Black Diamond Group Limited

Good day and thank you for standing by. Welcome to the Black Diamond Group fourth quarter 2021 results conference call. At this time, all participants will not listen only notes. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you need to press star one on your telephone. If you require any further assistance, please press star zero. I would like to hand the conference over to your speaker today, Jason Zhang, Investor Relations. Please go ahead.

Thank you. Good morning, and thank you for attending Black Diamond's fourth quarter and year-end 2021 results conference call. With us on the call today is our CEO, Trevor Haynes, and CFO, Toby Labrie. We're also joined today by COO, Modular Space Solutions, Ted Redmond, COO, Workforce Solutions, Mike Ridley, and CIO, 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 and ratios in today's call, such as adjusted EBITDA, free cash flow, or net debt. For more information on these terms, please review the sections of Black Diamond's fourth quarter 2021 management's discussion and analysis entitled Forward-Looking Statements, Risks and Uncertainties, and Non-GAAP 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 will now turn the call over to Trevor Haynes to review the quarter.

Thank you, Jason. Good morning, and thank you for joining us to discuss our fourth quarter and year-end 2021 results. I am very pleased with our recent results. In my view, the business is running really quite well. And I'd like to acknowledge and thank our team members across North America and Australia for their hard work in delivering a fantastic year as we continue to set new records in rental revenue growth within MSS, drive record booking volumes in LodgeLink, and boasting one of the strongest years recently for WFS based on improving utilization and sales. We generated consolidated revenue of $340 million for the 2021 year and reported adjusted EBITDA of $64 million. These were improvements of 89% and 58% from the prior year respectively. And even more importantly, we did this as we have done in previous years with health and safety top of mind, reporting a top decile total recordable incident frequency rate, or TRIF, of 0.56 for the year. Within the year, we reinstated our quarterly dividend on the strength of continued stability of the business and the free cash flow it is generating. We are pleased to announce a 20% increase to our quarterly dividend to 1.5 cents for an annual dividend of 6 cents per share. Highlights in the fourth quarter include total rental revenue of $27.3 million, up 51% year-over-year, which drove a consolidated return on assets of 17% for the quarter. In MSS, we recorded the eighth consecutive quarterly record for rental revenue in this business, along with continued utilization improvement in our WFS division and another record for booking volumes within LodgeLink. We generated free cash flow of over $15 million in the quarter and exited with available liquidity of over $113 million. Now to go into some more detail on the portfolio. In the quarter, MSS rental revenue grew to $16.1 million, up 42% from the comparative quarter, For the year, MSS rental revenue of $60 million was up 53% from the comparative year, and EBITDA of $46.8 million was up 59% year-over-year. Our MSS business continues to see healthy demand in all regions, and we anticipate continued growth in our recurring rental revenue base through an expanding fleet, increasing uptake and value-added products and services, or VAS revenue, and continued escalation in average rental rates across the fleet, which for the most recent quarter was up 9% year-over-year on a constant currency basis, while Q4 utilization was strong at 85%. Moving to our WFS business unit, we are seeing continued progress across WFS, driven by our efforts in the past several years to diversify this business, streamline operations, while also continuing to monetize underutilized assets. Average utilization in WFS has improved to 49% from 28% the year before. We are seeing particular strength in Australia, but have also seen continued improvement throughout Canadian and US markets. WFS rental revenue for the quarter of $11.2 million improved 67% year-over-year. EBITDA of $9.7 million was up 126% from the prior year as WFS also benefited from stronger sales and non-rental contribution in the quarter. For the year, WFS rental revenue of $38 million was up 44% which helped to drive a 57% improvement in EBITDA to $34.6 million. We've talked some time about the existing operating leverage within our WFS business. We note that the 57% growth in EBITDA this year has been off the back of minimal capital expenditures. We expect to continue to realize the operating leverage potential within this business both through profitable sale of excess capacity, but also through our diversification efforts and the resulting improved utilization across our regions. We are constructive on our WFS business into 2022, owing to existing contracted rental revenues in place, driven by near full utilization in Australia, strong demand in mining markets across Canada, and further supported by gradually improving field-level activity among some of our more energy-weighted customers. LodgeLink, our digital marketplace offering that is bringing innovation to the crew travel industry, continues to scale. Despite initial expectations for a slowdown during the fourth quarter holiday season, LodgeLink delivered its highest-ever quarter for room nights sold annually. There were over 70,300 rooms sold in the fourth quarter, up 96% from the comparative quarter, and up 16% sequentially from a previous record high quarter in the third quarter. Net revenue for the quarter was $1.1 million, up 120% from the comparative quarter. At the end of the fourth quarter, LodgeLink had over 6,300 listed properties, servicing 615 distinct corporate customers and their thousands of crew members. LodgeLink has been off to a strong start throughout the first two months of 22, and we expect ongoing sequential growth in booking volumes as we look to continue to demonstrate a unique value proposition by leveraging increasing sophistication of our tech platform to this very large addressable market of approximately $60 billion per year. As we reflect on our accomplishments in 2021, I'd like to once again recognize the hard work and dedication of our team. We implemented a strategy some years ago to scale and diversify our specialty rental platforms, and we are seeing a notable shift in terms of the quality and stability of our overall cash flows and revenue streams across White Tynan. We believe we can continue to build upon this momentum, and we'll do so by expanding our MSS business, improving utilization in WFS, and aggressively growing our B2B travel tech ecosystem in LodgeLink. I will now turn the call over to Toby for some further details on the fourth quarter financial and year-end 2021 results. Toby? Thanks, Trevor.

