Black Diamond Group Limited Reports Results for the Third Quarter Ended September 30, 2012
CALGARY, ALBERTA, Nov 5, 2012 (Menafn - Marketwire via COMTEX) -- Black Diamond Group Limited ("Black Diamond" or the "Company") is pleased to announce its financial and operational results for the three and nine months ended September 30, 2012.
Third Quarter 2012 Highlights
Revenue generation in the third quarter of 2012 was 74.9 million with EBITDA of 31.2 million for the period, compared to revenue of 63.1 million and EBITDA of 25.2 million for the same period in 2011.
Rental revenue generated of 29.3 million was 44% higher than the prior year's comparable period due to the increase in the rental fleet of the Company as well as utilization and rental rate increases for many of the asset classes and branch operations of the Company. Non-rental revenue of 30.5 million represented a slight increase from the prior year. Lodging revenue was 15.1 million, a slight increase from the prior year.
EBITDA margins of 42% for the quarter were up from the 40% generated in the prior year. This was due to increasing gross margins as a result of a higher percentage of revenues coming from rental activity. Highlights from each of the operating divisions for the quarter are as follows:
Camps:
The division ended the quarter with 2,652 units representing approximately 10,815 accommodation beds in the rental fleet which averaged 93% utilization for the period. The division generated 25.5 million in revenue compared to 19.3 million in the same quarter of 2011. Rental revenues increased by 59% over the second quarter of 2011 to 17.3 million as a result of the larger fleet of assets and rental rate increases. Non-rental revenues decreased slightly in the quarter due to a decline in the volume of sales of newly manufactured products in the quarter. EBITDA generated in the quarter was 16.2 million or 32% higher than that generated in the same period last year.
Logistics:
The division ended the quarter with 2,641 beds in the operated camps, which were fully utilized during the period. Lodging revenues from these operated camps for the period were 15.1 million, an 8% increase from the third quarter of 2011. Operational revenues saw a 376% increase as compared to the third quarter of 2011 due to the initial operational activity associated with the deployment of several substantial projects requiring transportation and installation. EBITDA generated in the quarter was 7.8 million or 30% higher than that generated in the same period last year.
BOXX Modular:
The division ended the quarter with 3,024 units in the rental fleet which averaged 75% utilization for the period. The division generated 13.2 million in revenue compared to 18.1 million in the same quarter of 2011. The decrease in revenues was due to fewer sales of custom product. Rental revenue was 36% higher year over year as a result of an increased rental fleet. The EBITDA for the quarter was 5.7 million, a small increase from the prior year third quarter EBITDA of 5.6 million.
Energy Services:
The division ended the quarter with 2,328 units in the surface rental fleet which averaged 46% utilization for the period and 269 pieces of drilling accommodations fleet representing 954 accommodation beds which averaged 67% utilization during the quarter. The division generated 9.2 million in revenue, a minimal change from the same quarter of 2011. There was a slight increase in rental revenue for the current quarter as compared with the third quarter of 2011. The increase in rental revenue was offset by a decrease in non-rental revenue. Non-rental revenue for the period was 4.1 million compared with 4.8 million. As such, the EBITDA generated by this division for the quarter was 3.6 million, an increase from 3.4 million from the same period of 2011.
Balance Sheet
The Company ended the period with net debt of 25.1 million, comprised of 25 million drawn on its capital facility, senior secured notes of 61.3 million, net of amortized set up costs, and a working capital surplus of 61.2 million.
The current number of common shares outstanding is 41.1 million, with 3.4 million common shares reserved for issuance pursuant to the exercise of options which have been granted pursuant to the share option plan.
Dividends
The Company paid dividends of 0.06 for July, August, and September (equivalent to 0.72 per share when annualized) resulting in a payout ratio for the period of 24%, comparable with the same period in 2011. The Board of Directors of Black Diamond is confident that the cash generated from operations will be sufficient to meet the dividend obligations.
Outlook
The third quarter of 2012 has delivered both record revenue and EBITDA generation. The strong results are related to the Company's continued capital program coupled with strong utilization. Field level operations related to the installation of new facilities were also very strong in the quarter. Management expects similar strength in Q4 and anticipates results to be generally in line with the current quarter.
The resource industry continues to have very strong demand for workforce lodging and temporary workspace. This demand is being generated from oilsands development projects, unconventional oil and gas development, resource related infrastructure projects and mining developments. Black Diamond is also experiencing steady demand for drilling and completions support equipment and wellsite accommodation assets. The ongoing demand from all three of our asset-based operating divisions has lead to the approval of an initial 2013 capital expenditure budget of 90 million. This compares to 135 million of capital expenditures approved and committed in 2012. Management anticipates that the 2013 capex will be allocated in the typical non-speculative manner followed in previous years with roughly the same weighting between business units. It is expected that this capital program will translate into revenue and EBITDA growth as corresponding operations and rental revenues build.
