Black Diamond Group Limited

Thank you for standing by. This is the Chorus Call Conference Operator. Welcome to Black Diamond's first quarter 2021 results conference call. As a reminder, all participants are in a listen-only mode and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Mr. Jason Jang. Please go ahead, sir.

Thank you, operator. Good morning, and thank you for attending Black Diamond's first quarter 2021 results conference call. With us on the call today is our CEO, Trevor Haynes, and CFO, Toby Labrie. We are also joined today by COO, Modular Space Solutions, Ted Redman, and COO, Workforce Solutions, Mike Ridley, as well as CIO and EBP, Patrick Melanson. Our comments today may include forward-looking statements regarding Black Diamond's future results. We caution that these forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. Management may also make reference to non-GAAP financial measures in today's call, such as adjusted EBITDA or net debt. For more information on these terms, please review the sections of Black Diamond's first quarter 2021 management's discussion and analysis entitled Forward-Looking Statements, Risks and Uncertainties, and Non-Gap Measures. This quarter's MD&A news release and financial statements can be found on the company's website at www.blackdiamondgroup.com, as well as on the CDAR website. Dollar amounts discussed in today's call are expressed in Canadian dollars, unless noted otherwise, and are generally rounded. I'll now turn the call over to Trevor Haynes to review the quarter.

Thank you, Jason, and good morning, and thank you for joining us to discuss our first quarter of 2021 results. We've had a strong start to the year, and I'd like to thank all of our team members for their hard work and resiliency in the face of some increased pressures from the COVID-19 pandemic. We have continued to execute on our plan to grow and diversify our business and believe the first quarter results are yet another positive data set demonstrating our progress in this regard. Highlights include another record quarter for rental revenue generation in our modular space solutions business unit, record booking volumes within LodgeLink, and strong contract wins in our workforce solutions business unit that have increased contracted revenue by over $55 million so far this year. Total adjusted EBITDA for the quarter was $13.3 million, an increase of 34 percent from Q1 2020. We also reported positive earnings of $2.7 million in the quarter, or 5 cents per share on a diluted basis, compared to a net loss of $.1 million in the comparative quarter. In the MSS segment, Rental revenue grew to $13.9 million, or by 56%, from Q1 2020, which is a fifth consecutive quarterly record. Our first quarter results include a full three months of contribution from Vanguard Modular, which we acquired in November of 2020, the integration of which is ongoing. The outlook for MSS remains positive as we are seeing ongoing opportunities to put organic growth capital to work at attractive rates of return and contract duration across North America. We expect steady and continued growth in rental revenues driven by strong utilization, increasing rental rates, ongoing fleet additions, and increased penetration of our value-added products and services, or VAPs. Our WFS segment is showing further signs of recovery and benefiting from our efforts to diversify by end market and geography. As mentioned, since the start of 2021, WFS has added more than $55 million of new contracted revenue, which includes our previously announced Australian contract, additional assets and services in support of the Coastal GasLink project, and further contracts with mining customers in Eastern Canada. A number of these contracts will begin generating rental revenue throughout the latter part of the second quarter, which should provide strong momentum in rental revenue growth into the second half of the year. Our Australia market continues to perform well and with the recent contract award is experiencing strong utilization with good contract durations and strong rental rates across the business. We remain well positioned with respect to the Goldboro LNG project, should it receive a positive final investment decision by the project proponent in the coming months. Last, but certainly not least, we remain very excited about LodgeLink, our digital marketplace offering that is bringing innovation to the crew travel industry. LodgeLink set another quarterly record in room night bookings, with approximately 48,000 room nights booked despite pandemic-related headwinds for travel services. This was up 109% from the comparative quarter and 36% sequentially from Q4 2020. At the end of the quarter, the platform had approximately 3,600 listed properties representing roughly 330,000 rooms servicing 662 distinct corporate customers. We believe the platform is positioned for continued growth this year. Given the contracts awarded to date and continued positive momentum throughout the Black Diamond businesses, which is driving increased visibility, we are optimistic that the balance of the year will show improving results across the business as we make further progress on our strategic objectives of growing and diversifying our MSS business unlocking operating leverage from our existing fleet of remote accommodation assets in WFS, and scaling our LodgeLink travel tech ecosystem. I will now turn the call over to Toby for some further details on the first quarter financial results.

