CALGARY, Alberta, Oct. 31, 2024 (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, 2024 (the "Quarter") compared with the three and nine months ended September 30, 2023 (the "Comparative Quarter"). All financial figures are expressed in Canadian dollars.
Key Highlights from the Third Quarter of 2024
- Consolidated rental revenue of $37.9 million decreased a modest 4% as compared to the Comparative Quarter and was up 7% from the second quarter of 2024. Modular Space Solutions ("MSS") rental revenue of $24.5 million, was another quarterly record and increased 11% from $22.0 million in the Comparative Quarter, while Workforce Solutions ("WFS") rental revenue was down 23% to $13.4 million due to the completion of two large pipeline projects at the end of 2023.
- Adjusted EBITDA1 of $28.8 million was down 21% from the Comparative Quarter primarily due to lower contribution from WFS, a positive settlement recognized in the Comparative Quarter of $2.1 million related to a customer dispute from a prior year related to one project ("2023 Settlement"), as well as slightly lower custom sales contribution from MSS.
- Consolidated contracted future rental revenue at the end of the Quarter continued to grow and was up 27% from $128.6 million at the end of the Comparative Quarter to $163.8 million.
- Total capital expenditures for the Quarter and Year of $23.8 million and $94.5 million is up 18% and 71% respectively and highlights the organic growth opportunities Management continues to see across the platform to drive growing contracted future rental revenue.
- Return on Assets1 of 19% for the Quarter continues to represent an attractive return profile given the long-life and low maintenance characteristics of the Company's rental assets.
- MSS average monthly rental rate per unit increased 10% from the Comparative Quarter (or 9% on a constant currency basis), while contracted future rental revenue increased 28% to $127.6 million at the end of the Quarter from $99.7 million at the end of the Comparative Quarter.
- WFS contracted future rental revenue from contracts in place was $36.2 million, an increase of 25% from the Comparative Quarter.
- LodgeLink net revenue was a record $3.4 million, an increase of 26% from $2.7 million in the Comparative Quarter. Total room nights sold increased 34% from the Comparative Quarter, to a record of 147,560.
- Long term debt and Net Debt1 at the end of the Quarter increased 28% and 24% since December 31, 2023, to $243.2 million and $228.4 million, respectively. The increase is primarily attributable to growth capital expenditure during the year. Net Debt to trailing twelve month ("TTM") Adjusted Leverage EBITDA1 of 2.2x is at the low-end of the Company's target range of 2.0x to 3.0x, while available liquidity was $98.4 million at the end of the Quarter.
- Given continued strength across the rental platform, subsequent to the end of the Quarter, the Company announced a 17% increase to its quarterly dividend from $0.03 to $0.035 per quarter. The fourth quarter dividend of $0.035 is payable on or about January 15, 2025 to shareholders of record on December 31, 2024.
Outlook
The Company remains well-positioned for continued growth for the remainder of 2024 and into 2025. The positive outlook for the business is driven in-part by over $163.8 million of contracted future rental revenue, up 27% from the end of the Comparative Quarter. The meaningful growth in future contracted rental revenues has been driven by the Company's disciplined organic growth initiatives this year with $94.5 million of gross capital expenditures for the Year, as well as renewals of existing contracts.
During the Quarter, MSS generated a record $24.5 million in rental revenue, up 11% from the Comparative Quarter, driven by increased average rental rates and ongoing organic fleet investment, slightly offset by a moderate decline in utilization. Current utilization remains at healthy levels for the MSS platform in the context of long-term industry trends. Sales revenue declined 25% from a historically strong Comparative Quarter, but increased from the first half of 2024 as previously delayed projects reach completion. Non-rental revenue in the Quarter was up 24% from the Comparative Quarter, as installation activity remained robust for both the rental fleet and custom sales. MSS contracted future rental revenue continues to grow and ended the Quarter at $127.6 million, up 28% or $27.9 million from the Comparative Quarter, with an average rental duration of 51 months. Demand remains strong in key infrastructure and education verticals which continues to support ongoing deployment of organic fleet growth into 2025.
For the Year, WFS performance is modestly below the Prior Year with revenue and Adjusted EBITDA down 12% and 6%, respectively, despite the completion of two large projects at the end of 2023. For the Quarter, revenue and Adjusted EBITDA was down 31% and 39%, respectively, primarily due to a high degree of contribution from these aforementioned projects in the Comparative Quarter. Management continues to focus on growing rental revenues through improving utilization across our WFS geographies amidst a generally higher rate environment. The WFS sales pipeline and opportunity set remain robust with contracted future rental revenue increasing 25% to $36.2 million.
