GlobeNewswire
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, 2021 (the "Quarter") compared with the three and nine months ended September 30, 2020 (the "Comparative Quarter"). All financial figures are expressed in Canadian dollars.
In the third quarter of 2021, Black Diamond reported consolidated revenue of $108.8 million, Adjusted EBITDA of $19.7 million, and core rental revenue of $26.0 million.
Key Highlights from the Third Quarter of 2021
Executive Summary
MSS rental revenue set a seventh consecutive quarterly record and grew $5.4 million to $15.3 million, up 55% from the Comparative Quarter. Recurring rental-revenue growth in the MSS segment has been driven by continued fleet growth (both organic and through the acquisition of Vanguard Modular Building Systems ("Vanguard")), robust utilization and continued increases in average rental rates. Adjusted EBITDA of $12.5 million was also a quarterly record for the MSS segment and increased 60% from the Comparative Quarter.
WFS generated Adjusted EBITDA of $12.6 million, a 180% increase versus the Comparative Quarter. WFS revenue of $58.6 million was up 239% from the Comparative Quarter due to increased revenue in rental, lodging and non-rental revenue streams in both North America and Australia.
At the end of the Quarter, net debt of $159.5 million decreased from $172.0 million in Q4 2020. Excess borrowing capacity under the Company's asset-based credit facility (the "ABL Facility") was approximately $115.8 million (Q4 2020 - $84.4 million) and the appraised liquidation value used to calculate the Company's borrowing base was $294.8 million Q4 2020 - $291.5 million) at the end of the Quarter.
Outlook
Third quarter results reflect the Company's multi-year strategy to scale and diversify its platform. Recurring rental revenue growth of 64% across the Company was underpinned by strong utilization levels and rental rates in the MSS business, ongoing strength in WFS within both the Australian and North American markets, as improving fundamentals drive utilization.
The MSS segment set a seventh consecutive quarterly record in rental revenue. The macroeconomic backdrop remains attractive for the Company's MSS rental fleet, with utilization levels expected to remain strong amidst ongoing increases in average rental rate. Average rental rates in the Quarter across the MSS segment were up 9% year-over-year on a constant currency basis. The Company continues to prioritize capital investment opportunities that provide contracted cash flows at attractive returns. Notwithstanding a modest, seasonal pullback due to the holiday period in the fourth quarter, management expects utilization and rental revenue to remain strong. In the Quarter, the MSS segment generated record quarterly sales revenue driven primarily by operations in the U.S. While fourth quarter sales volumes are expected to remain comparatively strong on a year-over-year basis, the Company views the third quarter to be a high-water mark with respect to sales and non-rental revenue for 2021.
The WFS segment is expected to benefit from the Company's continued focus to diversify by end-market and geography, as well as continued strength in commodity prices as the pandemic abates. Several previously awarded contracts commenced operating during the Quarter, which is expected to result in steady utilization for the workforce accommodations assets throughout the fourth quarter and into 2022. The large increase in WFS non-rental revenue in the Quarter was driven by several projects across North America and Australia. Management expects a more normalized cadence of non-rental revenue for the remainder of the year. However, rental and sales revenues are expected to remain strong.
LodgeLink delivered its highest ever quarterly gross revenue and volume of room nights booked. Total gross bookings grew 98% to $10.1 million from the Comparative Quarter as customers across most end markets are increasing travel volumes amid abating COVID-19 related restrictions. Total room bookings for the quarter grew 87% to 60,398 from the Comparative Quarter, which represents greater than 60% of total room nights booked in 2020. At the end of the Quarter, LodgeLink had 605 unique active corporate customers signed onto the platform with approximately 6,200 properties or 599,000 rooms listed. The Company remains highly optimistic on the future growth potential of LodgeLink as the digital platform continues to scale.
The Company expects continued strength in its recurring, consolidated rental revenue driven by previously awarded WFS contracts, an improving outlook for WFS given stronger supply and demand fundamentals, and the steady cadence of investment in the MSS rental fleet which continues to see an attractive backdrop of steady utilization and improving rental rates due to favorable end market conditions.
Third Quarter 2021 Financial Highlights
Three months ended Nine months ended September 30, September 30, (in millions, except where noted) 2021 2020 Change 2021 2020 Change $ $ $ $ Revenue Modular Space Solutions 50.2 23.9 110% 122.6 62.3 97% Workforce Solutions 58.6 17.3 239% 120.8 61.2 97% Total Revenue 108.8 41.2 164% 243.4 123.5 97% Total Adjusted EBITDA 19.7 9.8 101% 46.5 29.5 58% Funds from Operations 23.4 8.6 172% 55.0 30.4 81% Per share ($) 0.40 0.16 150% 0.96 0.55 75% Profit (loss) 5.7 (0.7) 914% 9.7 (1.3) 846% Profit (loss) per share - Basic 0.10 (0.01) 1,100% 0.17 (0.02) 950% - Diluted 0.10 (0.01) 1,100% 0.16 (0.02) 900% Capital expenditures 12.0 8.7 38% 25.8 30.9 (17)% Business acquisitions -- -- --% -- 6.6 (100)% Property & equipment (NBV) 404.6 347.4 16% 404.6 347.4 16% Total assets 548.6 425.9 29% 548.6 425.9 29% Long-term debt 164.6 113.8 45% 164.6 113.8 45% Cash and cash equivalents 5.1 2.5 104% 5.1 2.5 104% Free Cashflow 17.1 2.8 511% 38.8 15.0 159%