Thanks, Trevor. Black Diamond reported consolidated revenue of $65.8 million in the first quarter and total adjusted EBITDA of $13.3 million an increase of 46 percent and 34 percent from the comparative quarter, respectively. Net income for the quarter was 2.7 million, or 5 cents per diluted share, compared to a net loss of 0.1 million in Q1 2020. Adjusted EBITDA for MSS was $10.3 million, up 124 percent from the same quarter last year, and total revenue of 35.2 million was up 113 percent from the comparative quarter. This is attributable to continued growth in all revenue streams. As mentioned, the first quarter 2021 results also include a full quarter's worth of contribution from our acquisition of Vanguard Modular in the US. Adjusted EBITDA for workforce solutions was $6.1 million, down 22% from the same quarter last year. WFS revenue of $30.5 million was up 7% from the comparative quarter, mainly due to to positive contribution from used fleet sales in the quarter. Excluding these asset sales, overall WFS segment performance should continue to see sequential improvement on the strength of recently awarded and expanded contracts. Total administrative costs for the quarter of $10.1 million were up 29% from the comparative quarter, primarily due to an increase in personnel costs, including the addition of Vanguard personnel. There has also been a steady increase in staffing levels within LodgeLink as we remain focused on growing this platform. Total administrative costs as a percentage of revenue of 15% was down two percentage points from 17% in the comparative quarter. At the end of the quarter, net debt of $169 million was down from $172 million in Q4 2020. Excess borrowing capacity under the company's asset-based credit facility was approximately $87 million, and the value of eligible rental fleet used to calculate the company's borrowing base was approximately $290 million at the end of the quarter. The company exited the quarter with a net debt to adjusted EBITDA ratio of 3.8, primarily due to the funding of the acquisition of Vanguard. Net debt to adjusted EBITDA, including Vanguard's trailing 12-month results, was 3.2, and we expect this leverage ratio to be back within our target range of two to three times by the end of 2021. Committed CapEx as of March 31, 2021, was approximately $14 million, the majority of which were ongoing MSS fleet growth across North America, with a particular focus in the U.S., We are seeing ample opportunities for organic growth in MSS and expect organic fleet growth to drive continued MSS rental revenue growth throughout the year, consistent with our stated strategies. As Trevor mentioned, we believe we are off to a strong start in 2021 and expect to continue to build on this momentum in the coming quarters as we execute on our growth strategies. Operator, we'd like to now turn the call over to open the call to questions.

Thank you. We will now begin the question and answer session. To join the question queue you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone please pick up your handset before pressing any keys. To withdraw your question please press star then 2. We will pause for a moment as callers join the queue. The first question is from Frederic Bastien with Raymond James. Please go ahead.

Good morning.

Good morning.

Guys, I'd just like to get a bit more color on how the LaunchLink platform is doing. I know you've got all the stats available in MD&A, but I understand that You were hoping for this platform to be break-even kind of at around end of Q2, so I'm just wondering if you could get an update there. Thank you.

Yeah, thanks for the question, Frederick. Toby, do you want to give some color there?

Yeah, absolutely. Frederick, that's a good question. Our primary focus for LodgeLink is on growing net revenue, we believe, There's tremendous value growth created there. We do see a path to break even, and we see that in the near term. We're not currently breaking even with LodgeLink, but we do expect to see that in 2021 as our margins continue to improve with increased booking volumes on the platform.

Okay, thanks for that. Second question relates to, I guess there was some activity in the space, United Rental acquiring General Finance Corporation, or at least they announced that mid-month last April. I'm wondering if you get some color on your thoughts for the industry in general and whether there's any implications for Black Diamond.

Yeah, that's a good question. Obviously, We're paying attention to the transactions in and around our MSS business. We've seen consolidation accelerating over the last couple of years with the Will Scott platform acquiring a number of larger players such as Modspace and more recently combining with Mobile Mini and then United Rent Corp acquiring General Finance or announcing the intent to acquire. You know, we're certainly paying attention to the multiples of EBITDA being paid and note that they're considerably higher than the multiple on the Black Diamond platform. But generally speaking, from a competitive perspective, we see the consolidation as being positive. At least that's been the trend to this point. We're seeing rates improving across the marketplace. We're of the mind that the end markets want competition, and so it leaves a pathway for us to continue to grow our platform and to potentially increase the pace of our expansion with some inorganic transactions ourselves. I'll just ask Ted Redmond, who operates our MSS business, if, Ted, you have any other comments you would make?

No, I concur with your comments. The Will Scott acquisitions have resulted in fewer large competitors and we've generally seen rate increases across the business, both as a result of the consolidation, but also probably just more generally because of this strong uh, industry drivers, including the economy and also including, uh, in our business space, uh, additional space needed for COVID.

