BDIMF - Earnings call transcript Q1 2022 | Black Diamond Group Limited

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Operator

Thank you for standing by. This is the conference operator. Welcome to Black Diamond Group’s First Quarter 2022 Conference Call. [Operator Instructions] I would now like to turn the conference over to Jason Zhang, Investor Relations. Please go ahead.

Jason Zhang

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

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

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

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

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

Trevor Haynes

key diversify results. a business. us as Jason Thank company you, morning. first indicators the reflected to execute you the performance The continue strong strong throughout to we had quarter and for This discuss plan Thank has start grow good to our platform. year joining and to the our by on is

certain We these strategies macroeconomic are multiyear from also tailwinds. while the seeing benefiting of intended results

Specific the million million. revenue generated XX% year, These increased $XX.X of of year, and the results the quarter, stability first our dividend comparative of adjusted One quarter which and of from consolidated last to of XXXX. of of EBITDA the reinstitution and since improvements $XX.X strength the have were for we of X% reported was the quarterly the we company respectively.

on assets quarter assets. in the MSS WFS revenue percentage X of and or rental revenue by WFS XX% generated of million the comparative which grew MSS million points return last quarter reported unlocking our from as free increased rental ROA and driven $XX.X comparative quarter of up cash down existing of total in to revenue in XX%, and million $XX.X and XX% operating consolidated the of quarter. We rates flow of million, $XX.X $XX.X quarter MSS Consolidated XX%, improved utilization of $XX.X the also rental increasing X% from rental of $XX.X increasing through revenue X% first same million adjusted EBITDA from year and million, the was respectively. leverage

anticipate see second MSS respect to Our in growth recurring regions, quarter business rental our continues high-margin the revenue. unit and all and we beyond continued demand of to with healthy base in

expect increased stronger XX% while we revenues WFS, but from half adjusted from up escalation rental the timing. on the quarter quarter most expansion year-over-year down quarter-to-quarter of In the project of sales $XX $XX.X XX% year. was quarter, million, of and EBITDA the year. pipeline revenue remains the sales said, was in the million robust, last up same comparative That second QX was from Custom We VAPS average year-over-year, revenue constant fleet, currency rates across the and in fleet, recent a to the basis. was X% sales ongoing can expect continued rental in uptake due which, vary for up

risen from to last our platform to operations, efforts XX% are streamline this positive WFS underutilized has utilization assets. across business, to also continuing momentum driven We XX% Average in by diversify seeing year. the while monetize

and LodgeLink, over up seen implemented the in quarter business, years utilization the XX% The the scale extend. to quality turn as stability platform. the nights expectations travel crew room tech continues And aggressively year, strategy on had our Toby? customer from segment’s by travel continued over Canadian scale details thousands innovation Toby this financial quarter. and of in of end continue customers further the a ago projects call as portfolio. quarter, growing comparative and streams diversified was our acquisitions from first improvement We had addressable a by for results. offering and our are the Net diversify LodgeLink in through momentum BXB crew the unique this are fully XX% platforms business, our first balance billion. and both specialty ecosystem year a seeing now is LodgeLink. digital leveraging our that the and plan on base in million, for increased rental At demonstrate particular have I to evolution approximately revenue some to and strength with to organically the first We industry our a scale. platform marketplace up the of while sold LodgeLink of remains another notable X,XXX to expanding continue WFS in business essentially markets. corporate quarter. into We we we sophistication active, our record flows several travel This had the of and is servicing proposition XXX by their has volumes crew our improving terms start expect Diamond the ongoing Black where with tech listed U.S. across the as in Australia, utilized our growth quarter and market $XX result, properties along comparative in but to the value we will building quarter revenue cash our MSS a XX,XXX strong existing of the seeing are all-time positive of quarter, to outlook distinct to members. with for now increasingly throughout also bringing larger the $X.X

Toby Labrie

Thanks, Trevor.