Total adjusted EBITDA for the quarter was $17.5 million, an increase of 58% from Q4 2020. For the year, total adjusted EBITDA of $64 million was also up 58% from 2020. Most notably, total rental revenue for the quarter and year-end of 2021 was $27.3 million and $97.9 million respectively. This represented year-over-year growth of 51% and 49%. The increase in our core recurring rental revenue streams resulted in an ROA for the fourth quarter of 2021 of 17% and an ROA for the full year of 2021 of 15%. Our balance sheet remains strong following the recent extension of our asset-based credit facility which is now committed out to the fall of 2026. At the end of the quarter, net debt of $151 million was down from $172 million at the end of Q4 2020, and current available liquidity sits at $113 million. Our net debt to EBITDA ratio at December 31, 2021, of 2.4 times, is within our stated long-term range of 2 to 3 times. Equally as important, our average cost of debt in 2021 was 2.1%. And finally, roughly one-third of our outstanding long-term debt is hedged at recent record low rates. Overall, the strength of our balance sheet gives us access to plenty of flexible and relatively inexpensive debt to continue to grow the business and leverage returns. On a gross basis, we invested approximately $38 million of capital in the business in 2021. On a net basis, after accounting for used fleet sales, net capex was approximately $15 million for the year, as used sales throughout the year were higher than expected and above our historical range. We expect a fairly similar cadence of gross capital investment in 2022 compared to 2021. but currently expect a more normalized level of used fleet sales of approximately $10 to $15 million. Within our portfolio, MSS reported fourth quarter adjusted EBITDA of $13.3 million, up 33% from the same quarter last year, and total revenue of $51 million, which was up 62% from the comparative quarter. This is attributable to continued growth in rental revenue as well as a stronger than average contribution from sales revenue in the quarter. Adjusted MSS EBITDA margins in the quarter of 26% were lower than the comparative quarter of 32% due to this relatively higher proportion of consolidated revenue being driven by sales and non-rental revenue, which are lower margins than rental revenue. We believe that the full year of 2021 results in MSS are a good proxy for estimating a more long-term average around sales and non-rental revenue as a proportion of total revenue based on the makeup of our current platform. For the year, MSS total revenue of $174 million was up 85% year-over-year and adjusted EBITDA of $46.8 million grew 59% from 2020. In WFS, Q4 2021 adjusted EBITDA was $9.7 million, up 126% from the same quarter last year. WFS revenue of $45.1 million was up 81% from the comparative quarter. This is attributable to increased non-rental revenues from several projects across North America and Australia during the quarter, as well as increases in rental and used fleet sales revenue as activity levels continue to improve in North America and remain resilient in Australia. For the year, WFS revenue of $166 million was up 93% year over year, and EBITDA of $34.6 million was up 57% from 2020 levels. We continue to pursue our strategy of unlocking the operating leverage within WFS by selling underutilized fleet diversifying revenue by end market and geography, and increasing utilization. LodgeLink is continuing to scale and we are confident in the significant value creation of this unique platform as we continue to penetrate a very large North American market of over $60 billion U.S. with a differentiated digital solution. We continue to see a negative cash burn from this business but Logilink is profitable in processing current volumes against the existing cost structure. However, by design, we are continuing to invest in growth G&A as we exponentially grow net revenue, which we are confident will continue to deliver significant long-term value creation. On a consolidated company-wide basis, total administrative costs as a percentage of revenue of 14% was down 2 percentage points from 16% in the comparative quarter. For the year, total administrative costs of 14% was down 4 percentage points from 18% in 2020. Total administrative costs for the quarter of $13 million grew 43% from the comparative quarter, primarily due to an increase in staffing levels following the Vanguard acquisition, continued growth across the company, as well as higher profit incentives due to strong performance of the business. Our asset rental model has continued to provide a strong base of free cash flow generation and we view our rental assets as an attractive hedge in the current inflationary environment. We continue to see a healthy market for used fleet equipment sales and in instances where we are selling used fleet assets, we are realizing sale prices that are above replacement costs for producing assets and are driving strong economic returns for shareholders. In summary, by almost all metrics, the business has performed very well over the past year and is expected to observe continued growth in core recurring rental revenues. As a result, we also announced a 20% increase to our dividend. The Board has declared a Q1 2022 dividend of 1.5 cents, which amounts to 6 cents per share on an annualized basis. The dividend is expected to be paid on or about April 15, 2022 to shareholders of record on March 31, 2022. With that, we'd like to turn the call back over to the operator for questions.