Okay. But I understand that, um, I mean, just wanting to know if, uh, your asset base currently overlaps with that of, um, general finance. I understand they, they run this PAC van division. So wondering if there's, Any overlap there? And just some basic understanding on how, I mean, United Rental is publicly traded, so I'm sure they're a disciplined bunch of guys, but I'm just wondering if you could get some color there as well.

Yeah, when we look at the modular space marketplace in the U.S., there's a number of segments. Certainly there's geographic segmentation, the way that the market is structured. PacVan and our Box Modular and Vanguard businesses have similar assets, but generally speaking, we've been focused on different regions within the U.S., so not a huge amount of overlap, but certainly in the same space. The other way we look at it is that there's the... single-wide container and trailer rental business, which is more transactional, more of a volume business, more construction-oriented, which we view that as the market that United Rent Corp is interested in. Our business is more focused on a more sophisticated asset mix, multi-sectional buildings, and markets such as education, government, larger commercial type of applications that require more of a skill set for the assembly, turnkey construction type of work around the buildings, et cetera. So we think or we know that there's a difference between the higher volume transactional platforms that are being built versus our more sophisticated project-oriented and larger asset complement. Why do we like this space? Because we feel that the higher touch part of the market, if you can perform, offers a different competitive landscape, fewer competitors, and potential for stronger margins when you take the blended services along with the asset rental. plus the larger multi-sectional assets tend to stay on rent for longer periods of time with our customers. And so when we look at the market through those couple of lenses, we view it as very constructive for our platform and our vision for what we're building.

Great. Thanks. That's great color. Last one for me, I mean, we've seen nice, steady performance from MSS and then I guess from my perspective WFS met my expectations for Q1 but given the successes you've had adding more contracts to this division should we expect you know just curious how we should expect this particular segment to perform throughout the year should we see steady growth from the six million bucks of EBITDA you reported or should we expect a bit of lumpiness given the timing of these contracts?

Yeah, good question, and that's an area we've been very focused on. We've been pleased with the performance and growth and diversity we've achieved with our MSS business. When we look at our strategies around our WFS business, what we've been working on over the last several years is to broaden out beyond Western Canadian oil and gas, build up a network within end markets such as mining, disaster recovery, government, et cetera. It takes time. All of these are longer sales cycle. And where we are today with the contract wins and what we're seeing in our marketplace, we're very constructive on our forward view of performance of WFS. It is inherently a project-oriented business. And as such, there's always a degree of lumpiness. But we think we'll be able to inform sort of less volatility based on the growing rental stream in behind these contracts we've been signing. And I'll get Mike Ridley, who leads our WFS business, to add some color there too, Mike.

Thanks, Trevor. Hi, Frederick. Yeah, we're really pleased with the strategy. We've been working hard on it for the last few years to really diversify our business and move away from the oil and gas sector, the mining sector, into eastern Canada. Construction, government, we've partnered with a number of companies around disaster relief when those occurrences occur. We're on the heels of good contracts already in place with the Coastal Gas Link. That continues on and we have assets deployed for Trans Mountain and these contracts that are recently announced. So feel pretty good about the quarters ahead. And further to that, also, our Australia business continues to perform very well. Also, strong space rentals business education market and a steady and good workforce market over there as well. So pleased with the progress we've made and like the way the balance of the year looks.

Okay, great. Thank you both.

Thanks. To finish the question there, Frederick, Q1, we did have the benefit of a larger asset sale to a customer who also took equipment on rental. As we move into Q2 and beyond, I think we'll see performance in line, but the mix of revenues with more rental and more contribution from multiple projects is what we'll show, and then growth in the subsequent quarters as well. Got it.

Thank you. Thank you.

The next question is from Brent Watson with Cormark Securities. Please go ahead.

Hi, thanks. Maybe to that point about workforce, if you guys could maybe characterize for us sort of the level of bidding activity going on now relative to where we might have been just sort of prior to COVID. and what kind of end users are kind of looking the most promising at this point?

Yeah, that's a good question. We did see things soften through the initial part of COVID, but our pipelines are looking quite robust with lots of different customer projects in different areas. And again, Mike, why don't you give some color there?

