quarter. base XX% quarter. from $XX.X of Solutions from addition value initial comparative strength rebound last There in for QX to a of de-leveraging driven of in XX% been flow of non-rental back well the of quarter the December, cash comparative rental in borrowing on and $XX.X the million due attributable dynamics of the questions. an continue to $XXX from for but our million to $XX.X at up comparative for has from increase in lodging was end of generation turn healthy market Average resource XX% by of costs, and the the from from the healthy expect from administrative rental to million, to of of the EBITDA Subsidy like XXX% EBITDA of whereas the X% down the revenue continued We also with $XX this XX% revenue and adjusted X%, $XX.X contribution from as MSS up rental of cost revenue, approximately primarily quarter million, the diversified quarter, Adjusted the was the operator is is last in revenue personnel Vanguard. was which comparative continued pressure increased of The the in was $XXX that, QX resulting Total million. year Trevor. in from markets. would up strong approximately into believe the growth highlights EBITDA XX% constant the the were quarter, $X.X ahead of used of At With comparable inclusion quarter the from a platform Thanks, owing on no of $XX.X XX% platform. total across CEWS up call million a in quarter to million for company currency the following which debt quarter, the to activity contribution million and of our sharp X as quarter Pace credit XX% were up including facility half was comparative revenue. MSS Total rates the XXXX. the growth a from XXXX administrative net quarter were company’s as rental as was over in was and by continued second as well free end the market $X.X we

Operator

Thank comes BMO from Markets. of John Capital Please first you. Gibson ahead. [Operator The Instructions] question go

John Gibson

taking my Good guys. call. morning, Thanks for

like can see with starting do and quarter, I feel utilization go mean, but Just asked MSS, or peak? high I I sort how being mid-XXs you as it of wondering just this every

Trevor Haynes

good and morning. John Thanks,

is concerned utilization the are in we utilization low-XXs. running look We average with the high when at how

utilizations over we up look and If seeing you at are specific markets, towards XX%. XX%

we that looking facing have have mixed don’t building is a customer that we risk is the The for. local And so the fleet market.

That have program strong. absorption so fairly And about market we share is healthy said, increasingly got we underway being and a become concerned CapEx really leakage.

perhaps could add to expand And are we continuing but So, you demand very some Ted, remains strong. color. capacity,

Ted Redmond

everything Yes, I Trevor. Thanks, just Trevor agree with said.

get is have to units program rental rental-ready us is to unit and the our for a – active in high every this shape. pretty so also utilization of reefer We get ready encouraging all

think needs the our to And the part, we units we pipeline moving order capital pipeline, And the are around are the the on so and customer demand. doing customer that most in meet between and units between geographies branches for to. I and the in best

we meet our to we we think job – can are on the that. a and of as it’s business and as customer many doing pretty to like increasing discipline are we needs execution good think I So, try

John Gibson

Great.

competitors well? me first in U.S. driving Second or the this as increases BD-specific your it utilization what’s some or thing more of sort the broadly one for pricing leading really one, high on a seeing is is

Trevor Haynes

especially it comps or are in specifically We our the U.S. seeing in peer

year-over-year we line. what but perhaps in So, X% our thematically, marginally across the seeing think we board, than stronger is it’s that are

John Gibson

Thanks.

– workforce, of to these the average at hit than contracts? maybe you signed them to year-to-date, start an should duration could give results of you really when contracts and $XX Turning in million QX in look more have most you

Trevor Haynes

Yes.

in the Ridley, assets, to and dynamics. We year kitchens of have pace some of which that this are coverage, the and rent, on we equipment, rental cap for And the very so to With see don’t quarter, there? quite provide contracting the and come worked pleased following yet related have contract positioning dorms color etcetera, regard Mike mobilization to why rates specifically still revenue did time. haven’t some good assets you of some some with all

Mike Ridley

Sure.