LodgeLink performance continued to set quarterly records as Gross Bookings1 for the Quarter were up 31% to $27.2 million and net revenue grew 26% from the Comparative Quarter to a record $3.4 million. Total room nights sold in the Quarter rose 34% from the Comparative Quarter to a record 147,560. The LodgeLink supply network also continues to scale with over 1.7 million rooms of capacity in over 17,000 North American properties. Management remains focused on efficiently growing LodgeLink net revenue and based on current trends, expects modest positive EBITDA contribution from LodgeLink in 2025.
With respect to the Company's ongoing ERP upgrade and implementation project, the Company has set a remaining budget of $11.9 million for the ERP upgrade related to Black Diamond's MSS and Corporate segments with anticipated implementation in early 2026.
Black Diamond remains focused on driving profitable growth while compounding the Company's high-margin, recurring rental revenue streams in both North America and Australia. The Company is well positioned to fund continued organic and inorganic growth with liquidity of $98.4 million, and Net Debt to TTM Adjusted Leverage EBITDA1 of 2.2x, which is at the low end of the Company's targeted range of 2.0x to 3.0x. The outlook to close out calendar 2024 remains positive and the Company maintains strong momentum into 2025 supported by healthy contracted rental revenues, a growing fleet of long-lived assets, a robust sales pipeline, and the continued scaling of LodgeLink.
1 Adjusted EBITDA, Net Debt and Gross Bookings are non-GAAP financial measures. Return on Assets, Net Revenue Margin and Net Debt to TTM Adjusted Leverage EBITDA are non-GAAP ratios. Refer to the Non-GAAP Measures section of this news release for more information on each non-GAAP financial measure and ratio.
| Third Quarter 2024 Financial Highlights | ||||||
| Three months ended September 30, | Nine months ended September 30, | |||||
| ($ millions, except as noted) | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Financial Highlights | $ | $ | % | $ | $ | % |
| Total revenue | 101.2 | 117.5 | (14)% | 270.3 | 290.1 | (7)% |
| Gross profit | 46.7 | 54.2 | (14)% | 128.5 | 130.9 | (2)% |
| Administrative expenses | 18.2 | 17.5 | 4% | 55.0 | 50.3 | 9% |
| Adjusted EBITDA(1) | 28.8 | 36.6 | (21)% | 76.2 | 80.5 | (5)% |
| Adjusted EBIT(1) | 16.2 | 24.0 | (33)% | 41.7 | 47.5 | (12)% |
| Funds from Operations(1) | 31.2 | 39.2 | (20)% | 80.5 | 86.7 | (7)% |
| Per share ($) | 0.51 | 0.65 | (22)% | 1.32 | 1.44 | (8)% |
| Profit before income taxes | 10.3 | 18.7 | (45)% | 22.6 | 32.0 | (29)% |
| Profit | 7.4 | 13.6 | (46)% | 16.3 | 22.5 | (28)% |
| Earnings per share - Basic ($) | 0.12 | 0.22 | (45)% | 0.27 | 0.37 | (27)% |
| Earnings per share - Diluted ($) | 0.12 | 0.22 | (45)% | 0.26 | 0.37 | (30)% |
| Capital expenditures | 23.8 | 20.1 | 18% | 94.5 | 55.2 | 71% |
| Property & equipment | 571.1 | 510.1 | 12% | 571.1 | 510.1 | 12% |
| Total assets | 745.5 | 669.3 | 11% | 745.5 | 669.3 | 11% |
| Long-term debt | 243.2 | 206.1 | 18% | 243.2 | 206.1 | 18% |
| Cash and cash equivalents | 15.1 | 5.6 | 170% | 15.1 | 5.6 | 170% |
| Return on Assets (%)(1) | 19.3% | 27.3% | (800) bps | 17.5% | 20.2% | (270) bps |
| Free Cashflow(1) | 19.6 | 30.6 | (36)% | 47.2 | 60.8 | (22)% |
| (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 Measures section of this news 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, 2024 and 2023 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 - MSS and WFS. We operate in Canada, the United States, and Australia.
MSS through its principal brands, BOXX Modular, CLM, MPA Systems, and Schiavi, 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 owns a large rental fleet of modular accommodation assets of various types. Its regional operating terminals rent, sell, service, and provide ancillary products and services including turnkey operated camps to a wide array of customers in the resource, infrastructure, construction, disaster recovery, and education sectors.
