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, 2019 (the "Quarter") compared with the three and
nine months ended September 30, 2018 (the "Comparative
Quarter"). All financial figures are expressed in Canadian dollars.
- Consolidated rental revenue increased to $17.4 million, up 35%
from the Comparative Quarter.
- Modular Space Solutions ("MSS") revenue increased by 36% to
$22.2 million, with rental revenue up 19% from the Comparative
Quarter.
- Workforce Solutions ("WFS") revenue increased to $23.7 million,
up 16% from the Comparative Quarter. Rental revenue increased 56%
in the Quarter, from the Comparative Quarter.
- On October 31, 2019, Black Diamond closed a new $200 million
four-year secured asset-based credit facility ("ABL Credit
Facility").
In the third quarter of 2019, Black Diamond reported revenue of
$45.9 million, up 25% from the Comparative Quarter. Revenue
generated from outside of the western Canadian energy resource
sector remained consistent at approximately 65% in the Quarter.
Adjusted EBITDA of $10.5 million increased 128% from Comparative
Quarter Adjusted EBITDA of $4.6 million. Adjusted EBITDA was
positively impacted by $1.2 million due to the adoption of IFRS
16.
Key Highlights from the Third Quarter of
2019
For the Quarter, MSS Adjusted EBITDA of $7.3 million increased
74% from $4.2 million in the Comparative Quarter. The increase in
EBITDA is attributed to the business unit's growing rental and
non-rental revenue along with a positive $0.7 million impact from
IFRS 16. As of September 30, 2019, the MSS fleet increased to 6,122
units, up approximately 5% from 5,813 units at December 31,
2018.
In the WFS business unit, Adjusted EBITDA for the Quarter was
$6.1 million, up 110% from the Comparative Quarter due to changes
in revenue mix and stronger rental margins attributed to higher
fleet utilization. Adjusted EBITDA was also positively impacted by
$0.5 million from IFRS 16. Subsequent to the Quarter, the Company
completed mobilization of just over half of the assets related to
the Sukunka River Lodge, a $45 million full turnkey project which
will support construction of the Coastal GasLink Pipeline.
At the end of the Quarter, Net Debt was consistent at $93.8
million as compared to $93.5 million at June 30, 2019. Black
Diamond spent $7.5 million on capital expenditures for the Quarter,
up from $4.1 million in the Comparative Quarter. With $25.8
million spent on capital for the YTD and planned expenditures for
the fourth quarter of 2019, the Company is trending towards its $35
million gross capital plan.
Subsequent to the Quarter, Black Diamond announced a new $200
million ABL Credit Facility which replaced the Company's current
debt structure. The ABL Credit Facility provides the Company with
increased liquidity and financial flexibility to continue to invest
in the growth of the MSS business, while also lowering borrowing
costs. As part of the ABL Credit Facility set-up process, an
independent third-party appraisal of the MSS and Energy Services
assets was commissioned. The assets were appraised at a Net Orderly
Liquidation Value ("NOLV") of $180 million. This NOLV is
approximately equal to the current net book value of these assets
on the Company's balance sheet, and represents approximately half
of Black Diamond’s total capital assets by net book value.
Outlook
Third quarter results reflect continued strong growth in the
Company's MSS business unit, with increasing rental revenue and
robust utilization rates throughout all regions. During the
Quarter, the MSS segment sold 77 units from the rental fleet due
mostly to a project opportunity, and therefore, net fleet growth
during the Quarter was lower than anticipated. In the Quarter,
capital spending for MSS reflects increased refurbishment capital
to put previously idle units to work at higher returns than
purchasing new units. While the outlook for the balance of the year
remains constructive, the Company expects some typical annual
seasonality to affect certain of the northern MSS geographies. On
an annual basis, the Company expects to deliver significant MSS
EBITDA growth as well as continued growth in the MSS fleet. With
the addition of the ABL Credit Facility, the Company expects to
achieve its long-term growth strategy of increasing the fleet count
on average by 10% per year.
In the WFS business unit, rental revenue increased in the
Quarter from a variety of projects, providing Black Diamond with
customer and geographical diversification. We expect this trend to
continue into the fourth quarter. During the Quarter, as part of
the phased project plan, just over half of the contracted assets
were installed at the Sukunka River Lodge, while the Company also
realized full rental contribution from the previously announced
California project. However, lodging activity remained muted in the
Quarter and is anticipated to remain so through the fourth quarter.
In Australia, year-to-date revenue and activity levels continue to
remain strong and management expects this momentum to continue into
the fourth quarter as the region puts new and existing capital to
work. Utilization in the Energy Services business, in both Canada
and the US has held steady but macro-economic conditions remain
challenging.
The Company's digital marketplace for workforce accommodation,
LodgeLink, continued to gain traction with customers and suppliers
during the Quarter. LodgeLink now has approximately 900 properties
listed, representing over 100,000 rooms of capacity within
workforce lodges and hotels across Canada and the US. LodgeLink has
over 400 unique corporate customers and is experiencing the most
success with small crews of highly transient workers.
The Company is continuing to execute on its long-range vision of
growth in its diversified MSS operations, while remaining
disciplined with capital allocation to ensure return on asset
hurdles are being met. The WFS business, while somewhat challenged
in some areas, has also continued to evolve throughout 2019 with
more diverse cash flow streams coming from different geographies,
customers, and product lines. WFS utilization levels have improved
modestly from historically lows, and could improve further as a
number of sizable infrastructure projects could change the
supply/demand fundamentals in the Company's camps rental business.
With the recently announced ABL Credit Facility in place, the
Company is well-positioned to advance its long-term growth
strategies, while lowering borrowing costs and maintaining
conservative debt levels.
Third Quarter 2019 Financial Highlights
|
Three months ended September 30, |
(in millions, except where noted) |
2019 |
2018 |
Change |
|
$ |
$ |
|
Revenue |
|
|
|
Modular Space Solutions |
22.2 |
16.3 |
36 |
% |
Workforce Solutions |
23.7 |
20.5 |
16 |
% |
Total
Revenue |
45.9 |
36.8 |
25 |
% |
|
|
|
|
Total Adjusted
EBITDA |
10.5 |
4.6 |
128 |
% |
|
|
|
|
Funds from Operations |
13.3 |
9.5 |
40 |
% |
Per share ($) |
0.24 |
0.17 |
41 |
% |
|
|
|
|
Loss |
(0.3) |
(4.7) |
(94 |
)% |
Loss per share - Basic and diluted |
— |
(0.09) |
(100 |
)% |
|
|
|
|
Capital expenditures |
7.5 |
4.1 |
83 |
% |
|
|
|
|
Property & equipment (NBV) |
331.2 |
340.5 |
(3 |
)% |
Total assets |
419.7 |
390.5 |
7 |
% |
Long-term
debt |
96.8 |
83.6 |
16 |
% |
Additional Information
A copy of the Company's unaudited interim condensed consolidated
financial statements for the three and nine month periods ended
September 30, 2019 and 2018 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, 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 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.
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
StatementsCertain 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 2019
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 increased activity levels, 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 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, 2018 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 MeasuresIn this news release, the
following terms have been referenced: Adjusted EBITDA, Funds from
Operations and Net Debt. 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 month
periods ended September 30, 2019 filed on SEDAR.
Black Diamond (TSX:BDI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Black Diamond (TSX:BDI)
Historical Stock Chart
From Apr 2023 to Apr 2024