I some year projects the that continue year sort we that the think numerous GasLink, on, And previously to when commencing Mountain go at Coastal will transported into into will this and that carry well. to they when year. for of getting into going through year and are commencing as and in Trans the of of carry Trevor Australia, have next projects are around that over year middle on are and next back they balance next and installed be touched half we have the of as also you

John Gibson

segment? of seen some we particularly pretty it. terms in what acquisitions for Obviously, Last the in you me, are space. Solutions Got for Modular big have for multiples M&A, seeing one Thanks. the

the Just bid you move sort here? even the come wondering or have higher down of if seeing from are prices

Trevor Haynes

rentals are increasing points space have been data Recent still. for fleets indicating valuations

seeing So, we very multiples. are strong

Some targeting. of we a quite these be are bigger platforms would than what bit

But would even And applied looking XXX,XXX fleet, high. would would targets be size, example, I multiple units paid be by Modular acquiring in so we are trending suggest the the multiples multiples that mid-market in at, Europe does question not. Brookfield, for

valuations aggregating those terms smaller business on to quite we guess, believe in inorganic that to are edged And But some our accretively and aggregate I valuation etcetera. organic, arguably, can we we double there are, space. of organic at going fleets, to sword. to targets question our ensure bump, of accretion, a our growth, that multiples. platforms have valuable to with get are is acquire we that in is is coupled side our that look So, the the based continue smaller But no

John Gibson

responses. your will appreciate turn I Thanks. it. it Got I back.

Trevor Haynes

Thanks John.

Operator

[Operator Instructions] Raymond comes from Ryan from go Bass question Please The next James. ahead.

Ryan Bass

I large my or for the guess, just length received, guys. you have start think that Thanks. have off, to grants on been been Good the I to space? individuals questions. able leverage you maybe Thanks you from to Have tech morning, attract hire taking

Trevor Haynes

do take that? Toby, you to want

Toby Labrie

Yes, sure.

So, that increments. certain OCIF on it’s tested way is the the agreement works

So, test to we haven’t yet. quite the increment hit first

So still satisfy attract any standing no, yet us But for technology received talent we to our growing not opportunity and there. Calgary provides agreement needs. funding to have good in to remains the development an

Ryan Bass

Okay, expect business breakeven? to fair that when Thanks. And be LodgeLink, then enough. again, you on EBITDA part the just of do

Trevor Haynes

far We generate on the expansion, margins closely track from looking margin net existing we and for as revenue. that gross business as revenue

these on for the a technology requires to continued growth of is satisfied margin are that that investment, the speak. growth is The for G&A, albeit so we opportunity part platforms basis. have the business challenge so, gross profitable we And in built

as add to proposition, so handling run the workflow quarters that greater to EBITDA we continue expect of lean continue into that the we sort we will of we suppliers, that resources negative for software seeing out growth we core as build for and modestly are several more next here. customers the And the value opportunities to of volume the and

Ryan Bass

an on just sense. makes overall how can get CapEx it funds then allocated update will the this we Okay, be year? just And on and the business,

Trevor Haynes

out debt business we between fairly we have which point the program. very both bringing same At Xx set And time. We range focused within is accomplishing are on with are that this the and that time, are got pleased healthy CapEx had we Xx. a our the quite in we at

had am business my And not have of our America. focus our a terms So, that the in set with you and maybe can our North net etcetera, CapEx and of range out sure remains MSS cadence we uptake with absorption primary I we good the as capital same numbers, in of Toby around – answer.

Toby Labrie

Sure.

capital – the following to have deleveraging $XX as target CapEx the our with while Vanguard we million. $XX So, as acquisition, most we on net mentioned, on growing focused both Trevor of been focused plan, been have our million fleet,

coming within that we to so, do in expect And be range.

target and CapEx with expect $XX the existing healthy and that – slightly coming in, seen However, we do continued we to are potentially of sales with we see and above, fleet growth have so million. activity seeing at are at where targeting

out to expected So, as it LodgeLink, shape. the in at that we to deployed some modest we we finally, get assets have has And in continue units workforce, continue be on various business some rental been amount as to allocated we to work growth to projects capital primarily in a also MSS. to ready then of But there. put have capital allocate

Ryan Bass

Thanks. me. for it that’s Okay,

Toby Labrie

Thank you.

Operator

to like phone There are question-and-answer the back lines. from conference Haynes no the the This questions closing over I more would session. concludes Mr. remarks. any turn to for Trevor

Trevor Haynes

everybody you listening Thank today. you. Thank for

with our pleased specifically stream also growth capital our around revenue, and backlog the very strong rental our the continued sales around in rental rental pipeline and utilization, we particular and where business up, rates, sum of increasing organic And absorption are program. characteristics then to how strong performing growth lodging. strong Just is

our for as outlook believe year is remaining So, of the quarters continue. we these this trends positive

Black a you has interest in day. care. great and Take hope Diamond for everybody thank So, your

Operator

call. conference today’s concludes This

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

Black Diamond Group Limited (BDIMF) 9 Aug 212021 Q2 Earnings call transcript