Continued high utilization, fleet growth and strong pricing will characterize both our Camps and Logistics divisions over the next several quarters. The operated lodges' revenue will be similar or slightly lower in Q4 as the Sunday Creek Lodge is being retrofitted with two-storey dormitory complexes. Lodging revenue is expected to rise in 2013 after the retrofit of Sunday Creek is completed and additional facilities have been brought on stream. The space rentals business is expected to continue to grow in western Canada with continued strong demand. Eastern Canada and the US are expected to generate similar revenue as the current quarter through to 2013. And, the Energy Services division will experience strengthened rental and operations revenue as we enter the higher activity winter drilling months and continue to assets to the fleet.
Our balance sheet continues to have significant capacity to meet current and anticipated market demand for fleet additions as well as potential strategic opportunities.
Summary Financial Statements
The following is a summary of the Company's unaudited condensed consolidated interim statement of financial position as at September 30, 2012 and the audited consolidated statement of financial position as at December 31, 2011 and the Company's unaudited condensed consolidated interim statements of net income and cash flows for the three and nine months ended September 30, 2012 and 2011. These summary statements should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements including the accompanying notes for the three and nine months ended September 30, 2012 and 2011 as filed on SEDAR.
Black Diamond Group Limited
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited)
(Expressed in thousands)
September 30, 2012December 31, 2011
As at
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ASSETS
Current
Cash and cash equivalents18,98922,990
Trade and accrued receivables70,28047,641
Due from related parties-1,313
Prepaid expenses and other current
assets11,9087,978
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101,17779,922
Non-Current
Long term receivables4,504-
Property and equipment387,197301,073
Intangible assets and other non-
current assets9,94610,778
Goodwill34,52534,657
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537,349426,430
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued
liabilities38,50924,708
Due to related parties9731,415
Dividends payable2,4691,771
Income taxes payable7,15744
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49,10827,938
Non-Current
Long-term debt86,30086,130
Deferred revenue6580
Risk management liability1,4982,074
Asset retirement obligations1,9451,907
Deferred income taxes43,23538,892
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182,151157,021
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Shareholders' equity
Share capital308,439240,350
Non-controlling interest4,4421,359
Contributed surplus3,6884,778
Accumulated other comprehensive income(3,909)(2,889)
Retained earnings42,53825,811
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355,198269,409
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537,349426,430
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Black Diamond Group Limited
CONSOLIDATED STATEMENTS OF NET INCOME
(unaudited)
(Expressed in thousands,
except per share amounts)
Three month period endedNine month period ended
SeptemberSeptemberSeptemberSeptember
30, 201230, 201130, 201230, 2011
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Revenue74,90163,070195,832175,602
Direct costs35,49731,58288,53087,607
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Gross Profit39,40431,488107,30287,995
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Expenses
Administrative expenses9,1766,80225,55020,796
Depreciation of property
and equipment9,4126,91224,62119,567
Amortization of intangible
assets2193756591,138
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18,80714,08950,83041,501
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Operating profit20,59717,39956,47246,494
Finance costs1,4261,4664,1713,507
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Income before income taxes19,17115,93352,30142,987
Income tax
Current2,377127,11448
Deferred2,2303,7245,62210,517
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4,6073,73612,73610,565
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Net income14,56412,19739,56532,422
Net income attributable to
non-controlling interest1,5821,1862,5642,131
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Net income attributable to
Black Diamond Group
Limited12,98211,01137,00130,291
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Net income per share
Basic0.320.300.960.84
Diluted0.320.290.940.82
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Black Diamond Group Limited
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three month periodNine month period
(Expressed in thousands)endedended
SeptemberSeptemberSeptemberSeptember
30, 201230, 201130, 201230, 2011
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Operating activities
Net income attributable to Black
Diamond Group Limited12,98211,01137,00130,291
Add (deduct) non-cash items:
Depreciation of property and
equipment9,4126,91224,62119,567
Amortization of intangible
assets2193756591,138
Net income attributable to non-
controlling interest1,5821,1862,5642,131
Unrealized foreign exchange
(gain)/loss15(9)(27)(13)
Finance costs1,4261,4664,1713,507
Deferred income taxes2,2303,7245,62210,517
Share-based compensation
expense9674892,4231,390
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28,83325,15477,03468,528
Book value of used fleet sales
in operating activities1,9687,7275,42611,125
