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, 2023 (the "Quarter") compared with the three and
nine months ended September 30, 2022 (the "Comparative
Quarter"). All financial figures are expressed in Canadian dollars.
Key Highlights from the
Third Quarter of
2023
- Consolidated rental revenue of
$39.5 million and Adjusted EBITDA1 of $36.6 million were
up 25% and 41% from the Comparative Quarter, respectively. This
represents the Company's highest quarterly rental revenue and
Adjusted EBITDA in a decade.
- The Company’s consolidated
contracted future rental revenue at the end of the Quarter was
$128.6 million, up $43.7 million or 51% from the
Comparative Quarter. Modular Space Solutions ("MSS") contracted
future rental revenue for units on rent was $99.7 million at
the end of the Quarter, up 54% from the Comparative Quarter.
Workforce Solutions ("WFS") contracted future rental revenue for
contracts in place was $28.9 million at the end of the Quarter, up
42% from the Comparative Quarter.
- MSS rental revenue for the Quarter
was a fourteenth consecutive record high at $22.0 million and
was up 19% from the Comparative Quarter. Adjusted EBITDA was an all
time record high at $22.2 million, and was up 31% from the
Comparative Quarter.
- MSS average monthly rental rate per
unit (excluding the impact from acquisitions made in 2022)
increased 13% from the Comparative Quarter (or 11% on a constant
currency basis).
- WFS rental revenue and Adjusted
EBITDA for the Quarter were $17.5 million and
$21.8 million, up 35% and 49% respectively from the
Comparative Quarter. WFS consolidated utilization of 68% continues
to trend higher and remains at the highest level observed in over
half a decade.
- LodgeLink net revenue grew 50% to a
record of $2.7 million from the Comparative Quarter,
generating record Net Revenue Margins1 of 12.7%. LodgeLink also
reported 109,898 room nights sold in the Quarter, a 16% increase
from the Comparative Quarter.
- Return on Assets1 for the Quarter
of 27.3% represents a meaningful premium over the Company's cost of
capital and was up 340 basis points from the Comparative
Quarter.
- Capital investment into organic
growth was $18.3 million, while maintenance capital for the
Quarter was $1.8 million. Rental asset additions have been
primarily deployed on projects with long-term contracts at rental
rates that meet or exceed the Company’s hurdle rates.
- Funds from Operations1 of
$39.2 million and Free Cashflow1 of $30.6 million were
each up 28% from the Comparative Quarter.
- Long-term debt and Net Debt were
$206.1 million and $200.8 million respectively at the end
of the Quarter. Continued positive Free Cashflow1 decreased
long-term debt and Net Debt by $20.8 million and
$18.1 million respectively since December 31, 2022. Net
Debt to trailing twelve month ("TTM") Adjusted Leverage EBITDA1 of
1.9x is now just below the Company's target range of 2.0x to 3.0x
while available liquidity was $126.0 million at the end of the
Quarter.
- Profit for the Quarter of
$13.6 million increased 51% from the Comparative Quarter.
- Subsequent to the end of the
Quarter, the Company increased its quarterly dividend per share
payout by 50% from $0.02 to $0.03. The Company declared a fourth
quarter dividend of $0.03 payable on or about January 15, 2024 to
shareholders of record on December 31, 2023. This is the third
dividend increase since dividends were reinstated in the fourth
quarter of 2021. Dividends are designated as "eligible dividends"
for Canadian income tax purposes.
OutlookThe strong financial and
operating results in the Quarter and YTD continue to demonstrate
the foundational strength and diversity of the Company’s platform.
The business continues to benefit from strong contract coverage,
supportive macro tailwinds, and a healthy pipeline of growth
opportunities in North America and Australia. Management remains
focused on growing the Company’s high margin, recurring rental
revenues through disciplined capital allocation and expects
continued momentum into 2024.