comparative earnings EBITDA also is increase $X.XX, that million, worth per As a diluted of the QX quarter Trevor revenue was drove an The quarter. the rental for million adjusted comparative stronger increase At from of total an It quarter, the share This repeating our for was XXXX. QX $XX.X mentioned, an total in increase which lodging well revenue XX% million, quarter rental of quarter. the increase XX% $XX.X from was the resulted for XX% represented of the net revenue XX%. debt of in of from down recurring $XXX.X end core of quarter end ROA as million the as first the from $XXX.X at XXXX.

of is Our March target EBITDA of long-term XXXX debt of to X.Xx ratio to Xx within current as net XX, Xx. our range adjusted

interest with rates of on quarter lock to environment. is quarters, believe We during our of swaps a fixed approximately several the Our over lower million was our And average we liquidity. in debt $XXX debt cost one-thirds conservatively for last almost X.X%. the available entered of sheet into levered have rate balance rate

slight insurance primarily costs down market activity in We percentage in $XX.X acquisition travel-related X.X have XX% the Alberta to levels, in gross as a was our total grew increase such points earlier week. comparative tuck-in costs growing properties. XX.X% we the comparative administrative profit the powder business basis, in ample the our in dry of administrative from both continue MSS consolidated of On million the quarter. percentage acquisitions, announced through and staffing more ease a to increase business quarter an due and that in as from organically a as restrictions and of quarter XX.X% Total

strong as provide environment. has free we growing continued view and assets the our rental asset flow to continue inflationary Our of attractive investment generation, model a in base to cash rental an current

contracts continue nearly inflation, assets of While ongoing and in been new acquiring rates which we at the acquired term. with is hurdle investment assets. escalation our with on of deployed inflation across has was overall units the on also to increases return rental assets lower rising fleet our X,XXX therefore, costs rates This MSS further and exceed value meet existing driving on

strengthening and with commodity WFS is minimal which in capital also prices, opportunities seeing improving is Our business. utilization rates business this investment amidst

to of cash shares that we to growth into from a repurchase part addition continue issued business reinvesting of and as In the preference expansion, Vanguard free were flow subsidiary acquisition. fleet capital the

are the of return balance the intend million sheet the for We the business growth closing, free is have past cash In million the and X in additional poised flow these position over repurchase exponential common to debt we have remaining shares shareholders. liquidity for of months Once these robust. continued extinguished, available repurchased LodgeLink to $X.X us in is reinvest XXXX. $X.X on our cost to and business meaningful outlook and or gives will our low optionality.

about of With back the year the for like questions. start optimistic to over remain continue business I and our with strategies. execute as call are operator turn to on would we our We the that, to pleased the

Operator

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

Matthew Lee

morning. Good

of all from quarter good – all. from quarter Another you

units Just can a in us fleet, expecting fits you ‘XX selling I maybe and you the question for growth that M&A every are you but into net the how on are idea picture? F quarter, an know give maybe fleet MSS then of the some

Trevor Haynes

organic So, net you want split inorganic. fleet ‘XX on there, a and growth and start rough MSS Ted? Do on to for

Ted Redmond

Yes. Sure.

got planned year. CapEx we significant So have the for

is continue to used we fleet the fleet to year. year this It’s offset will So have deemphasizing to but difficult sales, from compared been predict, sales grow. used last because net bit growth a

question? used was second growth CapEx significantly versus So, the year What we increased the the half to will have prior definitely think higher this fleet due net lower of we year and sales.

Trevor Haynes

versus inorganic. Organic

Ted Redmond

Yes.

the piece. branch. inorganic predict nice done in It’s The organic from to hard or sales the Cambrian our it’s sales pickup done. that’s So, of Calgary M&A a had acquisition we piece, until inorganic

about of M&A. back it talk pass will Trevor wants I maybe pipeline if the to he So to

Trevor Haynes

buying difficult end our any a that the the actively and but of Yes. we but quality our opportunities looking have pipeline We upon like of in not within year, and would to Well, if framework and certainly, we to more, asset. of at predict. success timing won’t do tuck-in and the before valuation very comment Matt, another are for specifics, we

are over, we on have we control which very focused with organic. what regard So, mentioned is the Ted to what