Long term trade receivables(4,504)-(4,504)-
Change in non-cash working
capital related to operating
activities
(1,046)(14,080)(9,465)(51,095)
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Net cash from/ (used in)
operating activities25,25118,80168,49128,558
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Investing activities
Purchase of property and
equipment(49,407)(17,551)(117,012)(66,084)
Change in non-cash working
capital related to investing
activities(1,993)4,0154,96510,301
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Net cash used in investing
activities(51,400)(13,536)(112,047)(55,783)
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Financing activities
Proceeds from long-term debt-40,072-86,072
Repayment of long-term debt-(16,969)-(66,000)
Sale of shares held in trust--100-
Repayment of finance lease-(157)-(504)
Interest in period(1,365)(1,447)(3,962)(3,453)
Net proceeds from issuance of
shares57,465(117)57,46548,772
Dividend payments(7,230)(5,304)(19,576)(14,830)
Distribution to non-controlling
interests-(557)(393)(1,483)
Purchase of shares in trust--(993)(74)
Share options exercised1,0722867,1461,555
Advances/(repayment) of
operating facility(4,239)(5,036)-(6,776)
Change in non-cash working
capital related to financing
activities(555)-(174)-
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Net cash from/(used in)
financing activites45,14810,77139,61343,279
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Increase/ (decrease) in cash and
cash equivalents18,99916,036(3,943)16,054
Cash and cash equivalents,
beginning of period--22,990-
Effect of foreign currency rate
changes on cash and cash
equivalents(10)13(58)(5)
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Cash and cash equivalents, end
of period18,98916,04918,98916,049
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Additional Information
A copy of the Company's unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2012 and 2011 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).
Conference Call
Black Diamond will host a conference call for analysts, investors and interested parties to discuss its financial and operational results at 4:00 p.m. MST on November 5, 2012. Trevor Haynes, President and Chief Executive Officer, and Michael Burnyeat, Executive Vice President and Chief Financial Officer, will be in attendance. The call can be accessed by calling 416-340-8530 or toll free 1-877-240-9772 prior to the scheduled start time. Digital playback of the conference call will be available under the investor relations tab on the Company's website at www.blackdiamondlimited.com.
About Black Diamond
Founded in 2003, Black Diamond Group Limited is one of North America's fastest growing remote lodging, modular building and energy services companies. With its corporate head office located in Calgary, Black Diamond provides world-class services to a full spectrum of industries including oil and gas, mining, power, construction, engineering, military, government and education.
Through its wholly-owned subsidiaries, Black Diamond Limited Partnership, BOXX Modular Inc. and through its 50% equity participation in the Black Diamond Dene Limited Partnership, Black Diamond West Moberly Limited Partnership, and Black Diamond Nehiyawak Limited Partnership, Black Diamond operates four complementary divisions in thirteen strategic locations across Canada and the USA.
Black Diamond Camps rents and sells remote workforce housing and provides associated services; Black Diamond Logistics provides turnkey lodging services, remote facility management and supply chain solutions; BOXX Modular specializes in renting and selling a broad range of modular work space solutions and Black Diamond Energy Services rents and sells a complement of oilfield equipment and services.
Reader Advisory
Certain information in this news release contains forward-looking statements including management's assessment of future plans and operations of Black Diamond including, without limitation, statements relating to utilization rates, fleet size, revenue, EBITDA, margins, cash flows, capital expenditures, further deployment of equipment, demand from existing and new customers and future dividends. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Black Diamond's control including, without limitation, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of exchange rates, environmental risks, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could affect Black Diamond's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Black Diamond's website (www.blackdiamondlimited.com). 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 publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
In this news release, the following terms have been referenced: EBITDA (earnings before interest, taxation, depreciation and amortization), gross profit margin and payout ratio. Readers are cautioned that these measures are not defined under Generally Accepted accounting Principles ("GAAP"). Readers are cautioned that these non-GAAP measures are not alternatives to measures under GAAP 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 GAAP is included in management's discussion and analysis for the three and nine months ended September 30, 2012 filed on SEDAR.
FOR FURTHER INFORMATION PLEASE CONTACT: Black Diamond Group LimitedTrevor HaynesPresident and Chief Executive Officer(403) 206-4737(403) 264-9281 (FAX)
Black Diamond Group Limited Michael Burnyeat Executive Vice President and Chief Financial Officer (403) 206-4740 (403) 264-9281 (FAX) www.blackdiamondlimited.com
SOURCE: Black Diamond Group Limited
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