MSS set all-time records in both rental revenue
and Adjusted EBITDA1 driven by robust utilization, fleet growth and
a supportive rate environment. At the end of the Quarter, the MSS
segment reported an average rental duration of 50.4 months and
contracted forward rental revenue of approximately $100 million.
The Company continues to see particularly strong activity and
opportunities in its core education and infrastructure customer
segments and expects healthy demand for longer-duration rental
assets to drive continued rental revenue growth into 2024 and
beyond.
WFS performance has also continued to improve on
the back of years of successful efforts to diversify by geography
and end-market. Rental revenue and Adjusted EBITDA reached levels
not seen since 2014, improving 35% and 49%, respectively versus the
Comparative Quarter driven by improving consolidated utilization
and overall activity levels across North America and Australia.
Management is anticipating a moderation in rental revenue and
Adjusted EBITDA on a sequential, quarterly basis into early 2024 as
certain assets are redeployed from previous contracts that are
expected to result in a relatively flat rental revenue comparison
year over year relative to Q1 2023. The bid and sales pipeline
remains robust and management anticipates a return to sequential
growth in WFS in the latter half of 2024 as assets are redeployed
in a higher rental rate environment.
The Company continues to see positive momentum
in LodgeLink, with Gross Bookings1 and net revenue growing 27% and
50% from the Comparative Quarter, respectively. Net Revenue
Margins1 have also continued to improve and are up 170 basis points
from the Comparative Quarter reaching a record rate of 12.7%.
Management remains highly optimistic with respect to LodgeLink’s
future growth potential in an estimated $70 billion market. The
business continues to scale and service our 886 cumulative
corporate customers with the support of our supply partners that
represent 1.36 million rooms of capacity across North America.
From a financial standpoint, the Company
continues to deliver robust Free Cashflow1 that enabled the
repayment of $20.8 million of long-term debt in the first
nine-months of 2023, while also funding $49.1 million of
existing organic growth year to date. Currently, the Company’s
$126.0 million of available liquidity through an asset-based
lending facility provides ample financial flexibility to continue
investing through both organic and inorganic expansion
initiatives.
1 Adjusted EBITDA, Net Debt, Funds from
Operations, Gross Bookings and Free Cashflow are non-GAAP financial
measures. Return on Assets, Net Debt to TTM Adjusted Leverage
EBITDA and Net Revenue Margin are non-GAAP ratios. Refer to the
Non-GAAP Financial Measures section of this press release for more
information on each non-GAAP financial measure and ratios.
Third Quarter
2023 Financial Highlights
|
Three months ended September 30, |
Nine months ended September 30, |
($ millions, except as noted) |
2023 |
2022 |
Change |
2023 |
2022 |
Change |
Financial Highlights |
$ |
$ |
% |
$ |
$ |
% |
Total revenue |
117.5 |
95.9 |
23% |
290.1 |
235.5 |
23% |
Gross profit |
54.2 |
40.0 |
36% |
130.9 |
101.9 |
28% |
Administrative expenses |
17.5 |
14.0 |
25% |
50.3 |
39.8 |
26% |
Adjusted EBITDA(1) |
36.6 |
26.0 |
41% |
80.5 |
62.1 |
30% |
Adjusted EBIT(1) |
24.0 |
16.8 |
43% |
47.5 |
35.5 |
34% |
Funds from Operations (1) |
39.2 |
30.7 |
28% |
86.7 |
70.0 |
24% |
Per
share ($) |
0.65 |
0.52 |
25% |
1.44 |
1.18 |
22% |
Profit before income taxes |
18.7 |
13.5 |
39% |
32.0 |
26.7 |
20% |
Profit |
13.6 |
9.0 |
51% |
22.5 |
17.0 |
32% |
Earnings per share - Basic ($) |
0.22 |
0.15 |
47% |
0.37 |
0.29 |
28% |
Earnings per share - Diluted ($) |
0.22 |
0.15 |
47% |
0.37 |
0.28 |
32% |
Capital expenditures |
20.1 |
15.1 |
33% |
55.2 |
37.5 |
47% |
Property & equipment |
510.1 |
423.7 |
20% |
510.1 |
423.7 |
20% |
Total assets |
669.3 |
566.9 |
18% |
669.3 |
566.9 |
18% |
Long-term debt |
206.1 |
160.6 |
28% |
206.1 |
160.6 |
28% |
Cash and cash equivalents |
5.6 |
12.3 |
(54)% |
5.6 |
12.3 |
(54)% |
Return on Assets (%)(1) |
27.3% |
23.9% |
340 bps |
20.2% |
19.3% |
90 bps |
Free Cashflow(1) |
30.6 |
23.9 |
28% |
60.8 |
52.0 |
17% |
(1) Adjusted EBITDA, Adjusted EBIT, Funds from
Operations and Free Cashflow are non-GAAP financial measures.
