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 twelve months ended
December 31, 2020 (the "Quarter") compared with the three and
twelve months ended December 31, 2019 (the "Comparative
Quarter"). All financial figures are expressed in Canadian dollars.
In the fourth quarter of 2020, Black Diamond
reported consolidated revenue of $56.3 million, Adjusted EBITDA of
$11.1 million, and core rental revenue of $18.1 million.
Key Highlights from the Fourth Quarter
of 2020
- Generated consolidated revenue of $56.3 million and Adjusted
EBITDA of $11.1 million, up 19% and 4% from the Comparative Quarter
respectively.
- Closed the acquisition of Vanguard
Modular Building Systems ("Vanguard") for US$58.7 million, plus
~US$3 million for deferred receivables for total purchase price
consideration of US$61.8 million and an increase in the credit
facility from $200.0 million to $300.0 million.
- Received approval for a funding grant from the Opportunity
Calgary Investment Fund of up to $3 million towards continued
growth of LodgeLink, the Company’s digital platform for crew
travel.
- Announced a 2021 gross capital plan of ~$35 million ($25 to $30
million net), with roughly $25 to $30 million anticipated for
ongoing organic growth of the Modular Space Solutions ("MSS")
segment.
- MSS rental revenue of $11.3 million was the fourth consecutive
quarterly record and grew 31% from the Comparative Quarter.
- MSS Adjusted EBITDA of $10.0 million was a quarterly record and
increased 49% from the Comparative Quarter.
- MSS rental fleet grew to 8,784, up 43% from the Comparative
Quarter, while utilization held steady and average rental rates
increased 6%.
- LodgeLink room bookings set another quarterly record and grew
49% to ~36,000 room nights.
- There was no contribution from the Canadian Emergency Wage
Subsidy during the Quarter.
- Subsequent to the Quarter the Company:
- Increased Workforce Solutions ("WFS") contracted revenue by
over $36 million, inclusive of rental and non rental revenue.
- Renewed its Normal Course Issuer Bid.
Executive Summary
The MSS segment has continued to grow its
recurring, rental-revenue due to ongoing fleet growth,
strengthening rental rates, stable utilization and increased
ancillary rentals through Value Added Products and Services
("VAPS"). Rental revenue in the Quarter grew to a quarterly record
of $11.3 million, up 31% versus the Comparative Quarter. MSS
revenue of $31.4 million was up 47% versus the Comparative Quarter
primarily due to higher revenue from rental and non-rental sources.
Adjusted EBITDA of $10.0 million was a quarterly record and
increased 49% from the Comparative Quarter. Results for the Quarter
included one month of contribution from Vanguard.
The Company’s WFS business unit generated
Adjusted EBITDA of $4.3 million, a 39% decrease versus the
Comparative Quarter. WFS revenue of $24.9 million was down 4% from
the Comparative Quarter primarily due to lower sales, and rental
revenue in its US Energy and Lodging businesses caused in large
part by weak industry conditions brought on by COVID-19.
At the end of the Quarter, Net Debt of $172.0
million was up from $111.3 million in Q3 2020 primarily due to the
acquisition of Vanguard. Excess borrowing capacity under the
Company’s asset-based credit facility was approximately $84.3
million and the value of eligible rental inventory used to
calculate the Company’s borrowing base was approximately $292
million at the end of the Quarter.
Outlook
Fourth Quarter 2020 results reflect continued
growth and diversification of the overall business as the Company
remains focused on growing its recurring rental-revenue stream
across the platform.
The Company is encouraged with the performance
of its MSS segment which saw rental revenue set a fourth
consecutive quarterly record high. This was driven by organic
growth within the existing platform as well as one month of
contribution from the acquisition of Vanguard. The outlook for the
MSS segment remains positive as the rental business proved to be
resilient throughout 2020 and continues to see opportunities for
deployment of additional growth capital across North America and
through the recently acquired Vanguard platform. Utilization is
anticipated to stay consistent with levels observed over the last
several quarters while rental revenues should see continued growth
through ongoing fleet additions, VAPS growth and rental rate
increases.