In addition, WFS includes LodgeLink which operates a digital marketplace for business-to-business crew accommodation, travel, and logistics services across 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 1, 2024. 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 1-844-763-8274. International callers should use 1-647-484-8814. 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/13707
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.
https://www.gowebcasting.com/13707
Reader Advisory
Forward-Looking Statements
Certain information set forth in this news release contains forward-looking statements including, but not limited to, the Company's outlook for the remainder of 2024 and into 2025, expectations for and opportunities in different geographic areas, opportunities for organic investment, the Company's ability to fund organic and inorganic growth, the sales and opportunity pipeline, timing and payment of a fourth quarter dividend, the anticipated timeline for the Company's Enterprise Resource Planning ("ERP") system upgrade and implementation project, management's assessment of Black Diamond's future operations and what may have an impact on them, expectations regarding the rental rate environment, 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, expectations for demand and growth in the Company's operating and customer segments, future deployment of assets, amount of revenue anticipated to be derived from current contracts, anticipated debt levels, liquidity demands and sources, ongoing contractual terms and debt obligations, liquidity, working capital and other requirements, sources and use of funds, economic life of the Company's assets, expected length of existing contracts and future growth and profitability of the Company. With respect to the forward-looking statements in this news release, Black Diamond has made assumptions regarding, among other things: future commodity prices, the future rate environment, that Black Diamond will continue to raise sufficient capital to fund its business plans in a manner consistent with past operations, timing and cost estimates of a new ERP system, 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, the Company's ability to attract new customers, political 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, 2023 and other reports on file with the Canadian securities regulatory authorities which can be accessed on Black Diamond's profile 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 specified financial measures and ratios have been disclosed: Adjusted EBITDA, Adjusted EBIT, Adjusted EBITDA as a % of Revenue, Return on Assets, Net Debt, Net Debt to TTM Adjusted Leverage EBITDA, Funds from Operations, Free Cashflow, Gross Bookings, and Net Revenue Margin. 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, non-recurring 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) | 2024 | 2023 | Change % | 2024 | 2023 | Change % |
| Profit | 7.4 | 13.6 | (46)% | 16.3 | 22.5 | (28)% |
| Add: | ||||||
| Depreciation and amortization(1) | 12.6 | 12.6 | -% | 34.5 | 33.0 | 5% |
| Finance costs(1) | 4.3 | 3.7 | 16% | 11.6 | 10.4 | 12% |
| Share-based compensation(1) | 1.2 | 1.6 | (25)% | 4.3 | 5.1 | (16)% |
| Non-controlling interest(1) | 0.4 | 0.3 | 33% | 1.1 | 0.9 | 22% |
| Current income taxes(1) | - | - | -% | 0.2 | 0.1 | 100% |
| Deferred income taxes | 2.6 | 4.8 | (46)% | 5.0 | 8.5 | (41)% |
| Non-recurring costs: | ||||||
| ERP implementation and related costs(2) | 0.3 | - | 100% | 2.6 | - | 100% |
| Acquisition costs | - | - | -% | 0.6 | - | 100% |
| Adjusted EBITDA | 28.8 | 36.6 | (21)% | 76.2 | 80.5 | (5)% |
| Less: | ||||||
| Depreciation and amortization(1) | 12.6 | 12.6 | -% | 34.5 | 33.0 | 5% |
| Adjusted EBIT | 16.2 | 24.0 | (33)% | 41.7 | 47.5 | (12)% |
| Total revenue(1) | 101.2 | 117.5 | (14)% | 270.3 | 290.1 | (7)% |
| Adjusted EBITDA as a % of Revenue | 28.5% | 31.1% | (260) bps | 28.2% | 27.7% | 50 bps |
| Annualized multiplier | 4 | 4 | 1.3 | 1.3 | ||
| Annualized adjusted EBITDA | 115.2 | 146.4 | (21)% | 99.1 | 104.7 | (5)% |
