Black Diamond Group Limited Reports Results for the Second Quarter Ended June 30, 2013
CALGARY, ALBERTA--(Marketwired - Aug. 8, 2013) - Black Diamond Group Limited ("Black Diamond" or the "Company") (TSX:BDI) is pleased to announce its financial and operational results for the three months ended June 30, 2013 .
SECOND QUARTER 2013 CONSOLIDATED HIGHLIGHTS
Black Diamond realized significant increases in revenue generation for the three months ended June 30, 2013 ("Period") compared to the three months ended June 30, 2012 ("Comparative Period"). Revenue generation in the Period was $71.1 million compared to $62.0 million in the Comparative Period, or a 15% increase. EBITDA of $29.2 million in the Period increased from $26.5 million in the Comparative Period, or a 10% increase.
The Company realized a significant revenue increase from the rental platform of the business. Rental revenue generated for the Period was $35.6 million, 44% higher than the Comparative Period, due in part, to a strong capital expenditure program in 2012. Non-rental revenue was $17.8 million and lodging revenue was $17.7 million for the Period.
SECOND QUARTER 2013 BUSINESS UNIT HIGHLIGHTS
STRUCTURES BUSINESS UNIT
The Structures business unit ended the Period with 2,915 workforce accommodation units in the rental fleet which averaged 88% utilization for the Period. The workforce accommodation bedcount reached 11,953 during the Period and the space rentals units reached 3,194 with an 85% average utilization during the Period.
The business unit generated $43.5 million in revenue during the Period compared to $39.4 million in the Comparative Period of 2012. Rental revenue increased significantly from $20.6 million in the Comparative Period to $28.7 million in the Period. Non-rental revenue decreased to $14.8 million in the Period from $18.8 million in the Comparative Period due to lower custom and fleet sales.
EBITDA increased to $27.0 million in the Period from $21.5 million in the Comparative Period.
LOGISTICS BUSINESS UNIT
The Logistics business unit ended the Period with a managed bedcount of 3,704. The total bedcount for the business unit increased, however occupancy decreased in the Period due to project timing. The business unit generated $17.7 million in lodging revenue in the Period compared to $15.1 million in the Comparative Period. The increase was in line with management's expectations with two substantial full service camps winding down in the Period, offset by several full service camps added since Q2 2012 and expansion of the Sunday Creek Lodge.
EBITDA decreased from $5.4 million in the Comparative Period to $3.1 million in the Period
ENERGY SERVICES BUSINESS UNIT
The Energy Services business unit ended the Period with 290 drilling accommodation units in the fleet which averaged 57% utilization, a drilling accommodation bedcount of 916 and 2,331 units in the surface rental fleet which averaged 24% utilization during the Period. The business unit generated $5.2 million in revenue in the Period compared to $7.5 million in the Comparative Period which corresponded with a reduction in drilling activity and pricing in the oil and gas industry.
EBITDA decreased from $2.3 million in the Comparative Period to $1.6 million in Period.
INTERNATIONAL BUSINESS UNIT
The International business unit generated total revenue of $4.6 million in the Period including rental revenue of $3.3 million and non-rental revenue of $1.3 million. The business unit ended the Period with 1,126 workforce accommodation and space rental units in the fleet which averaged 83% utilization during the Period. The workforce accommodation bedcount for the business unit was 1,610 at the end of the Period.
EBITDA for the Period was $1.5 million. There is no Comparative Period figure as this is a new operating unit.
Black Diamond paid dividends of $0.07 per share per month during the Period, resulting in a payout ratio for the Period of 32% compared to 25% for the Comparative Period during which the Company paid $0.06 per share per month. The Board of Directors of Black Diamond is confident that the cash generated from operations will be sufficient to meet the dividend obligations for the foreseeable future.
Financial results for the second quarter of 2013 were in-line with management's expectations - moderately stronger than the second quarter of 2012 but significantly weaker than the first quarter of 2013. As anticipated, project sequencing gaps in both the Camps and the Logistics business units and expected lower activity in the Energy Services business unit contributed to lower financial results and EBITDA during the period.
Management's outlook is positive for the remainder of 2013 and moving into early 2014 as it expects increases in year-over-year and quarter-over-quarter revenue and corresponding EBITDA as it continues to invest in fleet assets, secures longer-term key contracts, and maintains high utilization rates of existing fleet, all of which contribute to strong visibility in all revenue streams.
Considerable increases in revenue and EBITDA are anticipated for the remainder of the year in both the Black Diamond Structures and the Black Diamond Logistics business units as several large-scale, longer-term contracts come on-line to service resource development in western Canada. Within the Energy Services division, management expects moderate increases for the remainder of 2013 as activity levels climb throughout the latter half of the year, aided by modestly stronger drilling activity. Black Diamond Australia expects to maintain status quo financial results for the second half of 2013 as the business continues to establish itself by solidifying the support team and establishing both the brand and operations for growth.
The strength of future expected financial results is based on previously announced new contracts, a robust sales pipeline and high level of visibility in new business development.
To date, Black Diamond has committed approximately $102 million of its previously announced $117 million 2013 capital budget. Capital spending for 2013 will remain at $117 million, focused primarily on remote, large scale infrastructure and resource related projects.