Toby Labrie

current we of CapEx I a will profile that see, capital in we commitments you that note And with place. think have significant amount the

slots have that also capacity, guarantee in our with tightness do market manufacturers today. that can see manufacturing we we the so some of because secured We manufacturing

range with inorganic organically, between So I to would XX% do but to fleet the – poses year. X% growing makes that for growth it in and that think challenges like fleet target the to our the some growth organic that, some we it

Matthew Lee

gross That’s between how think two your split And the does on if great then segments? CapEx, CapEx, color. I that maybe about

Trevor Haynes

a the of market The in which very years going Australia, however, do, is bulk several towards at And smaller last smaller a CapEx robust have percentage of WFS an fleet We growth we strategy basis are unit. North we the CapEx the in business MSS. over Australia, our MSS, Australia scaling business so with on up net have here organic shared and MSS fits America. albeit significantly have we the is than than under percentage consistent in adding

buildings but same again. the about amount LodgeLink two assets the get little small for going So, those year as Matt, it of some key we get the areas build out takes around continue which last of MSS. capital we the And into operational those software or is that WFS that of sometimes maintenance bit side then the few the for work, terms allocation, capital of business, a and technology years haven’t have as cadence of to to development and opportunity capitalizing repurposing see with to bulk, are some in a course, we a worked

Matthew Lee

helpful. really pass I Alright. the That’s will line.

Trevor Haynes

you. Thank

Operator

next Our comes Bastien Frederic ahead. Raymond James. go of Please from question

Frederic Bastien

expand one? all. go was just why you you acquisition I in see they in this decide through so expand the own whether other you make but were surprised regions, the perhaps did potentially that speak. act on specific on to tuck-in rationale to Guys, other backyard, to opportunities Well, to and Can hi, your fleet

Trevor Haynes

the Good to Calgary market Well-known in a XX question. the Thanks. market XX here. years. occupy Cambrian brand, for has part they of very distinct operated

resources. look to built fleet, the works in to about timing we’ve Also, a the terms So in now. opportunity to years happening happened it couple what Canada with rationale XX was sort shift to for of as Prairies, in as our and mirrored talked the operations Western the the be owners regard of We’ve of we ways.

And up big work side MSS more so, towards the projects would the on and XX/XXs that was sized fleet complexes north. on the larger

we increasingly that become the complete brought areas, didn’t mix focused Cambrian we’ve As the fleet it’s us. found have in where we urban to

if mobile items, you wheeled units, menu storage. of smaller a The other will, amount so small

growing also matched And again. And city us we’re so within more competitive really quite types more of Calgary. makes of different much the or city to the clearly bullish is demand the

we think fits from so And it in synergies a perspective. well really

a full have here. We operating branch

and or any but don’t brought require assets people we’ve contracts infrastructure. so And the over

it’s really transaction good a has well-respected seller business. from who a really accretive So nice a

owner. We’re the quite to pleased be Ted?

Ted Redmond

Trevor our just construction industrial, diversify to it Alberta what more helps cover Southern said, Well, on to add to Calgary type business commercial, and customers.

that, think a that’s positive. we So

Frederic Bastien

that’s call at Perfect. often ago, overall Thanks be an to indicator your what’s last since you own going good least outlook and conference in you last and markets for economy. a your about changed – or of but in going a changed was that lot end as specific months guess only financial markets the couple on happen reported? as color. strategy or the How there of business to out dramatically are those to seems on has the the feeling I

Trevor Haynes

perhaps. I guess, dramatically, changed Strategies haven’t tactics

in and a to a type would demand areas or being say, strong. U.S., the I that to certain Mike, of it’s which extent, renewed we seeing has predicted customers have whether are different We strength discussion, us energy our not reacting may Canada as around in a as

the workforce lodging noticed this active. been You Prairie business, – Sunset in but past player a Lodge in revenue, open very volumes our we’re has into lodging quarter, not big our in

read seeing much us oil say, upstream level our pipeline also think, I the format on gas construction then seen to the of surprised and small we’ve activity strength has, safe from expected. of loading terms been you some field had than We’re business in to camps, camp slower, And the seeing higher through oil Canada. of our have just activity. But then but starting services And energy has uptick. U.S. businesses. from Australia and been that a side it’s not certainly customers, a gas, bit we’re we’re see and mining