The Company's WFS segment continues to see an
active pipeline as the backlog of contracted total revenue in the
division has increased by more than $36 million since the start of
2021. This includes the recently announced Australian contract for
$16 million, further change orders related to assets in support of
the Coastal GasLink pipeline construction of approximately $12
million as well as additional sales and rental projects in Eastern
Canada. Total contracted WFS revenue associated with the Coastal
GasLink project (including Sukunka River Lodge) is approximately
$65 million, with approximately $40 million yet to be billed.
Previously deferred rental projects are also expected to see a
measured restart in the coming quarters. While occupancy levels and
utilization in both the operated lodges and U.S. wellsite business
have been soft since the start of the COVID-19 pandemic, there is a
line of sight to a gradual recovery depending on the pace with
which COVID-19 restrictions continue to ease. The large format
accommodations fleet has also continued to benefit from
diversification efforts, with over 1,000 beds on rent in Eastern
Canada. The Company sees continued opportunities for additional
asset deployment in this region. WFS Australia continues to build
on strong momentum over the last several quarters with a recent,
sizable contract win which will further contribute to ongoing
diversification of revenue within the broader WFS segment.
On October 1, 2020, the Company announced that,
in partnership with the Nova Scotia Mi’kmaq Communities, it had
received a Letter of Award from the proponent of the Goldboro LNG
Facility for approximately $720 million to provide a workforce
lodge in support of the Goldboro LNG Project. Currently, a final
investment decision for the project is estimated to be announced on
or before June 30, 2021, by the project proponent, which continues
to work through various approvals and financing conditions. Should
the project go ahead, Black Diamond expects a meaningful increase
to existing camp rental utilization levels over the term of the
contract, which is currently anticipated to be in the range of four
years.
LodgeLink, Black Diamond’s digital marketplace
platform for workforce travel and accommodation has continued to
have a strong uptake with new and existing customer and suppliers.
Despite an expected fourth quarter holiday slow-down and ongoing
headwinds for travel services related to COVID-19, LodgeLink set a
quarterly record in volumes with ~36,000 room nights booked in the
Quarter. At the end of the Quarter, LodgeLink had 582 unique
corporate customers on the platform with ~2,500 properties listed
representing approximately ~242,000 rooms.
Fourth Quarter 2020 Financial Highlights
|
Three months ended December 31, |
(in millions, except where noted) |
2020 |
2019 |
Change |
|
$ |
$ |
|
Revenue |
|
|
|
Modular Space Solutions |
31.4 |
21.4 |
47% |
Workforce Solutions |
24.9 |
25.9 |
(4)% |
Total Revenue |
56.3 |
47.3 |
19% |
|
|
|
|
Total Adjusted
EBITDA |
11.1 |
10.7 |
4% |
|
|
|
|
Funds from
Operations |
12.2 |
11.4 |
7% |
Per share
($) |
0.22 |
0.21 |
5% |
|
|
|
|
Loss |
(2.2) |
(2.5) |
12% |
Loss per share - Basic
and diluted |
(0.04) |
(0.05) |
20% |
|
|
|
|
Capital
expenditures |
5.0 |
7.8 |
(36)% |
|
|
|
|
Property &
equipment (NBV) |
410.0 |
327.5 |
25% |
Total
assets |
511.9 |
422.6 |
21% |
Long-term
debt |
175.7 |
102.4 |
72% |
Cash and cash equivalents |
3.7 |
4.3 |
(14)% |
Additional Information
A copy of the Company's audited consolidated
financial statements of the Company for the years ended
December 31, 2020 and 2019 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
AdvisoryForward-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 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 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 twelve
month periods ended December 31, 2020 filed on SEDAR.
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