As a reminder, to ask a question, you need to press star 1 on your telephone and to withdraw your question, just press the button. Once again, that's star 1 for questions, 1 more for questions. Our first question is from Matthew Lee from Canaccord. You may begin.

Hey, thanks for taking my question. Congrats on the great quarter. I wanted to maybe understand what went into the decision to raise your dividend again after instating it last quarter. What has changed in the environment that has given you more confidence to elevate the payout?

Thanks, Matt. The dividend is really an outcome of our view of the stability of the business. And we believe that the company, as we continue to demonstrate the stability of our cash flows based on the diversification of where that cash flow is being generated by region, by asset type, by business unit. And we believe that that stability is such that we can begin paying our shareholders a gain, which we did implement in Q4. And our view and that of the board is that the continued performance of the business justifies increasing the dividend for this year. And we hope to position the company that as we move into the following year, that we also have the ability to increase the dividend. Of course, we compare it against our full panel of capital allocation. options and based on where our priorities are, we continue to see really good metrics on investment in areas of our business, specifically MSS, but also our Australian business. It's bringing us really strong returns and in certain cases, refurbishing or adding certain assets into our WFS business. And so the growth, certainly growth within our risk strike zone, is our first use of capital. And then looking at potentially inorganic growth for some tuck-ins, if we can be successful there, would augment that growth and then a reasonable return to our shareholders and reducing debt. But as Toby mentioned, our current ABL is quite quite reasonable for this type of business and our cost of debt is really quite low. So we're looking to reduce our ratios on debt by increasing our cash flows or EBITDA by growing the core business. So that's how we think about it and as we look through that equation certainly room to increase the dividend and that was the decision of the state.

That's great. And then maybe in terms of fleet growth, I'm a little surprised about net capex being where it is. I would have suspected that given the strong demand, maybe there was a desire from your perspective to add to the fleet faster. Can you maybe talk about why you kind of kept net capex around the same as it was this year?

I think the importance is to look at gross capex. That's where we are purposefully allocating capital and growing the business, and the cadence of gross capital we think is still quite strong. There's still a bit of a repositioning within our fleet that you saw last year, and if you break down the sale of assets that informs net capex, you'll see that we've been selling parts of our workforce fleet where there's excess capacity, but in the current market we're getting pretty good bid for sale of assets. And so we view that as sort of rationalizing our capital and being able to reinvest that elsewhere. Also through acquisition, often you get non-standard assets. And so we look to rationalize the fleet and to sell down some assets. And then we have certain customers who will be renting assets and it makes sense for them to own them over the long term. And the way we view that is In the current market, we expect to get and have been getting replacement value, even though the cost of a new unit has been increasing. So I think the discipline through the system has been there. Keep in mind, also, we acquired Vanguard, which was a fairly large piece for us, in late 2020, adding roughly 2,000 units. And so through the early part of last year, we were absorbing that acquisition and getting making sure we understood that asset, and so we were very focused. Also, we had taken a bit more debt on, and so we were quite cautious, if you will, on the net capex calculus. And then, as you saw, later in the year, with Vanguard Acquisition performing extremely well, and markets and demand really strong, us accelerating our gross capex. So as we move into this year, again, we're looking to add to our fleets, and we expect we will show growth once again. But we're also continuing to look at some areas where we have overcapacity in markets around our workforce business, and so you'll see a cadence of used sale, probably less used sale, I would predict, in the MSS business.