Sure. Good question, Brent. The pipeline of activity continues to be good. I would say it's better than it was, actually, even ahead of COVID. And with COVID, actually, it's created some opportunities for social distancing in terms of how dorms are configured, as well as on the space rental side of the business. They have a requirement for additional space with more lunchrooms, et cetera. Yeah, it's a pretty active market in terms of the type of opportunities. It's certainly less in oil and gas. It's more a lot in the eastern Canada mining sector. And as I touched on earlier, a fair bit of construction across the country with opportunities as well down into the U.S. and Australia.

Great. Thanks very much.

The next question is from John Gibson with BMO Capital Markets. Please go ahead.

Good morning, all. First question, MSS utilization, you know, it's nice to see a continued trend upwards. I guess in a perfect world, could utilization get to, you know, 100%? I mean, not that it will, but I'm just trying to wonder, or I'm just trying to get at, like, how high could it move from here, or will it be sort of capped at a certain level?

Yeah, that's a good question. My view has always been that as you get up into the mid-80s, it becomes inefficient in that we do have shorter-term transactional needs from our customers, and if we don't have the buildings on hand, then we're not able to service the customer and, in fact, end up potentially losing that customer to a competitor simply because of availability of supply. So as we look at replenishing our fleets based on utilization, replenishing as in adding additional capacity, we look for utilizations rising above 80%. And then, of course, we also look at our trailing ROI hurdle rate and then look to add assets. So the system is fairly optimal right now in terms of utilization. We do have more fleet additions coming in Q2 and through to the end of the year, consistent with our CAPEX plan. But we were constrained internally, I guess, just to make sure that we brought the Vanguard business on and we understood, after taking on some debt to do that, how our cash flows were running, etc. So 100% is is possible. It's unusual and not healthy for this type of rental business. Ted, anything you would add to those comments?

No, you covered it pretty completely there. I guess my only other comment would be, as Trevor said, 100% is possible, but it's very difficult because As assets come off rent, it can take a few weeks or a month to get them turned around and back on rent just because of the timing of our customers' needs. So we don't want to get too much higher than we're currently at. Some of our markets are higher and some of them are slightly lower because we've got numerous...

Hello? Hello? Are you still there? I don't know if we lost Ted there.

No worries. That was a great answer. I just had one more. It's around your WFS segment. I'm just wondering how much of those $56 million in contracts recently signed hit during the quarter versus what will sort of

move into future quarters if you could provide any sort of breakdown yeah it's a good question and important in understanding what happens next in our wfs business mike can you sort of give some color on how those contracts roll out over the next while you'll see it's it's you'll see some up front like with trans and install parts of the that will roll sort of into q2 and some small rent but the the bulk of the

revenue and rental revenue is sort of beyond Q2 into Q3, Q4 and even into next year.

Okay, great. I appreciate the call for impact.

A number of those contracts have up to 36 month rental commitments in behind them. So we're starting to build up our base recurring rental stream. in our WFS business as those unutilized assets, some of which haven't worked for a number of years, are going to work and will be generating recurring cash flow for us. And that, aside from the operational revenue we'll receive for positioning the assets, which will show up in the near term, those nice steady recurring monthly rental revenues is what we're really quite excited about as a new development.

Thanks again. I'll turn it back. Thanks, John.

The next question is from Dustin Lee with Lee Sarman. Please go ahead.

Hi, good morning. I just had a question on LodgeLink. You put up some very impressive growth against just a really difficult macro backdrop this quarter. Why not invest more aggressively to turbocharge growth given how well the product is resonating with customers and just the size of the opportunity here. Do you think it makes sense at some point to bring in a third party like a VC to help take this business to the next level and as a means of highlighting the value that you guys are building here?

Good question. In our view, If I break your question down, first off, yes, we're really pleased with the traction LodgeLink is getting in the context of the business travel industry, which at one point was down about 90% in terms of volumes due to the pandemic and even as of today continues to have headwinds. So in light of that, we think the growth that we're showing there is very meaningful in terms of the adoption of the platform and the quality of the product, et cetera. To your second point, we don't feel that we have been constraining LodgeLink. We've been adding resources slightly faster than we're seeing the volumes increase. It takes some time to convert a corporate customer into a user on the platform And so we have a bit of visibility through how the pipeline works from initiating conversations, demos, et cetera, and then running pilots, and then beginning to onboard the internal users of our customers, which sort of gives us the benefit of being able to gauge the pace at which we need to add to all of our teams, customer support, customer success, billing and admin, as well as product, et cetera. So we don't feel we've been throttling the business back. And, in fact, we have increased the headcount in LodgeLink, as Toby mentioned. The third question, yeah, I mean, our intent is to generate as much value for the Black Diamond shareholders as possible in all of our businesses, including LodgeLink, and we think there's a great deal of potential there. There's different ways that we can unlock that value. and we'll look at all of them. But in the near term, what we need to do is continue to drive that volume growth and that revenue growth. And as the business scales, it becomes more valuable, and then we can look at whether we need a strategic partner to help inform the best outcome in terms of performance or value of the business or any of a number of other means by which we can contribute We can accomplish that over time.