Return on Assets is a non-GAAP ratio. Refer to the Non-GAAP
Financial Measures section of this press release for more
information on each non-GAAP financial measure and ratio. |
Additional Information
A copy of the Company's unaudited interim
condensed consolidated financial statements for the three and nine
months ended September 30, 2023 and 2022 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.sedarplus.ca) 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, MPA, Schiavi and CL Martin, 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. 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. The LodgeLink proprietary
digital platform enables customers to efficiently find, book, and
manage their crew travel and accommodation needs through a rapidly
growing network of hotel, remote lodge, and travel partners.
LodgeLink exists to solve the unique challenges associated with
crew travel and applies technology to eliminate inefficiencies at
every step of the crew travel process from booking, to management,
to payments, to cost reporting.
Learn more at www.blackdiamondgroup.com.
For investor inquiries please contact Jason Zhang at
403-206-4739 or investor@blackdiamondgroup.com.
Conference Call
Black Diamond will hold a conference call and
webcast at 9:00 a.m. MT (11:00 a.m. ET) on Friday, November 3,
2023. CEO Trevor Haynes and CFO Toby LaBrie will discuss Black
Diamond’s financial results for the Quarter and then take questions
from investors and analysts.
To access the conference call by telephone dial toll free
1-800-319-4610. International callers should use 1-604-638-5340.
Please connect approximately 10 minutes prior to the beginning of
the call.
To access the call via webcast, please log into
the webcast link 10 minutes before the start time at:
https://www.gowebcasting.com/12921
Following the conference call, a replay will be available on the
Investor Centre section of the Company’s website at
www.blackdiamondgroup.com, under Presentations & Events.
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 2023 capital plan, how such capital will be
expended, expectations for asset sales, timing, payment and
increase of the Company's quarterly dividend, management's
assessment of Black Diamond's future operations and what may have
an impact on them, opportunities and effect of deploying investment
capital, financial performance, business prospects and
opportunities, changing operating environment including changing
activity levels, effects on demand and performance based on the
changing operating environment, amount of revenue anticipated to be
derived from current contracts, anticipated debt levels, liquidity
sources and needs, economic life of the Company's assets, future
growth and profitability of the Company, future revenue and
realization of the anticipated benefits of acquisitions and sales.
With respect to the forward-looking statements in this news
release, Black Diamond has made assumptions regarding, among other
things: future commodity prices, that Black Diamond will continue
to raise sufficient capital to fund its business plans in a manner
consistent with past operations, that counterparties 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: volatility of industry conditions,
dependence on agreements and contracts, competition, credit risk,
information technology systems and cyber security, vulnerability to
market changes, operating risks and insurance, weakness in
industrial construction and infrastructure developments, weakness
in natural resource industries, access to additional financing,
dependence on suppliers and manufacturers, reliance on key
personnel, and workforce availability. 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, 2022
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 specified financial measures and ratios have
been disclosed: Adjusted EBITDA, Adjusted EBIT, Funds from
Operations, Net Debt, Net Debt to TTM Adjusted Leverage EBITDA,
Return on Assets, Net Revenue Margin, Adjusted EBITDA as % of
Revenue, Gross Bookings and Free Cashflow. These non-GAAP and other
financial measures do not have any standardized meaning prescribed
under International Financial Reporting Standards ("IFRS") and
therefore may not be comparable to similar measures presented by
other entities. 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.