All right, that's very helpful. Thanks again.

Our next question will come from Frederick Bastian from Raymond James. You may begin.

Hi. Good morning, everybody. Good morning, Frederick. Good morning. So this all-around solid performance and outlook are the result of good vision, discipline, and hard work for many, many years. So I want to first start by giving a big shout-out to your team. Now onto questions. So there's a lot of talk about inflation. I know your business is not labor-intensive. It's really asset-intensive. But I was wondering if you could provide some commentary on the inflationary pressures that you're seeing, if any.

Yeah, for sure. And it is interesting how we're seeing it and thinking through with our platform how to best respond. So perhaps we can... get a couple of our team members to comment here. Maybe Toby, you could kick off and then perhaps Ted, you can talk about what we're seeing in our supply chain. Sure.

Generally, we are seeing inflation in our input costs throughout the business, direct costs of delivering services, although we don't carry a lot of those services ourselves. We are seeing some inflation on with our vendors. And so those input costs are going up, but we are seeing that being matched with the price increases that we are realizing on the rental and sale of our assets. And so with those input costs going up on the operations side, but also on the cost of our fleet, we are seeing the manufacturing costs increasing. but we are continuing to realize above our hurdle rates on deploying new equipment. And so the benefit of the price increases on our existing fleet far outweighs, from a returns perspective, the inflation that we're seeing across the other parts of the business. Maybe, Ted, you can elaborate on that from what we're seeing specifically in the MSS business.

Yeah, thanks, Toby. Yes, we are. We're seeing material shortages and material cost increases, although our repair and maintenance costs for 2021 decreased. So we're managing that. We're trying to order further in advance. for our repair and maintenance needs. We've also formed a supply chain group within our operational excellence group, and they're focused on negotiating strategic sourcing agreements and doing some of these volume purchases. So that program's been working well, and we'll continue to work on that as the year goes on. As Toby also mentioned, for new manufacturing units, we are seeing price increases, and again, we've been increasing our rates to offset that, and we've also in some areas even increased our hurdle rates for new investments. We are, again, to deal with manufacturing shortages, we're trying to book line time out further in advance while still leaving ourselves the flexibility that If we don't need that line time, we can, you know, trade it for other line time or not take the line time based on commitment windows. So I think we're doing our best to manage it, and really I think the main thing we're trying to do is push higher rates across the system to compensate for that. And as Toby said, since, you know, we might grow the fleet somewhere between 5% and 10%, per year, depending organically and how much acquisitions we do, but that's a small portion of our total fleet, and the rate increases go across our entire fleet. Again, I think we're on the positive side of the inflation trend based on that.

Thanks, Jeff. Thanks for that call. I guess your ability to pass on I mean, those higher costs and increased prices is really a function of also demand. Demand's been strong. Just wondering if there's any inflation that you index into your contracts and how quickly those contracts roll over. And, you know, wondering if there's any ways or at least, you know, is there any lag with respect to your ability to pass on higher prices?

Yeah, we... I guess we're protected because we have so many contracts across the platform and so you've got this, even though we work to place assets where they're going to have an extended duration with that customer at that location, we still have a turnover where as assets go out, they go out at new rates and so you get this gradual increasing in rental rates. What we have done recently is is look where a contract comes to term, but the customer is continuing to use the asset in the past. We would just let that go month to month and be happy for the utilization. As we're building into our contracts these days, at the maturity of that contract, that's where we would stipulate in advance what the increase in rate is. And that's a response to a different environment. If the customer doesn't want to pay the rate and the asset comes back to us, well, we have more demand than we have assets in most of our categories right now, and so it'll go out to work at market rates elsewhere. So that's one of the ways that we've responded. But as you point out, I mean, we've got in our MSS fleet roughly 9,000 buildings, and so you think of those costs being fixed, And if we can get higher and higher rental rates against that original fixed cost, that's where you'll see a bit of an exponential profile in ROA if inflation does continue or accelerate. And as you mentioned earlier, we're not labor intensive, although on the people side, we do feel cost pressure, but it's not a big component of our business and so far outweighed by the upside on an asset management business in an inflationary period.