Great. Thank you. Thank you.

Once again, if you have a question, please press star, then 1. The next question is from Jeff Federley with Peters & Co. Please go ahead.

Morning, guys. Just a question on CapEx. Whether it's the operational side of the platform or the balance sheet, what's your comfort level in pushing CapEx beyond the 35 number you've talked about?

That's a good question. In CapEx or capital allocation, we're looking at a number of factors, certainly debt levels, cash flows, how contracted the forward cash flows are, etc. What we're seeing on the platform right now is very positive from what our expectations had been at this point. However, we've not allocated the full $35 million at this point, and also with the WFS asset sale in Q1, we're running stronger than we had anticipated at fleet sales, and so it gives us some variability when we look at net capex. to support the business. And Toby, any other thoughts there?

Yeah, I just thought that we've been trending to get back to our target leverage ratios more quickly than we had originally planned. doing that through a combination of modest debt repayment. And as Trevor mentioned, starting to allocate more quickly our capital program. And so that's increasing our EBITDA generation. We see that continuing to improve throughout the year. And so with that combination, we think that on a net capex basis, as Trevor mentioned, we have some headroom and potential opportunity to continue to deploy more capital. But primarily we're focused on that leverage coming back down, and we think we'll get there more quickly than we first anticipated.

And how much of the 35 is unallocated at this point?

We probably have about a third of that unallocated. Okay.

And so do you expect that that will be spoken for fairly quickly, or could it take a couple more quarters to get full visibility over your program?

I think we'll have visibility, Jeff, as we go into Q3. typically demand in our system slows going into the winter months, as in the Canadian markets, MSS sees a softer period in Q1, as construction starts usually coincide with frost coming out of the ground. And when we look even in the U.S. with the Vanguard system, Within Black Diamond now, the majority of their business is school-oriented, and so the big push for school additions, et cetera, is around this time of year, so it's usually a Q2, Q3 CAPEX demand. So based on those factors, we would expect that, if not all, the majority of our CAPEX will have been allocated before the end of the summer. That doesn't mean it's spent, but that it's been allocated. And then we'll take deliveries through to early fall, and then it'll taper off.

Just one quick question on VAPS. So the comment in the MD&A about the differential between VAPS penetration on Vanguard versus Boxx, Is there anything structural on the Vanguard side that would limit VAPs from gravitating over time towards the box level?

I don't know if Ted's back on the call.

Yeah, I am.

Yeah, so I was just going to point out the difference of the education market and assets for VAPs, but I'll turn it over to you, Ted.

Okay. I think there is a difference between the businesses. The education market certainly would have different VAPs and probably maybe less VAPs. But the same, I think, philosophy applies where we can give our customers one-stop shopping and easier access to outfitting services. their units. We've been successful at that. So there's definitely some opportunities within Vanguard to increase the VAPS usage in that market. And then there's also still opportunities across the rest of the MSS platform to increase VAPS adoption and also to come up with new VAPS products that we can offer our customers. So, we expect continued growth on the VAPS side, both on a percentage basis and a dollar basis over time.

Is there an internal stretch target that you have in mind for where you think VAPS could go?

We set our, I mean, we're setting our VAPS targets on an annual basis, so we're definitely targeting probably over 10% VAPS growth per year internally on an absolute dollar basis. So I guess that's about it. Trevor, do you have maybe an additional color on that?

I mean, notionally, trying to get our VAPS and operational revenues on ratios to work up the return on the investment in the asset itself is the... the overriding philosophy, and then convenience to our customer that we can include other items that they require that they would have to source elsewhere. And so in my mind, if we can get ourselves between 15% and 20% of our rental revenue, and it's going to differ by market and by product type. We don't dictate through the system. We ask our regions what else could we add that would be convenient to our customer that connects to our main business, which is renting the buildings.

Thanks for the color. Appreciate it. Thanks, Jeff.

The next question is from Greg Bennett, private investor. Please go ahead.