Mike and in areas, let some a are give color those So second. I’ll

we increases everybody time work and our also The part fixed is it into other about across base like a how the inflation it such way certainly large a cost a inflation We lot that a we’re beneficiary works that has were model. of rate of to are is thinking But spend inflation. business asset of convinced cost. adjusting that

small bit thinking more our maybe so have business. we’ve terms couple adjust of that to how workforce footprint give tactics. business. focusing of are the But our I we a of the is a a most those and people our We But size Mike there. in things about relative – And around notable, been think, on little color

Mike Ridley

thanks Frederic question. Hi, your for

really the I a probably hard, to good news strategy. much more know think is worked few as I the you really, think we’ve years last employ sort of diversified

housing, looking think being good, when and primarily but sort So look being oil at Geographically, for we rent colleges, market, just sector. the I as solely types very on much dorms energy, on migrant macroeconomic Eastern of have marketplace diverse not solid with of we’re classroom and and U.S., the market. of X,XXX better way Canada, on infrastructure. and then other mining and a construction, projects space than to go premier that, one now with disaster diverse becoming gas that the more you with far the environment universities overflow a seeing focused sector green in mining as gas workforce to oil The tied well with with Australia, beds providers is that opportunities really in projects. very good relief, Education, we’re are

working. So will geographically, bit And when hold I very a think really, diversified even a our I strategy there downturn. industry-wise up of we is having is being of really think

that. as we’re a So super result with the happy getting of results that

Toby Labrie

Yes.

would is other the Frederic, trajectory we more that market this I in. would be going the The thought is piece less add, or

locking of the and in emphasis at rates saw for XXXX balance And and so locking at our fixed sheet a some that debt that of time. in third perspective, our that from in was financial rates we

we So us I earlier costs our as and good of that forward. like comments, mentioned in look what surety gives going that, my fixed will feel stability

Frederic Bastien

on. I guys. pass will you so much, Thank it Great.

Trevor Haynes

Frederic. Thanks,

Operator

Our Gibson Capital Instructions] go ahead. Please [Operator of question from next John BMO Markets. comes

John Gibson

I guys. pretty a And was good on morning, congrats what quarter Good thought again.

due of both a you’ve this if a contribution, I guess higher and saw you how increase. nice both but wondering know rental seen touch I segments? was segments margins off, portion even pricing on to First much in jump could revenue

Trevor Haynes

For off, general? To in sure. start margins Toby,

Toby Labrie

we margins, – look are on margins revenue typically seeing by at good stream. General will Yes. we it

on revenue in a of And from previous – from Workforce good basis, rental so we’ve strong seen margins business, see In our we and incurred that periods. recovery costs did perspective. some

things period up bit. in the current that little so skewed a And

so And that longer-term. we sizable quarters an of out saw few the in margins our trend pretty In at mix good a revenue. way to looking change how really average is a over about over on think those last MSS, the

would expect so when and which attracts margins higher with bit due a typically we costs that part integration. going some And year-over-year quite an that than higher training do and to completed have of there rental final because big you we increase that, margins. of and non-recurring as doing on final we non-rental integration some of you forward. – being incurred little approximately We some we and typically our had the expect typically margins then some $XXX,XXX didn’t is of proportion revenue, would see that as of reorganization our lower that systems internally, will Vanguard of well expect a And uptick a compare of we integration business, full

expect further there. don’t costs I any So

John Gibson

one assets out assets about of they MSS area? organic various earlier. touch spoke businesses? you on spread Got are Are Thanks. growth Where in the areas Are pretty it. seeing these your new – of to across headed? I’m going you kind strength more these