Just a couple other points, Frederick, on some of our larger contracts as well. We have CPI built in to the contracts, so we are able to get increases throughout the duration of the contract. And then secondly, when we put our assets out to work, as you know, there's often a transport installation component. And with rapid rising material prices, labor prices, we're able to sort of drive to sort of a cost-plus model where we're not really impacted by inflation as much.

Yeah, and then maybe finally, I think what you're getting at as well, Frederick, is that the 9% rate increases that we're seeing on average in the MSS business, that is the average through the fleet. And so at the margin, we're seeing rate increases quite a bit higher than that. probably averaging upwards of 20%. And certain markets are seeing more strength than others, but certainly the 9% is an average because we do have the turnover of our assets. As Trevor mentioned, we are pushing rate increases on those more frequently than we have in the past.

Awesome. Thanks for that very detailed answer, guys. Next one would be around... whether Omicron has had any impact on lodging occupation in Q1 thus far. I assume it has, and obviously your diversification efforts have allowed this business become less meaningful, but just curious how that business is doing.

Thank you. Yeah, Mike Ridley, why don't you?

Yeah, I can go. It actually, sort of as we kick into this new year, It's had very little impact, quite frankly. Our team's very diligent in terms of how we monitor it. And we have, for example, at many of our camps, we have set-aside dorms where if they do come down with a case, they need to be isolated. So we're not really seeing it. I think we're coming out of it, which is great. And sort of on a go-forward basis, we just don't see it being as much of an issue, but we're certainly not taking our eye off the ball operationally on how we're dealing with it and the service that we're providing to our customers and making sure we have the appropriate manpower at our camps in the event that we end up with a few cases here and there. But at this point, it has not really had that much of an impact.

Thanks, Mike. I have other questions, but I'll pass it on and we'll get back to you. Thanks.

Thanks, Frederick.

And our next question will come from Brent Watson from CoreMark Securities. You may begin.

Hi, guys. I guess my question was related to the supply chain there. Maybe if you can kind of quantify how order lead times has changed in the last three, four months?

Yeah, thanks, Brent. As Ted alluded to, we're having to adjust our typical methodology by committing farther ahead for line time to ensure that we've got access to supply to match up with what we see in our sales pipeline, not just for rental contracts coming up, but also we do in certain regions a healthy amount of new project sales where the customer is buying the asset but we handle the full turnkey transaction. So there's certainly a change that way. And it's also somewhat regional. Certainly in all three countries we have seen strong demand and the demand for line space for manufacturers has increased and so The offline from order time has expanded. I would say we're seeing, on average, a six-month turnaround, where a year and a half ago it would have been six weeks. And so it does change how we approach the supply side of the business. That said, I think our team has done a really good job, and we've got long-term success. relationships with our core manufacturers. And so we're working to ensure that we do have capacity available to us. Slightly different adjustment in risk, but also looking at ways that we can have some flexibility with our manufacturers. And just to flip over to the manufacturer side, I mean, they have struggled, as most businesses have, that are more labor-intensive. They have struggled to get their staffing levels up. They've struggled with increases in wages to attract when we look at whether it's the US or Canada or even Australia. And so they've got challenges that way. And then they have challenges in all type of material components, whether it's everything from lumber, insulation, drywall, A lot of the adhesives and paints, et cetera, overhang from the Texas freeze-up a couple of years ago. So it's very complicated. And so if you think of it from a positive side, high demand in the marketplace, the industry struggling to add capacity, which means we should see continued high utilization and reasonably strong rates. I'll just pause there. Ted Redman, it impacts MSS perhaps more than WFS currently. Any additional color you would add, Ted?

Well, I think that was very comprehensive, Trevor. So we've, like Trevor said, we've got great multi-year relationships with our suppliers. So we're literally working with them on a daily, weekly basis and, you know, booking making sure that we're booking a headline time and they're reserving space for us based on our estimated CapEx and custom sales needs. So we just work very closely with them. Our sales team is also well aware of the lead times and pushing our customers, which helps us close deals quicker because we tell our customers if they want their building by their deadlines, they've got to give us quick decisions and get their orders in. So that's a positive as well. So I think we're managing the situation quite well, but we have to stay on top of it.

