Black Diamond Group (BDI) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenue was CAD 101.2 million and adjusted EBITDA was CAD 28.8 million, down 14% and 21% year-over-year due to prior-year unique items and lower WFS contribution.

• Net profit was CAD 7.4 million and EPS CAD 0.12, down 46% and 30% year-over-year.

• Rental revenue, the core business, was CAD 37.9 million, up sequentially from Q2 but down 4% year-over-year.

• Contracted future rental revenue reached a record CAD 163.8 million, up 27% year-over-year and CAD 25 million sequentially.

• The board increased the annual dividend by 17% to CAD 0.035 per quarter, payable in January 2025.

Financial highlights

• MSS rental revenue grew 11% year-over-year to a record CAD 24.5 million; WFS rental revenue declined 23% to CAD 13.4 million due to project completions.

• Gross profit for the quarter was CAD 46.7 million, down 14% year-over-year; Adjusted EBIT was CAD 16.2 million, down 33%.

• Year-to-date capital expenditures were CAD 94.5 million, up 85% year-over-year, including a CAD 20.5 million fleet acquisition.

• Available liquidity at quarter-end was CAD 98.4 million.

• Net debt to trailing 12-month adjusted EBITDA was 2.2x, within the target range.

Outlook and guidance

• Management expects higher Q4 sales as delayed projects are completed and continued growth into late 2024 and 2025, supported by record contracted future rental revenue.

• Strong forward visibility for rental performance and continued growth for LodgeLink.

• Positive outlook for Australia and continued rental rate growth, especially in education and U.S. markets.

• WFS performance is expected to improve through better utilization, with a 25% increase in contracted future rental revenue.

• LodgeLink is expected to deliver modest positive EBITDA in 2025 as its network and bookings scale.