Trevor Haynes

of a there? why a color you couple got give We’ve Ted, strength. don’t of areas

Ted Redmond

meet utilization rates. because That demand, we’re seeing regions are good we’re high that focusing our on to said, we’re able we’re hurdle Yes, there grow. to platform and across investing the

So on we’re in West demand of Canada, some the our Coast again, markets. strong of seeing BC

we’ve Quebec moving the very market over very the Ontario last utilization in high months, there. we’re So successfully, investing markets. into those and been Quebec, XX

to there. investing to work we’re put So units

than Quebec markets, would the higher existing seeing base, growth quicker And So demand. we’re strong the that and U.S. market. then say, is of amount market like of growing that unit percentage the asset our percentage-wise, we’re Ontario so versus I investment again, terms in in of in

So especially demand rental units on the strong. East education new Coast for remains

business investment program East significant we’ve our and but in a So also investing in U.S. our U.S. had still –

Southwest business.

Board those couple the extra the and of across noted Board across I areas investing with strong of emphasis. So

John Gibson

And diversified we’ve for Typically, a and your we Okay. gas Got for bookings year, here? see it’s it. LodgeLink customer think could just base will given me. probably last do next outside the oil or we one quarter Over effect in an play of you seasonality is drop a space? seen how bit in increase room QX, see last possible

Trevor Haynes

pushing building I been into that market U.S. percentage And trend the be in the going QX. is see up there. U.S. was think hard Canadian trend seeing, place we’ve presence to our shifting. we’re to of Well, you’ll in commercial and the And and revenues that

QX. continue what effect that you’re terms We’re seeing is muting in certainly And breakup, that the which helps there. us to of spring alluding of in

heavy frost to ground, Canada of here So very out Western as move in the comes the equipment. difficult

specifically and big gas So around we projects. equipment slow have on more services, but a any broadly, heavy oil movement period,

the other expand in into servicing push April who where – we the specifically we increasingly, as period. volume also U.S., And sectors seen have specifically as numbers in don’t we industrial movement factors in apply. we value. for LodgeLink the that in month show up So to those crew in have add logistics But

see year-over-year to business you’ll continuing the less on John, I’m breakup So the volumes. pronounced confident, that of pretty grow a effect see you’re LodgeLink a to going on and basis,

Toby Labrie

another an of right in give shaping put how up, and maybe way, you And John, was idea with April January is April to line much pretty February.

of gives happen hard we June, an but are what in that trending. at So will and how indicator to know May you least

John Gibson

will the I it. it Appreciate color. Got back. turn

Trevor Haynes

Nice, John.

Operator

Dalrymple Our comes Dalrymple next Please ahead. Finance. of go Keith question from

Keith Dalrymple

Hi.

a in might M&A You’ve little any have. in money multiples the like spoken creep the what’s industry competition pipeline little what and whether inflation an into in you deals chasing happening about of in multiples, more bit color give be with on or terms M&A and is beginning us from changes to a Could M&A it’s new driving asset perspective? for assets you

Trevor Haynes

for Keith. Thanks Yes. the question,

ex-M&A several the space rising key and multiples of sized framework MSS to within But acquirer years, being the consequence, that view I U.S. quite asset the to difficult consolidation market. far for We as we’ve the as as view also also compared have continue class a seen how guess, targets and there long-term for over period average, ourselves, as that during to fewer in and stay of from over but desire we’ve a of valuation, in a marketplace take of seen the these bit utilization the strategics it’s specifically fleets And cycles. time, as the consequence long-term to we the is improving value sector and seen positive. on within an last our performs certainly this it drivers

bit little out what of color a seeing So we’re there. of

to many we good we pipeline businesses. strong we have their of – However, have and to I continue a sell looking relationships, for think those are and

Keith Dalrymple

much. Great. That very was Thank you helpful.

Trevor Haynes

you. Thank

Operator

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

Trevor Haynes

the listening Thank us morning for joining you, you I conference call discussion. this everybody a joining day. and thank great hope the have operator to and you and you. Thank

Operator

concludes This conference call. today’s

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

Black Diamond Group Limited (BDIMF) 9 May 222022 Q1 Earnings call transcript