Okay, great. That's a fantastic color. Maybe just a quick one here on LodgeLink. Do you see the headcount expanding much this year, or do you think you're at a point where you can push kind of the next level of sales with the current count?

As Toby mentioned, we did. From a growth G&A perspective, we did have a push on the commercial side last fall to give us the capacity for the sales and opening up of markets that we had planned for this year. Where we do struggle a bit is on the technology side and trying to meet our objectives in terms of enhancement to the sophistication of the tech platform. And Patrick, why don't you? It gives some color around our expectation for not just increasing headcount, but the access to talent.

Thank you, Trevor. Yes, the access to talent, I think, is well documented where technology is a certain demand right across the planet. We'd love to have them in Calgary here in town to work with, but the reality is some of them will work from home. The pandemic has made that easy for all of them to take on jobs from around the planet. FlipFi is an opportunity for us to retain talent from around the planet, but it is highly competitive in the market. We are not Silicon Valley based, but we still have an offering that is very appealing to certain segments of the development community. And we do our best to retain the ones that we do have. We have a good complement of what I would consider to be very seasoned experts in our technology team. We keep working at bringing in the, what I call, intermediate and junior developers into our team. to round out support and other needs in the business. And lastly, I would say that with some partnerships with vendors to augment what we need in a space where we want to have good partnerships, not just transactional vendors that come in and out of our platform. We want to protect our intellectual property very carefully. We have those in place as well to make sure we can meet our product development requirements.

And I would say overall, Brent, to meet our plan for this year, we will see a headcount increase of between 20 and 30 percent. So a lot of what we require is already on team as we exited the year and entered this year in order to deliver that meaningful growth over the course of the year. And then we probably see, if we're on plan, The next level of growth in terms of headcount would be later this year going into 23. Okay, that's great.

I'll turn it back. Thanks. Thanks, Brent.

And our next question comes from Trevor Reynolds from Acumen Capital. You may begin.

Morning, guys. Morning, Trevor. I'm just curious where you guys see WFF utilization getting to in the current environment and if more capital investment is required or what that kind of looks like.

Yeah, happy to. Well, fortunately, broadly speaking, we continue to have capacity to match up with increasing demand, and as the team – It continues to build our network into other end markets like mining and disaster recovery. So it's more repositioning some maintenance capital for assets that haven't worked for some time as we match them up with the market.

But Mike, why don't you give a call over there? Yeah, just further to sort of the capital side of it. In Australia, we continue to add capital to our space rentals piece over there. And strategic capital on our workforce where we can get good term and good rate In this market here, though, Trevor and Toby both touched on our strategy and are really super happy with how well we've done with it the last few years and put ourselves in a good position where we're not reliant now on the oil and gas sector. So we've really spread our network of opportunity geographically and industry-wise. So we're in the U.S. now. We're starting to see some of our large format camps be marketed and sold and rented into the United States. Eastern Canada, as I think we noted, we're up over 2,000 beds now in that marketplace, focused primarily on mining. We're out in Labrador. We've spread very far where we weren't like that several years ago. And construction, government, homeless initiatives, social housing. So Although there are some oil and gas contracts still in play, we're a much different company than we were, so I still see opportunity for our utilization to improve, along with an answer. But there's just more opportunity for us than there was.

Upside on utilization, but not a lot of capital investment to meet that demand.

Got it. And then just in terms of... Australia, you're fully utilized there. Are you guys looking to grow that fleet or just harvest the cash flow? What's the plan there?

Australia is performing really well. Our team has done a fantastic job. We are investing in Australia. I believe it's less than the cash flow we're generating there, so a little bit of both in our answer to your question. harvesting and investing. The return metrics on an ROI or ROA basis are some of the strongest we see across the platform. And where we talk about being close to 100%, that's on the workforce side, so that's the camp and housing side of the business as we see some of the commodity end markets, whether it's iron ore, coal, certainly the gas side of the business supporting some of the drillers and producers, but also remote infrastructure, disaster recovery, education using dormitories, etc. So it's quite robust. But then the other part of the business, we do a very healthy business in education, providing classrooms and schools to the state school districts. Really nice return solid utilization there. And then our general modular. So we do have a blended platform in Australia, and we're seeing strength as we are in North America in all three of those verticals. And based on the returns, it does warrant investment, and we're continuing to invest in that business, and we really like that market.