Adjusted EBITDA is not a measure recognized
under IFRS and does not have standardized meanings prescribed by
IFRS. Adjusted EBITDA refers to consolidated earnings before
finance costs, tax expense, depreciation, amortization, accretion,
foreign exchange, share-based compensation, acquisition costs,
non-controlling interests, share of gains or losses of an
associate, write-down of property and equipment, impairment,
restructuring costs, and gains or losses on the sale of non-fleet
assets in the normal course of business.
Black Diamond uses Adjusted EBITDA primarily as
a measure of operating performance. Management believes that
operating performance, as determined by Adjusted EBITDA, is
meaningful because it presents the performance of the Company's
operations on a basis which excludes the impact of certain non-cash
items as well as how the operations have been financed. In
addition, management presents Adjusted EBITDA because it considers
it to be an important supplemental measure of the Company's
performance and believes this measure is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in industries with similar capital
structures.
Adjusted EBITDA has limitations as an analytical
tool, and readers should not consider this item in isolation, or as
a substitute for an analysis of the Company's results as reported
under IFRS. Some of the limitations of Adjusted EBITDA are:
- Adjusted EBITDA excludes certain
income tax payments and recoveries that may represent a reduction
or increase in cash available to the Company;
- Adjusted EBITDA does not reflect
the Company's cash expenditures, or future requirements, for
capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect
changes in, or cash requirements for, the Company's working capital
needs;
- Adjusted EBITDA does not reflect
the significant interest expense, or the cash requirements
necessary to service interest payments on the Company's debt;
- depreciation and amortization are
non-cash charges, thus the assets being depreciated and amortized
will often have to be replaced in the future and Adjusted EBITDA
does not reflect any cash requirements for such replacements;
and
- other companies in the industry may
calculate Adjusted EBITDA differently than the Company does,
limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA
should not be considered as a measure of discretionary cash
available to invest in the growth of the Company's business. The
Company compensates for these limitations by relying primarily on
the Company's IFRS results and using Adjusted EBITDA only on a
supplementary basis. A reconciliation to profit, the most
comparable GAAP measure, is provided below.
Adjusted EBIT is Adjusted
EBITDA less depreciation and amortization. Black Diamond uses
Adjusted EBIT primarily as a measure of operating performance.
Management believes that Adjusted EBIT is a useful measure for
investors when analyzing ongoing operating trends. There can be no
assurances that additional special items will not occur in future
periods, nor that the Company's definition of Adjusted EBIT is
consistent with that of other companies. As such, management
believes that it is appropriate to consider both profit determined
on a GAAP basis as well as Adjusted EBIT. A reconciliation to
profit, the most comparable GAAP measure, is provided below.
Adjusted EBITDA as a % of
Revenue is calculated by dividing Adjusted EBITDA by total
revenue for the period. Black Diamond uses Adjusted EBITDA as a %
of Revenue primarily as a measure of operating performance.
Management believes this ratio is an important supplemental measure
of the Company's performance and believes this measure is
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in industries
with similar capital structures.
Return on Assets is calculated
as annualized Adjusted EBITDA divided by average net book value of
property and equipment. Annualized Adjusted EBITDA is calculated by
multiplying Adjusted EBITDA for the Quarter and Comparative Quarter
by an annualized multiplier. Management believes that Return on
Assets is a useful financial measure for investors in evaluating
operating performance for the periods presented. When read in
conjunction with our profit and property and equipment, two GAAP
measures, this non-GAAP ratio provides investors with a useful tool
to evaluate Black Diamond's ongoing operations and management of
assets from period-to-period.
