Black Diamond logo

BDI - Black Diamond News Story

C$3.97 0.2  3.9%

Last Trade - 8:54pm

Sector
Consumer Cyclicals
Size
Small Cap
Market Cap £129.1m
Enterprise Value £250.1m
Revenue £104.2m
Position in Universe 631st / 2712

Black Diamond Reports Third Quarter 2020 Results

Wed 4th November, 2020 12:17am
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20201104:nGNX5S0jkt


CALGARY, Alberta, Nov. 03, 2020 (GLOBE NEWSWIRE) -- 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, 2020 (the "Quarter") compared with the three and nine
months ended September 30, 2019 (the "Comparative Quarter"). All financial
figures are expressed in Canadian dollars.

In the third quarter of 2020, Black Diamond reported consolidated revenue of
$41.2 million, Adjusted EBITDA of $9.8 million, and core rental revenue of
$15.9 million.

Key Highlights from the Third Quarter of 2020
* Subsequent to the end of the Quarter, Workforce Solutions ("WFS") received a
$720 million conditional Letter of Award to support construction of the
Goldboro LNG project in Nova Scotia.
* Subsequent to the end of the Quarter, won a new rental-only contract in WFS
associated with a pipeline project for $6.4 million over a 30 month term,
with rent beginning in mid-November. 
* Generated consolidated Adjusted EBITDA of $9.8 million in the Quarter.
* Modular Space Solutions ("MSS") rental revenue of $9.9 million was another
quarterly record and grew 13% from the Comparative Quarter.
* MSS rental fleet grew to 6,660 units, or 9% from the Comparative Quarter
while utilization held steady and average rental rates increased 8%.
* LodgeLink room bookings set a quarterly record and grew 129% to ~32,000 room
nights.
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
$9.9 million, up 13% versus the Comparative Quarter.  MSS revenue of
$23.9 million was up 8% versus the Comparative Quarter as a Sales revenue
decline of 29% from the Comparative Quarter was offset by Non-rental revenue
growth of 30% from the Comparative Quarter.  Adjusted EBITDA of $7.8 million
was a quarterly record and increased 7% from the Comparative Quarter, while
Adjusted EBITDA margin of 33% from the Comparative Quarter was unchanged.

The Company's WFS business unit generated Adjusted EBITDA of $4.5 million, a
26% decrease versus the Comparative Quarter.  WFS revenue of $17.3 million
was down 27% from the Comparative Quarter primarily due to lower occupancy and
utilization in the Company’s Lodging and Energy Services businesses
respectively.  Australian operations remained strong, with revenue up 6% from
the Comparative Quarter, providing a modest offset to the decrease in
consolidated revenue. 

On January 15, 2020 Black Diamond announced TSX approval of a Normal Course
Issuer Bid ("NCIB").  Over a 12-month period, the Company may, in the normal
course, purchase up to 4,180,249 Common Shares (10% of the public float of
common shares) in the capital of the Company ("Common Shares"). Since the
implementation of the NCIB, the Company has purchased 328,600 shares at an
average price of $1.26.

At the end of the Quarter, Net Debt of $111.3 million was up modestly from
$108.9 million in Q2 2020.  

Outlook

Throughout the first three quarters of 2020, consolidated EBITDA has been
essentially flat and has been muted by ongoing macro-economic factors
including the COVID-19 pandemic and consistently weak activity levels in
certain of the Company's WFS business lines.  However, Black Diamond has
continued to grow its recurring rental-revenue stream, particularly in the MSS
business, and is encouraged both by the relative health of this business unit
throughout the pandemic as well as its future growth prospects.  The WFS
segment, despite a challenged market in certain sectors has continued to hold
in reasonably well and continues to present meaningful operating leverage
through one of the largest mobile workforce accommodation fleets in North
America.  The Company is pleased with the MSS fleet and rental revenue growth
over the past year. Having invested close to $31 million over the first nine
months of the year, the Company expects sequentially lower capital investment
in Q4 2020, as the 2020 $35 million capital budget remains unchanged.  The
Company remains focused on maximizing free cash flow while executing on its
long-term strategic growth plans. 

The Company continues to execute on its diversification strategy, a result of
which is the setting of a third, consecutive, quarterly rental revenue record
within the MSS segment.  Management expects ongoing rental revenue growth
within this segment to be driven by fleet growth across the Company's North
American footprint. Utilization within the MSS business has remained steady,
despite broader macro-economic headwinds caused by COVID-19.   The current
expectation is for utilization levels to remain relatively consistent,
notwithstanding a slight seasonal slow-down through the holiday period at the
end of the Q4 2020.   Management anticipates that Sales revenue for customer
major projects within MSS will continue to be lower than normal given project
delays and uncertainty caused by the COVID-19 pandemic.   

The WFS Segment performance has on balance been flat, with continued strength
in Australia and modest improvement in camps rental utilization offset by
weakness in the lodging and energy services business lines as drilling and
completion activity remain at multi-year lows.  The Company continues to
execute on diversifying its existing WFS business and expects approximately
1,000 beds to be on rent in Eastern Canada by year-end on several mining
projects. The Company expects slightly lower Q4 2020 performance from the
lodging business as seasonal holidays impact occupancy.  Camp rental revenue
should improve modestly into 2021 on the back of newly awarded contracts,
while Australia remains robust with a constructive outlook.  

On October 1, 2020, the Company announced that, in partnership with the Nova
Scotia Mi’kmaq Communities, it had received a conditional Letter of Award
from the proponents of the Goldboro LNG Facility for approximately
$720 million to provide a workforce lodge in support of the Goldboro LNG
Project.   Currently, the contract is expected to begin on or before June
30, 2021, which is the anticipated date for a final investment decision by the
project proponent.   Black Diamond expects a significant 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 seen a healthy recovery in booking volumes as certain
regions have begun to open back up following COVID-19 travel restrictions that
were put in place throughout the second quarter. During the Quarter, LodgeLink
set a record high for room nights booked in a single month, while continuing
to grow unique customers and suppliers on the platform.  At the end of the
Quarter, LodgeLink had 545 unique customers signed onto the platform with
1,900 properties listed representing approximately 191,000 rooms.

Third Quarter 2020 Financial Highlights

                                     Three months ended  September 30,         
 (in millions, except where noted)   2020          2019          Change        
                                     $             $                           
 Revenue                                                                       
 Modular Space Solutions             23.9          22.2          8%            
 Workforce Solutions                 17.3          23.7          (27)%         
 Total Revenue                       41.2          45.9          (10 )%        
                                                                               
 Total Adjusted EBITDA               9.8           10.5          (7)%          
                                                                               
 Funds from Operations               8.6           13.3          (35)%         
 Per share ($)                       0.16          0.24          (35)%         
                                                                               
 Loss                                (0.7)         (0.3)         (133)%        
 Loss per share - Basic and diluted  (0.01)        —             —%            
                                                                               
 Capital expenditures                8.7           7.5           16%           
                                                                               
 Property & equipment (NBV)          347.4         331.2         5%            
 Total assets                        425.9         419.7         1%            
 Long-term debt                      113.8         96.8          18%           
 Cash and cash equivalents           2.5           3.0           (17)%         

Additional Information

A copy of the Company's unaudited interim condensed consolidated financial
statements for the three and nine months ended September 30, 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 Advisory
Forward-Looking Statements
Certain 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 2020 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, 2019 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 Measures
In 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, 2020 filed on SEDAR.


(https://www.globenewswire.com/NewsRoom/AttachmentNg/659a5e3f-2817-453a-a50e-9b13d6d1bfdc)



GlobeNewswire, Inc. 2020
© Stockopedia 2021, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.