| Average net book value of property and equipment | 597.8 | 535.9 | 12% | 566.3 | 531.6 | 7% |
| Return on Assets | 19.3% | 27.3% | (800) bps | 17.5% | 20.2% | (270) bps |
| (1) Sourced from the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023. (2) This relates to the corporate structure reorganization costs that have been incurred in preparation of a new ERP system in which the first phase of the implementation went live on May 1, 2024 and costs are included in administrative expenses. | ||||||
Net Debt to TTM Adjusted Leverage EBITDA is a non-GAAP 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) | 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | 2023 | 2022 | Change |
| Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | ||
| Profit | 7.4 | 7.5 | 1.5 | 7.8 | 13.6 | 4.6 | 4.4 | 9.4 | |
| Add: | |||||||||
| Depreciation and amortization | 12.6 | 11.1 | 10.7 | 11.2 | 12.6 | 10.6 | 9.8 | 8.6 | |
| Finance costs | 4.3 | 3.4 | 3.8 | 3.7 | 3.7 | 3.7 | 2.9 | 3.6 | |
| Share-based compensation | 1.2 | 1.6 | 1.5 | 1.1 | 1.6 | 1.3 | 2.2 | 1.3 | |
| Non-controlling interest | 0.4 | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.4 | |
| Current income taxes | - | - | 0.2 | 0.1 | - | 0.1 | - | 0.1 | |
| Deferred income taxes | 2.6 | 2.1 | 0.3 | 0.4 | 4.8 | 1.9 | 1.8 | 3.7 | |
| Impairment reversal | - | - | - | - | - | - | - | (6.3) | |
| Non-recurring costs | |||||||||
| ERP implementation and related costs (1) | 0.3 | 1.8 | 0.5 | 1.5 | - | - | - | - | |
| Acquisition costs | - | - | 0.6 | - | - | - | - | 1.2 | |
| Adjusted EBITDA | 28.8 | 27.9 | 19.4 | 26.1 | 36.6 | 22.5 | 21.4 | 22.0 | |
| Acquisition pro-forma adjustments(2) | - | - | - | - | - | - | - | 0.5 | |
| Adjusted Leverage EBITDA | 28.8 | 27.9 | 19.4 | 26.1 | 36.6 | 22.5 | 21.4 | 22.5 | |
| TTM Adjusted Leverage EBITDA | 102.2 | 103.0 | (1)% | ||||||
| Long-term debt | 243.2 | 206.1 | 18% | ||||||
| Cash and cash equivalents | 15.1 | 5.6 | 170% | ||||||
| Current portion of long term debt (3) | 0.3 | 0.3 | -% | ||||||
| Net Debt | 228.4 | 200.8 | 14% | ||||||
| Net Debt to TTM Adjusted Leverage EBITDA | 2.2 | 1.9 | 16% | ||||||
| (1) This relates to the corporate structure reorganization costs that have been incurred in preparation of a new ERP system in which the first phase of implementation went live on May 1, 2024. (2) Includes pro-forma pre-acquisition EBITDA estimates as if the acquisition that occurred in the fourth quarter 2022, occurred on January 1, 2022. (3) 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) | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Cash Flow from Operating Activities(1) | 31.4 | 33.5 | (6)% | 81.2 | 97.9 | (17)% |
| Add/(Deduct): | ||||||
| Change in other long term assets(1) | 1.1 | 0.5 | 120% | (0.5) | 0.1 | (600)% |
| Changes in non-cash operating working capital(1) | (1.3) | 5.2 | (125)% | (0.2) | (11.3) | 98% |
| Funds from Operations | 31.2 | 39.2 | (20)% | 80.5 | 86.7 | (7)% |
| Add/(deduct): | ||||||
| Maintenance capital | (3.2) | (1.8) | (78)% | (9.3) | (6.1) | (52)% |
| Payment for lease liabilities | (2.4) | (2.0) | (20)% | (6.6) | (5.7) | (16)% |
| Interest paid (including lease interest) | (4.2) | (3.6) | (17)% | (11.5) | (10.0) | (15)% |
| Net current income tax expense | - | - | -% | 0.2 | 0.1 | 100% |
| Dividends paid on common shares | (1.8) | (1.2) | (50)% | (5.5) | (3.6) | (53)% |
| Distributions paid to non-controlling interest | - | - | -% | (0.6) | (0.6) | -% |
| Free Cashflow | 19.6 | 30.6 | (36)% | 47.2 | 60.8 | (22)% |
| (1) Sourced from the Company's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2024 and 2023. | ||||||
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) | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Net revenue(1) | 3.4 | 2.7 | 26% | 8.9 | 7.2 | 24% |
| Costs paid to suppliers(1) | 23.8 | 18.1 | 31% | 64.2 | 51.6 | 24% |
| Gross Bookings(1) | 27.2 | 20.8 | 31% | 73.1 | 58.8 | 24% |
| Net Revenue Margin | 12.5% | 12.7% | (20) bps | 12.2% | 12.2% | - bps |
| (1) Includes intercompany transactions. | ||||||