Reconciliation of Consolidated Profit to Adjusted
EBITDA, Adjusted EBIT, Adjusted EBITDA as a % of Revenue and Return
on Assets:
|
Three months ended September 30, |
Nine months ended September 30, |
($ millions, except as noted) |
2023 |
2022 |
Change % |
2023 |
2022 |
Change % |
Profit (1) |
13.6 |
9.0 |
51% |
22.5 |
17.0 |
32% |
Add: |
|
|
|
|
|
|
Depreciation and amortization (1) |
12.6 |
9.2 |
37% |
33.0 |
26.6 |
24% |
Finance costs (1) |
3.7 |
2.1 |
76% |
10.4 |
5.3 |
96% |
Share-based compensation (1) |
1.6 |
1.3 |
23% |
5.1 |
3.6 |
42% |
Non-controlling interests (1) |
0.3 |
0.5 |
(40)% |
0.9 |
1.5 |
(40)% |
Current income taxes (1) |
— |
— |
—% |
0.1 |
0.4 |
(75)% |
Deferred income taxes (1) |
4.8 |
3.9 |
23% |
8.5 |
7.7 |
10% |
Adjusted EBITDA (1) |
36.6 |
26.0 |
41% |
80.5 |
62.1 |
30% |
Less: |
|
|
|
|
|
|
Depreciation and amortization |
12.6 |
9.2 |
37% |
33.0 |
26.6 |
24% |
Adjusted EBIT |
24.0 |
16.8 |
43% |
47.5 |
35.5 |
34% |
|
|
|
|
|
|
|
Total
revenue |
117.5 |
95.9 |
23% |
290.1 |
235.5 |
23% |
Adjusted EBITDA as a % of Revenue |
31.1% |
27.1% |
400 bps |
27.7% |
26.4% |
130 bps |
|
|
|
|
|
|
|
Annualized multiplier |
4 |
4 |
|
1.3 |
1.3 |
|
Annualized adjusted EBITDA |
146.4 |
104.0 |
41% |
104.7 |
80.7 |
30% |
Average
net book value of property and equipment |
535.9 |
431.3 |
24% |
531.6 |
426.3 |
25% |
Return on Assets |
27.3% |
23.9% |
340 bps |
20.2% |
19.3% |
90 bps |
(1) Sourced from the Company's unaudited interim
condensed consolidated financial statements for the three and nine
months ended September 30, 2023 and 2022. |
Net Debt to TTM
Adjusted Leverage EBITDA is a non-GAAP financial ratio
which is calculated as Net Debt divided by trailing twelve months
Adjusted Leverage EBITDA. Net Debt, a non-GAAP
financial measure, is calculated as long-term debt minus cash and
cash equivalents. A reconciliation to long-term debt, the most
comparable GAAP measure, is provided below. Net Debt and Net Debt
to TTM Adjusted Leverage EBITDA removes cash and cash equivalents
from the Company's debt balance. Black Diamond uses this ratio
primarily as a measure of operating performance. Management
believes this ratio is an important supplemental measure of the
Company's performance and believes this measure is frequently used
by securities analysts, investors and other interested parties in
the evaluation of companies in industries with similar capital
structures. In the quarter ended June 30, 2022, Net Debt to TTM
Adjusted EBITDA was renamed Net Debt to TTM Adjusted Leverage
EBITDA, to provide further clarity on the composition of the
denominator to include pre-acquisition estimates of EBITDA from
business combinations. Management believes including the additional
information in this calculation helps provide information on the
impact of trailing operations from business combinations on the
Company's leverage position.