Got it. And then last one, just in the Logilink sector with the a lot of the jobs going remote there. Are you guys going to be able to take advantage of that opportunity Calgary investment fund that you guys qualified for last year?

We believe so, Trevor. COVID kind of threw a wrench in things. OSIF is based on partnering to bring tech talent to Calgary physically and to physically work here. And as you can imagine, as we have picked up team members in various parts of the world, they've tended to work remotely more than moving them here. And even if they did move here, I mean, we haven't been working in person, as you know, for the better part of a year and a half. So as we get, you know, past the restrictions of COVID and start sort of forging the new path of what our workplace looks like. I think that's where OSEF comes back into frame for us. And Toby, I don't know if you want to add anything on the OSEF side.

Yeah, I think our ambition, as Trevor mentioned, is to continue to bring tech talent into Calgary. So far, that hasn't quite met the... our original plans based on the headwinds that have been put in place by COVID and other factors and the tight tech market. And as Patrick discussed, the ability for a lot of those individuals to work remotely and essentially create a worldwide pool of talent. But we are continuing to... to work with OSEF and we believe we're working in the spirit of the agreement and we're making some headway, but perhaps not as much as we originally contemplated.

Perfect. That's all for me. Thanks.

Thank you. Once again, that's star one for questions. Star one. Our next question will come from the line of Frederick Boston from Raymond James. You may begin.

Hey guys, you note that travel bookings represented 9% of your quarterly gross bookings. Just curious what qualifies as travel booking or not?

Yeah, thanks for the opportunity to clarify that. We acquired a full-service travel agency about a year and a half ago so that In addition to managing the accommodation requirements of our customers moving through, we could also offer them the airline booking, car rental, all of the other elements of full cycle travel. Although the tech platform and the core transaction and what we've been building in terms of lines of code is to solve the complicated elements of moving large groups of people to and from accommodation increasingly we're wrapping around that the ability to provide them services for airline etc and as we continue to build the platform it will become more integrated so when we break out that we do have some customers who we organize charters for them to move their crew in and out of remote mining sites for example and then just generally you know more of the the airline travel. And for some of our mid-sized customers, we'll handle even their management travel, et cetera. So it's all one stop. And Patrick, maybe from the platform perspective, if you could just give some more color on the difference between the two revenue streams and Toby as well.

Well, the core offering at the moment is accommodations for large crews. They tend to move in trucks, cabs of four, and on a convoy kind of thing. So they're more ground-based, and because the crews are large, their movements are somewhat unpredictable. Coming early, leave late, substitutions, and so on. This is our sweet spot in our offering where the common mainstream travel platform just do not accommodate the $60 billion a year adjustable market that Trevor was speaking to. So we're totally focused on that. The small travel agency that we acquired does complement today. It helps us understand the needs of our customers as well when they ask, which tend to be B2C at times, but we're focused on B2B. But as we blend the two together over time, we believe we're going to have something pretty powerful as an offer.

Do we have anything to add on the differentiation of the revenue streams?

I think just as we move forward, part of our ambition is to integrate that into the technology offering. Currently, it sits on the side a little bit as a bit of a manual offering that we provide, but in the future, we see it being an integral part of the LodgeLink service.

Okay, super. How should we think about the EBITDA eliminations at the corporate level? We saw a bit of a step change in the second half, presumably due to some share-based compensation expenses, but any guideposts you can provide for us looking at 2022?

Yeah, I think a big part of the increase, Frederick, besides the standard increase that we saw for the full year because of because of the Vanguard acquisition and the people and G&A costs that came with that. Obviously, that increased the admin costs on a year-over-year basis for each quarter this year compared to the same quarter in 2020. But especially in the second half of the year, we started to increase our provision for bonuses and profit incentives as we had a really strong year And so with that, we saw a fairly significant increase. And we carry those costs in 2021. We've carried those costs at the corporate level for the full business. So that's the majority of what you're seeing there in addition to the addition of Vanguard. So as we move forward, we hope to... to outperform our growth expectations in the future as well. But I'd say this was a fairly exceptional year on that basis. And so, you know, looking forward, I wouldn't necessarily model in the same level of GNA for, you know, a standard growth assumption over top of 2021.

Good, got it. And then if you end up recording the same amount, well, it's a good news story.

Exactly, yeah.

Okay, thank you.

Thank you.

And I'm not showing any further questions in the queue. I'll turn the call over to the speakers for any closing remarks.

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