Black Diamond Group Limited

Thank you for standing by. This is the conference operator. Welcome to Black Diamond's fourth quarter and year-end results 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 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Jason Zeng, VP of Capital Markets. Please go ahead.

Thank you. Good morning and thank you for joining us today for Black Dining Group's fourth quarter 2023 results conference call. On the line with us today are our CEO, Trevor Haynes, and CFO, Toby Labrie. as well as additional members of our executive, including COO of Modular Space Solutions, Ted Redman, COO of Workforce Solutions, Mike Ridley, COO of LodgeLink, Kevin Lowe, and CTO of LodgeLink, Patrick Melanson. Please be reminded that our discussions today may include forward-looking statements regarding Black Diamond's future results and that such statements are subject to a number of risks and uncertainties. Actual financial and operational results in the future may differ materially from these forward-looking expectations. Management may also make reference to various non-GAAP financial measures in today's call, such as adjusted EBITDA or net debt. For more information on these terms and others, please review these sections of Black Diamond's fourth quarter 2023 management's discussion and analysis entitled Forward-Looking Statements, Risks and Uncertainties, and Non-GAAP Financial Measures. This quarter's MD&A financial statements and press release may be found on both the company's website at www.blackdiamondgroup.com and also on the CDR website at www.cdrplus.ca. Dollar amounts discussed in today's call are expressed in Canadian dollars unless noted otherwise and may be rounded. I will now turn the call over to Trevor Haynes to review this quarter's operational highlights.

Thank you, Jason. Good morning and thank you all for joining. We have been focused on building a diverse specialty rental and services platform that can generate predictable compounding growth. The very strong 2023 results highlight the effectiveness of this strategy. Full year consolidated rental revenue was up 21% over the prior year to $145 million, and EBITDA rose 27% to $106.6 million. 2023 is yet another in a series of strong years, culminating in Black Diamonds having a five-year compounding annual growth rate of 22% and 29% for rental revenue and EBITDA, respectively. We are confident that the business will continue to compound these and other key performance indicators in 2024 and beyond. This confidence stems in part from the company having over $136 million of rental revenue behind contract at year end 2023. We therefore step into 24 on solid footing given the correlation between rental revenue and cash flows. Our strong free cash flow generation and conservatively levered balance sheet provide considerable flexibility to fund any or all of organic and inorganic growth debt repayment, dividend, and or share buybacks. We continue to experience tailwinds in several end market verticals, such as education and infrastructure construction. These, along with steady levels of activity across our customer segments, are driving strong sales pipelines, which in turn will lead to attractive organic investment opportunities. We believe that our primary contributor to growth will continue to be from new rental units being added to our regional fleets. This primary growth will be augmented by our continued broadening of our increasingly diverse WFS segment, the ongoing scale-up of LodgeLink, and the possibility of further tuck-in acquisitions. We have achieved these strong results in current positioning due to the quality of our team and their relentless focus on achieving excellence, as exemplified by our safety culture. The company ended the year with an enviable 0.22 total recordable incident frequency rate, or TRIV, and zero lost time claims. We are truly appreciative of our fantastic team. Moving to the quarterly results. Fourth quarter consolidated rental revenue of $36 million and adjusted EBITDA of $26.1 million, increased 8% and 19%, respectively, year over year. MSS results for the quarter were healthy, with rental revenue of $22 million and EBITDA of $17.3 million, up 10% and 21%, respectively, year over year. Utilization has remained stable, and at the high end of what we consider to be optimal for this type of business. While we have been seeing lower activity levels in certain commercial construction segments in central Canada, these are being offset by continued strength in the education sector on both sides of the border and infrastructure construction activity in key US markets. Average rental rates remain robust and continue to move higher as legacy contracts renew or the assets are redeployed at prevailing market rates. Our MSS segment exited the quarter with contracted future rental revenue of approximately $102 million, an 8% increase over a comparative quarter, and with average rental duration of 52 months. Our workforce solutions business continues to benefit from multi-year diversification initiatives that has significantly broadened our customer base by sector as well as by geography. In the quarter, WFS rental revenue of $14 million increased 5% from the comparative quarter, while adjusted EBITDA improved 6% from the comparative quarter to $14.7 million. This rental revenue and EBITDA performance was achieved despite a decline of 9 percentage points in rental utilization to 60%. This decline was expected due to the previously noted completion of several large-scale oil and gas pipeline camp projects, all of which are now off rent and only nominally contributed to the fourth quarter results. We have been redeploying WFS rental assets at comparatively higher rates, which explains the modest year-over-year growth in Q4 rental revenue despite lower utilization. We expect relatively stable sequential rental revenue performance in the short term as we mobilize assets in a generally higher rate environment and anticipate a return to growth in the latter part of 2024 as utilization rises with further rental asset deployments. Our forward contracted rental revenue in WFS increased 56% year over year to $34.6 million. highlighting the attractive sales and rental pipeline in place. Our enticing opportunity set is being driven by a broad and diverse set of customers across North America, as we are seeing activity in several verticals, including mining and energy production and infrastructure development, but also disaster relief, transitional and social housing, and other temporary accommodation requirements for government and industry applications. Our operations in Australia remain a focus as we have been intentional in adding new rental units to meet strong demand and in an effort to manage utilization within an optimal range. We expect healthy rental revenue growth to continue in this region given ongoing demand tailwinds. Over the last several years, we have worked intently to successfully diversify our WFS business in order to evolve from a mostly oil and gas oriented CAF provider into a more diverse temporary housing and accommodations business, servicing many end uses and geographies. The result is evident in a more stable and predictable cash flow now being generated from numerous projects of varying sizes. We believe this stability and diversity is driving a higher quality WFS cash flow stream, which we believe is increasingly comparable to the predictability observed in our MSS business units. LodgeLink, our disruptive digital marketplace, continues to scale with over 101,000 room nights sold in the fourth quarter, bringing the trailing 12-month total to just over 419,000 room nights sold, an 18% increase compared to the same period in 22. Q4 23 booking volumes in LodgeLink were down year over year, given a particularly strong comparative year driven by disaster recovery volumes. We are seeing first half 24 booking volumes strengthening based on current activity and new customers trading on the platform. Annual net revenue of 9.8 million was up 47% year over year and net revenue margins improved by 120 basis points as we leveraged higher volumes through the platform and additional revenue streams were introduced. We expect continued growth for LodgeLink both from a volume standpoint and from improving economics as net and gross margins expand on the back of additional revenue streams, ongoing scale-up, and improved efficiencies. In summary, the fourth quarter and year-end results capped off another very strong year for the company. Our outlook is constructive as we are well-positioned across the business with stability and tailwinds being indicated across our end-market verticals. which points to opportunities for further organic growth with particular strength in education and infrastructure construction in both North America and Australia. We have the financial flexibility and the best-in-class team to capitalize. I'll now turn the call over to Toby, our CFO, for a more in-depth look at our financial position. Toby.