Reconciliation of Consolidated Profit to
Adjusted EBITDA, Net Debt and Net Debt to TTM Adjusted Leverage
EBITDA:
($ millions, except as noted) |
2023 |
2023 |
2023 |
2022 |
2022 |
2022 |
2022 |
2021 |
Change |
|
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
|
Profit |
13.6 |
4.6 |
4.4 |
9.4 |
9.0 |
4.0 |
4.0 |
10.7 |
|
Add: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
12.6 |
10.6 |
9.8 |
8.6 |
9.2 |
8.8 |
8.6 |
8.9 |
|
Acquisition costs |
— |
— |
— |
1.2 |
— |
— |
— |
— |
|
Finance costs |
3.7 |
3.7 |
2.9 |
3.6 |
2.1 |
1.7 |
1.5 |
1.7 |
|
Share-based compensation |
1.6 |
1.3 |
2.2 |
1.3 |
1.3 |
1.1 |
1.2 |
1.0 |
|
Non-controlling interests |
0.3 |
0.3 |
0.3 |
0.4 |
0.5 |
0.5 |
0.5 |
0.4 |
|
Current income taxes |
— |
0.1 |
— |
0.1 |
— |
0.4 |
— |
0.1 |
|
Gain on sale of real estate assets |
— |
— |
— |
— |
— |
— |
— |
(0.7) |
|
Deferred income taxes |
4.8 |
1.9 |
1.8 |
3.7 |
3.9 |
1.7 |
2.1 |
(4.6) |
|
Impairment reversal |
— |
— |
— |
(6.3) |
— |
— |
— |
— |
|
Adjusted EBITDA |
36.6 |
22.5 |
21.4 |
22.0 |
26.0 |
18.2 |
17.9 |
17.5 |
|
Acquisition pro-forma adjustments(1) |
— |
— |
— |
0.5 |
2.3 |
2.2 |
1.5 |
— |
|
Adjusted Leverage EBITDA |
36.6 |
22.5 |
21.4 |
22.5 |
28.3 |
20.4 |
19.4 |
17.5 |
|
|
|
|
|
|
|
|
|
|
|
TTM Adjusted Leverage
EBITDA |
103.0 |
|
|
|
85.6 |
|
|
|
20% |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
206.1 |
|
|
|
160.6 |
|
|
|
28% |
Cash and cash equivalents |
5.6 |
|
|
|
12.3 |
|
|
|
(54)% |
Current
portion of long term debt (2) |
0.3 |
|
|
|
— |
|
|
|
100% |
Net Debt |
200.8 |
|
|
|
148.3 |
|
|
|
35% |
Net Debt to TTM Adjusted Leverage EBITDA |
1.9 |
|
|
|
1.7 |
|
|
|
12% |
(1) Includes pro-forma pre-acquisition EBITDA
estimates as if the acquisition that occurred in the fourth quarter
2022, occurred on January 1, 2022. |
(2) Current portion of long-term debt relating to
the payments due within one year on the bank term loans assumed as
part of the acquisition in the fourth quarter of 2022. |
Funds from Operations is
calculated as the cash flow from operating activities, the most
comparable GAAP measure, excluding the changes in non-cash working
capital. Management believes that Funds from Operations is a useful
measure as it provides an indication of the funds generated by the
operations before working capital adjustments. Changes in long-term
accounts receivables and non-cash working capital items have been
excluded as such changes are financed using the operating line of
Black Diamond's credit facilities. A reconciliation to cash flow
from operating activities, the most comparable GAAP measure, is
provided below.
Free Cashflow is calculated as
Funds from Operations minus maintenance capital, net interest paid
(including lease interest), payment of lease liabilities, net
current income tax expense (recovery), distributions declared to
non-controlling interest, dividends paid on common shares and
dividends paid on Preferred Shares plus net current income taxes
received (paid). Management believes that Free Cashflow is a useful
measure as it provides an indication of the funds generated by the
operations before working capital adjustments and other items noted
above. Management believes this metric is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in industries with similar capital
structures. A reconciliation to cash flow from operating
activities, the most comparable GAAP measure, is provided
below.
