Black Diamond Group Limited

Thank you for standing by. This is the conference operator. Welcome to Black Diamond's first quarter 2023 conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. And should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Jason Zhang, VP Capital Markets. Please go ahead.

Good morning, and thank you for attending Black Diamond's first quarter results 2023 conference call. With us on the call today is our CEO, Trevor Haynes, and CFO, Toby Labrie. We are also joined by COO of Modular Space Solutions, Ted Redman. 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 2023 management's discussion and analysis, entitled Forward-Looking Statements, Risks and Uncertainties, and Non-GAAP Financial 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 CNR 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 first quarter results which further demonstrates the growth, diversification and momentum our specialty rental platform has seen over the last several years. This has resulted in yet another record in rental revenue generation in our MSS segment and continued improvement in our WFS utilization, which is at the highest level seen in numerous years. The significant year-over-year scaling of our travel tech platform LodgeLink continues to prove out its unique value proposition. Specific to the first quarter of 2023, We generated consolidated rental revenue of $34.4 million and reported adjusted EBITDA of $21.4 million. These were improvements of 28% and 20% from the comparative quarter, respectively. Despite macroeconomic concerns that we all have at the moment, we are seeing healthy sales pipelines in each of our business units, with strong conversion rates to contracted revenue resulting in over $130 million of contracted rental revenue at the end of the quarter versus $76 million a year ago. At the end of the quarter, we had committed capital of $35.5 million, the majority of which is under contract with rental contracts approaching an average term of roughly 36 months. This is reflective of our disciplined approach to capital investment, where the majority of our committed CapEx is supported by long-term contracts and attractive economics. Looked at another way, our visibility on forward growth or core recurring rental revenue remains strong. MSS reported a record-setting first quarter adjusted EBITDA of $16.1 million, up 55%, driven by rental revenue of $20.4 million, up 27% from the same quarter last year, and total revenue of $46.1 million, which was an increase of 34% from the comparative quarter. In line with earlier comments, our MSS business unit continues to see healthy demand, and we anticipate continued growth into the second quarter and beyond with respect to our base of high-margin recurring rental revenue. We expect continued expansion of the rental fleet and increased uptake in VAPs. Should increases in spot rates begin to moderate with inflation, we expect to continue the ongoing growth in average rental rates as existing contracts either renew or are replaced with new customers at current rates. During Q1-23, average rental rates in MSS were up 11% year-over-year on a constant currency basis, excluding the effect of acquisitions. In WFS, first quarter rental revenue of $14 million was up 30% from the comparative quarter, while consolidated revenue and adjusted EBITDA were down 1% and 8%, to $35.4 million and $11 million, respectively. The modest EBITDA decline year-over-year was primarily related to lower revenue and margins on lodge service and non-rental revenue streams, slightly offset by higher rental revenues. We are continuing to see positive momentum across WFS driven by our efforts to diversify the business, streamline operations, while also continuing to monetize underutilized assets. This has resulted in consolidated WFS utilization rising to 65.4% from 47.8% last year, the highest utilization level seen in many years in this business unit. We continue to see strength in Australia but are also experiencing improving utilization in Canada and U.S. markets. The outlook into the balance of the year is positive. based on an active pipeline of opportunities in numerous end markets and geographies. Therefore, we expect our rental revenue base in WFS to build throughout 23 into next year, followed by a subsequent moderation as certain assets come off rent later this year, with the net effect being a relatively flat rental revenue run rate for this business in early 24 on a year-over-year basis before building again. We think it is important to note that the complexion of our WFS segment has also changed considerably over the years, as we have worked hard to expand into additional end markets and geographies. The cash flows in this segment are significantly more diversified by industry, customer, and geography than ever, which we believe will continue to drive lower variability over time. LodgeLink, our digital marketplace offering that is bringing innovation to the crew travel industry, continues to scale, with approximately 106,000 room nights sold in the first quarter, up 39% from the comparative quarter. Gross bookings of $18.5 million grew 59%, while net revenue for the quarter of $2.2 million was up 69% from the comparative quarter. We are now seeing a stronger pace of growth in our U.S. LodgeLink market, which more than doubled its gross revenues year over year. At the end of the first quarter, LodgeLink had over 11,300 properties listed, representing over 1.1 million rooms of capacity, servicing 793 cumulative corporate customers and their thousands of crew members. LodgeLink is off to a strong start in 23, and we expect ongoing growth in year-over-year volumes as we continue to demonstrate a unique value proposition by leveraging increased sophistication of our tech platform to this addressable market of approximately 70 billion US. We continue to believe that the strategies implemented years ago have resulted in a notable evolution in terms of the quality and stability of our revenue streams and cash flows across Black Diamond. Our strong balance sheet and liquidity position, which Toby will touch on shortly, as well as our strong levels of contracted revenue and diverse customer base provides what we believe our attractive defensive characteristics should uncertain macroeconomic events persist or worsen. We will remain disciplined with our capital allocation approach, but as we sit here today, we reiterate that we continue to see ample opportunities to reinvest, grow, and compound cash flows throughout our system. I will now turn the call over to Toby for some further details on the first quarter results and the company's financial position. Toby.