Congratulations on another good quarter. If the Gold Spur contract is awarded, would that change your revenue forecast for 2021, or is that all pushed into 2022? And is there any capex spending that you'd be doing this year in order to fulfill that contract?

Yeah, our current view, Brad, on Goldboro, if it does achieve final investment decision on June 30th, which is the date that's been put out by the proponent, period A, that the revenue in this calendar year would be fairly light for us, in that the front end of the project entails the site geotech and initial permitting, and then we need to do the civil works to prepare the site where the camp will go. And so we may have some operational revenue if we can get all of the permits in place and get to work on the site, but very little by way of assets being on rent. And as far as capex for the year, if anything, it would be very light based on based on what's involved in the first phases. Okay.

Switching over to LodgeLink, I keep track of your customer count, I guess, and your property count. I'm wondering, you went from 582 in the fourth quarter to 662 for customers, and properties went from 2,500 to 3,600. Do you have any guesstimate or estimate what the size of that market could be as far as a customer count and or property count?

That's a good question. Usually we look at the size of the market as tracked by the Global Business Travel Association, the GBTA, and they track a subsector called ERM. which is essentially crew travel, and they track globally about $380 billion of spend, and that's the trade between buyers of travel services, rooms, airplane seats, et cetera. And so when we look at the addressable market, even in North America, over $60 billion, this is pre-pandemic numbers, it's a very sizable market, and we've got lots of room When we think about the number of properties, it becomes a bit more difficult to zero that in. I guess technically any hotel and any camp or lodge in North America is a potential property, but of course the ones that are most suitable for crew travel sort of narrows us down into certain brands and certain properties. I don't know about Patrick Melanson. Our chief technology officer is on the call. I don't know if this is a data point you've seen or that our team has been focused on, Patrick.

Yes, I can add a little bit of color on that, Trevor, in that the properties that we are enlisting for quality control purposes, we want to be cautious. We have our customers stay in the, let's call them, very suitable properties. So we stick to going after brands. So think about the large brands that we're all familiar with. and they have sub brands that are germane to the worker crew traveler. So we focus on those and those there'll be a limited capacity. I don't have that number here, but they certainly have many, many properties across North America and beyond. With respect to the smaller properties that are sometimes not affiliated, we're cautious with those because without the quality control of a brand, we'd be at risk of putting our gas into properties that might be not as desirable, not what we want to do. So there is a number we can get to that for the brands for North America, perhaps for a future disclosure.

So these would be like the Microtels or the Hilton True or? Correct. Correct. Yeah. All right. And then from a customer, I'm sorry, go ahead.

Yes, on the customer side, we have a very good strategy going after different verticals and by extension geographies. We all know we start in Western Canada, which is where our bread and butter was and our basket of knowledge is. But now we've grown that across North America to go after customers that have crews that do work in different verticals, beyond construction, mining and oil and gas, there's other verticals. And we're finding companies with crews of five or 50 or, you know, we'll take many, many. That's our differentiator. And we've yet to scratch the surface in the U.S. as far as I'm concerned because we've been concentrated mostly in the southern part of the U.S.

In terms of numbers, companies that could be customers, I mean, it would be in the thousands. Yes. We've got a long ways to go. Okay.

Have you seen any new competition under that market? I guess you have the first mover advantage and what other people call it. You're growing as fast as you can and there's no constraint, I guess, that you have. Is that correct?

Well, what we're addressing is the... The inefficiency and the complexity of crew travel from a number of different perspectives. A lot of what we do is efficiency-oriented software for tracking costs against AFEs, purchase orders, etc., speeding up the internal administration and cost control for our customer so they can turn around more quickly and invoice their customers. So, yeah, the search and book is a component, but it isn't the differentiator. Really, if we look at the space, yes, there's been travel agencies and booking tools that have been involved in helping these companies book into hotels or onto airplanes, but looking at the whole integrated travel cycle and trying to bring efficiency through digital we think we're one of the few focused on this particular part of the business travel world. So I wouldn't say there aren't others with traditional offerings or others that are on the peripheral of what we consider our core, but at the moment we think we've got... fairly little competition for the core target of what LogsLink is going after.

Thank you very much. Thanks for a great job. Appreciate all you guys are doing. Thanks. Thank you. Thanks for your questions.

For any further questions, you may press star and 1 on your keypad. Gentlemen, there are no more questions registered at this time. I would like to turn the conference back over to Mr. Zhang for any closing remarks.

Thank you all for joining and stay safe. We will talk to you next quarter.

Thank you.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.