Reconciliation of Cash Flow from
Operating Activities to Funds from Operations and Free
Cashflow:
|
Three months ended September 30, |
Nine months ended September 30, |
($ millions, except as noted) |
2023 |
2022 |
Change |
2023 |
2022 |
Change |
|
|
|
|
|
|
|
Cash Flow from Operating
Activities (1) |
33.5 |
27.3 |
23% |
97.9 |
64.4 |
52% |
Add/(Deduct): |
|
|
|
|
|
|
Change in other long term assets (1) |
0.5 |
(2.5) |
120% |
0.1 |
(0.7) |
114% |
Changes in non-cash operating working capital (1) |
5.2 |
5.9 |
(12)% |
(11.3) |
6.3 |
(279)% |
Funds from Operations |
39.2 |
30.7 |
28% |
86.7 |
70.0 |
24% |
Add/(deduct): |
|
|
|
|
|
|
Maintenance capital |
(1.8) |
(1.9) |
5% |
(6.1) |
(5.0) |
(22)% |
Payment for lease liabilities |
(2.0) |
(1.7) |
(18)% |
(5.7) |
(4.9) |
(16)% |
Interest paid (including lease interest) |
(3.6) |
(2.1) |
(71)% |
(10.0) |
(5.1) |
(96)% |
Net current income tax expense |
— |
— |
—% |
0.1 |
0.4 |
(75)% |
Dividends paid on common shares |
(1.2) |
(0.9) |
(33)% |
(3.6) |
(2.5) |
(44)% |
Distributions paid to non-controlling interests |
— |
(0.1) |
100% |
(0.6) |
(0.5) |
(20)% |
Dividends paid on Preferred Shares |
— |
(0.1) |
100% |
— |
(0.4) |
100% |
Free Cashflow |
30.6 |
23.9 |
28% |
60.8 |
52.0 |
17% |
(1) Sourced from the Company's unaudited interim
condensed consolidated financial statements for the three and nine
months ended September 30, 2023 and 2022. |
Gross Bookings, a non-GAAP
measure, is total revenue billed to the customer which includes all
fees and charges. Net revenue, a GAAP measure, is Gross Bookings
less costs paid to suppliers. Revenue from bookings at third party
lodges and hotels through LodgeLink are recognized on a net revenue
basis. LodgeLink is an agent in the transaction as it is not
responsible for providing the service to the customer and does not
control the service provided by a supplier. Management believes
this ratio is an important supplemental measure of LodgeLink's
performance and cash generation and believes this ratio is
frequently used by interested parties in the evaluation of
companies in industries with similar forms of revenue
generation.
Net Revenue Margin is
calculated by dividing net revenue by Gross Bookings for the
period. Management believes this ratio is an important supplemental
measure of LodgeLink's performance and profitability and believes
this ratio is frequently used by interested parties in the
evaluation of companies in industries with similar forms revenue
generation where companies act as agents in transactions.
Reconciliation of Net Revenue to Gross Bookings and Net
Revenue Margin:
|
Three months ended September 30, |
Nine months ended September 30, |
($ millions, except as noted) |
2023 |
2022 |
Change |
2023 |
2022 |
Change |
Net revenue(1) |
2.7 |
1.8 |
50% |
7.2 |
4.3 |
67% |
Costs
paid to suppliers(1) |
18.1 |
14.6 |
24% |
51.6 |
34.9 |
48% |
Gross Bookings(1) |
20.8 |
16.4 |
27% |
58.8 |
39.2 |
50% |
Net Revenue Margin |
12.7% |
11.0% |
170 bps |
12.2% |
11.0% |
120 bps |
(1) Includes intercompany transactions. |
Readers are cautioned that the non-GAAP measures
are not alternatives to measures under IFRS and should not, on
their own, be construed as an indicator of Black Diamond's
performance or cash flows, a measure of liquidity or as a measure
of actual return on the shares of Black Diamond. These non-GAAP
measures should only be used in conjunction with the consolidated
financial statements of Black Diamond.
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