SUMMARY FINANCIAL STATEMENTS
The following is a summary of the Company's unaudited condensed consolidated interim statement of financial position as at June 30, 2013 and December 31, 2012 and the Company's unaudited condensed consolidated interim statements of net income and cash flows for the three month periods ended June 30, 2013 and 2012. 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 six month periods ended June 30, 2013 and 2012 as filed on SEDAR.
|CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)|
|as at June 30, 2013 and December 31, 2012|
|(Expressed in thousands)||2013||2012|
|Cash and cash equivalents||14,757||2,697|
|Trade and accrued receivables||70,987||76,578|
|Prepaid expenses and other current assets||3,787||7,598|
|Income taxes receivable||1,057|
|Property and equipment||468,885||423,281|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accounts payable and accrued liabilities||32,919||39,486|
|Due to related parties||569||1,174|
|Income taxes payable||-||8,524|
|Risk management liability||993||1,324|
|Asset retirement obligations||3,022||1,955|
|Deferred income taxes||49,773||44,821|
|Accumulated other comprehensive loss||(5,199||)||(3,285||)|
|CONSOLIDATED STATEMENT OF NET INCOME (unaudited)
|for the three month periods ended June 30,|
|(Expressed in thousands, except per share|
|Depreciation of property and equipment||12,388||7,895|
|Amortization of intangibles||501||220|
|Income before income taxes||13,526||16,169|
|Net income before non-controlling interest||10,210||12,200|
|Net income attributable to non-controlling interest||1,264||1,224|
|Net income per share|
|CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the three month periods ended June 30,
|(Expressed in thousands)||2013||2012|
|Add (deduct) non-cash items:|
|Depreciation of property and equipment||12,388||7,895|
|Amortization of intangible assets||501||220|
|Net income/(loss) attributable to non-controlling interest||1,264||1,224|
|Unrealized foreign exchange loss/(gain)||163||(14||)|
|Deferred income taxes||1,530||2,352|
|Share-based compensation expense||957||861|
|Book value of used fleet sales in operating activities||1,226||1,400|
|Change in long-term receivables||991||-|
|Change in non-cash working capital related to operating activities||16,447||(2,802||)|
|Net cash from operating activities||46,087||23,443|
|Purchase of property and equipment||(19,524||)||(47,928||)|
|Change in non-cash working capital related to investing activities||4,960||7,982|
|Net cash used in investing activities||(14,564||)||(39,946||)|
|Proceeds from long-term debt||-||4,239|
|Repayment of long-term debt||(5,000||)||-|
|Net draw (repayment) on operating facility||(7,469||)||-|
|Interest paid in the period||(1,647||)||(1,253||)|
|Distribution to non-controlling interest||(790||)||(393||)|
|Sale of shares in trust||65||100|
|Share options exercised||4,567||2,964|
|Change in non-cash working capital related to financing activities||(2,616||)||915|
|Net cash (used in)/from financing activities||(21,644||)||101|
|Increase (Decrease) in cash and cash equivalents||9,879||(16,402||)|
|Cash and cash equivalents, beginning of period||4,763||16,450|
|Effect of foreign currency rate changes on cash and cash equivalents||115||(48||)|
|Cash and cash equivalents, end of period||14,757||-|
A copy of the Company's unaudited condensed consolidated interim financial statements for the three and six month periods ended June 30, 2013 and 2012 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).
Black Diamond will host a conference call for analysts, investors and interested parties to discuss its second quarter financial and operational results at 4:30 p.m. MST on August 8, 2013. 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 416-340-2217 or toll free 1-866-696-5910 (Participant pass code 9763785) prior to the scheduled start time. Digital playback of the conference call will be available on the Company's website.
About Black Diamond
Founded in 2003, Black Diamond Group provides remote workforce accommodations, modular space solutions and oilfield products and services in Canada, the United States and Australia. With its corporate head office located in Calgary, Alberta, Black Diamond provides its products and services to a full spectrum of industries including oil, natural gas, mining, power, construction, engineering, military, government and education.
Through its subsidiaries and its approximate 50% equity participation in certain aboriginal limited partnerships, Black Diamond operates four complementary business units comprised of Black Diamond Structures, Black Diamond Logistics, Black Diamond Energy Services and Black Diamond International.
Black Diamond Structures rents and sells remote workforce housing and modular workspace solutions and provides associated services; Black Diamond Logistics provides turnkey lodging services, remote facility management and supply chain solutions; Black Diamond Energy Services rents and sells a complement of oilfield equipment and services; and Black Diamond International rents and sells remote workforce housing and modular workspace solutions and provides associated services outside of North America.
Black Diamond operates its four complementary business units in 17 strategic locations across Canada, the United States and Australia.
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, the Board of Director's future expectations regarding dividend levels set out under the heading "Dividends" and management's future expectations of the operational and financial performance of the Company during 2013 and into early 2014 set out under the heading "Outlook". 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 Black Diamond's annual information form for the year ended December 31, 2012 and other 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.blackdiamondgroup.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 and payout ratio. Readers are cautioned that these measures are not defined under International Financial Reporting Standards ("IFRS"). Readers are cautioned that these non-IFRS 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-IFRS 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 six month periods ended June 30, 2013 and 2012 filed on SEDAR.
President and Chief Executive Officer
(403) 264-9281 (FAX)
Black Diamond Group Limited
Executive Vice President and Chief Financial Officer
(403) 264-9281 (FAX)